AMSC ASA — Interim / Quarterly Report 2019

Nov 20, 2019

AMERICAN SHIPPING COMPANY ASA

Third Quarter 2019 Report

Third Quarter 2019 Report

Lysaker, 20 November 2019, American Shipping Company ASA ("AMSC" or the "Company") announces results for third quarter ending 30 September 2019.

HIGHLIGHTS

• Stable Q3 bareboat revenue of USD 22.1 million
• Backlog of secured bareboat revenue of USD 237.1 million with average weighted tenor of 2.7 years
• Normalized EBITDA for Q3 of USD 22.4 million and adjusted net profit of USD 3.0 million
• Declared Q3 dividend of USD 0.08 per share, in line with previous guidance and backed by the Company's contracted cash flow

AMSC CEO, Pål Lothe Magnussen comments, "We are encouraged to see significant chartering activity in the Jones Act tanker market during the last few months leaving very limited shipping capacity available until the end of 2020. New time charter contracts are done at higher levels than last year and for longer durations, signaling a continued strengthening in the market. Current market rates in the high fifties are profitable for both owners and operators, and we believe we are in a multi-year period of stable and improving market conditions."

MAIN EVENTS DURING AND SUBSEQUENT TO THE THIRD QUARTER

• Operating income: Operating income was stable at USD 13.0 million in Q3 2019 versus USD 12.8 million in Q3 2018.
• Profit share: There was no profit share for Q3 2019 or Q3 2018 attributed to AMSC. The profit share is reported quarterly, but calculated on an aggregated fleet level over a full calendar year. See note 11 for further details.
• Normalized EBITDA: Normalized EBITDA of USD 22.4 million for Q3 2019 consists of base bareboat revenue of USD 22.1 million, plus Deferred Principal Obligation ("DPO") of USD 0.9 million, less SG&A of USD 0.6 million. The comparative figure for Q3 2018 for normalized EBITDA was USD 22.2 million (consisting of base bareboat revenue of USD 22.1 million, plus DPO of USD 0.9 million, less SG&A of USD 0.8 million). See Note 14 for more detailed information.
• Adjusted net profit: Adjusted net profit of USD 3.0 million for Q3 2019 consists of net profit after tax, adjusted for non-recurring items, currency fluctuations, mark-to-market of derivatives and changes to noncash deferred tax expenses. The comparative figure for Q3 2018 was USD 2.2 million. See Note 14 for further details.
• Dividends: On 23 August 2019, the Board authorized a quarterly dividend payment of USD 0.08 per share, the equivalent of NOK 0.7249 per share, to the shareholders on record as of 2 September 2019, which was paid on 10 September 2019. The dividend was classified as a return of paid in capital.

On 19 November 2019, the Board authorized a quarterly dividend payment of USD 0.08 per share to the shareholders on record as of 27 November 2019, in line with prior guidance. The shares in AMSC will be traded ex. dividend from and including 26 November 2019, and the dividend will be paid on or about 5 December 2019. The dividend is classified as a return of paid in capital.

Dividend guidance: The Company's policy with respect to dividends is driven by the Board's commitment to return value to its shareholders while also prudently managing its balance sheet and maintaining financial flexibility to pursue growth and diversification opportunities. Dividend payments depend on, among other things, performance of existing contracts including outlook for profit share, and will be considered in conjunction with the Company's financial position, debt covenants, capital requirements, and market conditions going forward.

THIRD QUARTER FINANCIAL REVIEW

Condensed Income Statement

	unaudited
	Q3	Q3	Year to date
Amounts in USD million (except share and per share information)	2019	2018	2019	2018
Operating revenues	22.1	22.1	65.7	65.7
Operating profit before depreciation - EBITDA	21.5	21.3	63.4	62.9
Normalized EBITDA	22.4	22.2	66.1	65.6
Operating profit - EBIT	13.0	12.8	38.1	37.6
Gain / (loss) on investments	-	-	(0.1)	-
Net interest expense	(10.0)	(10.4)	(30.4)	(31.0)
Unrealized gain/(loss) on interest swaps	0.1	0.1	(3.3)	2.5
Profit/(loss) before income tax	3.1	2.5	4.3	9.1
Income tax expense	-	(0.2)	(0.1)	(0.2)
Non-cash income tax (expense) / benefit	(0.2)	0.1	0.3	(0.6)
Net profit/(loss) for the period *	2.9	2.4	4.5	8.3
Adjusted net profit	3.0	2.2	7.5	6.4
Average number of common shares	60,616,505	60,616,505	60,616,505	60,616,505
Earnings/(loss) per share (USD)	0.05	0.04	0.07	0.14

