American Shipping Company

Annual report 2009

In review

3 Company Overview
5 Goals and strategies

Performance 2009

6 Board of directors' report
12 Annual accounts - group
12 Statement of financial position
13 Income statement and statement of comprehensive income
14 Statement of changes in equity
15 Cash flow statement
16 Notes to the accounts

32 Annual accounts - parent company
32 Statement of financial position
33 Income statement and statement of comprehensive income
34 Cash flow statement
35 Notes to the accounts

40 Auditor's report
42 Share and shareholder information

Corporate governance

45 Corporate governance statement 2009
48 Presentation of the board of directors
49 Presentation of management
50 Company information

In review
Company overview

This is American Shipping Company

American Shipping Company ASA (AMSC) is a shipping company that owns and leases world-class quality U.S. Jones Act vessels for operations between ports in the United States. The Company is headquartered in Oslo, Norway, with its principal operating subsidiaries located in Philadelphia, Pennsylvania, USA.

AMSC's business model is to own and bareboat charter vessels for operation in the U.S. Jones Act market through its wholly owned subsidiary leasing companies. All of its vessels are fully qualified to participate in the domestic maritime trades of the United States.

The vessels which AMSC owns are the most modern product tankers in operation and use the proven design of Hyundai Mipo Dockyard. These 46,000 dwt vessels are state-of-the-art, fuel efficient vessels with highly flexible cargo systems. Their outstanding performance, reliability and quality have been recognized by those chartering these vessels over the last three years.

Financial calendar 2010

7 April Annual General Meeting 2010
23 April 1st quarter interim results
6 August 2nd quarter interim results
5 November 3rd quarter interim results

(Dates subject to change)

History

2005

Closed a ten ship bareboat charter agreement with Overseas Shipholding Group, Inc. (OSG)
Aker American Shipping ASA (AKASA) established and listed on Oslo Stock Exchange. Purchased the former Kvaerner Philadelphia Shipyard

2007

Obtained permanent ownership financing for ten vessels and issued NOK 700 million bond for investments in vessels and operations
Split of Aker American Shipping's ship owning operations from its ship building operations. Aker American Shipping sold Aker Philadelphia Shipyard
Took delivery of the first three product tankers

2008

Aker ASA reduced its ownership interest, as planned, to 19.9% due to U.S. Jones Act restrictions which would have limited its further ambition for developing maritime business outside the U.S.
Name changed from Aker American Shipping ASA to American Shipping Company ASA. Trading ticker also changed from AKASA to AMSC
Took delivery of two more product tankers

2009

Finalized settlement agreement with Overseas Shipholding Group, Inc. that settled commercial disputes between the companies
Stronger balance sheet and better positioned for future opportunities
Took delivery of two additional product tankers

American Shipping Company annual report 2009

OVERSEAS BOSTON
PROTECT THE ENVIRONMENT

In review
Goals and Strategies

Goals and Strategies

Be the preferred ship owning and lease finance Company in the Jones Act market

Generate stable cash flow from long term bareboat charters protected from short term market movements, but with exposure to the long term positive outlook for Jones Act shipping
Work closely with OSG to ensure that maximum value is gained from each of the time charters and the profit sharing arrangements
Maintain stringent controls on all costs associated with the management of AMSC

Have the newest, safest and most modern and operationally friendly fleet

Continue to seek improvements in the design and operation of our vessels in a manner than will ensure the safest, highest quality and most environmentally friendly fleet
Maintain close relationship with Aker Philadelphia Shipyard to secure timely delivery of vessels

Explore and invest in value creation opportunities for our shareholders

Continue to focus our efforts on value creation opportunities in both the Jones Act market and the financial markets and position ourselves to take advantage of these opportunities
Create shareholder value through optimal structuring and financial transactions

American Shipping Company annual report 2009

Performance 2009
Board of Directors' report

Navigating in the Jones Act during economic slowdown

Introduction

American Shipping Company ASA ("AMSC" or the "Company") is a ship owning and leasing company with a modern fleet of tanker vessels operating in the U.S. domestic ("Jones Act") trades. During 2009, AMSC took delivery of its sixth and seventh product tankers, realizing total operational revenues of USD 54.4 million with operating income before interest, taxes, depreciation and amortization of USD 45.2 million. In connection with the Settlement Agreement (discussed below), AMSC assigned all of its rights under the shipbuilding contracts for the two shuttle tankers to Overseas Shipholding Group, Inc. in 2009. AMSC currently has three additional tankers on order with Aker Philadelphia Shipyard, Inc. (Aker Philadelphia Shipyard, Inc. is a wholly owned subsidiary of Aker Philadelphia Shipyard ASA; collectively "AKPS") and options for four additional tankers. The seven product tankers in operation and the three product tankers on order have all been, or will be bareboat chartered to Overseas Shipholding Group, Inc. or one of its subsidiaries (collectively "OSG").

The Group's business activities

The main entities in the AMSC Group ("Group") are the Norwegian holding company American Shipping Company ASA, the U.S. intermediate holding company American Tanker Holding Company, Inc. (ATHC), American Tanker, Inc. (ATI), American Shipping Corporation (ASC) and the ten separate leasing companies (ASC Leasing I through X, Inc.) that own (or will own) each of the ten product tankers. American Shipping Company ASA is domiciled in Oslo, Norway, with the U.S. subsidiaries and operations located in Philadelphia, Pennsylvania, and Wilmington, Delaware, USA.

AMSC's current business model is to own and bareboat charter vessels for operation in the U.S. Jones Act market. The vessels are being built at AKPS, a leading U.S. commercial shipyard. AMSC, through its subsidiaries, will own and bareboat charter the vessels to vessel operating companies. Ten vessels (either delivered or to be delivered) are all on bareboat charter to subsidiaries of OSG.

The shipbuilding contracts for the two vessels that will be converted to shuttle tankers have been assigned to OSG.

Goals and strategies

AMSC's primary goal is to be the preferred ship owning and lease finance company in the U.S. Jones Act market. The Group will continue to explore and invest in value creation opportunities for our shareholders.

AMSC employs several strategies to ensure the attainment of our goals. The Group will continue to work closely with its customer to ensure that maximum value is gained from each of the time charters and the profit sharing arrangements. AMSC focuses on long-term charters to generate stable cash flows so as to protect the Group's revenue from short-term market movements. The Group will maintain stringent controls on all of its costs. In addition, by maintaining a close, commercial relationship with Aker Philadelphia Shipyard, the Group seeks to secure the timely delivery of all of our vessels.

AMSC has the most modern fleet in the market. The ship design achieves high standards and AMSC will continue to seek improvements for the safety of personnel and protection of the environment.

The Group will continue to focus our efforts on additional value creation opportunities, both in the Jones Act market as well as in the financial markets. It is the Group's plan to be in a position to take advantage of these opportunities in order to create value for our shareholders.

The Jones Act market

The U.S. cabotage law, commonly referred to as the Jones Act, requires all commercial vessels transporting cargoes between ports in the United States to be built, owned, operated and manned by U.S. citizens and to be registered under the U.S. flag.

Since AMSC is not a U.S. citizen qualified to operate vessels in the Jones Act, it is dependent on the lease finance exception which permits foreign ownership of Jones Act ships under certain conditions. If AMSC does not fully comply with the terms of the lease finance exception, its vessels will not be qualified to operate in

the U.S. coastwise or "Jones Act" trade. Compliance with the lease finance exception requires, among other things, that AMSC's subsidiaries bareboat charter their vessels to qualified U.S. citizen operators.

The Oil Pollution Act of 1990 ("OPA 90") was enacted as a result of the Exxon Valdez oil spill. OPA 90 created a new legal regime to increase pollution prevention, ensure better spill response capability, increase liability for spills, and facilitate prompt compensation for cleanup and pollution damage. OPA 90 also established phase-out dates for existing single-hull tanker vessels and required all newly constructed tanker vessels to meet double-hull standards. Beginning in 2015 all tanker vessels trading in the United States must meet double-hull standards.

In the 1990's, there was a surplus capacity of product tankers and barges. As more vessels reach their OPA 90 retirement date, we expect capacity will decrease and eventually create a supply deficit. Although the end of 2008 and 2009 marked a lower demand for oil products due to the poor global economy, we remain optimistic about the long term demand for tankers. Due to a limited number of vessels under construction, it is reasonable to assume a stronger market for new tankers in the future.

Key events 2009

The sixth and seventh product tankers were delivered to AMSC in February and June, respectively. The sixth and seventh vessels, the Overseas Boston and the Overseas Nikiski, are both on long-term time charter from OSG to Tesoro. The long-term bareboat charter agreements that the Group has with subsidiaries of OSG have different fixed charter periods of between five and ten years from delivery and, as such, these vessels have secure, stable cash flows with charters expiring between 2014 and 2021, with options for OSG to extend the bareboat charter term. As noted below, upon satisfaction of certain conditions in the Settlement Agreement, all of the charters will be extended to ten years, with option extensions remaining in place. Further, in a U.S. product tanker market with strong funda

American Shipping Company annual report 2009

Performance 2009
Board of Director's report

mentals, the charter agreements have upside potential above the fixed bareboat charter rates through a profit sharing mechanism.

Settlement Agreement

In December 2009, the Company entered into a settlement agreement ("Settlement Agreement") with OSG that settled all of the outstanding commercial disputes between AMSC and OSG. (Aker ASA and Converto Capital Fund AS (formerly named Aker Capital Fund AS) (collectively "Aker") and AKPS were also parties to the Settlement Agreement.) The Settlement Agreement will enable the Group to complete the twelve vessel build series (ten product tankers and two shuttle tankers) with AKPS. The Settlement Agreement provides for the dismissal with prejudice of all claims in the arbitration with OSG.

As part of the settlement, the fixed terms of the bareboat charters of the ten product tankers (seven of which have been delivered with the remaining three to be delivered before 30 September 2011) will be extended to a common expiration date that is ten years from the date of the Settlement Agreement (December 2019) upon satisfaction of certain conditions including the timely delivery of the remaining vessels in the twelve ship order and the satisfactory refinancing or extension of AMSC's vessel debt and bond obligations. Various other agreements with OSG have been modified including the elimination of exclusivity, the sale (to OSG) of the two shuttle tanker shipbuilding contracts and changes to the profit sharing agreement. The assignment of the two shuttle tanker shipbuilding contracts for USD 35 million each (reflecting a return of capital paid per vessel of approximately USD 20 million each) resolves AMSC's inability to obtain permanent financing for these two vessels under the continuing challenging credit markets and allows AMSC to continue with the full twelve ship order from OSG. The proceeds from the sale also provide AMSC with needed liquidity to assist the Group in meeting its debt service obligations to its senior lenders. The changes to the profit sharing agreement include overall simplification of the calculations, a change to increase AMSC's sharing percentage to fifty percent under all circumstances, and a provision allowing OSG to retain the first USD 18.2 million of profit sharing otherwise payable to AMSC (such retained profit sharing to accrue interest until paid).

In connection with the Settlement Agreement with OSG, several of AMSC's

agreements with AKPS have been modified including the elimination of exclusivity, reduction of purchase prices on remaining vessels to be delivered, and cancellation of nine option agreements for tankers beyond AKPS's hull 020. AMSC maintains four options with AKPS for product tankers. In exchange for these agreements and relieving the Group of future obligations and cash payments, the Group transferred to AKPS its ownership interest in USD 3.0 million of assets ("long-lead items") that had been purchased (on our behalf by AKPS) for future option vessels.

In addition, as part of the Settlement Agreement, Converto Capital Fund AS has made an unsecured, subordinated loan of USD 20 million to AMSC, which will provide additional liquidity to the Group. Interest under this loan will be payment-in-kind interest. Loan repayment restrictions apply until specific conditions are met including the timely delivery of the remaining vessels in the twelve ship order and the satisfactory refinancing or extension of AMSC's vessel debt and bond obligations. The loan's maturity date is three years from the date that those conditions are satisfied, which is not expected to occur before 2013.

With the Settlement Agreement, AMSC resolved its inability to fund the purchase of the two shuttle tankers as well as the anticipated shortfall in debt service coverage on its senior debt resulting from the absence of profit sharing under the bareboat charters. In addition, with the modification of the agreements with AKPS, the Group has improved its cash position with the elimination of future obligations and fees associated with the option contracts.

Review of the annual accounts

AMSC prepares and presents its accounts according to International Financial Reporting Standards (IFRS) as adopted by the EU, and has one operating segment.

Profit and loss accounts

In 2009, AMSC had operating revenues of USD 54.4 million versus operating revenues of USD 33.3 million in 2008 as the fleet grew from five to seven vessels. Revenues are recognized on a monthly basis and represent the income from the bareboat charter agreements. No revenue from the profit sharing arrangement with OSG was recognized in 2009 or 2008. The Group's operating profit before interest, taxes, depreciation and amortization (EBITDA) amounted to USD 45.2 million in

2009 compared to USD 27.9 million in 2008.

Depreciation was USD 27.9 million in 2009 versus USD 17.5 million in 2008. AMSC's operating profit (EBIT) was USD 17.3 million in 2009 versus USD 10.4 million in 2008.

Net financial items and other gain was negative USD 18.8 million in 2009 compared to negative USD 84.9 million in 2008. Gain on the sale of the first shuttle tanker shipbuilding contract was USD 11.2 million in 2009. Net financial items of negative USD 30.0 million in 2009 consist primarily of an unrealized, non-cash gain on the mark-to-market valuation of interest rate swap agreements of USD 21.6 million, offset by net interest expense of USD 34.9 million and other financial expense of USD 16.7 million. Net financial items of negative USD 84.9 million in 2008 related primarily to an unrealized, non-cash loss on the mark-to-market valuation of interest swap contracts of USD 66.1 million. The remaining negative USD 18.8 million in 2008 reflected net interest expense of USD 21.2 million and other financial income of USD 2.4 million.

Income tax benefit for 2009 was USD 0.2 million, compared to expense of USD 0.2 million in 2008.

AMSC's 2009 net loss was USD 1.3 million versus a 2008 net loss of USD 74.7 million. The net loss of 2008 includes the negative effect of the unrealized, non-cash loss on the mark-to-market valuation of the interest rate swap contracts. The 2009 earnings per share (EPS) was negative USD 0.08 and the diluted EPS was negative USD 0.08. The corresponding figures for 2008 were negative USD 2.71, for both basic and diluted EPS.

Cash flow

The Group's cash flow is primarily composed of bareboat charter hire paid. Total net cash flow from operating activities in 2009 was positive USD 39.4 million, and in 2008 was negative USD 15.5 million. The increase in 2009 versus 2008 is primarily due to cash losses incurred in 2008 versus current year cash gains on the settlement of foreign currency swaps and the net gain on the sale of the first shuttle tanker shipbuilding contract in 2009.

Net cash flow from investment activities was negative USD 192.6 million in 2009 compared to a negative USD 230.4 million in 2008. This is mainly attributable to the vessels delivered in each year as well as to milestone payments made to AKPS for the vessels currently on order. In addition, 2009 includes the return of our capital

American Shipping Company annual report 2009

Performance 2009
Board of directors' report

investment in the first shuttle tanker shipbuilding contract that was sold in 2009.

Net cash flow from financing activities was USD 113.6 million in 2009 related to the take-out financing of the two vessels delivered versus USD 170.3 million in 2008 related to the take-out financing of three vessels delivered.

Balance sheet and liquidity

As of 31 December 2009, American Shipping Company had cash on deposit with banks totaling USD 57.8 million. Of this total amount, USD 25.2 million is non-current cash held for specified uses. The corresponding amounts for 2008 were USD 71.8 million in cash on deposit with banks and USD 0.0 million in non-current cash held for specified uses. The decreased cash in 2009 is primarily related to the purchase of vessels from AKPS. Cash held for specified uses, in accordance with the Settlement Agreement, can be used to pay any remaining milestone payments due and final purchase price payments for the three product tankers and the shuttle tanker, debt service requirements, selling, general and administrative expenses (subject to a maximum of USD 1.0 million per quarter), tax expenses, and prepayments of the Fortis loan.

Other current assets were USD 22.5 million as of 31 December 2009, mainly representing assets held for sale related to the second shuttle tanker shipbuilding contract which is expected to be delivered in the fourth quarter of 2010. Other current assets as of 31 December 2008 were USD 22.2 million, mainly representing receivables from AKPS and Aker ASA.

Property, plant and equipment as of 31 December 2009 and 2008 was USD 703.9 million and USD 520.8 million, respectively, and includes seven vessels in 2009 versus five vessels in 2008. Prepayments made to AKPS in accordance with the shipbuilding contracts for the vessels under construction were USD 74.7 million at 31 December 2009 and USD 92.9 million at 31 December 2008.

Interest-bearing long-term receivables totaled USD 7.3 million and USD 6.3 million as of 31 December 2009 and 2008, respectively. These amounts include the deferred principal obligation (DPO) receivable from OSG and in 2008 also included a restricted cash deposit serving as security for the foreign exchange swap agreements.

At 31 December 2009, total assets were USD 866.3 million versus USD 714.1 million at 31 December 2008. The increase represents the delivery of two additional vessels in 2009.

At 31 December 2009, total equity was USD 78.8 million. The equity ratio was 9% of total assets. Corresponding amounts for 2008 were USD 101.0 million and 14%, respectively. This decrease in total equity is primarily due to the redemption of a subsidiary of AMSC's preferred shares in 2009.

One of the covenants on the Company's NOK denominated bond requires that consolidated equity be maintained at a level not less than USD 140 million. As a result of changes in interest rates and their impact on total equity, resulting from recording interest rate swap arrangements at fair value, AMSC approached the Loan Trustee early in 2009 on its NOK 700 million bond loan to request that the Trustee convene a bondholders meeting to consider a request for consent to disregard any effect of any non-cash gain or loss from the change in fair market value of interest rate hedging agreements in connection with the calculation of the required equity balance. In addition to the minimum equity covenant change, AMSC also requested consent to extend the option to select Payment-in-Kind (PIK) interest throughout the loan term. The Trustee agreed with our request and convened a bondholders meeting on 25 February 2009. At that meeting, the bondholders voted to accept both of the Company's proposals. Therefore, with the bondholders' approval, the calculation of equity under the amended covenants as of 31 December 2009 and 2008 was approximately USD 158 and USD 202 million, respectively. However, because as of 31 December 2008 equity was less than the required minimum at that time, all of the Group's debt was classified as current on its balance sheet due to IFRS requirements as well as cross-default provisions which impact the Group's other debt facility. Due to the approved modification in 2009 of the bond covenant, the Group was able to classify the majority of its debt as long-term for its 31 March 2009 interim reporting and for the balance of the year.

