AMSC ASA — Interim / Quarterly Report 2021

Aug 20, 2021

AMERICAN SHIPPING COMPANY ASA

Second Quarter 2021 Report

Second Quarter 2021 Report

Lysaker, 20 August 2021, American Shipping Company ASA ("AMSC" or the "Company") announces results for the second quarter ending 30 June 2021.

HIGHLIGHTS

• Stable Q2 financial performance with bareboat revenue of USD 21.9 million, normalized EBITDA of USD 21.4 million and adjusted net profit of USD 4.0 million
• Declared Q2 dividend of USD 0.10 per share, supported by the Company's free cash flow
• Backlog of secured bareboat revenue of USD 192 million with average weighted tenor of 2.2 years
• The Company executed a USD 20 million tap issue under the senior unsecured bond

AMSC CEO, Pål Lothe Magnussen comments, "We are pleased to report stable financial performance in a recovering Jones Act tanker market. Over the past few months there have been several new time charter fixtures made for multiple year terms at healthy rate levels. The long term fundamentals remain attractive which is underpinned by recent M&A activity at strong valuations."

MAIN EVENTS DURING AND SUBSEQUENT TO THE SECOND QUARTER

• Operating income: Operating income was stable at USD 12.1 million in Q2 2021 and USD 12.8 million in Q2 2020.
• Normalized EBITDA: Normalized EBITDA of USD 21.4 million for Q2 2021 consists of base bareboat revenue of USD 21.9 million, plus Deferred Principal Obligation ("DPO") of USD 0.8 million, less SG&A of USD 1.3 million. The comparative figure for Q2 2020 for normalized EBITDA was USD 22.1 million (consisting of base bareboat revenue of USD 21.9 million, plus DPO of USD 0.9 million, less SG&A of USD 0.7 million). See Note 14 for more detailed information.
• Adjusted net profit: Adjusted net profit of USD 4.0 million for Q2 2021 consists of net profit after tax, adjusted for non‐ recurring items, currency fluctuations, mark‐to‐market of derivatives and changes to non‐cash deferred tax expenses. The comparative figure for Q2 2020 was USD 3.5 million. See Note 14 for further details.
• Bond tap Issue: On 15 April 2021, American Tanker, Inc. ("ATI"), an indirectly wholly owned subsidiary of AMSC, executed a tap issue of USD 20 million in the senior unsecured bond due 2 July 2025. The tap issue was made at an issue price of 101% of nominal amount. Following settlement on 19 April 2021, the outstanding amount of the senior unsecured bond is USD 220 million.
• Dividends: On 19 May 2021, the Board authorized a quarterly dividend payment of USD 0.10 per share, the equivalent of NOK 0.8321 per share, to the shareholders on record as of 27 May, which was paid on 4 June 2021. The dividend was classified as a return of paid in capital.

On 19 August 2021, the Board authorized a dividend payment of USD 0.10 per share to the shareholders on record as of 27 August 2021. The shares in AMSC will be traded ex. dividend from and including 26 August 2021, and the dividend will be paid on or about 3 September 2021. 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. The COVID‐19 pandemic is creating uncertainty on market fundamentals impacting the Jones Act tanker market and may affect the Company's ability to continue paying dividends.

SECOND QUARTER FINANCIAL REVIEW

Condensed Income Statement

		unaudited
	Q2	Q2	Year to Date
Amounts in USD million (except share and per share information)	2021	2020	2021	2020
Operating revenues	21.9	21.9	43.6	43.8
Operating profit before depreciation ‐ EBITDA	20.6	21.2	41.0	42.3
Normalized EBITDA	21.4	22.1	42.7	44.0
Operating profit ‐ EBIT	12.1	12.8	24.2	25.4
Net financial expense	(7.6)	(10.8)	(14.5)	(22.4)
Unrealized gain/(loss) on interest swaps	0.4	(1.1)	(0.1)	(0.3)
Net foreign exchange gain/(loss)	‐	0.2	‐	‐
Profit/(loss) before income tax	4.9	1.1	9.6	2.7
Income tax expense	(0.3)	(0.1)	‐	(0.1)
Non‐cash income tax (expense) / benefit	(1.0)	0.1	(2.1)	0.1
Net profit/(loss) for the period *	3.6	1.1	7.6	2.7
Adjusted net profit	4.0	3.5	9.5	6.4
Average number of common shares	60,616,505	60,616,505	60,616,505	60,616,505
Earnings/(loss) per share (USD)	0.06	0.02	0.12	0.05

* Applicable to common stockholders of the parent company

Second quarter results

AMSC's operating revenues for Q2 2021 and Q2 2020 were USD 21.9 million each. EBITDA was USD 20.6 million in Q2 2021 and USD 21.2 million in Q2 2020. EBIT was USD 12.1 million in Q2 2021 and USD 12.8 million in Q2 2020.