* Applicable to common stockholders of the parent company

Third quarter results

AMSC's operating revenues for each of Q3 2019 and Q3 2018 were USD 22.1 million. EBITDA was USD 21.5 million in Q3 2019 (USD 21.3 million in Q3 2018). EBIT was USD 13.0 million in Q3 2019 (USD 12.8 million in Q3 2018).

Net interest expense (interest expense less interest income) for Q3 2019 was USD 10.0 million (USD 10.4 million in Q3 2018).

In Q3 2019, AMSC had an unrealized gain of USD 0.1 million on the mark-to-market valuation of its interest rate swap contracts related to its vessel financing (gain of USD 0.1 million in Q3 2018).

AMSC had a net profit before tax for Q3 2019 of USD 3.1 million (USD 2.5 million in Q3 2018). Non-cash deferred income tax expense was USD 0.2 million in Q3 2019 (benefit of USD 0.1 million in Q3 2018). Current tax expense was USD 0.2 million in Q3 2018.

The non-cash deferred income tax expense/benefit was the result of accelerated tax depreciation, which has created differences between accumulated depreciation for book and tax purposes and corresponding tax losses, the net of which is recognized as a deferred tax liability on the balance sheet.

As of 30 September 2019, AMSC has approximately USD 549 million of federal net operating losses in carryforward in its U.S. subsidiaries. See Note 6 for more detailed information.

Net profit for Q3 2019 was USD 2.9 million compared to USD 2.4 million in Q3 2018.

Year to date results

AMSC's operating revenues for each of the first nine months of 2019 and 2018 were USD 65.7 million. EBITDA was USD 63.4 million in the first nine months of 2019 (USD 62.9 million for the nine months ending 30 September 2018). EBIT was USD 38.1 million for the nine months ending 30 September 2019 and USD 37.6 million for the same period in 2018.

Net interest expense (interest expense less interest income) for the first nine months of 2019 was USD 30.4 million (USD 31.0 million for the same period in 2018).

In the first nine months of 2019, AMSC had an unrealized loss of USD 3.3 million on the mark-to-market valuation of its interest rate swap contracts related to its vessel financing (gain of USD 2.5 in the same period in 2018).

AMSC had a net profit before tax for the nine months ending 30 September 2019 and 2018 of USD 4.3 million and USD 9.1 million, respectively. Non-cash deferred income tax benefit was USD 0.3 million in the first nine months of 2019 (expense of USD 0.6 million in the same period of 2018). AMSC recognized an income tax expense of USD 0.1 million in the first nine months of 2019 (USD 0.2 million in the same period 2018), relating to state taxes. Net profit for year-to-date 2019 was USD 4.5 million compared to USD 8.3 million in the same period of 2018.

	unaudited
	30-Sep	30-Sep	31-Dec
Amounts in USD million	2019	2018	2018 *
Vessels	686.5	720.3	711.8
Interest-bearing long term receivables (DPO)	25.3	27.2	26.7
Other non current assets	-	16.4	16.4
Derivative financial assets	-	4.2	2.4
Trade and other receivables	0.1	0.1	0.2
Cash held for specified uses	2.4	2.1	2.7
Cash and cash equivalents	50.5	47.3	51.1
Total assets	764.8	817.7	811.3
Total equity	166.0	180.6	176.1
Deferred tax liabilities	12.7	12.3	13.0
Interest-bearing long term debt	533.2	580.7	572.3
Derivative financial liabilities	0.9	-	-
Interest-bearing short term debt	41.6	28.3	29.6
Deferred revenues and other payables	10.4	15.8	20.3
Total equity and liabilities	764.8	817.7	811.3

Condensed Statement of Financial Position

* Derived from audited financial statements

The decrease in Vessels from 31 December 2018 reflects depreciation of the Company's 10 vessels for the nine months ending 30 September 2019.

During Q3 2019, Overseas Shipholding Group, Inc. ("OSG") made repayments on the DPO of USD 0.9 million, of which USD 0.5 million is principal repayment. See note 12 to the condensed consolidated financial statements for additional information on the DPO.