Given the challenges in global financial markets and tightness in credit, the extension of the option to declare PIK interest on a quarterly basis will help the Group's cash position to the benefit of all stakeholders.

Total current liabilities as of 31 December 2009 were USD 113.6 million, consisting of USD 79.0 million for the mark-to-market valuation of the interest rate swap contracts, USD 2.8 million for trade and other payables and USD 31.8 for short-term interest bearing debt. The corresponding total current liabilities as of 31 December 2008 of USD 613.1 million were mainly related to the current classification of debt referred to above. Total debt included in this amount was USD 504.4 million, of which USD 385.2 million relates to bank debt for the first five vessels and USD 119.2 million relates to the Norwegian Kroner (NOK) denominated bond. Also included in current liabilities is the mark-to-market valuation of the interest rate swap contracts of USD 100.6 million, trade and other payables of USD 6.3 million and other derivative financial liabilities of USD 1.8 million.

Non-current liabilities totaled USD 673.9 million at 31 December 2009, consisting of bank debt of USD 496.3 million related to the seven vessels owned by AMSC, a bond payable of USD 157.6 million and a subordinated loan of USD 20.0 million. Non-current liabilities at 31 December 2008 were USD 0.0 million.

Risks

AMSC faces risks related to construction of vessels and to market risk related to financing and ownership of vessels. The risks related to vessel construction are primarily AKPS's ability to deliver the vessels on time. The overall market risk is related to the future of the Jones Act, but market experts think it is very unlikely that the Jones Act will be overturned or that waivers to bring in foreign built vessels will be granted. Although the Group's vessels are all on long term bareboat charter contracts, AMSC is exposed to normal market risk related to imbalance between supply and demand for the future growth of its fleet.

AMSC and its subsidiaries have implemented sound, comprehensive risk management systems and procedures. Maintaining open and effective communication is stressed by the Board of Directors. It is important that any deviations from plan specifications or expected performance are identified quickly so that corrective measures can be taken at an early stage, thus limiting the consequences of such deviations.

AMSC and its subsidiaries adhere to a risk policy designed to minimize exposure to financial market risk, such as foreign exchange, interest risk and counterparty risk.

Financial risk and risk management

AMSC's activities expose it to a variety of financial risks: market risk, including cur

American Shipping Company annual report 2009

Performance 2009
Board of Directors' report

rency risk, interest rate risk, price risk, credit risk, and liquidity risk. AMSC's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on AMSC's financial performance. AMSC uses derivative financial instruments to hedge certain risk exposure.

AMSC operates in a business environment that is capital intensive. The Group is dependent upon having access to long-term funding for vessels and other loans and debt facilities to the extent its own cash flow from operations is insufficient to fund its operations and capital expenditures. AMSC has secured take-out financing for the first ten product tankers. The Settlement Agreement with OSG, including the sale of both shuttle tanker shipbuilding contracts, has resolved AMSC's inability to obtain permanent financing for the two shuttle tankers under the current challenging credit markets.

Through both the take-out financing and the NOK bond, the Group is exposed to fluctuations in interest rates. The interest rate risk related to the permanent term loan for the ten product tankers is offset by use of financial instruments, namely interest rate swap agreements to hedge the interest risk. The Group entered into interest rate swaps to convert its floating rate debt to a fixed rate under their USD 770 million loan facility.

AMSC's take-out financing has certain cross-defaults to AKPS's construction financing. AMSC closely monitors this link to AKPS and its impact on operations through frequent updates with AKPS's management. If there is an event of default under AKPS's construction financing and the construction debt repayment is accelerated, AMSC's take-out financing would also be in default, which would require AMSC to seek waivers from its lending syndicate. As a condition to any such waiver, a lender might, among other

things, require additional collateral or guarantees, increase the interest rate, and/or impose fees. There is no guarantee the lending syndicate would grant any such waiver, in which case they could demand immediate repayment of their loans, foreclose on their collateral and/or exercise their other rights and remedies. In view of AKPS's financial condition and record of delivering vessels on time, this counter-party credit risk is presently regarded as minimal.

In addition to the above mentioned cross default on AKPS's construction financing, AMSC also has additional risk associated with AKPS in the form of guarantees on a loan that AKPS has with the Pennsylvania Industrial Development Corporation Regional Center, LP XV and the Counter Guarantee (an agreement between AKPS and the governmental parties which provided funding for the shipyard renovation and for workforce training) that calls for a minimum level of employ

American Shipping Company annual report 2009

Performance 2009
Board of Directors' report

ment at the shipyard through 31 December 2014. If certain levels of employment are not maintained, then liquidated damages will be incurred. These guarantees are approximately USD 20.0 million each. In the event the AKPS is unable to pay the loan when due, or if the shipyard reduces or ceases its operation, then AMSC may be liable under these guarantees. We closely monitor the factors associated with the cross defaults and guarantees to determine the probability and materiality of the risk. This counterparty risk is presently not regarded as material.

Credit risk associated with OSG or its subsidiaries is regarded as minimal. Credit risk associated with cash and bank deposits is regarded as minimal.

AMSC is also faced with the risk of refinancing its vessels when the current term loan is due and under conditions imposed upon the Company by the Settlement Agreement. Although this particular risk does not exist in the short term (as the refinancing is not required before 2014), there can be no assurance that the Group will be able to refinance its debt when due depending on the market conditions as well as the availability of credit.

AMSC is subject to a covenant in its bond obligation that requires the Group to maintain a minimum level of USD 140.0 million of consolidated equity. Consolidated equity for the Group is primarily impacted through the results of its operations and through the foreign currency translation impact of its Norwegian Kroner (NOK) denominated bond. The Group closely monitors changes to the USD/NOK foreign currency rate and is prepared to act quickly to put in place the appropriate measures to prevent a negative impact to the equity covenant requirement. The Group's equity under the covenant calculation was USD 157.8 million as of 31 December 2009. The Group currently views this risk as minimal.

Based on the information known today, and subject to the above noted risks, the Board deems that the Group is financially sound and has an appropriate financing structure.

Events after the balance sheet date

There were no significant events that occurred after the balance sheet date.

The going concern assumption

In view of AMSC's financial position and its projections, the Board confirms that the 2009 annual accounts have been prepared based on the assumption of a going concern.

Parent company accounts and allocation of profit for the year

The profit and loss account of American Shipping Company ASA shows a loss for the year 2009 of USD 22.8 million. The Board of Directors proposes that the profit for the year be allocated as shown below:

Dividend payments
Other equity	negative USD 22.8 million
Total allocated	negative USD 22.8 million
Unrestricted equity amounts to	negative USD 9.1 million

Safety, quality and environment

Safety of personnel and protection of the environment is an important part of AMSC's strategy. AMSC takes its environmental responsibilities seriously. Beginning with our fifth product tanker, our vessels have been modified to incorporate three improved diesel-powered electrical generating sets to power the vessel's electrical system. These diesel engines comply with the Environmental Protection Agency's Tier II requirements. When in operation, these new engines produce lower levels of pollutants and particulate than previous versions. The vessel's emergency diesel generator, hydraulic power packs and rescue and lifeboat engines have all been upgraded as well.

No significant accidental environmental emissions were recorded in 2009 or in 2008.

AMSC focuses on the safety of our employees and their surroundings. We work safely and in a manner that protects and promotes the health and well-being of our employees and the environment.

Organization

Effective 31 December 2009, Robert K. Kurz resigned from his position as President and CEO, and is no longer employed by the Group. Coinciding with Mr. Kurz's resignation, board member John Rose assumed the position of General Manager on an interim basis. On 18 January 2010, the Board of Directors announced the appointment of Gregory J. Matecki as its new President and CEO. Mr. Matecki is the Group's Chief Financial Officer and will continue to hold that position. It is expected that Mr. Matecki will assume the role of General Manager upon obtaining regulatory approval. AMSC has a services agreement with Aker Philadelphia Shipyard for services related to IT, human resources and certain other services. Furthermore, AMSC has agreements with

Aker ASA and Resource Group International which primarily includes accounting and tax services. As such, the equivalent full time staff of AMSC would be approximately four persons as of 31 December 2009.

Equal-opportunity employer

American Shipping Company ASA seeks to be an attractive employer and maintains a human relations policy that is open and fair. AMSC is committed to providing equal employment opportunity to all employees and applicants for employment, regardless of race, ethnic background, gender, religion, age or any other legally protected status. Diversity strengthens AMSC's overall capacity and skills.

The entire industry faces the challenge of developing and sustaining diversity in the workplace. At year-end 2009, two of AMSC's three full time employees are women (controller and office manager). In addition, two of the five members of the board of directors are women.

Corporate governance

American Shipping Company ASA's corporate governance policy exists to ensure an appropriate division of roles among the company's owners, board of directors, and executive management. Such a separation of roles ensures that goals and strategies are prepared, adopted corporate strategies are implemented, and the results achieved are subject to verification and follow-up. Applying these principles also contributes to satisfactory group wide monitoring and verification of activities. An appropriate division of responsibilities and satisfactory internal controls will contribute to the greatest possible value creation over time, to the benefit of shareholders and other stakeholders. AMSC's corporate governance guidelines are presented in greater detail on page 45 of this annual report.

Good corporate governance, that is, proper board conduct and company management, are key to AMSC's efforts to build and maintain trust. AMSC is committed to maintaining an appropriate division of responsibilities between the Company's governing bodies, its Board of Directors, and management. AMSC has compared the Norwegian requirements and recommendations on corporate governance for listed companies with the Group's own corporate governance procedures and practice. The findings show that the Company is in compliance with respect to the requirements and substan

American Shipping Company annual report 2009

Performance 2009
Board of Directors' report

tially in conformance with those recommendations. The Company's board chairman is elected at the Company's annual shareholders' meeting and the shareholder-elected directors are elected for two year terms. At the Company's annual general meeting in April 2009, Dag Fasmer Wittusen and Mavis Hawkes were elected as new board members.

Following the April 2009 annual general meeting, the Board members of AMSC are as follows:

Chairman	Robert N Caruso
Board Member and
Vice Chairman	Annette Malm Justad
Board Member	John Rose
Board Member	Dag Fasmer Wittusen
Board Member	Mavis Hawkes

Further description of the Board Members is on page 48.

Outlook

The U.S. Jones Act market, which has been in existence since 1920, is expected to remain positive as more vessels reach their OPA 90 retirement dates. Due to a limited number of vessels under construction, apart from the remaining vessels under our ten product tankers and the two shuttle tankers, it is reasonable to assume charter rates will rise as the OPA 90 deadline approaches. The fixed charter agreements with OSG and its subsidiaries, assuming ten year charter terms under the Settlement Agreement, would secure AMSC's leasing backlog in excess of USD 830 million from bareboat charter revenues. Any profit sharing contribution will come in addition to the fixed bareboat charter revenues.

The extent of profit sharing contributions will depend on the time charter rates obtained by OSG as well as OSG's ability to operate the vessels in a cost efficient manner.

AMSC believes there will be an increasing need for more vessels within existing and new market segments. AMSC will continue to evaluate opportunities in the various market segments with the goal of growing the Group and creating long-term shareholder value.

Responsibility statement

Today, the Board of Directors and the General Manager reviewed and approved the Board of Directors' Report and the consolidated and parent company annual financial statements for American Shipping Company ASA as of and for the year ending 31 December 2009 (Annual Report 2009).

American Shipping Company ASA's consolidated financial statements have been prepared in accordance with IFRSs as adopted by the EU and additional disclosure requirements in the Norwegian Accounting Act. The separate financial statements for American Shipping Company ASA have been prepared in accordance with the Norwegian Accounting Act and Norwegian accounting standards as of 31 December 2009. The Board of Directors' Report for the group and the parent company is in accordance with the requirements in the Norwegian Accounting Act and Norwegian Accounting Standard no. 16 as of 31 December 2009.

To the best of our knowledge:

The consolidated and parent annual financial statements for 2009 have been prepared in accordance with the applicable accounting standards.

The consolidated and parent annual financial statements give a true and fair view of the assets, liabilities, financial position and profit (or loss) as a whole as of 31 December 2009 for the group and the parent company.

The Board of Directors' Report for the group and the parent company includes a true and fair review of:

the development and performance of the business and the position of the group and the parent company
the principal risks and uncertainties the group and the parent company face

Oslo, 18 February 2010
The Board of Directors
American Shipping Company ASA

Robert N. Caruso
Chairman

Annette Malm Justad
Vice Chairman

John Rose
Board Member/Interim General Manager

Mavis Hawkes
Board Member

Dag Fasmer Wittusen
Board Member

American Shipping Company annual report 2009

Performance 2009

Group accounts

American Shipping Company ASA Group

Consolidated Statement of Financial Position as of 31 December

Amounts in USD thousands	Note	2009	2008
ASSETS
Property, plant and equipment	6	703 898	520 828
Interest-bearing long-term receivables	7	7 341	6 301
Non-current cash held for specified uses	12	25 226	-
Other non-current assets	8	74 711	92 931
Total non-current assets		811 176	620 060
Assets held for sale	9	21 250	-
Trade and other receivables	10	1 001	22 124
Tax receivable		292	84
Cash held for specified uses	12	12 076	6 733
Cash and cash equivalents	12	20 481	65 072
Total current assets		55 100	94 013
Total assets		866 276	714 073

EQUITY AND LIABILITIES

Share capital and share premium	14	180 408	180 408
Retained earnings/(Accumulated deficit)		(101 641)	(99 394)
Total equity attributable to equity holders of the parent		78 767	81 014
Preferred shares in subsidiary	14	-	20 000
Total equity		78 767	101 014
Interest-bearing loans	16	673 936	-
Total non-current liabilities		673 936	-
Interest-bearing loans	16	31 803	504 360
Trade and other payables	19	2 712	6 187
Tax payable		82	87
Derivative financial liabilities	11	78 976	102 425
Total current liabilities		113 573	613 059
Total liabilities		787 509	613 059
Total equity and liabilities		866 276	714 073

American Shipping Company annual report 2009

Performance 2009
Group accounts

American Shipping Company ASA Group

Consolidated Income Statement

Amounts in USD thousands	Note	2009	2008
Operating revenues		54 363	33 341
Wages and other personnel expenses	2	(996)	(896)
Other operating expenses	3	(8 178)	(4 562)
Operating profit before depreciation		45 189	27 883
Depreciation	6	(27 932)	(17 482)
Operating profit		17 257	10 401
Gain on sale of shipbuilding contract	4	11 215	-
Financial income	4	22 241	5 432
Financial expenses	4	(52 266)	(90 321)
Loss before income tax		(1 553)	(74 488)
Income tax (expense)/benefit	5	247	(232)
Net loss for the year		(1 306)	(74 720)

American Shipping Company ASA Group

Consolidated Statement of Comprehensive Income

Amounts in USD thousands (except per share amounts)	Note	2009	2008
Net loss for the year		(1 306)	(74 720)
Other comprehensive income for the period, net of tax		-	-
Total comprehensive income for the year (1)		(1 306)	(74 720)
Attributable to:
Equity holders of the parent		(1 306)	(74 720)
Basic earnings/(loss) per share	13	(0.08)	(2.71)
Diluted earnings/(loss) per share (2)	13	(0.08)	(2.71)

1) Applicable to common stockholders of the parent company.
2) There was no potentially dilutive securities outstanding as of 31 December 2009 and 2008.

American Shipping Company annual report 2009

Performance 2009

Group accounts

American Shipping Company ASA Group

Consolidated Statement of Changes in Equity

Amounts in USD thousands	Share Capital	Share Premium	Retained earnings/(Accumulated deficit)	Equity of common shareholders of the Parent	Preferred Shares of subsidiary	Total equity
Balance at 31 December 2007	42 462	137 946	(24 674)	155 734	-	155 734
Issuance of preferred shares in subsidiary	-	-	-	-	20 000	20 000
Total comprehensive loss for the year	-	-	(74 720)	(74 720)	-	(74 720)
Balance at 31 December 2008	42 462	137 946	(99 394)	81 014	20 000	101 014
Dividends paid from subsidiary	-	-	(941)	(941)	-	(941)
Preferred stock redeemed by subsidiary	-	-	-	-	(20 000)	(20 000)
Total comprehensive loss for the year	-	-	(1 306)	(1 306)	-	(1 306)
Balance at 31 December 2009	42 462	137 946	(101 641)	78 767	-	78 767

American Shipping Company annual report 2009

Performance 2009
Group accounts

American Shipping Company ASA Group

Consolidated Cash Flow Statement

Amounts in USD thousands	Note	2009	2008
Net loss before tax		(1 553)	(74 488)
Unrealized foreign exchange gain/loss and other non-cash items		36 211	(21 867)
Unrealized (gain)/loss interest swaps	11	(21 626)	66 096
Net financial expense/(income)	4	34 942	21 243
Non-cash interest expense	4	10 869	14 743
Depreciation	6	27 932	17 482
(Increase)/decrease in:
Other current assets	10	(245)	1 377
Other long-term operating assets	7	(994)	(5 510)
Increase/(decrease) in:
Accrued liabilities and other payables	19	(21 692)	(27 147)
Taxes paid	5	(306)	(1 072)
Interest paid, net of capitalized interest	4	(24 581)	(10 807)
Interest received	4	396	4 417
Net cash flow from operating activities		39 353	(15 533)
Investments in ships	6, 8	(234 447)	(210 419)
Sale of assets		21 025	-
Note receivable	10	20 867	(20 000)
Net cash flow used in investing activities		(192 555)	(230 419)
Proceeds from interest bearing loans	16	180 000	160 000
Repayment of interest bearing loans	16	(20 278)	(9 741)
Non-current cash held for specified uses	12	(25 226)	-
Proceeds from/(redemption of) a subsidiary's issuance of preferred shares	14	(20 000)	20 000
Dividends paid	14	(941)	-
Net cash flow from financing activities		113 555	170 259
Net change in cash and cash equivalents		(39 647)	(75 693)
Effects of changes in exchange rates on cash	4	399	(4 367)
Cash and cash equivalents, including cash for specified uses as of 1 January		71 805	151 865
Cash and cash equivalents, including cash for specified uses as of 31 December	12	32 557	71 805

American Shipping Company annual report 2009

Performance 2009

Group accounts

American Shipping Company ASA Group

Notes to the consolidated accounts

Note 1: Accounting principles

CORPORATE INFORMATION

American Shipping Company ASA (the Company, the Group or AMSC) is incorporated and domiciled in Norway. The address of the main office is Fjordalleen 16, P.O. Box 1423 Vika, NO-0115 Oslo, Norway. American Shipping Company ASA is listed on the Oslo Stock Exchange. The principle activity of the business is to purchase and bareboat charter product tankers, shuttle tankers and other vessels to operators and end users in the U.S. Jones Act market.