Net financial expense for Q2 2021 was USD 7.6 million (USD 10.8 million in Q2 2020). The reduced expense is due to the refinancing of AMSC's debt during 2020, as well as a USD 0.2 million gain on the bond tap issued at 101 of par recognized during Q2 2021.

In Q2 2021, AMSC had an unrealized gain of USD 0.4 million on the mark‐to‐market valuation of its interest rate swap contracts related to its vessel financing (USD 1.1 million loss in Q2 2020).

AMSC had a net profit before tax for Q2 2021 of USD 4.9 million (USD 1.1 million in Q2 2020). Income tax expense for Q2 2021 was USD 0.3 million (USD 0.1 million in Q2 2020). Non‐cash deferred income tax expense was USD 1.0 million in Q2 2021 (USD 0.1 million benefit in Q2 2020). Net profit for Q2 2021 was USD 3.6 million compared to USD 1.1 million in Q2 2020.

Year to date results

AMSC's operating revenues for the first six months of 2021 and 2020 were USD 43.6 million and USD 43.8 million, respectively. EBITDA was USD 41.0 million year to date in 2021 and USD 21.2 million in the same period of 2020. EBIT was USD 24.2 million in the six months ending 30 June 2021 (USD 25.4 million in the same period of 2020).

Net financial expense for the first six months of 2021 was USD 14.5 million (USD 22.4 million in the first six months of 2020). The reduced expense is due to the refinancing of AMSC's debt during 2020, as well as a USD 0.2 million gain on the bond tap issued at 101 of par recognized during Q2 2021. During Q1 2020, AMSC made a one‐time payment of USD 1.9 million to terminate the interest rate swaps in connection with the refinancing

In 2021, AMSC had an unrealized loss of USD 0.1 million on the mark‐to‐market valuation of its interest rate swap contracts related to its vessel financing (USD 0.3 million loss in 2020).

AMSC had a net profit before tax for the six months ending 30 June 2021 of USD 9.6 million (USD 2.7 million for the six months ending 30 June 2020). Income tax expense for year to date 2021 was 0 (USD 0.1 million in 2020). Non‐

cash deferred income tax expense was USD 2.1 million in 2021 (USD 0.1 million benefit in 2020). Net profit for the first six months of 2021 was USD 7.5 million compared to USD 2.7 million in the first six months of 2020.

As of 31 December 2020, AMSC has approximately USD 517.6 million of federal net operating losses in carryforward in its U.S. subsidiaries and approximately USD 75.8 million of net operating losses in Norway. See Note 6 for more detailed information.

The non‐cash deferred income tax benefit in the U.S. 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.

Condensed Statement of Financial Position

	unaudited
	30‐Jun	30‐Jun	31‐Dec
Amounts in USD million	2021	2020	2020 *
Vessels	632.7	662.0	649.5
Deferred tax assets	13.7	‐	14.8
Interest‐bearing long term receivables (DPO)	22.4	24.3	23.3
Trade and other receivables	0.9	0.3	0.3
Cash held for specified uses	1.4	0.9	0.9
Cash and cash equivalents	58.5	44.5	34.9
Total assets	729.6	732.0	723.7
Total equity	156.7	157.9	161.3
Deferred tax liabilities	10.3	11.2	9.2
Interest‐bearing long term debt	524.1	527.1	516.8
Derivative financial liabilities	1.3	1.1	1.2
Interest‐bearing short term debt	26.8	26.8	26.8
Deferred revenues and other payables	10.4	7.9	8.3
Total equity and liabilities	729.6	732.0	723.7

* Derived from audited financial statements

The decrease in Vessels from 31 December 2020 reflects depreciation of the Company's 10 vessels for the first six months of 2021.

At year‐end 2020, AMSC recognized its Norwegian net deferred tax assets which had not previously been recognized.

During 2021, Overseas Shipholding Group, Inc. ("OSG") made repayments on the DPO of USD 1.7 million, of which USD 0.9 million is principal repayment. See note 12 to the condensed consolidated financial statements for additional information on the DPO.

Interest bearing debt as of 30 June 2021 was USD 550.9 million, net of USD 8.0 million in capitalized fees versus USD 543.6 million as of 31 December 2020. This debt relates to the bank financing for the Company's 10 vessels of USD 338.9 million and the unsecured bond of USD 220.0 million. AMSC was in compliance with all of its debt covenants as of 30 June 2021.