Other non-current assets included AMSC's 19.6% investment in Philly Tankers AS ("PTAS"). In Q1 2019, PTAS liquidated the company and distributed its remaining available cash to its shareholders. AMSC received USD 16.3 million net of tax, of which USD 10.7 million was used to repay all outstanding principal and interest on its subordinated loan from Aker ASA. In total, AMSC received USD 28.8 million in gross after tax proceeds from the initial USD 25 million investment in PTAS.

Interest bearing debt as of 30 September 2019 was USD 574.8 million, net of USD 5.3 million in capitalized fees versus USD 601.9 million as of 31 December 2018. This debt relates to the bank financing for the Company's 10 vessels of USD 360.1 million and the bond of USD 220.0 million. AMSC was in compliance with all of its debt covenants as of 30 September 2019.

Outlook

Similarly to last year at this time, all Jones Act tankers are currently on time charter contracts with most vessels chartered for 12 months or longer. Few vessels are available until the end of 2020 and multi-year contracts are now becoming more visible again. AMSC is of the opinion that we are in a multi-year period with a stable Jones Act tanker market which is demonstrating strengthening market conditions, resulting in gradually higher time charter rates for longer durations. Recent fixtures are higher than last year and for longer periods.

The current conditions in the Jones Act tanker market are a result of negative fleet growth over the past two years, in combination with gradually increasing demand for transporting clean products as well as a resurgence of crude shipping transportation.

The order book for new vessels is practically empty and older vessels are continuing to be removed from the fleet. This trend is expected to continue for the coming years with limited yard capacity effectively increasing newbuild cost and delaying potential delivery times. Expensive maintenance capex makes it unattractive to keep investing in older vessels, and we expect the remaining 10 vessels older than 35 years to leave the fleet over the next several years.

The market fundamentals driving demand for shipping clean products as well as crude remain stable and are expected to remain that way for the foreseeable future. The crude spread between WTI priced in Houston and Bonny Light remained open during Q3 and the monthly cargoes being shipped to the U.S. Northeast remained stable at similar levels as seen over the last two years. Clean cargo volumes, mainly from the U.S. Gulf into Florida, remained stable with the majority of the Jones Act fleet being deployed on this trade.

AMSC continues to enjoy downside protection with "come hell or high water" bareboat contracts, with five product tankers secured until December 2022, four product tankers secured until December 2020 and one shuttle tanker secured until June 2025. If the market enters into a period of extended strength, the Company may benefit from a profit share arrangement with OSG, which provides upside beyond fixed contracted rates.

Risks

The risks facing AMSC principally relate to the operational and financial performance of OSG, re-chartering risk as well as overall market risk.

AMSC's activities also expose the Company to a variety of other financial risks, including but not limited to, currency, interest rate, refinancing, and liquidity risk.

For further details of AMSC's risks, refer to the 2018 Annual Report.

Definitions

Jones Act - The U.S. cabotage law, referred to as Jones Act, requires all commercial vessels operating between U.S. ports to be built, owned, operated and manned by U.S. citizens and to be registered under the U.S. flag. In 1996 certain amendments were enacted to the U.S. vessel documentations laws, allowing increased non-U.S. participation in the ownership of vessels operating in the Jones Act trade under certain conditions, known as the finance lease exemption.

Lysaker, 19 November 2019 The Board of Directors and President / CEO American Shipping Company ASA

Annette Malm Justad Peter D. Knudsen Chairperson Director

Kristian Røkke Pål Magnussen Director President / CEO

AMERICAN SHIPPING COMPANY ASA GROUP CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRD QUARTER AND YEAR TO DATE 2019 CONDENSED INCOME STATEMENT

	unaudited
	Q3 Q3 Year to date
Amounts in USD million (except share and per share information)	2019	2018	2019	2018
Operating revenues	22.1	22.1	65.7	65.7
Operating expenses	(0.6)	(0.8)	(2.3)	(2.8)
Operating profit before depreciation - EBITDA	21.5	21.3	63.4	62.9
Depreciation	(8.5)	(8.5)	(25.3)	(25.3)
Operating profit - EBIT	13.0	12.8	38.1	37.6
Gain / (loss) on investments	-	-	(0.1)	-
Net interest expense	(10.0)	(10.4)	(30.4)	(31.0)
Unrealized gain/(loss) on interest swaps	0.1	0.1	(3.3)	2.5
Profit/(loss) before income tax	3.1	2.5	4.3	9.1
Income tax expense	-	(0.2)	(0.1)	(0.2)
Non-cash income tax (expense) / benefit	(0.2)	0.1	0.3	(0.6)
Net profit/(loss) for the period *	2.9	2.4	4.5	8.3
Average number of common shares	60,616,505	60,616,505	60,616,505	60,616,505
Earnings/(loss) per share (USD)	0.05	0.04	0.07	0.14