STATEMENT OF COMPLIANCE

The consolidated financial statements of American Shipping Company and all its subsidiaries (AMSC Group, the Group) have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS).

These accounts have been approved for issue from the Board of Directors on 18 February 2010.

BASIS FOR PREPARATION

These consolidated financial statements have been prepared on a historical cost basis, except for derivative financial instruments that have been measured at fair value. The carrying values of recognized assets and liabilities that are hedged are adjusted to record changes in the fair values attributable to the risks that are being hedged.

The consolidated financial statements are presented in USD (thousands), except when indicated otherwise.

USE OF ESTIMATES

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts in the financial statements. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revision affects that period or in the period of revision and future periods if the revision affects both current and future periods.

Critical accounting estimates and assumptions include revenue recognition, accounting for fixed assets, impairment and accounting for financial instruments. The significant factors that affect these estimates and assumptions are detailed in the accompanying financial statements and footnotes.

GROUP ACCOUNTING AND CONSOLIDATION PRINCIPLES

The consolidated financial statements of AMSC Group include the financial statements of the parent company American Shipping Company ASA and its subsidiaries. Subsidiaries are those entities in which AMSC Group either owns, directly or indirectly, over fifty percent of the voting rights, or otherwise has the power to govern their operating and financial policies. Share options, convertible debt and other equity instruments are considered when assessing whether an entity is controlled.

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

Functional currency

Items included in the financial statements of each subsidiary in the Group are initially recorded in the functional currency, i.e. the currency that best reflects the economic substance of the underlying events and circumstances relevant to that subsidiary.

The consolidated financial statements are presented in United States dollars (USD), which is the functional and reporting currency of the parent company and subsidiaries.

Transactions and balances

Foreign currency transactions are translated into USD using the exchange rates prevailing at the dates of the transactions. Receivables and liabilities in foreign currencies are translated into USD at the exchange rates ruling on the balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Foreign exchange differences arising in respect of operating business items are included in operating profit in the appropriate income statement account, and those arising in respect of financial assets and liabilities are recorded net as a financial item.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment acquired by Group companies are stated at historical cost. Depreciation is calculated on a straight-line basis and adjusted for impairment charges, if any. The carrying value of the property, plant and equipment on the balance sheet represents the cost less accumulated depreciation and any impairment charges. Cost includes expenditures that are directly attributable to the acquisition of the asset. Interest costs on borrowings to finance the construction of property, plant and equipment are capitalized during the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are expensed.

Expected useful lives of long-lived assets are reviewed annually and, where they differ significantly from previous estimates, depreciation periods are changed accordingly.

Ordinary repairs and maintenance costs are charged to the income statement during the financial period in which they are incurred. The cost of improvements is included in the asset's carrying amount when it is probable that the Group will derive future economic benefits in excess of the originally assessed standard of performance of the existing asset. Improvements are depreciated over the useful lives of the related assets.

Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount. Assets to be disposed of are reported at the lower of the carrying amount and the fair value less selling costs.

FINANCIAL INVESTMENTS

All investments are initially recognized at cost, being the fair value of the consideration given and including acquisition charges associated with the investment.

Other long-term investments that are intended to be held-to-maturity are subsequently measured at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any discount or premium on acquisition, over the year to maturity. For investments carried at amortized cost, gains and losses are recognized in income when the investments are derecognized or impaired, as well as through the amortization process.

IMPAIRMENT OF LONG-LIVED ASSETS

Property, plant and equipment and other non-current assets are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable, mainly independent, cash flows. An impairment loss is the amount by which the carrying amount of the assets exceeds the recoverable amount. The recoverable amount is the higher of the asset's net selling price and its value in use. The value in use is determined by reference to discounted future net cash flows expected to be generated by the asset. Most critical in determining the value in use of vessels is determining the estimated profit share on existing contracts and estimating future revenues from new leases. These estimates are primarily influenced by expectations of future demand in the Jones Act market.

A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the recoverable amount, however not to an extent higher than the carrying amount that would have been determined had no impairment loss been recognized in prior years.

LEASES

Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payment made under operating leases net of any incentives received from the lessor is charged

American Shipping Company annual report 2009

Performance 2009
Group accounts

to the income statement on a straight-line basis over the period of the lease.

OTHER NON-CURRENT ASSETS

Other non-current assets include milestone payments made on future committed tankers and the balance of the deferred principal obligation (DPO) from a customer.

TRADE RECEIVABLES

Trade receivables are carried at their anticipated realizable value, which is the original invoice amount less an estimated valuation allowance for impairment of these receivables. A valuation allowance for impairment of trade receivables is made when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less.

Cash held for specified uses, in accordance with the Settlement Agreement, can be used to pay any remaining deposits and final purchase price payments for the ten product tankers and the shuttle tanker, debt service requirements, selling, general and administrative expenses (subject to a maximum of USD 1.0 million per quarter), tax expenses, and prepayments of the Fortis loan.

Certain prior year reclassifications were made to conform with current year presentation.

SHARE CAPITAL

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares options are shown in equity as a deduction, net of tax, from the proceeds. Preferred shares of a subsidiary are classified as equity. Where any Group company purchases the Company's equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs, is deducted from equity.

INTEREST-BEARING LIABILITIES

All loans and borrowings are initially recognized at cost, being the fair value of the consideration received net of issue costs associated with the borrowing.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the effective interest method; any difference between proceeds (net of transaction costs) and the redemption value is recognized on the income statement over the period of the interest-bearing liabilities. Amortized cost is calculated by taking into account any issue costs, and any discount or premium on settlement.

Gains and losses are recognized in net profit or loss when the liabilities are derecognized or impaired, as well as through the amortization process.

INCOME TAXES

Current income taxes

Income tax receivable and payable for the current period are measured at the amount expected to be recovered or paid to the taxation authorities. The tax rates and tax law as used to compute the amount are those that are enacted or substantively enacted at the balance sheet date.

Deferred income taxes

Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax assets are recognized for all deductible temporary differences, carryforward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax assets and unused tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Expected utilization of tax losses are not discounted when calculating the deferred tax asset.

Deferred income tax assets are recognized when it is probable that they will be realized. Determining probability requires the Group to estimate the sources of future taxable income from operations and reversing taxable temporary differences. Determining these amounts is subject to uncertainty and is based primarily on expected earnings from existing contracts and expected profit sharing participation.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Income tax relating to items recognized directly in equity is recognized in equity and not in the income statement.

PROVISIONS

A provision is recognized when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable (i.e. more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

The amount of the provision is the present value of the risk adjusted expenditures expected to be required to settle the obligation, determined using the estimated risk free interest rate as the discount rate. Where discounting is used, the carrying amount of provision increases in each period to reflect the unwinding of the discount by the passage of time. This increase is recognized as interest expense.

PENSIONS

The Group has a defined contribution pension plan that covers its employees whereby contributions are paid to qualifying pension plans. Once the contributions have been paid, there are no further payment obligations. Plan contributions are charged to the income statement in the period to which the contributions relate.

FINANCIAL RISK MANAGEMENT

The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest risk and price risk), credit risk, cash-flow interest-rate risk and foreign exchange risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance.

The Group uses derivative financial instruments to hedge certain risk exposures.

Risk-management is carried out under policies approved by the Board of Directors. The Board of Directors provides principles for overall financial risk management as well as policies covering specific areas such as foreign exchange risk, interest-rate risk, credit risk, and use of derivative financial instruments and non-derivative financial instruments.

Credit Risk

Due to the nature of the Group's operations, revenues and related receivables, including the DPO, are currently concentrated amongst two parties. The Group continually evaluates the credit risk associated with customers.

Interest Rate Risk

The Group is exposed to fluctuations in interest rates for its variable interest rate debt related to the bond financing. With regards to the Fortis takeout financing, the Group has entered into interest swap agreements to lock in the interest rate paid.

Foreign Exchange Risk

American Shipping Company is exposed to foreign currency risk related to its Norwegian Kroner (NOK) bond (NOK 909.9 million outstanding as of 31 December 2009) and certain cash accounts, however, the Group will enter into foreign exchange derivative instruments, from time to time, to mitigate that risk.

Counter-party Credit Risk

AMSC's take-out financing has certain cross-defaults to Aker Philadelphia Shipyard, Inc.'s (Aker Philadelphia Shipyard, Inc. is a wholly owned subsidiary of Aker Philadelphia Shipyard ASA; collectively "AKPS") construction financing. AMSC closely monitors this link to AKPS and its impact on operations through frequent updates with AKPS's management. If there is an event of default under AKPS's construction financing and the construction debt is accelerated, AMSC's take-out financing would also be in default, which would require AMSC to seek waivers from its lending syndicate. As a condition to any such waiver, a lender might, among other things, require additional collateral or guarantees, increase the interest rate, and/or impose fees. There is no guarantee the lending syndicate would grant any such waiver, in which case they could demand immediate repayment of their loans, foreclose on their collateral and/or exercise their other rights and remedies.

AKPS currently has no orders for vessels beyond the twelve ship order from AMSC, which will be completed early in 2011. With respect to the AKPS construction financing, the counterparty credit risk is currently regarded as minimal.

Capital Management Risk

AMSC's objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, while maintaining an optimal capital structure to minimize the cost of capital. To meet these capital structure objectives, AMSC will review annually with its Board any proposed dividends as well as any needs to raise additional equity for future business opportunities or to reduce debt.

American Shipping Company annual report 2009

Performance 2009

Group accounts

Funding/Investment Risk

The current global financial crisis has placed existing and future financing sources at risk. AMSC regularly monitors the health of its take-out financing lending syndicate. Additionally, AMSC monitors the financial health of the financial institutions which it uses for cash management services and in which it makes deposits and other investments. AMSC responds to changes in conditions affecting its financing sources and deposit relationships as situations warrant.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions.

With regards to making the debt service payments on the Fortis loan, the Group has established cash retention accounts whereby all charter hire payments are deposited and utilized for debt service prior to being available for general corporate purposes.

AMSC is subject to a covenant in its bond obligation that requires the Company to maintain a minimum level of USD 140.0 million of consolidated equity (see note 16). Consolidated equity for the Company is primarily impacted through the results of its operations and through the foreign currency translation impact of its Norwegian Kroner (NOK) denominated bond. If the NOK significantly strengthens (greater than 10% based on 31 December 2009 USD/NOK exchange rate) or if the results of operations are significantly negatively different from what the Company projects, the risk of failing the covenant will increase accordingly. The Company monitors the USD/NOK foreign exchange rate and its impact on the bond covenant daily. As of 31 December 2009, a foreign exchange rate of 5.17 NOK/USD would have caused a breach in the minimum consolidated equity covenant (the actual rate as of 31 December 2009 was 5.75 NOK/USD). The Company's equity under the covenant calculation was USD 157.8 million as of 31 December 2009. Thus, the Company currently views this risk as minimal.

As mentioned above, AKPS has no orders for vessels beyond the twelve ship order from AMSC. AKPS has entered into non-cancellable commitments with various third party suppliers for four additional vessels (AKPS Hulls 017-020). If AKPS does not build its Hull 017, then it is estimated that AKPS would incur expenses in excess of USD 15 million. If AKPS does not build the three remaining option vessels, then AKPS would incur significant additional expense. Due to the guarantees that AMSC has made on behalf of AKPS (see note 23), AMSC's liquidity risk could change and become a significant risk to the Company.

Accounting for derivative financial instruments and hedging activities

Derivative financial instruments are recognized initially and in subsequent periods on the balance sheet at fair value. AMSC currently has no derivative instruments that qualify for hedge accounting under IFRS.

Changes in the fair value of any derivative instruments that do not qualify for hedge accounting under IFRS are recognized immediately in the income statement.

In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments.

Estimates of the fair value of foreign currency contracts and interest rate swaps are obtained from a third party, with an adjustment for the Company's credit risk as described in note 11. The fair value of derivative long-term financial liabilities is disclosed in note 20 regarding financial instruments.

RELATED PARTY TRANSACTIONS

All transactions, agreements and business activities with related parties are, in the Group's opinion, conducted on an arm's length basis according to ordinary business terms and conditions.

REVENUE RECOGNITION

Revenue is recognized only if it is probable that future economic benefits will flow to American Shipping Company, and these benefits can be measured reliably. Revenues related to vessel bareboat charter agreements are recognized over the charter period. Time-charter agreements may contain a revenue sharing agreement with the charterer. Revenue related to profit sharing agreements is recognized when the amount becomes fixed and determinable. Revenue related to the deferred principal obligation (note 7) is discounted in cases where a payment period extends beyond 12 months.

SEGMENT INFORMATION

AMSC has only one operating segment. All operations and bareboat charter revenues are in the U.S.

DIVIDENDS

Dividends are recorded in the Group's financial statements in the period in which they are approved by the Group's shareholders.

BASIC AND DILUTED EARNINGS PER SHARE

The calculation of basic earnings per share is based on the profit attributable to ordinary shareholders adjusted for preferred share dividends using the weighted average number of shares outstanding during the year after deduction of the average number of treasury shares held over the period. The calculation of diluted earnings per share is consistent with the calculation of basic earnings per share while giving effect to all dilutive potential ordinary shares that were outstanding during the period. The Group currently has no potentially dilutive shares outstanding.

EVENTS AFTER THE BALANCE SHEET DATE

A distinction is made between events both favorable and unfavorable that provide evidence of conditions that existed at the balance sheet date (adjusting events) and those that are indicative of conditions that arose after the balance sheet date (non-adjusting events). Financial statements will only be adjusted to reflect adjusting events and not non-adjusting events (although there are disclosure requirements for such events).

RECENTLY ISSUED ACCOUNTING STANDARDS AND PRONOUNCEMENTS

Effective 1 January 2009, AMSC has changed its accounting policy for the following accounting standards:

Amendments to IAS 1, Presentation of Financial Statements: A Revised Presentation is applicable to the company effective 1 January 2009.

This requires the Company to present a new statement on comprehensive income, which is shown as a separate statement, following the income statement. The Group presents in the consolidated statement of changes in equity all owner changes in equity, whereas all non-owner changes in equity are presented in the consolidated statement of comprehensive income. Reclassification adjustments and income tax relating to each component of other comprehensive income will be disclosed on the face of the statement of comprehensive income. Currently there are no such components applicable to the Company.

The Group also adopted International Financial Reporting Standard 8, Operating Segments on 1 January 2009 which did not impact the consolidated financial statements as the Group has only one operating segment.

No other accounting standards effective in 2009 impacted the Group's consolidated financial statements. In addition, no standards effective in 2010 are expected to significantly impact the Group.

Note 2: Wages and other personnel expenses

Wages and other personnel expenses consist of:

Amounts in USD thousands	2009	2008
Wages	901	829
Social security contributions	38	29
Pension costs (see note 18)	9	5
Other expenses	48	33
Total expense	996	896
Average number of employees	4	3
Number of employees at year-end	3	4

American Shipping Company annual report 2009

Performance 2009
Group accounts

Note 3: Other operating expenses

Other operating expenses consist of:

Amounts in USD thousands	2009	2008
Rent and leasing expenses	108	79
Transfer of long lead items	3 520	-
Other operating expenses	4 550	4 483
Total other operating expenses	8 178	4 562

The transfer of long lead items relates to the transfer of assets to Aker Philadelphia Shipyard as part of a settlement with AKPS (see note 23). Other operating expenses primarily relate to selling, general and administrative expenses including legal and outside consulting costs and fees to auditors for the American Shipping Company ASA Group. Audit fees were as follows:

Amounts in USD thousands	2009	2008
Audit fee	123	194
Total	123	194

Note 4: Financial items and other gain

Amounts in USD thousands	2009	2008
Other gain
Gain on sale of shipbuilding contract	11 215	-
Financial income
Interest income	615	5 432
Change in mark to market value of interest rate swaps	21 626	-
Financial income	22 241	5 432
Financial expenses
Interest expense	(43 487)	(36 652)
Interest capitalized on vessels	7 930	10 053
Net foreign exchange gain/(loss)	(8 823)	4 915
Change in mark to market value of interest rate swaps	-	(66 097)
Other financial expenses	(7 886)	(2 540)
Financial expenses	(52 266)	(90 321)
NET FINANCIAL ITEMS AND OTHER GAIN	(18 810)	(84 889)

Interest income in 2009 includes income on bank deposits of USD 0.2 million, interest accreted on the DPO receivable from OSG (see note 7) of USD 0.2 million and accrued interest on a note receivable from Aker ASA (see note 10) of USD 0.2 million. Interest income in 2008 includes income on bank deposits of USD 4.7 million and accrued interest on a note receivable from Aker ASA of USD 0.7 million.

The Company has interest rate swaps, related to its take-out financing, with Fortis Capital Corp. (Fortis) Estimates of the fair value of the interest rate swaps are obtained from a third party, with an adjustment for the Company's credit risk as described in note 11.

Interest expense in 2009 includes interest paid to Fortis of USD 32.5 million, accrued interest relating to the NOK denominated bond of USD 10.9 million and accrued interest relating to the USD 20.0 million loan from Converto Capital Fund AS (formerly named Aker Capital Fund AS) of USD 0.1 million. Interest expense in 2008 includes interest paid to Fortis of USD 20.9 million and accrued interest relating to the NOK denominated bond of USD 15.8 million.

Capitalized interest relates to the prepayments made to AKPS (see note 8). Interest is capitalized at a rate equal to the interest rate on the NOK denominated bond, which is the Norwegian Inter Bank Offered Rate (NIBOR) plus 4.75% (6.80% as of 31 December 2009).