Outlook

The long‐term fundamentals in the Jones Act tanker market remain attractive and market participants see encouraging signs for improved market conditions, which is evidenced by recent M&A activity by incumbents at healthy valuations. MR tankers are a reliable means of transportation and a key part of the infrastructure transporting fuel and crude oil across the USA. AMSC's 10 tanker fleet is key part of the Jones Act and represents about 30% of the modern tanker fleet.

Due to limited yard capacity, the vessel supply side remains stable with no newbuilds likely to enter the market for many years. The Jones Act tanker fleet is in addition likely to continue to shrink as older tonnage is facing expensive drydocks and special surveys and will likely be phased out of the market.

During the second quarter, demand for clean products was still lagging normal market conditions, but as economic recovery continues, current demand is only about 4% lower that pre‐COVID averages. The lag is partly due to higher than normal imports driven by low international product tanker rates and continued COVID‐19 measures in Europe and elsewhere making excess fuel available at low cost.

U.S. refinery utilization is now close to normal levels and above 90%. A continued recovery is expected to increase refinery activity further and subsequently demand for Jones Act tanker transportation.

Crude oil cargoes from the U.S. Gulf to the U.S. North East remain subdued as the price spread between WTI and Brent/Bonny has not been sufficiently wide to support cargo volumes experienced prior to the pandemic. We remain optimistic that this trade will return to historical levels as U.S. shale production increases on the back of a continued global economic recovery.

Over the past few months there have been numerous new time charter fixtures made for multiple year terms at healthy rate levels. End users are more optimistic and willing to commit to term contracts. Eight MR tankers remain in warm layup, but one has announced to emerge from lay up on the back of a new time charter during the second half of the year. The expectation is that vessels in layup will be further reduced during the remainder of the year and into next year on the back of a global economic recovery.

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 2023 and one shuttle tanker secured until June 2025.

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 2020 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 August 2021 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

Responsibility statement

The unaudited condensed interim consolidated financial statements of American Shipping Company ASA and its subsidiaries ("Group") and interim financial report as of 30 June 2021 and for the first half of 2021 were approved by the Board of Directors and Managing Director on 19 August 2021.

The interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as endorsed by the EU and the additional requirements in the Norwegian Securities Trading Act.

To the best of our knowledge, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principle opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.

Lysaker, 19 August 2021 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 SEOND QUARTER AND FIRST SIX MONTHS OF 2021

CONDENSED INCOME STATEMENT
	unaudited
	Q2	Q2	Year to Date
Amounts in USD million (except share and per share information)	2021	2020	2021	2020
Operating revenues	21.9	21.9	43.6	43.8
Operating expenses	(1.3)	(0.7)	(2.6)	(1.5)
Operating profit before depreciation ‐ EBITDA	20.6	21.2	41.0	42.3
Depreciation		(8.5) (8.4)	(16.8)	(16.9)
Operating profit ‐ EBIT	12.1	12.8	24.2	25.4
Net financial expense	(7.6)	(10.8)	(14.5)	(22.4)
Unrealized gain/(loss) on interest swaps	0.4	(1.1)	(0.1)	(0.3)
Net foreign exchange gain/(loss)	‐	0.2	‐	‐
Profit/(loss) before income tax	4.9	1.1	9.6	2.7
Income tax (expense) / benefit	(0.3)	(0.1)	‐	(0.1)
Non‐cash income tax (expense) / benefit	(1.0)	0.1	(2.1)	0.1
Net profit/(loss) for the period *	3.6	1.1	7.5	2.7
Average number of common shares	60,616,505	60,616,505	60, 616,505	60,616,505
Earnings/(loss) per share (USD)	0.06	0.02	0.12	0.05

CONDENSED STATEMENT OF CHANGES IN COMPREHENSIVE INCOME

	unaudited
	Q2	Q2		Year to Date
Amounts in USD million	2021	2020	2021	2020
Net income/(loss) for the period	3.6	1.1	7.5	2.7
Other comprehensive income for the period, net of tax	‐	‐	‐	‐
Total comprehensive income/(loss) for the period *	3.6	1.1	7.5	2.7

* Applicable to common stockholders of the parent company.