CONDENSED STATEMENT OF CHANGES IN COMPREHENSIVE INCOME

	unaudited
	Q3		Q3 Year to date
Amounts in USD million	2019	2018	2019	2018
Net income/(loss) for the period	2.9	2.4	4.5	8.3
Other comprehensive income for the period, net of tax	-	-	-	-
Total comprehensive income/(loss) for the period *	2.9	2.4	4.5	8.3

* Applicable to common stockholders of the parent company.

CONDENSED STATEMENT OF FINANCIAL POSITION

	unaudited
	30-Sep	30-Sep	31-Dec
Amounts in USD million	2019	2018	2018 *
Assets
Non-current assets
Vessels	686.5	720.3	711.8
Interest-bearing long term receivables (DPO)	25.3	27.2	26.7
Other long term assets	-	16.4	16.4
Derivative financial assets	-	4.2	2.4
Total non-current assets	711.8	768.1	757.3
Current assets
Trade and other receivables	0.1	0.1	0.2
Cash held for specified uses	2.4	2.1	2.7
Cash and cash equivalents	50.5	47.3	51.1
Total current assets	53.0	49.6	54.0
Total assets	764.8	817.7	811.3
Equity and liabilities
Total equity	166.0	180.6	176.1
Non-current liabilities
Bond payable	220.0	220.0	220.0
Other interest-bearing loans	318.5	366.9	358.5
Derivative financial liabilities	0.9	-	-
Capitalized fees	(5.3)	(6.2)	(6.2)
Deferred tax liability	12.7	12.3	13.0
Total non-current liabilities	546.8	593.0	585.3
Current liabilities
Interest-bearing short-term debt	41.6	28.3	29.6
Deferred revenues and other payables	10.4	15.8	20.3
Total current liabilities	52.0	44.1	49.9
Total liabilities	598.8	637.1	635.2
Total equity and liabilities	764.8	817.7	811.3

* Derived from audited financial statements

CONDENSED STATEMENT OF CHANGES IN TOTAL EQUITY

Amounts in USD million		unaudited
	Year to date
	2019	2018
Equity as of beginning of period	176.1	186.9
Total comprehensive income for the period	4.5	8.3
Repurchase of treasury shares	-	-
Proceeds from sale of treasury shares	-	-
Dividends/return of capital	(14.5)	(14.5)
Total equity as of end of period	166.0	180.6

CONDENSED CASH FLOW STATEMENT

	unaudited
	Year to date
Amounts in USD million	2019	2018
Net cash flow from operating activities	26.7	30.8
Net cash flow from investing activities	16.3	0.3
Net cash flow used in financing activities	(43.9)	(35.9)
Net change in cash and cash equivalents	(0.9)	(4.8)
Cash and cash equivalents, including cash held for specified uses at the beginning of period	53.8	54.3
Cash and cash equivalents, including cash held for specified uses at end of period	52.9	49.5

* Derived from audited financial statements

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2019

1. Introduction - American Shipping Company

American Shipping Company ASA ("AMSC") is a company domiciled in Norway. The condensed interim financial statements for the three and nine months ended 30 September 2019 comprise AMSC and its wholly owned subsidiaries. These financial statements have not been audited or reviewed by the Company's auditors. American Shipping Company has one operating segment.

The consolidated 2018 annual financial statements of AMSC are available at www.americanshippingco.com.

2. Basis of Preparation

These consolidated interim financial statements reflect all adjustments, in the opinion of AMSC's management, that are necessary for a fair presentation of the results of operations for the periods presented. Operating results for the three and nine month periods are not necessarily indicative of the results that may be expected for any subsequent interim period or year.

3. Statement of compliance

These consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS) applicable for interim reporting, IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as of and for the year ended 31 December 2018.