Net foreign exchange loss in 2009 includes a USD 27.2 million unrealized loss on the NOK denominated bond (see note 16), partially offset by a USD 0.4 million gain on the NOK cash balance and a USD 18.0 million gain on foreign exchange contracts. Net foreign exchange gain in 2008 includes a USD 35.3 million unrealized gain on the NOK denominated bond (see note 16), partially offset by a USD 4.4 million loss on the NOK cash balance, a USD 22.8 million loss on foreign exchange contracts and other foreign exchange loss of USD 3.2 million.

Other financial expenses in 2009 include USD 4.5 million for lender and guarantor fees associated with finalizing the settlement agreement (see note 23) and USD 3.4 million for amortization of lending fees. Included in other financial expenses in 2008 are amortization of lending fees and miscellaneous other financial costs of USD 2.5 million.

American Shipping Company annual report 2009

Performance 2009

Group accounts

Note 5: Tax

INCOME TAX EXPENSE

Recognized in the income statement

Amounts in USD thousands	2009	2008
Current tax expense:
Current year	(247)	232
Total current tax expense/(benefit)	(247)	232
Deferred tax expense:
Origination and reversal of temporary differences	-	-
Adjustment for discontinued operations	-	-
Total deferred tax expense	-	-
Total income tax expense/(benefit) in income statement	(247)	232

Reconciliation of effective tax rate

Amounts in USD thousands	2009	2008
Profit/(loss) before tax	(1 553)	(74 488)
	28.0%	28.0%
Expected tax benefit using nominal Norwegian tax rate of 28%	(435)	(20 857)
Effect of differences between nominal Norwegian tax rate and U.S. federal and state tax rate	1 748	(10 693)
Foreign exchange	3 384	(1 521)
Tax losses used in the current year for which no deferred income tax asset was previously recognised	(6 377)	-
Tax losses for which no deferred income tax asset was recognised and write-off of existing deferred tax assets	1 414	33 311
Tax losses used by member leaving the Group	-	(142)
Other differences	19	134
Total income tax expense/(benefit) in income statement	(247)	232

DEFERRED TAX ASSETS AND LIABILITIES

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority, which through 31 December 2009 for the Group were primarily the U.S., the Commonwealth of Pennsylvania and the City of Philadelphia.

The offset amounts for US items are as follows:

Amounts in USD thousands	2009	2008
Deferred tax assets	-	-
Deferred tax liabilities	-	-
Net deferred tax assets	-	-

Deferred assets have not been recognized in respect of the following items

The Group has net operating losses carryforwards as of 31 December 2009 of USD 123.8 million in the U.S. and USD 20.2 million in Norway. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit in the short term will be available against which the Group can utilize the benefits there from. In addition, no deferred tax assets have been established for unrealized net losses on derivative financial instruments of USD 79.0 million. On 6 June 2008, American Tanker, Inc. (ATI, formerly known as Aker American Shipping, Inc.) and Subsidiaries experienced a change of control in the U.S. as defined by Internal Revenue Code due to the sale of shares from Aker ASA to SEB Enskilda. Net operating losses carryfowards at that date are expected to be available for use under the tax laws.

The gross movement in the deferred income tax account for US tax jurisdictions is as follows:

Amounts in USD thousands	2009	2008
Beginning of the year	-	-
Deferred tax expense	-	-
Discontinued operations	-	-
End of the year	-	-

American Shipping Company annual report 2009

Performance 2009
Group accounts

The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the US tax jurisdiction, is as follows:

Deferred tax assets:

Amounts in USD thousands	Provisions of assets	Tax losses	Other	Total
Balance at 1 January 2008	-	-	270	270
(Credited)/charged to the income statement	-	-	(270)	(270)
Discontinued Operations	-	-	-	-
Balance at 31 December 2008	-	-	-	-
(Credited)/charged to the income statement	-	-	-	-
Discontinued Operations	-	-	-	-
Balance at 31 December 2009	-	-	-	-

Deferred tax liabilities:

Amounts in USD thousands	Accelerated tax depreciation	Projects	Other	Total
Balance at 1 January 2008	-	-	(270)	(270)
(Credited)/charged to the income statement	-	-	270	270
Discontinued Operations	-	-	-	-
Balance at 31 December 2008	-	-	-	-
(Credited)/charged to the income statement	-	-	-	-
Discontinued Operations	-	-	-	-
Balance at 31 December 2009	-	-	-	-

The Company is currently under audit by the Internal Revenue Service for the year ended 31 December 2007. The Company does not anticipate any adjustments resulting from the audit.

Note 6: Property, plant and equipment

Movements in property, plant and equipment for 2009 are shown below:

Amounts in USD thousands	Ships	Under construction	Total
Cost balance at 1 January 2009	536 764	8 411	545 175
Purchases	165 508	8 391	173 899
Reclassification from other long term assets	48 477	(6 307)	42 170
Disposals	-	(3 817)	(3 817)
Transfer to assets held for sale	-	(1 250)	(1 250)
Cost balance at 31 December 2009	750 749	5 428	756 177
Depreciation at 1 January 2009	24 347	-	24 347
Depreciation charge for the year	27 932	-	27 932
Depreciation at 31 December 2009	52 279	-	52 279
Book value at 31 December 2009	698 470	5 428	703 898

Movements in property, plant and equipment for 2008 are shown below:

Amounts in USD thousands	Ships	Under construction	Total
Cost balance at 1 January 2008	322 093	944	323 037
Purchases	165 000	10 667	175 667
Reclassification from other long term assets	49 671	(3 200)	46 471
Cost balance at 31 December 2008	536 764	8 411	545 175
Depreciation at 1 January 2008	6 865	-	6 865
Depreciation charge for the year	17 482	-	17 482
Depreciation at 31 December 2008	24 347	-	24 347
Book value at 31 December 2008	512 417	8 411	520 828

Depreciation period
Depreciation method

25 years
straight-line

American Shipping Company annual report 2009

Performance 2009

Group accounts

Secured property, plant and equipment

At 31 December 2009 vessels with a carrying amount of USD 698.5 million are subject to a registered debenture to secure bank loans (see note 16).

The Fortis credit facility is secured by, among other things, a first preferred mortgage on each of the first 10 product tankers, which is granted when such vessel is delivered, and a blanket lien on substantially all assets of the owners of those vessels. In addition, the Fortis credit facility is secured by collateral assignments of the earnings and bareboat charters for those vessels (and certain related guarantees of those bareboat charters and related supplemental indemnifications by OSG), and collateral assignments of the shipbuilding contracts and insurances for each of the first 10 product tankers, which are granted when such vessel is delivered.

As of 31 December 2009, AMSC is contractually obligated to purchase three tankers at USD 103.675 million each, plus a fixed escalation as defined in the agreement with AKPS.

Property, plant and equipment under construction

The total of USD 5.4 million asset under construction includes USD 5.2 million of capitalized interest on milestone payments for vessels under construction and USD 0.2 million for other ship related costs.

Disposals in 2009 include USD 3.3 million in capitalized interest and other capitalized costs related to the shuttle tanker shipbuilding contract, which was sold in connection with the Settlement Agreement. The remaining USD 0.5 million is capitalized interest related to the deposits for long lead items made to AKPS for the first two option vessels. The title to those deposits were transferred to Aker Philadelphia Shipyard in connection with the settlement with AKPS. See note 23 for further details.

Note 7: Interest-bearing long-term receivables

Financial interest-bearing long-term receivables consist of the following items:

Amounts in USD thousands	Interest rate	2009	Interest rate	2008
Restricted deposits		-	3.87%	2 582
Other interest-bearing long-term receivables	6.06%	7 341	6.06%	3 719
Total		7 341		6 301

The restricted deposits in 2008 relate to collateral deposited as security for foreign exchange swaps entered into, which bore interest at a floating rate based upon NIBOR. The swap contract matured in 2009 and the Company had not entered into a new swap contract as of 31 December 2009.

Other interest-bearing long-term receivables relate to a deferred principal obligation. Pursuant to the current charter and financing agreements, OSG America L.P. has the right to defer payment of a portion of the bareboat charter hire for the first five vessels during the initial seven year fixed bareboat charter periods. OSG America L.P. will pay a reduced bareboat charter rate and assume the deferred principal obligation (DPO). The DPO accrues on a daily basis to a maximum liability of USD 7.0 million per vessel subject to adjustments as defined in the agreements. The DPO during the initial seven year period is discounted. After the initial seven years, the DPO is repaid over 18 years including interest unless the bareboat charter is terminated earlier at which time the DPO becomes due immediately. Interest accreted to the receivable in 2009 was USD 219 thousand (USD 126 thousand in 2008).

Note 8: Other non-current assets

Other non-current assets consist of the following items:

Amounts in USD thousands	2009	2008
Deposits for ships	74 711	92 931
Total	74 711	92 931

Deposits for ships in 2009 include milestone payments for three vessels which the company has committed to purchase from AKPS. In 2008, deposits included milestone payments for seven vessels which the company had committed to purchase from AKPS, of which two vessels were delivered, one shipbuilding contract was sold to OSG in 2009, and one has been reclassified to assets held for sale (see note 9).

Also included in 2008 was USD 3.0 million for long lead items which the company had agreed to fund for the first two option vessels. As part of the Settlement Agreement (see note 23), the title to these deposits were transferred to Aker Philadelphia Shipyard as part of the settlement between AMSC and AKPS (see note 3).

Note 9: Assets held for sale

Amounts in USD thousands	2009	2008
Property, plant and equipment	1 250	-
Deposits for ships	20 000	-
Total	21 250	-

In connection with the Settlement Agreement with OSG (see note 23 for further details), the Company has agreed to sell its shipbuilding contract for the shuttle tanker which is expected to be delivered in the fourth quarter of 2010.

American Shipping Company annual report 2009

Performance 2009
Group accounts

Note 10: Trade and other receivables

Trade and other receivables consist of the following items:

Amounts in USD thousands	2009	2008
Advance payments to suppliers	392	521
Other short-term interest-free receivables	609	888
Other short-term interest-bearing receivables	-	20 715
Total	1 001	22 124

Advance payments to suppliers as of 31 December 2009 and 2008 include prepaid fees and deferred costs.

Other short-term interest-free receivables in 2009 are mainly from OSG and AKPS.

The interest-bearing receivable in 2008 was a note issued from a Company subsidiary to Aker ASA for USD 20.0 million from the proceeds of the sale of preferred stock (see note 14). The receivable bore interest at LIBOR plus 1.5 percent. Accrued interest through 31 December 2008 was USD 0.7 million. The note was called in Q1 2009 for USD 20.0 million plus accrued interest of USD 0.9 million.

Note 11: Derivative financial assets and liabilities

Derivative financial assets and liabilities comprise the following items:

Amounts in USD thousands	2009	2008
Fair value of interest rate swaps	78 976	100 601
Fair value of foreign currency forward contracts	-	1 824
Derivative financial liabilities	78 976	102 425

In connection with the Fortis loan, interest rate swap agreements were entered into in 2007 and as of 31 December 2009 and 2008 the market value was negative USD 79.0 million and negative USD 100.6 million, respectively. The fair value of the interest swaps is obtained from a third party. In accordance with IAS 39, the Company considered the impact its own credit risk would have on the valuation in the market. It therefore adjusted the risk-free discount rate to include a credit spread of 400 basis points at 31 December 2009 and 2008. The result of the credit spread differential had a positive impact of USD 5.1 million on the fair value of interest rate swaps at 31 December 2009 and USD 11.1 million in 2008.

The foreign currency forward contracts in 2008 were a combination of foreign currency swap contracts in order to hedge the profit and loss exposure to foreign exchange fluctuations and a forward contract for part of the NOK bond interest payment. Due to the bondholders' agreement in February 2009 to extend payment-in-kind interest through the end of the loan term, the Company did not enter into any new forward contracts for the NOK bond interest payments. Estimates of the fair value of these contracts were obtained from a third party. The impact of the Company's own credit risk on the foreign currency valuations was not significant in 2008. These contracts matured in 2009 and the Company did not enter into any new foreign currency contracts.

Note 12: Cash on deposit with banks

Cash on deposit with banks comprise the following items:

Amounts in USD thousands	2009	2008
Cash and bank deposits	20 481	65 072
Cash held for specified uses	12 076	6 733
Cash and cash equivalents	32 557	71 805
Non-current cash held for specified uses	25 226	-
Total cash on deposit with banks	57 783	71 805

Cash on deposits with banks is invested for varying periods of between one day and three months depending on the immediate cash requirements of AMSC, and earn interest at the respective short-term deposit rates.

Portions of the cash received in connection with the Settlement Agreement with OSG (see note 23), including funds received from the sale of the shuttle tanker shipbuilding contract and the funds received under the subordinated loan (see note 16), are held for specified uses in accordance with the Settlement Agreement. Cash held for specified uses can be used to pay any remaining deposits and final purchase price payments for the ten product tankers and the shuttle tanker, debt service requirements, selling, general and administrative expenses (subject to a maximum of USD 1.0 million per quarter), tax expenses, and prepayments of the Fortis loan (see note 16).

American Shipping Company annual report 2009

Performance 2009

Group accounts

Note 13: Earnings per common share

Basic and diluted

Basic and diluted earnings/(loss) per share are calculated by dividing the profit/(loss) attributable to equity holders of the Company by the weighted average number of ordinary shares.

Amounts in USD thousands (except share and per share data)	2009	2008
Profit/(loss) for the period	(1 306)	(74 720)
Dividends paid on preferred shares in subsidiary	(941)	-
Profit/(loss) attributable to equity holders of the Company for the period for determination of earnings per share	(2 247)	(74 720)
Weighted average number of ordinary shares in issue	27 600 000	27 600 000
Basic and diluted earnings/(loss) per share	(0.08)	(2.71)

There were no potentially dilutive securities outstanding as of 31 December 2009 and 2008.

Note 14: Paid in capital

The current authorized and issued share capital of AMSC is 27 600 000 ordinary shares, each with a par value of NOK 10 (USD 1.54 at an exchange rate of NOK/USD 6.50), fully paid. No common shares were issued in 2009 or 2008.

Amounts in USD thousands	Common shares of equity holders of the parent		Total paid in capital attributable to holders of the parent	Preferred shares in a subsidiary	Total paid in equity
	Share Capital	Share premium
1 January 2008	42 462	137 946	180 408		180 408
Issuance of preferred shares by subsidiary	-	-	-	20 000	20 000
31 December 2008	42 462	137 946	180 408	20 000	200 408
Redemption of preferred shares by subsidiary	-	-	-	(20 000)	(20 000)
31 December 2009	42 462	137 946	180 408	-	180 408

There were 3,500 preferred shares authorized in 2008 by a subsidiary of AMSC, of which 500 were issued. The 500 issued preferred shares were non-dilutive, redeemable preferred shares with a par value of USD 40,000 per share that were issued to Aker ASA. The preferred stock was redeemable only at the option of AMSC and holders had no voting rights. Dividends on the preferred shares are declared only at the Company's discretion equal to 5% annually and are payable in arrears. In the first quarter of 2009, the subsidiary declared and paid a dividend of USD 0.9 million on the preferred stock (USD 1,882 per share) and then redeemed all of the outstanding preferred shares.

Note 15: Group entities

The largest subsidiaries included in the American Shipping Company ASA's Group account were as follows. Companies owned directly by American Shipping Company ASA are highlighted.

	AMSC's common holding %	AMSC's voting share %	Principal place of business	Country
American Tanker Holding Company, Inc. (ATHC) (1)	100%	100%	Philadelphia, PA	USA
American Tanker, Inc. (ATI)	100%	100%	Philadelphia, PA	USA
American Shipping Corporation (ASC)	100%	100%	Philadelphia, PA	USA
American Tanker II, Inc. (ATI II)	100%	100%	Philadelphia, PA	USA
American Shipping Corporation II (ASC II)	100%	100%	Philadelphia, PA	USA
American Tanker III, Inc. (ATI III) (2)	100%	100%	Wilmington, DE	USA
American Shuttle Tanker, LLC (AST)	100%	100%	Philadelphia, PA	USA

1) ATHC was formed in 2009 and is now the holder of shares of ATI and ATI II, previously owned directly by AMSC.
2) This entity issued non-dilutive, non-voting shares of redeemable preferred stock in 2008 which were redeemed in 2009 (see note 14).

Restrictions on dividend payments

Subject to certain exceptions, the Fortis credit agreement restricts the payment of dividends by American Shipping Company ASA ("AMSC") and American Shipping Corporation ("ASC"). Specifically, AMSC may pay dividends only if it has a Fixed Charge Coverage Ratio of at least 1.1:1.0 for the most recent 12-month period and satisfies certain other requirements. In that case, it may pay a dividend of up to 50 percent of Net Cash Earnings for the most recent 12-month period provided that it also either (i) makes an equal prepayment on the Fortis loan or (ii) deposits an equal amount in an account pledged to

American Shipping Company annual report 2009

Performance 2009
Group accounts

the lenders as additional collateral for the Fortis loan. ASC may pay dividends only if it has a Fixed Charge Coverage Ratio of at least 1.05:1.0 for the most recent 12-month period and satisfies certain other requirements. Dividends may be paid by the leasing companies to ASC and by American Tanker, Inc. ("ATI") to AMSC.

Subject to certain exceptions, the Fortis Credit Agreement prohibits ATI and its subsidiaries from lending money, or making investments in other entities, including their affiliates. ATI may, however, make capital contributions to ASC, and ASC may make capital contributions to the leasing companies. These restrictions do not apply to AMSC.

Subject to certain exceptions, the Fortis credit agreement prohibits ATI and its subsidiaries from incurring additional indebtedness other than intercompany loans from AMSC that are not due prior to the maturity date of the Fortis loan and are fully subordinated to the Fortis loan. The Fortis credit agreement prohibits ATI and its subsidiaries from making any prepayment on any indebtedness (other than the Fortis loan), including any prepayment on subordinated indebtedness owing to AMSC. These restrictions do not apply to AMSC.

Note 16: Interest-bearing loans and liabilities

This note provides information about the contractual terms of AMSC's interest-bearing loans and borrowings. For more information about the Group's exposure to interest rate and foreign currency risk, see note 20.

