Strategy

As a major international shipping company focused on global energy transportation markets, OSG's goals are to:

• Be the market leader in all shipping segments in which it competes;
  
• Optimize its fleet in order to maximize ROIC¹ in all shipping cycles;
  
• Set the Gold Standard of technical management; and
  
• Maintain financial flexibility in order to expand existing businesses and enter new markets.

Global Market Leader
OSG has leading positions in the crude oil tanker, the product carrier and the U.S. Flag markets and is a recent entrant in the liquefied natural gas (LNG) business. By timing expansion in each sector, OSG is able to capitalize on continuously evolving market dynamics.

Building OSG’s fleet in each market segment gives it the scale to offer high quality, well operated vessels on demand, which in turn allows it both to expand long-term relationships and win new business with major oil companies. This scale enhances the Company’s ability to enter into contracts of affreightment (COAs) which can significantly increase vessel utilization. OSG’s participation in different market sectors improves cross selling opportunities leading to revenue expansion.

Set the Gold Standard for Technical Management
The large international oil companies of the world demand flawless, incident-free transportation of their cargoes. OSG delivers on this requirement by providing quality, double hull tonnage, experienced crews and has a track record of superior customer service. OSG has invested significantly in global chartering systems that manage vessel coordination and scheduling, as well as hiring and continuously training staff with sea and shore-based industry knowledge. The Company’s long-term goal is to set the industry Gold Standard for technical management. Through benchmarking and best practices, OSG continues to elevate the very high standards it has set for itself, benefiting all its customers.

Financial Flexibility
An important element of OSG’s success and a source for future growth is its strong balance sheet and access to capital. The Company’s balance sheet, credit rating and high level of unencumbered assets gives it access to both unsecured bank markets and public debt markets, allowing the Company to be primarily an unsecured borrower, an option unavailable to most of its competitors. This flexibility, and the high level of liquidity it confers, affords the Company the ability to reduce cash flow break-even levels and to pursue relevant merger and acquisition opportunities regardless of scale or timing. All investment opportunities are subject to rigorous scrutiny and are undertaken only if they enhance shareholder value.

¹ Return On Invested Capital
² Defined by number of vessels, and includes commercial pool vessels.