4. Significant accounting principles

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as of and for the year ended 31 December 2018.

There have not been any new IFRS standards or interpretations issued or effective after the completion of the annual consolidated financial statements for the year 2018 that have a significant impact on AMSC's financial reporting for the nine months ended 30 September 2019.

5. 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 these estimates.

The most significant judgments made by management in preparing these condensed consolidated interim financial statements in applying the Group's accounting policies, and the key sources of estimation uncertainty, are the same as those that applied to the consolidated financial statements as of and for the year ended 31 December 2018.

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

6. Tax

Income tax expense is recognized in each interim period based on the best estimate of the expected annual income tax rates.

Without the benefit of accelerated depreciation on vessels for U.S. income tax purposes, the Company would have U.S. taxable income. Accordingly, substantially all of the deferred tax expense results from accelerated tax depreciation, which has created differences between accumulated depreciation for book and tax purposes and corresponding tax losses, the net of which is recognized as a deferred tax liability. The Company expects that the deferred tax liability will continue to grow until the U.S. subsidiaries are in a tax payable position for U.S. Federal income tax purposes, which is not expected until the vessels are fully depreciated for tax purposes and currently available tax operating losses are fully utilized. Deferred tax expense is a non-cash item.

Deferred tax assets include the Company's net operating losses in carryforward, the losses on derivative financial liabilities, unused interest expense deductions and capitalized loan fees. Deferred tax liabilities include the value of the vessels. AMSC's effective tax rate is significantly impacted by losses in Norway for which no tax benefit is recorded.

The Company has approximately USD 549 million of federal net operating losses in carryforward in the U.S. subsidiaries as of 30 September 2019, of which approximately USD 381 million are subject to certain limitations under Internal Revenue Service Code Section 382 (see note 5 of the 2018 consolidated financial statements for more details). The Company also has USD 94.1 million of net operating losses in carryforward in Norway as of 31 December 2018.

7. Share capital and equity

As of 30 September 2019, AMSC had 60,616,505 ordinary shares at a par value of NOK 10 per share.

Dividends paid (classified as	2019			2018
repayment of previously paid in share premium)	15-Mar-19	5-Jun-19	10-Sep-19	1-Mar-18	7-Jun-18	7-Sep-18
NOK per share	0.6936	0.6975	0.725	0.6209	0.654	0.665
USD per share	0.080	0.080	0.080	0.080	0.080	0.080
Aggregate NOK (millions)	42.0	42.3	43.9	37.6	39.6	40.3
Aggregate USD (millions)	4.8	4.8	4.8	4.8	4.8	4.8

8. Interest-bearing debt

The following table shows material changes in interest-bearing debt:

	9 months to
Amounts in USD million	30-Sep-19	30-Sep-18
Balance at beginning of period	601.9	628.4
Repayment of debt / loan fees Amortization of loan fees and discount	(29.3) 2.2	(21.4) 1.9
Balance at end of period	574.8	609.0

The Company was in compliance with all of its debt covenants as of 30 September 2019.

9. Related party transactions

AMSC believes that related party transactions are made on terms equivalent to those that prevail in arm's length transactions.

10. Interest

	3 months to		9 months to
Amounts in USD million	30-Sep-19	30-Sep-18	30-Sep-19	30-Sep-18
Interest expense Interest income	(10.7) 0.7	(11.0) 0.6	(32.3) 1.9	(32.7) 1.7
Net interest expense	(10.0)	(10.4)	(30.4)	(31.0)

11. Profit sharing agreement with OSG

AMSC and OSG have an agreement to share profits from OSG's operations of AMSC's 10 vessels. The calculation of profit to share is complex and made on an aggregated fleet level. The calculation thus starts with total vessel revenue, subtracted by defined cost elements including provisions for drydock costs. The profit share is reported quarterly, but is calculated on an aggregated fleet level over a full calendar year. Accordingly, one may have individual quarters with positive profit share offset by quarters with negative profit share. Nonetheless, AMSC's portion of the profit can never be negative on an annual basis.

However, in years of weak markets there may be shortfalls in net time charter revenues applied to cover provisions for future drydocks. Such shortfalls need to be recovered by net time charter revenues in subsequent years with stronger markets. Similarly, if drydock provisions deducted in the profit share calculation are too high these are adjusted through a true-up mechanism once special surveys for individual vessels are completed. The concept of true-ups ensure that any shortfall or excess in drydock provisions are adjusted to reflect the actual cost of drydocks over the five year special survey cycles.