Amounts in USD thousands	2009	2008
Non-current liabilities
Secured loans	496 296	-
Unsecured bond issues	157 640	-
Subordinated loan from Converto Capital Fund AS	20 000	-
Total long term interest bearing loans	673 936	-
Current liabilities
Current portion of secured loans	31 803	385 200
Unsecured bond issues	-	119 160
Total interest-bearing short term debt	31 803	504 360
Secured Loans as of 31 December	Maturities	2009
---	---	---
Fortis Capital Corp. gross borrowings	2014-2016	546 619
Less unamortized loan fees		(18 520)
Sum Secured Loans		528 099

American Shipping Company has secured long-term take-out financing of USD 770 million for ten product tankers with Fortis. The facility is structured so that upon delivery of each vessel, AMSC will draw down approximately USD 80 million with partial repayment to Fortis over the initial fixed bareboat charter period.

In connection with the Fortis facility, AMSC has entered into interest rate swap agreements which, in effect, locks in the interest rate AMSC pays to Fortis. The fixed interest rates vary between 6.1 percent and 6.2 percent per annum.

Unsecured bond issue as of 31 December	Maturity	2009	2008
Bond issue	2012	114 170	114 170
Interest added to bonds outstanding		36 051	24 946
Cumulative foreign currency impact		8 124	(19 052)
Less unamortized loan fees		(705)	(904)
Sum Unsecured bond issue		157 640	119 160

On 16 February 2007 AMSC issued a NOK 700 million bond. The interest rate on the bond is NIBOR plus a margin of 4.75 percent. AMSC has the option to make any of the interest payments for the loan term as payment-in-kind (PIK) where the interest is added to the principal (as approved by the bondholders in the February 2009 bondholders' meeting discussed below). AMSC also has the option to call the bond, or parts of the bond, at certain dates. The first call date was August 2009 at which AMSC could redeem the bond at a call price of 104.75 percent of par. The Company did not call any parts of the bond in August 2009. The Company has elected PIK interest for all of its interest periods to date. The bond along with any PIK interest is due in full in February 2012. As of 31 December 2009, the bond loan balance including PIK interest is NOK 909.9 million (NOK 839.0 million as of 31 December 2008).

One of the original covenants on the Company's NOK denominated bond required that consolidated equity be maintained at a level not less than USD 140 million at a quarterly measurement date.

On 25 February 2009, a bondholders meeting was convened whereupon the Company's bondholders agreed to modify the covenant to exclude unrealized gains and losses on the interest rate swaps from the minimum consolidated equity calculation for the duration of the bond term. However, because as of 31 December 2008, equity was less than the required minimum amount, all of the Company's debt was classified as current on its balance sheet due to IFRS requirements, as well as cross-default provisions which impact the Company's other debt facility. As of 31 December 2009, consolidated shareholders' equity for determining compliance with debt covenants was approximately USD 158 million. See note 20 for an analysis of how foreign exchange fluctuations could impact consolidated equity.

Due to the approved modification in the minimum consolidated equity covenant subsequent to 31 December 2008, the Company again classified the majority of its debt as long-term beginning with its 31 March 2009 interim reporting.

American Shipping Company annual report 2009

Performance 2009

Group accounts

In addition, the bondholders voted to approve the Company's request to extend the PIK interest option through the end of the loan term.

In 2007, the Company had entered into a NOK 90 million foreign currency forward contract to hedge part of the NOK interest payment associated with its NOK denominated bond. The fair value on this contract was negative USD 2.6 million at 31 December 2008. This forward contract matured on 1 September 2009 and the Company took a charge of USD 0.5 million to settle the contract. Due to the bondholders' agreement in February 2009 to extend PIK interest, the Company did not enter into any new foreign currency forward contracts to hedge interest payments on the NOK bond, thus, the Company did not have any foreign currency contracts as of 31 December 2009.

The Company had also entered into a NOK 600 million foreign currency swap to hedge the translation of its NOK denominated bond. As of 31 December 2008, the fair value of those contracts was positive USD 803 thousand. The swap contract matured in 2009 and the Company had not entered into a new swap contract as of 31 December 2009.

Subordinated loan from Converto Capital Fund AS

In connection with the Settlement Agreement with OSG (see note 23), Converto Capital Fund AS has issued a USD 20.0 million loan to the Company. The loan is subordinated to the Fortis Credit Agreement, as well as any potential obligations and liabilities due to OSG and any potential liability associated with AKPS's construction financing which contains a put option to AMSC. The loan bears interest at the higher of 9.5% or LIBOR plus 5.75% (9.5% at 31 December 2009). Interest is payment in kind until certain conditions are met. It is expected that cash interest will not be paid in the next four years. The loan matures on 11 December 2017.

Note 17: Operating leases

Non-cancellable operating lease rentals are payable as follows:

Amounts in USD thousands	2009	2008
Less than one year	61	74
Between one and five years	129	263
More than five years	-	-
Total	190	337

In 2007 AMSC signed a new lease for office space in Philadelphia, Pennsylvania through 2012.

The Company has non-cancellable bareboat charter lease agreements with its customers, OSG Shipholding Group and OSG America LP, for periods of up to 10 years. The non-cancellable bareboat charter revenue backlog totals approximately USD 448.1 million as of 31 December 2009.

Note 18: Pensions

Pension expense recognised in the income statement:

Amounts in USD thousands	2009	2008
Contribution plans (employer's contribution)	9	5
Total net pension expense	9	5

The Group has a defined contribution plan for its employees which provides for a contribution based upon a fixed matching amount plus discretionary percentage of salaries. This expense is included in wages and other personnel expenses in the income statement.

Note 19: Trade and other payables

Trade and other payables comprise the following items:

Amounts in USD thousands	2009	2008
Trade accounts payable	24	644
Accrual of financial costs	1 033	1 161
Other short-term interest free liabilities	1 655	4 382
Total	2 712	6 187

Other short-term interest free liabilities at 31 December 2009 include deferred revenue of USD 0.6 million and guarantees and other accrued costs of USD 1.1 million. Other short-term interest free liabilities at 31 December 2008 include deferred revenue of USD 3.2 million and guarantees and other accrued costs of USD 1.2 million.

American Shipping Company annual report 2009

Performance 2009
Group accounts

Note 20: Financial instruments

Exposure to credit, interest rate and currency risk arises in the normal course of the Group's business. Derivative financial instruments are used from time to time to hedge exposure to fluctuations in foreign exchange rates and interest rates for business purposes.

Credit risk

The carrying amount of financial assets represents the maximum credit exposure.

At 31 December the maximum exposure to credit risk is as follows:

Amounts in USD thousands	2009	2008
Deposits	74 711	92 931
Loans and receivables	8 342	28 425
Cash and cash equivalents	20 481	71 805
Cash held for specified uses (current and non-current)	37 302	-
Total	140 836	191 752

AMSC regularly monitors the financial health of the financial institutions which it uses for cash management services and in which it makes deposits and other investments. AMSC responds to changes in conditions affecting its deposit relationships as situations warrant.

Receivables are to be collected from the following types of counterparties:

Amounts in USD thousands	2009	2008
Type of counterparty:
Security deposits receivable	-	2 582
Interest bearing short term receivable	-	20 715
End-user customer (1)	7 700	3 719
Other receivables	642	1 409
Total	8 342	28 425

1) Due to the nature of the Group's operations, revenues and related receivables, including the DPO, are currently concentrated amongst two parties.

Liquidity risk

The following are the contractual maturities of financial liabilities including interest payments:

Amounts in USD thousands	31 December 2009
	Book value	Contractual cash flow	6 mths and less	6-12 mths	1-2 years	2-5 years	More than 5 years
Non-derivative financial liabilities
Unsecured bond issues (gross)	158 345	(185 105)	-	-	-	(185 105)	-
Long-term interest bearing external liabilities (gross)	566 619	(728 305)	(32 530)	(33 736)	(67 431)	(440 787)	(153 821)
Derivative financial liabilities
Interest rate swaps	78 976	(76 951)	(15 463)	(15 582)	(21 579)	(23 766)	(561)
Total as of 31 December 2009	803 940	(990 361)	(47 993)	(49 318)	(89 010)	(649 658)	(154 382)
Amounts in USD thousands	31 December 2008
---	---	---	---	---	---	---	---
	Book value	Contractual cash flow	6 mths and less	6-12 mths	1-2 years	2-5 years	More than 5 years
Non-derivative financial liabilities
Unsecured bond issues (gross)	120 063	(162 065)	-	(6 672)	(13 344)	(142 049)	-
Current portion of long-term interest bearing external liabilities (gross)	405 926	(527 993)	(18 617)	(21 407)	(46 107)	(143 954)	(297 908)
Derivative financial liabilities
Interest rate swaps	100 601	(118 671)	(7 132)	(8 709)	(20 564)	(63 776)	(18 490)
Forward exchange contracts	1 824	(1 824)	802	(2 626)
Total as of 31 December 2008	628 414	(810 553)	(24 947)	(39 414)	(80 015)	(349 779)	(316 398)

The cash flows in 2008 associated with non-derivative financial liabilities reflect the confirmed bondholder actions discussed in note 16 and therefore are presented according to the original contractual maturities.

Currency risk

The Group incurs foreign currency risk on purchases and borrowings that are denominated in a currency other than USD. The currency giving rise to this risk is primarily NOK.

Changes in the fair value of forward exchange contracts that economically hedge monetary assets and liabilities in foreign currencies and for which no hedge accounting is applied are recognized in the income statement. Both the changes in fair value of the forward contracts and the foreign exchange

American Shipping Company annual report 2009

Performance 2009

Group accounts

gains and losses relating to the monetary items are recognized as part of “net financing costs” (see note 4). The Company did not have any exchange contracts at 31 December 2009. The fair value of exchange contracts used as economic hedges of monetary assets and liabilities in foreign currencies at 31 December 2008 was negative USD 1.8 million recognized in derivative liabilities.

As of 31 December 2008 the American Shipping Company ASA Group's portfolio of other foreign exchange transaction exposures represented the following currency and maturities. Amounts indicated represent the underlying notional amounts.

Amounts in USD thousands	Maturing in 2009	2010	2011	Later years	Total
Buy NOK	100 669	-	-	-	100 669
Buy total	100 669	-	-	-	100 669

Exposure to currency risk

The company's exposure to currency risk at 31 December 2009 and 2008 primarily related to amounts denominated in NOK, as follows:

Amounts in USD thousands	2009	2008
Gross balance sheet exposure
Trade payables (-)	(7)	-
Bond	(157 640)	(119 160)
Cash	392	303
Gross balance sheet exposure	(157 255)	(118 857)
Estimated forecast expenses (-)	(510)	(704)
Gross forecasted exposure	(510)	(704)
Forward exchange contracts	-	100 669
Net exposure	(157 765)	(18 892)

In addition to the above, at 31 December 2009 we expect to incur NOK-denominated PIK interest (non-cash) of approximately USD 11.2 million in 2010.

Sensitivity analysis

In managing interest rate and currency risks the Group aims to reduce the impact of short-term fluctuations on the Group's earnings. Over the longer term, however, permanent changes in foreign exchange and interest rates would have an impact on consolidated earnings.

It is estimated that a general strengthening of ten percent in the value of the USD against the NOK would have increased the Group's profit before tax by approximately USD 4.7 million for the year ended 31 December 2009 and decreased the Group's profit before tax by approximately USD 4.4 million for the year ended 31 December 2008. This analysis assumes that all other variables remain constant.

Exposure to interest rate risk

Sensitivity analysis

An increase of 100 basis points in interest rates in the reporting year would have increased /(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

Amounts in USD thousands	2009	2008
Increase/(decrease)
Bank deposits	493	1 223
Other financial assets	53	157
Financial liabilities	(1 431)	(1 440)
Interest swap	30 780	36 200
P&L sensitivity (net)	29 895	36 140

For 2009 and 2008, estimates of the interest swap valuation following the change in interest rates are obtained from a third party, with an adjustment for the Company's credit risk as described in note 11.

Fair values

The fair values of financial instruments together with the carrying amounts shown in the balance sheet as of 31 December are as follows:

American Shipping Company annual report 2009

Performance 2009
Group accounts

Amounts in USD thousands	Carrying amount 2009	Fair value 2009	Carrying amount 2008	Fair value 2008
Interest-bearing loans to external companies, maturity greater than 3 years	7 341	8 904	3 719	4 625
Interest-bearing loans to external companies, maturity less than 1 year	-	-	20 715	20 715
Interest swap used for hedging:
Liabilities	(78 976)	(78 976)	(100 601)	(100 601)
Interest-bearing long term receivables	-	-	2 582	2 582
Cash on deposit with banks	57 783	57 783	71 805	71 805
Forward exchange contracts used for hedging:
Liabilities	-	-	(1 824)	(1 824)
Unsecured bond issue (gross)	(158 345)	(102 925)	(120 063)	(84 044)
Secured loans (gross)	(546 619)	(499 169)	(405 926)	(368 890)
Subordinated loans (gross)	(20 000)	(20 000)	-	-

Estimates of the fair value for foreign currency contracts are obtained from a third party.

The fair value of the interest-bearing loans to external companies is calculated based on the present value of the gross principal balance, discounted at a market rate of 2 percent in both 2009 and 2008.

The fair value of the unsecured bond issue was obtained from a third party.

The fair value of fixed interest long-term debt is calculated based on the present value of future principle and interest cash flows, discounted at the market rate of 2.25 percent for 2009 and 3.22 percent for 2008.

Fair value hierarchy

IFRS requires companies to disclose certain information about how fair value is determined in a "fair value hierarchy" for financial instruments recorded at fair value, which for AMSC are derivative financial instruments. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 includes assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly.

The only financial instruments that the Company accounts for at fair value are the interest rate swaps as of 31 December 2009, which are classified in the Level 2 category described above. As of 31 December 2008, the Company accounted for interest rate swaps and foreign currency contracts at fair value, which are both classified in the Level 2 category described above.

Note 21: Shares owned or controlled by the President and Chief Executive Officer, Board of Directors and senior employees of the American Shipping Company Group

Shares in American Shipping Company ASA of 31 December 2009

Name	Position	Company	No. of shares
Dag Fasmer Wittusen	Board Member	AMSC	10 000

Robert K. Kurz, President and CEO, resigned from the Company on 31 December 2009. At the time of his resignation, Mr. Kurz owned 4 000 shares in the Company.

There is no share option agreement between American Shipping Company ASA and senior management or Directors.

Remuneration to the Board of Directors through 31 December 2009

Name	Position	Company	Remuneration
Robert N Caruso	Chairman	AMSC	40 827
Gary Mandel	Board Member	AMSC	35 377
John Rose	Board Member	AMSC	22 495
Annette Malm Justad	Board Member	AMSC	37 528
Hege Yli Melhus	Board Member	AMSC	17 755
Dag Fasmer Wittusen	Board Member	AMSC	-
Mavis Hawkes	Board Member	AMSC	-
Sum Directors' fee			153 982

The Chairman and the Board of Directors have not received benefits other than Directors' fees.

Following the sale by Aker ASA of its majority ownership position in AMSC in June 2008, Gary Mandel stepped down as Chairman of the Board of Directors, but continued to serve as a member of the board through the first quarter of 2009. Also at that time, Hege Melhus also resigned from her position as a member of the Board of Directors. At the Annual General Meeting in 2009, Dag Fasmer Wittusen and Mavis Hawkes were elected as members of the Board of Directors.

American Shipping Company annual report 2009

Performance 2009

Group accounts

Remuneration to the nomination committee

AMSC's nomination committee members withdrew their membership on 25 June 2008 and no new nomination committee has been elected.

Guidelines for remuneration to the President and CEO and members of the executive team

The basis of the remuneration of the President and CEO has been developed in order to create a performance-based system which is founded on the Company's values. This system of reward is designed to contribute to the achievement of good financial results and increase in shareholder value.

Effective 31 December 2009, Robert K. Kurz resigned from his position as President and CEO, and is no longer employed by the Company. Coinciding with Mr. Kurz's resignation, board member John Rose assumed the position of General Manager on an interim basis. On 18 January 2010, the Board of Directors announced the appointment of Gregory J. Matecki as its new President and CEO. Mr. Matecki is the Company's Chief Financial Officer and will continue to hold that position. It is expected that Mr. Matecki will assume the role of General Manager pending regulatory approval.

The CEO receives a base salary. In addition, a variable pay is awarded. This variable pay is based on the achievement of financial and personal performance targets in accordance with the Company's values.

The variable pay program represents a potential for an additional variable pay of between 25 and 150 percent of base salary depending on the achievement of defined performance targets.

The President and CEO participates in the standard pension and insurance schemes applicable to all employees. The Company practices standard employment contracts and standard terms and conditions regarding notice period and severance pay for the President and CEO.

The Company does not offer share option programs to executive managers.

Remuneration to senior management during 2009

		Base salary	Bonus	Other Benefits	Pension Contribution	Total (USD)	Severance pay
Robert K. Kurz	Jan - Dec	370 800	186 136	24 364	3 263	584 563	12 months
Gregory J. Matecki	Jan - Dec	231 750	24 881	13 813	5 382	275 826	12 months

Remuneration to senior management during 2008

		Base salary	Bonus	Other Benefits	Pension Contribution	Total (USD)	Severance pay
Robert K. Kurz	Jan - Dec	358 615	10 000	35 565	2 355	406 535	12 months
Gregory J. Matecki	Jun - Dec	125 481	-	7 525	2 197	135 203	6 months

Fredrik Nygaard, who served as the interim Finance Director in 2008, did not receive any compensation from the Company in 2008. His services were paid through a management services agreement with Aker ASA (see note 22).

Note 22: Transactions, guarantees and agreements with related parties

The ultimate parent company of American Shipping Company ASA prior to 6 June 2008 was Aker ASA. As of 6 June 2008, Aker ASA sold its majority ownership in AMSC. Except as described elsewhere, the Company believes that related party transactions are made on terms equivalent to those that prevail in arm's length transactions. All payables are paid within the normal course of business.

Transactions

The Group has service agreements with Aker ASA, AKPS and Resource Group International which provide certain specified accounting, financial and administrative services. The agreement with AKPS also included shared services of legal counsel for 2008 and part of the year 2009. Upon Aker ASA's sale of its majority ownership in the Company in 2008, Aker ASA and its subsidiaries are no longer related parties. The cost of these services was not material, however they are important to the Company's operations.

The Group entered into certain foreign exchange hedging instruments with SEB Merchant Banking on an arm's length basis. At 31 December 2009, there were no outstanding agreements with SEB Merchant Banking. SEB Enskilda ASA owns 33.3 percent of the outstanding shares of AMSC.