CONDENSED STATEMENT OF FINANCIAL POSITION

	unaudited
	30‐Jun	30‐Jun	31‐Dec
Amounts in USD million	2021	2020	2020 *
Assets
Non‐current assets
Vessels	632.7	662.0	649.5
Deferred tax assets	13.7	‐	14.8
Interest‐bearing long term receivables (DPO)	22.4	24.3	23.3
Total non‐current assets	668.8	686.3	687.6
Current assets
Trade and other receivables	0.9	0.3	0.3
Cash held for specified uses	1.4	0.9	0.9
Cash and cash equivalents	58.5	44.5	34.9
Total current assets	60.8	45.7	36.1
Total assets	729.6	732.0	723.7
Equity and liabilities
Total equity	156.7	157.9	161.3
Non‐current liabilities
Bond payable	220.0	220.0	200.0
Other interest‐bearing loans	312.1	314.0	325.6
Derivative financial liabilities	1.3	1.1	1.2
Capitalized fees		(8.0) (6.9)	(8.7)
Deferred tax liability	10.3	11.2	9.2
Total non‐current liabilities	535.7	539.4	527.3
Current liabilities
Interest‐bearing short‐term debt	26.8	26.8	26.8
Deferred revenues and other payables	10.4	7.9	8.3
Total current liabilities	37.2	34.7	35.1
Total liabilities	572.9	574.1	562.4
Total equity and liabilities	729.6	732.0	723.7

* Derived from audited financial statements

CONDENSED STATEMENT OF CHANGES IN TOTAL EQUITY

	unaudited Year to Date
Amounts in USD million	2021	2020
Equity as of beginning of period	161.3	165.0
Total comprehensive income for the period	7.5	2.7
Repurchase of treasury shares	‐	(0.1)
Proceeds from sale of treasury shares	‐	‐
Dividends/return of capital	(12.1)	(9.7)
Total equity as of end of period	156.7	157.9

CONDENSED CASH FLOW STATEMENT

	unaudited
	Year to Date
Amounts in USD million	2021	2020
Net cash flow from operating activities	30.1	23.4
Net cash flow used in financing activities	(6.0)	(25.9)
Net change in cash and cash equivalents	24.1	(2.5)
Cash and cash equivalents, including cash held for specified uses at the beginning of period	35.7	47.9
Cash and cash equivalents, including cash held for specified uses at end of period	59.9	45.4

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED 30 JUNE 2021

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 six months ended 30 June 2021 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 2020 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 six 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 2020.

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 2020.

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 2020 that have a significant impact on AMSC's financial reporting for the three and six months ended 30 June 2021.

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 2020.

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 the tax benefit was recorded during 2020.

The Company has approximately USD 517.6 million of federal net operating losses in carryforward in the U.S. subsidiaries as of 31 December 2020, of which approximately USD 164.3 million are subject to certain limitations under Internal Revenue Service Code Section 382 (see note 5 of the 2020 consolidated financial statements for more details). The Company also has approximately USD 75.8 million of net operating losses in carryforward in Norway as of 31 December 2020.

7. Share capital and equity

As of 30 June 2021, AMSC had 60,616,505 ordinary shares at a par value of NOK 10 per share.

Dividends paid (classified as repayment of	2021		2020
previously paid in share premium)	1‐Mar‐21	4‐Jun‐21	16‐Mar‐20	4‐Jun‐20
NOK per share	0.8470	0.8321	0.7478	0.8019
USD per share	0.100	0.100	0.080	0.080
Aggregate NOK (millions)	51.3	50.4	45.3	48.6
Aggregate USD (millions)	6.1	6.1	4.8	4.8

8. Interest‐bearing debt

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

	6 months to
Amounts in USD million	30‐Jun‐21	30‐Jun‐20
Balance at beginning of period	543.6	567.0
Repayment of debt / loan fees	(13.8)	(296.0)
Issuance of debt	20.0	280.0
Amortization of loan fees	1.1	2.9
Balance at end of period	550.9	553.9

The Company was in compliance with all of its debt covenants as of 30 June 2021.

On 15 April 2021, the Company executed a tap issue of USD 20 million in the senior unsecured bond due 2 July 2025. The tap issue was made at an issue price of 101% of nominal amount. Following settlement on 19 April 2021, the outstanding amount of the senior unsecured bond is USD 220 million. The USD 0.2 million gain on the issue was recognized during Q2 2021 as a reduction of interest expense.

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. Net financial expenses

	3 months to		6 months to
Amounts in USD million	30‐Jun‐21	30‐Jun‐20	30‐Jun‐21	30‐Jun‐20
Interest expense	(7.9)	(11.2)	(15.6)	(23.4)
Interest income	0.3	0.4	1.1	1.0
Net financial expense	(7.6)	(10.8)	(14.5)	(22.4)

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 time charter 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.