Profit Sharing Calculation for Q3 2019

AMSC's 50% share of the full year profit is used to reduce the OSG credit. In the agreement negotiated with OSG, the "OSG credit" is the amount of AMSC's profit sharing that OSG retains prior to having an obligation to remit profit sharing payments to AMSC. After the OSG credit has been fully reduced to zero, AMSC will receive its 50% share of the subsequent profit share in cash. The OSG credit balance was as of 31 December 2018 USD 5.9 million. Since profit share for 2019 was zero, the OSG credit balance of USD 5.9 million has not been reduced, and interest of USD 0.4 million was accrued.

12. Deferred Principal Obligation (DPO)

Pursuant to the current charter agreements, OSG had 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 paid a reduced bareboat charter rate and assumed the DPO. The DPO accrued on a daily basis to a maximum liability from OSG of USD 7.0 million per vessel. The DPO during the initial seven year period was discounted using the estimated market discount rate at lease inception. After the initial seven years, the DPO is repaid to AMSC over 18 years including interest unless the bareboat charter is terminated earlier at which time the DPO becomes due immediately. OSG has made repayments on all five vessels delivered under the arrangement, and those vessels' cash bareboat charter hire resumed to its full contractual amount.

	9 months to
Amounts in USD million	30-Sep-19	30-Sep-18
Balance at beginning of period	26.7	28.7
Repayments of principal	(1.4)	(1.5)
Balance at end of period	25.3	27.2

13. Financial Instruments

The only financial instruments that the Company accounts for at fair value on an ongoing basis are the interest rate swaps, which are classified in the Level 2 category as is described in the 2018 consolidated financial statements. The Company's policy is to recognize transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer. During the quarter ended 30 September 2019, there were no transfers between categories.

The fair values of financial instruments, the related fair value hierarchy, together with the carrying amounts shown in the balance sheet are as follows:

	Carrying	Fair	Fair
	amount	value	value
Amounts in USD millions	30-Sep-19	30-Sep-19	hierarchy *
Interest-bearing receivables (DPO)	25.3	20.9	3
Interest swap used for economic hedging	(0.9)	(0.9)	2
Unsecured bond issue (gross)	(220.0)	(221.1)	2
Secured loans (gross)	(360.1)	(363.8)	2

The fair value of cash, accounts receivable and accounts payable approximate the carrying values due to their short-term nature.

* Described in the 2018 consolidated financial statements

14. Alternative Performance Measures

Alternative performance measures are financial measures other than the financial measures defined under IFRS. In accordance with guidelines, AMSC publishes the explanation of the use of alternative performance measures used by the Company, definitions of the performance measures used and reconciliation with the IFRS financial statement.

AMSC discloses Normalized EBITDA and Adjusted Net Profit in order to provide meaningful supplemental information to management and investors as the Company believes these measures enhance an understanding of the Company's operating earnings. The Company also discloses its revenue backlog which includes its bareboat charter revenue from fixed bareboat contracts, not including options.

Normalized EBITDA is calculated as operating revenues (base bareboat revenue) less operating expenses plus profit sharing plus DPO. Adjusted Net Profit includes net profit/(loss) after tax, adjusting for nonrecurring items, currency fluctuations, mark-to-market of derivatives and changes to deferred tax. The tables below illustrate the comparative information for normalized EBITDA and reconciliation to the reported EBITDA and Adjusted net profit and a reconciliation to net profit/(loss) after tax.

	unaudited
	Q3	Q3	Year to date
Normalized EBITDA (amounts in USD millions)	2019	2018	2019	2018
Base bareboat revenue	22.1	22.1	65.7	65.7
Less operating expenses	(0.6)	(0.8)	(2.3)	(2.8)
Reported EBITDA	21.5	21.3	63.4	62.9
Plus profit share	-	-	-	-
Plus DPO	0.9	0.9	2.7	2.7
Normalized EBITDA	22.4	22.2	66.1	65.6
	unaudited
	Q3	Q3	Year to date
Adjusted net profit (amounts in USD millions)	2019	2018	2019	2018
Net profit/loss after tax	2.9	2.4	4.5	8.3
Add back:
Unrealized (gain)/loss on interest swaps	(0.1)	(0.1)	3.3	(2.5)
Non-cash income tax expense	0.2	(0.1)	(0.3)	0.6
Adjusted net profit	3.0	2.2	7.5	6.4

15. American Tanker, Inc. consolidated financial statements

In accordance with the bond loan agreement, below are the consolidated unaudited financial statements for American Tanker, Inc. and its subsidiaries for the first nine months of 2019.