Note 23: Guarantees and other material transactions

The Company has made the following guarantees:

Description	Beneficiary	Amount (USD thousands)	Guarantee party
Construction loan facility	Caterpillar Financial Services Corp.	150 000 (1)	Aker Philadelphia Shipyard, Inc.
Capital expenditure facility	PIDC Regional Center L.P. XV	20 000 (2)	Aker Philadelphia Shipyard, Inc.
Counter guarantee	Aker Maritime Finance AS	20 000 (3)	Aker Philadelphia Shipyard, Inc.

1) The construction loan facility is provided by Caterpillar Financial Services Corp. (CFSC) to AKPS for the construction of the remaining tankers in the twelve ship series. In connection with this facility, AMSC and CFSC entered into a put/call agreement. In the event that an event of default occurs and is continuing under the construction loan facility, CFSC may "put" the entire facility to AMSC, whereupon AMSC would be required to purchase 100% of the loans from CFSC at par plus accrued interest and unpaid expenses. The principal balance is approximately USD 48 million as of 31 December 2009.

2) The capital expenditure facility represents a loan from the Pennsylvania Industrial Development Corporation Regional Center, L.P. XV (Welcome Fund) to AKPS that is secured by a second mortgage against the property, plant and equipment of AKPS. This loan has a current outstanding balance of USD 19.8 million at 31 December 2009, interest is paid semi-annually and the principal is due March 2012. In connection with this facility, AMSC has agreed to guarantee the entire loan to the lender.

3) The counter guarantee relates to an agreement by AKPS to maintain minimum employment levels at the shipyard until 31 December 2014. AKPS will be required to pay liquidated damages

American Shipping Company annual report 2009

Performance 2009
Group accounts

in the event that the average number of full-time employees during a given year falls below the required minimum, subject to an aggregate cap of USD 20.0 million. This agreement is part of a Master Agreement between AKPS and the governmental parties which provided funding to the shipyard for the renovation and modernization of its facility and training of its workforce, and it is guaranteed by Aker Maritime Finance AS (as successor by merger to the former Kvaemer ASA). The counter guarantee was issued by AMSC to Aker Maritime Finance AS in connection with the organization of the AMSC Group in 2005. As part of the sale of AKPS in December 2007, AKPS issued a USD 20.0 million counter guarantee to AMSC and Aker Maritime Finance AS related to the minimum employment levels.

Other material transactions:

Shipbuilding contracts with Aker Philadelphia Shipyard, Inc.

AMSC had entered into shipbuilding contracts for ten product tankers in 2005. In 2007, two additional product tankers were ordered. These two additional tankers will be converted to shuttle tankers. At the end of 2007, AMSC split from the shipbuilding operation and modified the contracts for the remaining nine tankers on order, of which four tankers have been delivered and one shipbuilding contract was sold to OSG. The purchase price is USD 103.675 million (including construction financing). This price is subject to fixed escalation due to increases in material cost. As such, the total contract value for all nine tankers is approximately USD 933.1 million before any escalation. In addition, AMSC has option agreements with AKPS to build an additional four tankers.

Deposits made to AKPS for vessels under construction total USD 74.7 million as of 31 December 2009 for tankers eight through ten and USD 92.9 million as of 31 December 2008 for tankers six through twelve. An additional USD 20.0 million of deposits to AKPS are classified as held for sale (see note 9) in 2009.

Other outstanding balances related to AKPS were not material.

The Company and AKPS are jointly and severally liable to Overseas Shipholding Group for breaches by them under the framework agreement and related transaction documents governing the construction and leasing of the initial ten Jones Act tankers. The Company and AKPS have entered into a cross-indemnity agreement to allocate these liabilities among themselves based on relative fault.

Settlement Agreement with Overseas Shipholding Group, Inc. and OSG America, L.P.

In the fourth quarter of 2009, the Company announced that it had entered into a settlement agreement ("Settlement Agreement") with Overseas Shipholding Group, Inc. and OSG America L.P. (collectively "OSG") that settled all of the outstanding commercial disputes between AMSC and OSG. Aker ASA, Converto Capital Fund AS and AKPS are also parties to the Settlement Agreement. The Settlement Agreement will enable the Company to complete the twelve vessel build series with AKPS. The Settlement Agreement has received all necessary third party approvals, including approval of the Company's senior lenders and the U.S. Coast Guard. The Settlement Agreement provides for the dismissal with prejudice of all claims in the arbitration with OSG.

As part of the Settlement Agreement, the fixed terms of the bareboat charters of the ten product tankers (seven of which have been delivered with the remaining three to be delivered before 30 September 2011) will be extended to a common expiration date that is ten years from the settlement date upon satisfaction of certain conditions including the timely delivery of the remaining vessels in the twelve ship order and the satisfactory refinancing or extension of AMSC's vessel debt and bond obligations. Various other agreements with OSG have been modified including the elimination of exclusivity, the sale to OSG of the two shuttle tanker shipbuilding contracts and changes to the profit sharing agreement.

The shipbuilding contracts were assigned on the settlement date and the second shuttle tanker is expected to be delivered in the fourth quarter of 2010. The sale of the two shuttle tanker shipbuilding contracts for USD 35.0 million each (reflecting a return of capital paid per vessel of approximately USD 20.0 million each) resolves AMSC's inability to obtain permanent financing under the current challenging credit markets and allows AMSC to continue with the full twelve ship order. The proceeds from the sale also provide AMSC with needed liquidity to assist the Company in meeting its debt service obligations to its senior lenders. The changes to the profit sharing agreement include overall simplification of the calculations, a change to increase AMSC's sharing percentage to fifty percent under all circumstances, and a provision allowing OSG to retain the first USD 18.2 million of profit sharing otherwise payable to AMSC (such retained profit sharing to accrue interest until paid).

In connection with the Settlement Agreement, several of AMSC's agreements with AKPS have been modified including the elimination of exclusivity, reduction of purchase prices on remaining vessels to be delivered, and cancellation of nine option agreements for tankers beyond AKPS's hull 020. AMSC maintains four options with AKPS for product tankers.

In addition, as part of the Settlement Agreement, Converto Capital Fund AS has agreed to make an unsecured, subordinated loan of USD 20.0 million to AMSC, which will provide additional liquidity to the Company. Interest under this loan is payment in kind interest. Loan repayment restrictions apply until specific conditions are met including the timely delivery of the remaining vessels in the twelve ship order and the satisfactory refinancing or extension of AMSC's vessel debt and bond obligations. The loan's maturity date is three years from the date that those conditions are satisfied.

As a result of finalizing the Settlement agreement, the Company sold its shipbuilding contract for the first shuttle tanker in the fourth quarter of 2009 for USD 35.0 million. The Company's cost basis in the shuttle tanker was USD 23.8 million and recorded a gain on the sale of USD 11.2 million, shown as a separate line item below operating income (see note 4). In addition, the Company transferred title of the long lead items purchased in 2008 for the first two option vessels to AKPS. As a result of transferring title of the long lead items, the Company recorded a charge of USD 3.5 million in other operating expenses (see note 3). The Company also took a charge of USD 4.5 million for lender and guarantor fees (see note 4). With the Settlement Agreement, AMSC has resolved its inability to fund the purchase of the two shuttle tankers as well as the anticipated shortfall in debt service coverage on its senior debt resulting from the absence of profit sharing under the bareboat charters.

American Shipping Company annual report 2009

Performance 2009

Parent company accounts

American Shipping Company ASA

Statement of Financial Position

as of 31 December

Amounts in USD thousands	Note	2009	2008
ASSETS
Shares in subsidiaries	3	287 813	218 015
Other non-current assets		-	2 582
Long-term receivable group companies	5	61 535	92 684
Total financial non-current assets		349 348	313 281
Total non-current assets		349 348	313 281
Other short-term receivables		170	982
Cash and cash equivalents	8	1 199	850
Total current assets		1 369	1 832
Total assets		350 717	315 113
EQUITY AND LIABILITIES
Share capital		42 462	42 462
Share premium reserve		137 946	137 946
Total paid in capital		180 408	180 408
Other equity		(9 120)	13 647
Total retained earnings		(9 120)	13 647
Total equity	6	171 288	194 055
Bond obligation	7	157 640	-
Other interest-bearing debt	7	20 000	-
Total long-term liabilities		177 640	-
Bond obligation	7	-	119 160
Other short-term debt		1 789	1 898
Total short-term liabilities		1 789	121 058
Total equity and liabilities		350 717	315 113

American Shipping Company annual report 2009

Performance 2009
Parent company accounts

American Shipping Company ASA

Income Statement

Amounts in USD thousands	Note	2009	2008
Operating revenues		106	152
Other operating expenses	2	(673)	(845)
Operating loss		(567)	(693)
Interest income from group companies		5 615	10 552
Other interest and financial revenues		20 240	43 838
Other interest and financial expenses	2	(48 055)	(49 114)
Income/(loss) after financial items		(22 767)	4 583
Taxes	4	-	-
Profit/(loss) for the period		(22 767)	4 583
Allocation of net profit:
Profit		(22 767)	4 583
Other equity	6	22 767	(4 583)
Total		-	-

American Shipping Company ASA

Statement of Comprehensive Income

Amounts in USD thousands	2009	2008
Net income/(loss) for the period	(22 767)	4 583
Other comprehensive income for the period, net of tax	-	-
Total comprehensive income for the period	(22 767)	4 583

American Shipping Company annual report 2009

Performance 2009

Parent company accounts

American Shipping Company ASA

Cash Flow Statement

Amounts in USD thousands	2009	2008
Profit before tax	(22 767)	4 583
Unrealized foreign exchange (gain)/loss and unpaid interest expense	38 602	(15 861)
Impairment of shares in subsidiaries	5 631	-
Changes in short term receivables	812	2 257
Changes in short term liabilities	(109)	(2 062)
Cash flow from operating activities	22 169	(11 083)
Other changes in long term investments	(41 698)	(52 400)
Cash flow from investing activities	(41 698)	(52 400)
Debt fees paid	(122)	-
Proceeds from other interest-bearing debt	20 000	-
Cash flow from financial activities	19 878	-
Cash flow for the year	349	(63 483)
Cash and cash equivalents 1 January	850	64 333
Cash and cash equivalents 31 December	1 199	850

American Shipping Company annual report 2009

Performance 2009
Parent company accounts

American Shipping Company ASA:

Notes to the accounts

Note 1: Accounting principles

The annual report is prepared according to the Norwegian Accounting Act and generally accepted accounting principles in Norway.

Subsidiaries and investment in associates

Subsidiaries are valued by the cost method in the company accounts. The investment is valued at the cost of acquiring shares in the subsidiary, providing that a write down is not required. A write down to fair value will be carried out if the reduction in value is caused by circumstances which may not be regarded as incidental, and deemed necessary by generally accepted accounting principles. Write downs are reversed when the cause of the initial write down is no longer present.

If dividends exceed withheld profits after acquisition, the exceeding amount represents reimbursement of invested capital, and the distribution will be subtracted from the value of the acquisition in the balance sheet.

Balance sheet classification

Net current assets comprise creditors due within one year. Other entries are classified as fixed assets and/or long-term creditors.

Current assets are valued at the lower of acquisition cost or fair value. Short-term creditors are recognized at nominal value.

Fixed assets are valued at the cost of acquisition. In the case of non-incidental reduction in value, the asset will be written down to the fair value amount. Long-term creditors are recognized at nominal value.

The bond loan with fixed interest are recorded at amortized cost.

Trade and other receivables

Trade receivables and other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful accounts.

Foreign currency translation

The company's functional currency is U.S. dollars (USD). Foreign currency transactions are translated into USD using the exchange rates prevailing at the dates of the transactions. Receivables and liabilities in foreign currencies are translated into USD at the exchange rates ruling on the balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.

Short term investments

Short term investments (stocks, short-term bonds, liquid placements and shares) are valued at the lower of acquisition cost or fair value at the balance sheet date. Dividends and other distributions are recognized as other investment income.

Income tax

Tax expenses in the profit and loss account comprise both tax payable for the accounting period and changes in deferred tax. Deferred tax is calculated at 28 percent on the basis of existing temporary differences between accounting profit and taxable profit together with tax deductible deficits at year end. Temporary differences, both positive and negative, are balanced out within the same period. Deferred tax assets are recorded in the balance sheet to the extent it is more likely than not that the tax assets will be utilized.

Cash flow statement

The cash flow statement is presented using the indirect method. Cash and cash equivalents includes cash, bank deposits and other short-term highly liquid deposits with original maturities of three months or less.

Use of estimates

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts in the profit and loss statement, the measurement of assets and liabilities and the disclosure of contingent assets and liabilities on the balance sheet date. Actual results can differ from these estimates.

Contingent losses that are probable and quantifiable are expensed as occurred.

Certain prior year reclassifications were made to conform with current year presentation.

American Shipping Company annual report 2009

Performance 2009
Parent company accounts

Note 2: Other operating and financial expenses

Fees to the auditors of USD 35 thousand for ordinary audit was expensed in 2009. For more information on fees paid to KPMG, see note 3 in the consolidated accounts.

The company has no employees. The senior management is employed in the operating companies (see note 21 in the consolidated accounts). Board of directors expenses were USD 159 thousand in 2009.

Other interest and financial expenses include an impairment loss of USD 5.6 million on one of the Company's subsidiaries (see note 3).

Note 3: Shares

This item comprises the following as of 31 December 2009:

Amounts in USD thousands	Ownership of common shares(%)	Voting rights (%)	Business address	Historical cost	Book value
American Tanker Holding Company, Inc. (ATHC) (1)	100%	100%	Philadelphia, PA	287 484	287 484
American Tanker III, Inc. (ATI III) (2)	100%	100%	Wilmington, DE	329	329
Total shares				287 813	287 813
		ATHC	ATI III
Subsidiaries' 2009 results after tax in USD thousands		17 100	(3 903)
Subsidiaries' equity attributable to common shareholders at 31 December 2009 in USD thousands		197 484	329

American Shipping Company ASA (AMSC) analyzes the value of its investments in subsidiaries on an annual basis, or sooner if conditions change or events occur which could cause the carrying values to change. Detailed analysis, including discounted cash flows and third party appraisals, are prepared and reviewed by management supporting the carrying value of each of its investments. AMSC considers many factors, including the appropriate cost of capital, asset (investment) lives, market values and likelihood of events, in reviewing its investment value. For the year ending 31 December 2009, AMSC wrote down its investment in ATI III and took a charge of USD 5.6 million.

Note 4: Tax

The table below shows the difference between book and tax values at the end of 2009 and 2008, and the amounts of deferred taxes at these dates and the change in deferred taxes.

Amounts in USD thousands	2009	2008
Operating loss carried forward	(20 226)	(12 477)
Total differences	(20 226)	(12 477)
Net deferred tax asset, 28 percent	(5 663)	(3 494)
Restrictions regarding balance tax asset	5 663	3 494
Book value tax asset	-	-

Estimated result for tax purposes:

Amounts in USD thousands	2009	2008
Result before tax measured in NOK for taxation purposes	(10 683)	(850)
Permanent differences for impairment on shares	5 631	-
Estimated result for tax purposes	(5 052)	(850)
Payable current tax	-	-

The result before taxes in NOK are different from the result before taxes in USD primarily due to currency exchange differences.

American Shipping Company annual report 2009

Performance 2009
Parent company accounts

Taxes:

Amounts in USD thousands	2009	2008
Current payable tax charged to the income statement	-	-
Change in deferred tax	-	-
Total tax cost	-	-

Note 5: Long-term receivables

Long-term receivables are:

Amounts in USD thousands	2009	2008
American Shipping Corporation (ASC)	20 240	64 780
American Shipping Corporation II (ASC II)	21 189	24 636
American Shuttle Tanker, LLC (AST)	-	3 268
American Tanker, Inc. (ATI)	20 106	-
Total	61 535	92 684

The receivables have the following installment plan:

Amounts in USD thousands	2009	2008
Maturity within five years	41 429	92 684
Maturity later than five years	20 106	-
Total	61 535	92 684

The interest conditions on the receivables are at market conditions.

The loan amounts to ASC and ASC II will be converted to equity upon the delivery of vessels on order from Aker Philadelphia Shipyard, Inc. (Aker Philadelphia Shipyard, Inc. is a wholly owned subsidiary of Aker Philadelphia Shipyard ASA; collectively "AKPS"). The last of those vessels is expected to be delivered in March 2011. The loan to ATI is a result of the Settlement Agreement with OSG (see note 23 in the consolidated accounts). This unsecured, subordinated loan of USD 20 million will become a three year term loan upon the timely delivery of the remaining vessels in the twelve ship order and the satisfactory refinancing or extension of the vessel debt and AMSC's bond obligations. This loan has interest that is payment-in-kind until it becomes a three year term loan.

Note 6: Total equity

Changes in equity are:

Amounts in USD thousands	Share capital	Share premium	Total paid-in capital	Other equity	Total equity
Equity as of 1 January 2009	42 462	137 946	180 408	13 647	194 055
Net result	-	-	-	(22 767)	(22 767)
Equity as of 31 December 2009	42 462	137 946	180 408	(9 120)	171 288
Amounts in USD thousands	Share capital	Share premium	Total paid-in capital	Other equity	Total equity
Equity as of 1 January 2008	42 462	137 946	180 408	9 064	189 472
Net result	-	-	-	4 583	4 583
Equity as of 31 December 2008	42 462	137 946	180 408	13 647	194 055

The share capital of NOK 276 million consists of 27 600 000 shares with a par value of NOK 10.