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 Q2 2021

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 2020 USD 7.1 million.

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 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.

	6 months to
Amounts in USD million	30‐Jun‐21	30‐Jun‐20
Balance at beginning of period	23.3	25.3
Repayments of principal	(0.9)	(1.0)
Balance at end of period	22.4	24.3

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 2020 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 June 2021, 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‐Jun‐21	30‐Jun‐21	hierarchy *
Interest‐bearing receivables (DPO)	22.4	18.8	3
Interest swap used for economic hedging	(1.3)	(1.3)	2
Unsecured bond issue (gross)	(220.0)	(227.7)	2
Secured loans (gross)	(338.9)	(339.9)	2

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

* Described in the 2020 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 non‐recurring 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
	Q2 Q2 Year to Date
Normalized EBITDA (amounts in USD millions)	2021	2020	2021	2020
Base bareboat revenue	21.9	21.9	43.6	43.8
Less operating expenses	(1.3)	(0.7)	(2.6)	(1.5)
Reported EBITDA	20.6	21.2	41.0	42.3
Plus profit share	‐	‐	‐	‐
Plus DPO	0.8	0.9	1.7	1.7
Normalized EBITDA	21.4	22.1	42.7	44.0

		unaudited
	Q2	Q2	Year to Date
Adjusted net profit (amounts in USD millions)	2021	2020	2021	2020
Net profit/loss after tax	3.6	1.1	7.6	2.7
Add back:
Unrealized (gain)/loss on interest swaps	(0.4)	1.1	0.1	0.3
Net foreign exchange (gain)/loss	‐	(0.2)	‐	‐
Non‐cash income tax expense	1.0	(0.1)	2.1	(0.1)
Loan refinancing:
Interest swap termination payments	‐	‐	‐	1.9
Bond premium	(0.2)	‐	(0.2)	‐
Write‐off unamortized lending fees	‐	1.6	‐	1.6
Adjusted net profit	4.0	3.5	9.5	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 six months of 2021.

CONDENSED INCOME STATEMENT

	unaudited
	YTD
Amounts in USD million (except share and per share information)	2021
Operating revenues	43.6
Operating expenses	(1.4)
Operating profit before depreciation ‐ EBITDA	42.2
Depreciation	(16.8)
Operating profit ‐ EBIT	25.4
Net interest expense	(18.9)
Unrealized gain/(loss) on interest swaps	(0.1)
Other financial expenses	(1.0)
Profit/(loss) before income tax	5.3
Income tax expense	‐
Non‐cash income tax benefit/(expense)	(1.1)
Net profit/(loss) for the period *	4.2
Average number of common shares	1,000
Earnings/(loss) per share (USD thousands)	4.22

* Applicable to common stockholders of the parent company.

CONDENSED STATEMENT OF FINANCIAL POSITION

	unaudited
	30‐Jun
Amounts in USD million	2021
Assets
Non‐current assets
Vessels	631.7
Interest‐bearing long term receivables (DPO)	22.4
Total non‐current assets	654.1
Current assets
Other current assets	0.8
Cash held for specified uses	1.4
Cash and cash equivalents	52.5
Total current assets	54.8
Total assets	708.8
Equity and liabilities
Total equity	48.8
Non‐current liabilities
Bond payable	220.0
Other interest‐bearing loans	401.7
Derivative financial liabilities	1.3
Capitalized fees	(8.0)
Deferred tax liability	11.0
Total non‐current liabilities	626.1
Current liabilities
Interest‐bearing short‐term debt	26.8
Deferred revenues and other payables	7.1
Total current liabilities	33.9
Total liabilities	660.0
Total equity and liabilities	708.8

CONDENSED CASH FLOW STATEMENT

	unaudited
	YTD
Amounts in USD million	2021
Net cash flow from operating activities	25.8
Net cash flow used in financing activities	6.2
Net change in cash and cash equivalents	31.9
Cash and cash equivalents, including cash held for specified uses at the beginning of period	22.0
Cash and cash equivalents, including cash held for specified uses at end of period	53.9

16. Subsequent events

On 19 August 2021, the Board authorized a dividend payment of USD 0.10 per share to the shareholders on record as of 27 August 2021. The shares in AMSC will be traded ex. dividend from and including 26 August 2021, and the dividend will be paid on or about 3 September 2021. 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	Controller
Tel: +47 24 13 00 04	Tel: +47 24 13 00 87	Cell: +1 484 880 3741
Cell: +47 90 54 59 59	Cell: +47 90 09 55 94
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.