CONDENSED INCOME STATEMENT
	unaudited
	Q3
Amounts in USD million (except share and per share information)	2019
Operating revenues	65.7
Operating expenses	(1.0)
Operating profit before depreciation - EBITDA	64.7
Depreciation	(25.3)
Operating profit - EBIT	39.4
Net interest expense	(37.0)
Unrealized gain/(loss) on interest swaps	(3.3)
Other financial expenses	(1.9)
Profit/(loss) before income tax	(2.8)
Income tax expense	(0.1)
Non-cash income tax benefit/(expense)	0.5
Net profit/(loss) for the period *	(2.4)
Average number of common shares	1,000
Earnings/(loss) per share (USD thousands)	(2.40)

* Applicable to common stockholders of the parent company.

CONDENSED STATEMENT OF FINANCIAL POSITION
	unaudited
Amounts in USD million	30-Sep 2019
Assets
Non-current assets
Vessels	685.4
Interest-bearing long term receivables (DPO)	25.3
Derivative financial assets	-
Total non-current assets	710.7
Current assets
Other current assets	0.1
Cash held for specified uses	2.4
Cash and cash equivalents	31.0
Total current assets	33.5
Total assets	744.2
Equity and liabilities
Total equity	58.4
Non-current liabilities
Bond payable	220.0
Other interest-bearing loans	406.0
Derivative financial liabilities	0.9
Capitalized fees	(5.3)
Deferred tax liability	13.4
Total non-current liabilities	635.1
Current liabilities
Interest-bearing short-term debt	41.6
Deferred revenues and other payables	9.2
Total current liabilities	50.8
Total liabilities	685.9
Total equity and liabilities	744.2

CONDENSED CASH FLOW STATEMENT

	unaudited
	Q3
Amounts in USD million	2019
Net cash flow from operating activities	25.8
Net cash flow used in financing activities	(22.6)
Net change in cash and cash equivalents	3.2
Cash and cash equivalents, including cash held for specified uses at the beginning of period	30.2
Cash and cash equivalents, including cash held for specified uses at end of period

16. Subsequent events

On 19 November 2019, the Board authorized a quarterly dividend payment of USD 0.08 per share to the shareholders on record as of 27 November 2019, in line with prior guidance. The shares in AMSC will be traded ex. dividend from and including 26 November 2019, and the dividend will be paid on or about 5 December 2019. The dividend is classified as a return of paid in capital.

American Shipping Company ASA Oksenøyveien 10 PO Box 230 1326 Lysaker NORWAY

Pål Magnussen	Morten Bakke	Leigh Jaros
President / CEO	CFO	Business Controller/
		Financial Manager
Tel: +47 24 13 00 04	Tel: +47 24 13 00 87
Cell: +47 90 54 59 59	Cell: +47 90 09 55 94	Cell: +1 484 880 3741
pal.magnussen@amshipco.no	morten.bakke@amshipco.no	leigh.jaros@amshipco.com

Disclaimer

This release includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for American Shipping Company ASA and its subsidiaries and affiliates (the "American Shipping Company Group") lines of business. These expectations, estimates, and projections are generally identifiable by statements containing words such as "expects," "believes," "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the American Shipping Company Group's businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although American Shipping Company ASA believes that its expectations and the information in this release were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this release. Neither American Shipping Company ASA nor any other company within the American Shipping Company Group is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the release, and neither American Shipping Company ASA, any other company within the American Shipping Company Group nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the release.

American Shipping Company ASA undertakes no obligation to publicly update or revise any forward-looking information or statements in the release, other than what is required by law.

The American Shipping Company Group consists of many legally independent entities, constituting their own separate identities. American Shipping Company is used as the common brand or trade mark for most of these entities. In this release we may sometimes use "American Shipping Company"," "Group, "we," or "us," when we refer to American Shipping Company Group companies in general or where no useful purpose is served by identifying any particular company of American Shipping Company.