American Shipping Company annual report 2009

Performance 2009
Parent company accounts

The shares were owned by the following 20 largest parties as of 15 February 2010:
Number of shares held Ownership (in %)

SEB ENSKILDA ASA EGENHANDELSKONTO	9 183 274	33.3%
CONVERTO CAPITAL FUND AS	5 493 430	19.9%
GOLDMAN SACHS & CO - SECURITY CLIENT SEGR	4 175 520	15.1%
CREDIT SUISSE SECURI SPECIAL CUSTODY A/C	1 369 553	5.0%
ODIN NORGE	1 245 978	4.5%
COMMERZBANK AG LONDO A/C DBL ARB	799 026	2.9%
STATE STREET BANK AN A/C CLIENT OMNIBUS D	732 600	2.7%
ODIN MARITIM	710 000	2.6%
ODIN NORDEN	670 800	2.4%
STATE STREET BANK AN A/C CLIENT OMNIBUS F	534 000	1.9%
FRATERNITAS A/S	315 200	1.1%
RO LARS	212 121	0.8%
DEUTSCHE BANK AG LON PRIME BROKERAGE FULL	150 650	0.5%
DNB NOR NORGE SELEKT VPF	149 175	0.5%
MUSLIK AS	111 600	0.4%
DEUTSCHE BANK AG S/A HOLDING ACCOUNT	76 100	0.3%
JP MORGAN CLEARING C A/C CUSTOMER SAFE KE	70 379	0.3%
HØGELI AS	69 800	0.3%
ODIN NORGE II	51 147	0.2%
O. HOVDE AS	50 000	0.2%
Total, 20 largest shareholders	26 170 353	94.8%
Other shareholders	1 429 647	5.2%
Total	27 600 000	100.0%

Note 7: Other long term interest-bearing debt

The bond obligation is as follows as of 31 December 2009:

Amounts in USD thousands	Maturity	Balance	Interest Rate
Bond issue	2012	114 170	NIBOR + 4.75%
Interest added to bonds outstanding		36 051	(1)
Cumulative foreign currency impact		8 124	(1)
Less unamortized loan fees		(705)
Total Unsecured bond issue		157 640

1) Included in other interest and financial expenses.

One of the original covenants on the Company's NOK denominated bond required that consolidated equity be maintained at a level not less than USD 140 million at a quarterly measurement date.

On 25 February 2009, a bondholders meeting was convened whereupon the Company's bondholders agreed to modify the covenant to exclude unrealized gains and losses on the interest rate swaps from the minimum consolidated equity calculation for the duration of the bond term. However, because as of 31 December 2008, equity was less than the required minimum amount, all of the Company's debt is classified as current on its balance sheet due to IFRS requirements, as well as cross-default provisions which impact the Company's other debt facility. As of 31 December 2009, consolidated shareholders' equity for determining compliance with debt covenants was approximately USD 158 million. See note 20 in the consolidated accounts for an analysis of how foreign exchange fluctuations could impact consolidated equity.

Due to the approved modification in the minimum consolidated equity covenant subsequent to 31 December 2008, the Company again classified the majority of its debt as long term beginning with its 31 March 2009 interim reporting.

In addition, the bondholders voted to approve the Company's request to extend the PIK interest option through the end of the loan term.

American Shipping Company annual report 2009

Performance 2009
Parent company accounts

Subordinated loan from Converto Capital Fund AS

In connection with the Settlement Agreement with OSG (see note 23 in the consolidated accounts), Converto Capital Fund AS has issued a USD 20.0 million loan to the Company. The loan is subordinated to various matters involving subsidiary companies, including the Fortis Credit Agreement, as well as any potential obligations and liabilities due to OSG and any potential liability associated with AKPS's construction financing which contains a put option to AMSC (see note 10). The loan bears interest at the higher of 9.5% or LIBOR plus 5.75% (9.5% at 31 December 2009). Interest is payment in kind until certain conditions are met. It is expected that cash interest will not be paid in the next four years. The loan matures on 11 December 2017.

Note 8: Cash and cash equivalents

There is no restricted cash.

Note 9: Shares owned by the board of directors and the senior management

For information regarding shares owned by the members of the board of directors and the senior management, see note 21 in the Consolidated Accounts.

Note 10: Guarantees

The company has made the following guarantees:

Description	Beneficiary	Amount (USD thousands)	Guarantee party
Senior secured credit facility	Fortis Capital Corp	770 000 (1)	ASC Leasing I-X
Construction loan facility	Caterpillar Financial Services Corp	150 000 (2)	Aker Philadelphia Shipyard, Inc.
Capital expenditure facility	PIDC Regional Center LP XV	20 000 (3)	Aker Philadelphia Shipyard, Inc.
Counter guarantee	Aker Maritime Finance AS	20 000 (4)	Aker Philadelphia Shipyard, Inc.

1) The senior secured facility is for the financing of 10 product tankers which the company entered into with Fortis on 9 February 2007.
2) The construction loan facility is provided by Caterpillar Financial Services Corp. (CFSC) to AKPS for the construction of the remaining tankers in the twelve ship series. In connection with this facility, AMSC and CFSC entered into a put/call agreement. In the event that an event of default occurs and is continuing under the construction loan facility, CFSC may "put" the entire facility to AMSC, whereupon AMSC would be required to purchase 100% of the loans from CFSC at par plus accrued interest and unpaid expenses. The principal balance is approximately USD 48 million as of 31 December 2009.
3) The capital expenditure facility represents a loan from the Pennsylvania Industrial Development Corporation Regional Center, L.P. XV (Welcome Fund) to AKPS that is secured by a second mortgage against the property, plant and equipment of AKPS. This loan has a current outstanding balance of USD 19.8 million at 31 December 2009, interest is paid semi-annually and the principal is due March 2012. In connection with this facility, AMSC has agreed to guarantee the entire loan to the lender.
4) The counter guarantee relates to an agreement by AKPS to maintain minimum employment levels at the shipyard until 31 December 2014. AKPS will be required to pay liquidated damages in the event that the average number of full-time employees during a given year falls below the required minimum, subject to an aggregate cap of USD 20.0 million. This agreement is part of a Master Agreement between AKPS and the governmental parties which provided funding to the shipyard for the renovation and modernization of its facility and training of its workforce, and it is guaranteed by Aker Maritime Finance AS (as successor by merger to the former Kvaerner ASA). The counter guarantee was issued by AMSC to Aker Maritime Finance AS in connection with the organization of the AMSC Group in 2005. As part of the sale of AKPS in December 2007, AKPS issued a USD 20.0 million counter guarantee to AMSC and Aker Maritime Finance AS related to the minimum employment levels.

American Shipping Company annual report 2009

Performance 2009
Auditor's report

KPMG

KPMG AS
P.O. Box 7000 Majorstuen
Sørkedalsveien 6
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Fax +47 22 60 96 01
Internet www.kpmg.no
Enterprise 935 174 627MVA

To the Annual Shareholders’ Meeting of American Shipping Company ASA

AUDITOR’S REPORT FOR 2009

Respective Responsibilities of Directors and Auditors

We have audited the annual financial statements of American Shipping Company ASA as of 31 December 2009, showing a loss of USD 22,767,000 for the parent company and a total comprehensive income of USD -1,306,000 for the group. We have also audited the information in the Board of Directors’ report concerning the financial statements, the going concern assumption, and the proposal for the coverage of the loss. The annual financial statements comprise the parent company’s financial statements and the group accounts. The parent company’s financial statements comprise the statement of financial position, the statements of income and cash flows, and the accompanying notes. The group accounts comprise the statement of financial position, the income statement and the statement of comprehensive income, the statement of cash flows, the statement of changes in equity and the accompanying notes. The rules of the Norwegian accounting act and good accounting practice in Norway have been applied to prepare the parent company’s financial statement. The rules of the Norwegian accounting act and International Financial Reporting Standards as adopted by the EU have been applied to prepare the group accounts. These financial statements and the Board of Directors’ report are the responsibility of the company’s Board of Directors and Managing Director. Our responsibility is to express an opinion on these financial statements and on the other information according to the requirements of the Norwegian Act on Auditing and Auditors.

Basis of Opinion

We conducted our audit in accordance with the Norwegian Act on Auditing and Auditors and good auditing practice in Norway, including standards on auditing adopted by Den norske Revisorforening (The Norwegian Institute of Public Accountants). These auditing standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. To the extent required by law and good auditing practice an audit also comprises a review of the management of the company’s financial affairs and its accounting and internal control systems. We believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion,

the parent company’s financial statements are prepared in accordance with the law and regulations and give a true and fair view of the financial position of the parent company as of 31 December 2009, the results of its operations and its cash flows for the year then ended, in accordance with the rules of the Norwegian accounting act and good accounting practice in Norway

KPMG AS is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss corporation.
Status/demands reviewer - medlemmer av Den norske Revisorforening

Offices in:

Oslo	Haugesund	Sandeljord
Bede	Kristiansand	Sandvargen
Alle	Løvik	Stavanger
Arendal	Lillestønder	Stord
Bergen	Vest Flere	Tromsø
Eisvaart	Mørk	Trøndkøys
Fornøres	Nørvik	Tørskorg
Hørløp	Røros	Ålesund
Gorestad

40 American Shipping Company annual report 2009

Performance 2009
Auditor's report

the group accounts are prepared in accordance with the law and regulations and give a true and fair view of the financial position of the group as of 31 December 2009, the total comprehensive income, its cash flows and the changes in equity for the year then ended, in accordance with the rules of the Norwegian accounting act and International Financial Reporting Standards as adopted by the EU
the company’s management has fulfilled its duty to produce a proper and clearly set out registration and documentation of accounting information
the information in the Board of Directors’ report concerning the financial statements, the going concern assumption, and the proposal for the coverage of the loss is consistent with the financial statements and comply with the law and regulations.

Oslo, 3 March 2010
KPMG AS

Note: This translation from Norwegian has been prepared for information purposes only

American Shipping Company annual report 2009

Performance 2009
Share and shareholder information

Share and shareholder information

American Shipping Company is committed to maintaining an open and direct dialogue with its shareholders, potential investors, analysts, brokers, and the financial community in general. The timely release of information to the market that could affect the Company's share price helps ensure that American Shipping Company ASA's share price reflects its underlying value.

American Shipping Company's goal is that the Company's shareholders will, over time, receive competitive returns on their investment. The Board considers the amount of dividend, if any, to be recommended for approval by the shareholders on an annual basis. The recommendation is based upon earnings for the year just ended, the financial situation at the relevant point in time and applicable restrictions under AMSC's financial agreements.

Due to the fact that AMSC is currently in the middle of funding its new tanker fleet build program, the Board of Directors will propose at American Shipping Company's annual shareholders' meeting that no dividend is paid for the 2009 accounting year.

Year	Dividend (in NOK)
2008	-
2009 Proposed	-

Shares and share capital

American Shipping Company ASA has 27 600 000 ordinary common shares; each share has a par value of NOK 10 (see Note 14 to the Company's 2009 accounts). As of 31 December 2009, the Company had 323 shareholders, of whom 12.1 percent were non-Norwegian shareholders.

During 2009, one of American Shipping Company's wholly owned subsidiaries declared and paid a dividend of USD 0.9 million on its preferred stock and then redeemed all of the 500 preferred shares outstanding. These shares were non-voting and non-dilutive.

American Shipping Company ASA currently has a single share class. Each share is entitled to one vote, but is subject to certain voting and ownership restrictions due to the fact that the Company is operating under an exception from the U.S. ownership requirement in the Jones Act (see Articles of Association available on the Company's web page). The Company held no own (treasury) shares as of 31 December 2009. No share issues were carried out in 2009.

Stock-exchange listing

American Shipping Company ASA was listed on the Oslo Stock Exchange on 11 July 2005. At that time the Company was called Aker American Shipping ASA and traded under the ticker symbol "AKASA". The name change was the result of Aker ASA reducing its majority ownership in the Company during 2008. Approval for the name change was decided upon at the Extraordinary General Meeting held on 25 June 2008 and it was officially registered with the Norwegian Registry of Business Enterprises (NRBE) on 21 July 2008. The Company's shares are listed on the Oslo Stock Exchange's main (OSEBX) list (ticker: AMSC). American Shipping Company's shares are registered in the Norwegian Central Securities Depository; the shares have the securities registration number ISIN NO 0010272065. DnB NOR is the Company's registrar.

Majority shareholder

American Shipping Company ASA's largest/majority shareholder is SEB Enskilda, which holds 33.3 percent of the Company's shares. These shares were purchased from Aker ASA as part of a total return swap (TRS) agreement.

From time to time, agreements are entered into between two or more former related companies. The boards of directors and other parties involved in the decision-making processes related to such agreements are all critically aware of the need to handle such matters in the best interests of the involved companies, in accordance with good corporate governance practice and on an arm's length basis. If needed, external, independent opinions are sought.

Current Board authorizations

The Board of Directors has currently no authorizations to issue any new common shares.

Stock option plans

The Company currently does not have any stock option plans.

Investor relations

American Shipping Company ASA seeks to maintain an open and direct dialogue with shareholders, financial analysts, and the financial market in general. In addition to meetings with analysts and investors, the Company posts presentations and press releases on it web page.

Visitors to American Shipping Company's website at www.americanshippingco.com can subscribe to email delivery of American Shipping Company news releases.

American Shipping Company press releases and investor relations (IR) publications for the current and prior year are

Share capital development over the past three years

Date	Change in share capital	Share capital (in NOK million)	No. of shares	Par value (in NOK)
1 January 2007		276 000 000	276 000 000	10.00
Change in 2007	-
31 December 2007		276 000 000	276 000 000	10.00
Change in 2008	-
31 December 2008		276 000 000	276 000 000	10.00
Change in 2009	-
31 December 2009		276 000 000	276 000 000	10.00

American Shipping Company annual report 2009

Performance 2009
Share and shareholder information

available at the Company's website: www.americanshippingco.com. This online resource includes the Company's quarterly and annual reports, prospectuses, corporate presentations, articles of association, financial calendar, and its Investor Relations and Corporate Governance policies, along with other information.

Shareholders can contact the Company at [email protected].

Save the environment – read reports online

American Shipping Company ASA encourages its shareholders to subscribe to the electronic version of the Company's annual reports. Annual reports are published on the Company's website (www.americanshippingco.com) at the same time as they are made available via website release by the Oslo Stock Exchange/Oslo Axess: www.newsweb.no (ticker: AMSC). Subscribers to this service receive annual reports in PDF format by email.

American Shipping Company ASA encourages its shareholders to subscribe to the Company's annual reports via the electronic delivery system of the Norwegian Central Securities Depository (VPS). Please note that VPS services (VPS Investortjenester) are designed primarily for Norwegian shareholders. Subscribers to this service receive annual reports in PDF format by email. VPS distribution takes place at the same time as distribution of the printed version of AMSC's annual report to shareholders who have requested it.

Electronic distribution is the fastest channel for accessing Company information; it is also cost-effective and environmentally friendly.

Quarterly reports, which are generally only distributed electronically, are available from the Company's website and other sources. Shareholders who are unable to receive the electronic version of interim and annual reports, may subscribe to the printed version by contacting American Shipping Company.

20 largest shareholders

As of 15 February 2010

Shareholder	Number of shares held	Ownership (in %)
Seb Enskilda ASA Egenhandelskonto	9 183 274	33.3%
Converto Capital Fund AS	5 493 430	19.9%
Goldman Sachs & Co - Security Client Segr	4 175 520	15.1%
Credit Suisse Securi Special Custody A/C	1 369 553	5.0%
Odin Norge	1 245 978	4.5%
Commerzbank AG Londo A/C Dbl Arb	799 026	2.9%
State Street Bank AN A/C Client Omnibus D	732 600	2.7%
Odin Maritim	710 000	2.6%
Odin Norden	670 800	2.4%
State Street Bank AN A/C Client Omnibus F	534 000	1.9%
Fraternitas A/S	315 200	1.1%
Ro Lars	212 121	0.8%
Deutsche Bank AG Lon Prime Brokerage Full	150 650	0.5%
Dnb Nor Norge Selekt Vpf	149 175	0.5%
Muslik AS	111 600	0.4%
Deutsche Bank AG S/A Holding Account	76 100	0.3%
Jp Morgan Clearing C A/C Customer Safe Ke	70 379	0.3%
Hegeli As	69 800	0.3%
Odin Norge II	51 147	0.2%
O. Hovde AS	50 000	0.2%
Total, 20 largest shareholders	26 170 353	94.8%
Other shareholders	1 429 647	5.2%
Total	27 600 000	100.0%

Geographic distribution of shareholders

As of 15 February 2010

Nationality	No. of Shares Held	Ownership (in %)
Non-Norwegian shareholders	8 159 884	29.6%
Norwegian shareholders	19 440 116	70.4%
Total	27 600 000	100.0%

Ownership structure by number of shares held

As of 15 February 2010

Shares owned	Number of shareholders	Percent of share capital
1 – 100	48	0.01%
101 – 1 000	115	0.25%
1001 – 10 000	120	1.92%
10 001 – 100 000	44	4.16%
100 001 – 500 000	5	3.40%
Over 500 000	10	90.27%
Total	342	100.00%

American Shipping Company annual report 2009

Performance 2009

Share and shareholder information

Analyst coverage

The following securities broker provides analyst coverage of American Shipping Company ASA (as of 31 December 2009):

Company	Telephone
Nicolay Dyvik (SEB Enskilda)	+47 21 00 86 46

Annual shareholders' meeting

American Shipping Company ASA's annual shareholders' meeting is normally held in late March or early April. Written notification is sent to all shareholders individually or to shareholders' nominee. To vote at shareholders' meetings, shareholders (or their duly authorized representatives) must either be physically present or must vote by proxy.

2009 share data

The Company's total market capitalization as of 31 December 2009 was NOK 179.4 million. During 2009, a total of 2,290,793 American Shipping Company ASA shares traded, corresponding to 8.3 percent of the Company's freely tradable stock. The shares traded on 155 trading days.

Share price development in 2009

Highest traded	NOK	35.00
Lowest traded	NOK	5.56
Share price as of 31 December	NOK	6.50
Shares issued as of 31 December		27 600 000
Own (treasury) shares as of 31 Dec.		0
Shares issued and outstanding as of 31 Dec.		27 600 000
Market capitalization as of 31 Dec.	NOK million	179.4
Proposed share dividend	NOK per share	0.0

Share Price Development

American Shipping Company annual report 2009

Our organization and governance
Corporate governance

Corporate governance

American Shipping Company ASA's Corporate Governance policy was adopted by the Board of Directors in February 2008. The Company's corporate governance principles are based on the Norwegian Code of Practice for Corporate Governance, dated 4 December 2007.

The following presents American Shipping Company ASA's (hereinafter American Shipping Company, AMSC, the Company or the Group) practice regarding each of the recommendations contained in the Code of Practice. Any deviations from the recommendations are found under the item in question.

Purpose

American Shipping Company's Corporate Governance principles are intended to ensure an appropriate division of roles and responsibilities among the Company's owners, its Board of Directors, and its executive management and that the Company's activities are subject to satisfactory control. These principles contribute to the greatest possible value creation over time, to the benefit of owners and other stakeholders.

Values and ethical guidelines

The Board has adopted the AMSC's corporate values and ethical guidelines. American Shipping Company's corporate values are presented below.

SQE mindset

We take personal responsibility because we care

Delivering results

We deliver consistently and strive to beat our goals

Customer drive

Building customer trust is key to our business

People and teams

All our major achievements are team efforts

Hands-on management

We know our business and get things done

Open and direct dialogue

We encourage early and honest communication

Business

American Shipping Company's business purpose clause is as follows:

The business purpose of the Company is to own and carry out industrial business and other activities related hereto, including ownership of vessels, capital management and other functions for the group, as well as participation in or acquisition of other companies.

The function of the business purpose clause is to ensure that shareholders have control of the business and its risk profile, without limiting the Board or management's ability to carry out strategic and financially viable decisions within the defined purpose. The Group's financial goals and main strategies are presented on page 5 of this report and in the Board of Director's report.

Equity and dividends

Equity

The Group's equity as of 31 December 2009 was USD 78.8 million corresponding to an equity ratio of 9 percent. American Shipping Company regards the Group's current equity structure as appropriate and adapted to its objectives, strategy, and risk profile.

Dividends

American Shipping Company's dividend policy is included in the section Shares and shareholder information, see pages 42-44 of this annual report.

Board authorizations

The Board's proposals for future Board authorizations are to be limited to defined issues and to be valid only until the next annual shareholders' meeting.

Current Board authorizations to increase share capital and acquire own (treasury) shares are presented in the section Shares and Shareholder information on pages 42-44 of this annual report.

Equal treatment of shareholders and transactions with close associates

At the parent level, the Company has a single class of shares, and all shares carry the same rights in the Company. However, the shares are subject to certain voting and ownership restrictions due to the fact that the Company is operating under an exception from the U.S ownership requirement in the Jones Act (see the Company's articles of association, which are available on the Company's web page).

During 2008, one of the subsidiaries in the consolidated group of companies issued preferred redeemable shares of stock. This stock is non-voting and is not dilutive to the shareholders of AMSC. During 2009, the subsidiary declared and paid a dividend of USD 0.9 million and then redeemed all outstanding preferred shares.

Equal treatment of all shareholders is crucial. If existing shareholders' pre-emptive rights are waived upon an increase in share capital, the Board must justify the waiver. Transactions in own (treasury) shares must be executed on the Oslo Stock Exchange or by other means at the listed price.

If there are material transactions between the Company and a shareholder, board member, member of executive management, or a party closely related to any of the aforementioned, the Board shall ensure that independent valuations are available.

American Shipping Company ASA has prepared guidelines designed to ensure that members of the Board of Directors and executive management notify the Board of any direct or indirect stake they may have in agreements entered into by the Group/Company.

See information on transactions with related parties in Note 22 to the consolidated accounts.

Freely negotiable shares

American Shipping Company's shares are freely negotiable. However, the transferability of shares is subject to certain voting and ownership restrictions due to the fact that the Company is operating under an exception from the U.S ownership requirement in the Jones Act (see the

American Shipping Company annual report 2009

Our organization and governance
Corporate governance

Company's articles of association, which are available on the Company's web page).

Annual shareholders' meetings

The Company encourages shareholders to participate in shareholders' meetings. It is the Company's priority to hold the annual general meeting as early as possible after the year-end. Notice of general shareholders' meetings and comprehensive supporting information is made available for the shareholders on the Company's website and sent to the shareholders according to the deadlines stated in the Norwegian Public Company Act (allmennaksjeloven). The deadline for shareholders to register to the general shareholder's meetings is set as close to the date of the meeting as possible. Both on the attendance and proxy form and the notice of meeting, all procedures for registration are thoroughly explained. In addition, information on how to propose a resolution to the items on the agenda at the General Meeting will be included in the notice.

Pursuant to the Company's articles of association, the Chairman of the Board or an individual appointed by the Board Chairman will chair general shareholder's meetings. To the extent possible, Board members and auditor attend annual shareholders' meetings.

Minutes of shareholders' meetings are published as soon as practically possible via the Oslo Stock Exchange messaging service www.newsweb.no (ticker: AMSC) and on the Company's website www.americanshippingco.com.

Nomination committee

American Shipping currently does not have a nomination committee. Upon the reduction by Aker ASA of its majority ownership position in American Shipping Company in June 2008, the former nomination committee members stepped down from their positions and were not replaced. As provided in our articles of association, the shareholders may decide to reconstitute the nomination committee at the general meeting. If the nomination committee is reconstituted, pursuant to the articles of association, the nomination committee is to comprise no fewer than three members. The composition of the nomination committee must reflect the interests of the shareholders, and must ensure nomination committee members' independence from American Shipping Company's Board and executive management. Nomination committee members

and chair are elected by shareholders at the Company's annual shareholders' meeting, which also determines remuneration payable to committee members.

Pursuant to American Shipping Company's articles of association, the nomination committee recommends candidates for members of the Board of Directors. The nomination committee also makes recommendations as to remuneration of Board members. The nomination committee should justify its recommendation.

Audit committee

As of 1 July 2009, the Public Limited Liability Companies Act requires that companies listed on a regulated market shall have an audit committee. Prior to this date, the Company did not have an audit committee. The Board has recently resolved that the entire Board of Directors shall act as the audit committee and will seek to amend the Company's articles of association to reflect this decision at the annual general meeting in April 2010.

Board composition and independence

The Company does not have corporate assembly.

Pursuant to the Company's articles of association, the Board comprises between 3 and 9 members. Further, up to 3 shareholder-elected deputy board members may be elected annually. Pursuant to the Company's corporate governance policy, the Board is to comprise a total of 5 members. The Board chairman is elected at the Company's shareholders' meeting. The Board elects its own Deputy Board Chairman.

The majority of the shareholder-elected Board members are to be independent of the Company's executive management and its significant business associates. Further, no fewer than two of the shareholder-elected Board members are to be independent of the Company's main shareholder. Representatives of American Shipping Company's executive management are not to be Board members. With the exception of the audit committee, the Board has not deemed it necessary to establish Board committees at this time.

The current composition of the Board is presented on page 48 of this annual report; the Board members' expertise, capabilities, and independence are also presented. Board members' shareholdings are presented in Note 21 to the consolidated accounts. The Company encourages the board members to invest in the Company shares. The shareholder

elected Board members represent a combination of expertise, capabilities, and experience from various finance, industry, and non-governmental organizations.

One of the five shareholder-elected Board members are up for election in 2010.

The work of the Board of Directors

The Board of American Shipping Company ASA annually adopts a plan for its work, emphasizing goals, strategies, and implementation. Also, the Board has adopted board instructions that regulate areas of responsibility, tasks, and division of roles of the Board, Board Chairman, and President and CEO/General Manager. The Board instructions also feature rules governing Board schedules, rules for notice and chairing of Board meetings, decision-making rules, the President and CEO's/General Manager's duty and right to disclose information to the Board, professional secrecy, impartiality, and other issues.

The Board itself assesses the need to elect a deputy chairman.

The Board evaluates its own performance and expertise once a year.

Risk management and internal control

The Board is to ensure that the Company maintains solid in-house control practices and appropriate risk management systems tailored to the Company's business activities. The Board annually reviews the Company's most important risk areas and internal control systems and procedures, and the main elements of these assessments are mentioned in the Board of Directors' report. The issue is further described in Note 1 to the consolidated accounts.

Remuneration of the Board of Directors

Board remuneration is to reflect the Board's responsibility, expertise, time spent, and the complexity of the business. Remuneration does not depend on American Shipping Company ASA's financial performance. Board members and companies with whom they are associated must not take on special tasks for the Company beyond their Board appointments unless such assignments are disclosed to the full Board and remuneration for such additional duties is approved by the Board.

Additional information on remuneration paid to Board members for 2009 is presented in Note 21 to the consolidated accounts.

American Shipping Company annual report 2009

Our organization and governance
Corporate governance

Remuneration of executive management

The Board has adopted guidelines for remuneration of executive management in accordance with the Allmennaksjeloven (Norwegian Public Limited Company Act) § 6-16a. Salary and other remuneration of American Shipping Company ASA's President and CEO/General Manager are determined by a meeting of the Board of Directors.

American Shipping Company ASA does not have stock option plans or other such share award programs for employees. Further information on remuneration for 2009 for members of American Shipping Company ASA's executive management is presented in Note 21 to the consolidated accounts. The Group's guidelines for remuneration to executive management are discussed on page 29 of this annual report and will be presented to the shareholders at the annual general meeting.

Information and communications

American Shipping Company's reporting of financial and other information is to be based on openness and on equal treatment of shareholders, the financial community, and other interested parties.

The long-term goal of American Shipping Company's investor relations activities is to ensure the Company's access to capital at competitive terms and to ensure shareholders correct pricing of shares. These goals are to be accomplished through correct and timely distribution of information that can affect the Company's share price; the Company is also to comply with current rules and market practices, including the requirement of equal treatment. All stock exchange notifications and press releases are made available on the Company's website www.americanshippingco.com; stock exchange notices are also available from www.newsweb.no. All information that is distributed to shareholders is simultaneously published on American Shipping Company ASA's website. The Company endeavors to hold open presentations in connection with the reporting of the results and the presentations are often available on the web.

The Company's financial calendar is found on page 3 of this annual report.

Takeovers

The overriding principle is equal treatment of shareholders. The principles are based on the bidder, the target company and the management all having an independent responsibility for fair and equal treatment of the shareholders in a takeover process, and that the target company is not unnecessarily disturbed. It is the responsibility of the target company's board to ensure that the shareholders are kept informed and that have reasonable time to assess the offer.

Unless the Board has particular reasons for so doing, it will not take steps to prevent or obstruct a take-over bid for the Company's business or shares, nor use share issue authorizations or other measures to hinder the progress of the bid, without such actions being approved by the general shareholders' meeting after the take-over offer has become public knowledge.

Upon the issuance of an offer for the Company's shares, the Board will make a statement to the shareholders that provides an assessment of the bid, the Board's recommendations, and reasons for these recommendations. For each instance, an assessment will be made as to the necessity of bringing in independent expertise. A valuation is to be recorded in the Board's statement.

Transactions that have the effect of sale of the Company or a major component of it are to be decided on by shareholders at a shareholders' meeting.

Auditor

The auditor will make an annual presentation to the Board of a plan for the auditing work for the year. Further, the auditor is to provide the Board with an annual written confirmation that the requirement of independence has been met.

The auditor participates in the Board meeting that deals with the annual accounts. One meeting a year is held between the auditor and the Board, at which no representatives of executive management are present.

Guidelines have been established for executive management's use of auditors for services other than auditing. Auditors are to provide the Board with an annual overview of services other than auditing that have been supplied to the Company.

Remuneration for auditors, presented in Note 3 to the consolidated accounts, is stated for the two categories of auditing and other services. In addition, these details are presented at the annual general meeting.

American Shipping Company annual report 2009

Our organization and governance

Presentation of the Board of Directors

Robert N. Caruso

Chairman

Mr. Caruso (born 1951) has been a Board Member of American Shipping Company ASA since December 2007. Since 1998 he has worked as Managing Partner of B/3 Management Resources, LLC and VP/Partner in Ingenium Technology. His career history also includes several officer-level leadership positions spanning a wide range of commercial, technical and operational disciplines. He has industry background in high-tech and industrial products manufacturing, capital equipment, technical services, engineering products/materials and consulting. Mr. Caruso has a BS and a BA from Penn State University and a Masters Degree in Business Administration from Wayne State University. Mr. Caruso is a U.S. citizen. Mr. Caruso holds zero shares in the Company and no stock options. He has been elected for the period 2009-2011.

Annette Malm Justad

Vice Chairman

Ms. Justad (born 1958) has been a member of the American Shipping Company ASA's Board of Directors since December 2007. Since 2006, she has held the position of CEO of Eitzen Maritime Services ASA, a Norwegian marine shipping services Company. Prior to that she has held various positions in large companies such as Yara International ASA, Norgas Carriers/IM Skaugen ASA, and Norsk Hydro ASA. Ms. Justad is a member of the Board of Petroleum Geo Services ASA, Ms. Justad holds a Master degree of Technology Management from MIT (Sloan School)/NTH/NHH in addition to a MSc in Chemical Engineering from NTH. Ms. Justad is a Norwegian citizen. Ms. Justad holds zero shares in the Company and has no stock options. She has been elected for the period 2009-2011.

John Rose

Mr. Rose (born 1953) became a member of the American Shipping Company ASA's Board of Directors in June 2008. He is currently an Independent Management Consultant with worldwide experience in shipping. He has over 35 years of experience with extensive senior management employment in worldwide shipping and port operations. Specializing in strategic support for Shipping Companies and those involved in Oil Trading, Downstream Supply Distribution, Upstream Exploration & Productions and Liquid Natural Gas (LNG) business. Previous management experience is largely based on 28 years of employment with Shell. Mr. Rose holds a Master of Laws LLM from the University of Southampton. Mr. Rose is a British citizen. Mr. Rose holds zero shares in the Company and has no stock options. He has been elected for the period 2008-2010.

Mavis Hawkes

Ms. Hawkes (born 1952) is recently retired from BP after a career of over 30 years that included a range of senior level leadership/management roles encompassing Finance, Planning and Control, Logistics, Commercial and Strategy/Business Development. Ms. Hawkes has spent 16 years of her career in the domestic as well as international shipping business and has specific experience in the U.S. Jones Act market having been the project manager of several U.S. Flag Vessel Replacement Strategies and Implementation efforts. Ms. Hawkes holds a BS in Chemical Engineering from Howard University, a MS in Chemical Engineering from Illinois Institute of Technology and an MBA from the University of Chicago, majoring in finance. Ms. Hawkes is a U.S. Citizen. Ms. Hawkes holds zero shares in the Company. She has been elected for the period 2009-2011.

Dag Fasmer Wittusen

Mr. Wittusen (born 1944) is a Senior Advisor and Partner of Aker ASA. He has extensive experience in international finance, investment banking, restructuring and management. He has held numerous positions within the Aker Group, including Executive Director of TH Global (ex Kvaerner plc), head of Aker Finans AS, member of various Aker boards, Executive Vice President of Aker RGI, and Managing Director of RGI. Co-founder of Orkla Finans Group and principal advisor to RGI. Also former Vice President of Eksportfinans and Loan Officer at the World Bank. He holds a BA from Brown University and an MPA from Princeton University. Mr. Wittusen is a Norwegian citizen. He holds 10,000 shares in the Company. He has been elected for the period 2009-2011.

American Shipping Company annual report 2009

Our organization and governance
Presentation of Management

Presentation of Management

Gregory Matecki
President, CEO and CFO

Mr. Matecki (born 1960) joined American Shipping Company as CFO in June 2008. In January 2010, he was appointed by the Board of Directors as the President and CEO and will continue to hold the position of CFO. Mr. Matecki has 25 years of corporate financial experience including strategic planning, reporting and analysis. Prior to joining American Shipping Company, Mr. Matecki was employed by Binswanger, an international full-service real estate firm, where he was Vice President and Chief Financial Officer. Mr. Matecki has a Masters of Business Administration from Villanova University, a Bachelors Degree in Accounting and Finance from LaSalle University, and is a Certified Public Accountant in the Commonwealth of Pennsylvania. As of 31 December 2009, Mr. Matecki holds zero shares in the Company and no stock options. Mr. Matecki is a U.S. citizen.

American Shipping Company annual report 2009

Our organization and governance

Contact information

American Shipping Company ASA

Oslo Office
Fjordalleen 16, P.O. BOX 1423, Vika,
NO-0115 Oslo, NORWAY
Tel: +47 24 13 00 00, Fax: +47 24 13 01 01

Philadelphia Office
Philadelphia Naval Business Center
One Crescent Drive, Suite 104
Philadelphia, PA 19112 USA
Tel: +1 (866) 588-6106, Fax: +1 (215) 468-2378

50 American Shipping Company annual report 2009

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American Shipping Company ASA

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American Shipping Company

Annual report 2009

AI assistant

AMSC ASA — Annual Report 2009

3533_rns_2010-03-17_e54017ff-49a7-40d6-be71-5375531a0c3d.pdf

Annual report 2009

Contents

In review

Performance 2009

Corporate governance

This is American Shipping Company

Financial calendar 2010

History

2005

2007

2008

2009

Goals and Strategies

Be the preferred ship owning and lease finance Company in the Jones Act market

Have the newest, safest and most modern and operationally friendly fleet

Explore and invest in value creation opportunities for our shareholders

Navigating in the Jones Act during economic slowdown

Introduction

The Group's business activities

Goals and strategies

The Jones Act market

Key events 2009

Settlement Agreement

Review of the annual accounts

Profit and loss accounts

Cash flow

Balance sheet and liquidity

Risks

Financial risk and risk management

Events after the balance sheet date

The going concern assumption

Parent company accounts and allocation of profit for the year

Safety, quality and environment

Organization

Equal-opportunity employer

Corporate governance

Outlook

Responsibility statement

To the best of our knowledge:

American Shipping Company ASA Group

Consolidated Income Statement

American Shipping Company ASA Group

Consolidated Statement of Comprehensive Income

American Shipping Company ASA Group

Consolidated Statement of Changes in Equity

American Shipping Company ASA Group

Consolidated Cash Flow Statement

American Shipping Company ASA Group

Notes to the consolidated accounts

CORPORATE INFORMATION

STATEMENT OF COMPLIANCE

BASIS FOR PREPARATION

USE OF ESTIMATES

GROUP ACCOUNTING AND CONSOLIDATION PRINCIPLES

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

Functional currency

Transactions and balances

PROPERTY, PLANT AND EQUIPMENT

FINANCIAL INVESTMENTS

IMPAIRMENT OF LONG-LIVED ASSETS

LEASES

OTHER NON-CURRENT ASSETS

TRADE RECEIVABLES

CASH AND CASH EQUIVALENTS

SHARE CAPITAL

INTEREST-BEARING LIABILITIES

INCOME TAXES

Current income taxes

Deferred income taxes

PROVISIONS

PENSIONS

FINANCIAL RISK MANAGEMENT

Credit Risk

Interest Rate Risk

Foreign Exchange Risk

Counter-party Credit Risk

Capital Management Risk

AMSC ASA Annual Report 2009