Seaborne container transportation is performed by carriers who nearly all operate scheduled services with pre-set port calls, using a number of owned or chartered vessels in each service to achieve an appropriate service frequency. According to Braemar Container Shipping and Chartering, world container shipping volumes have grown from 37 million TEU in 1993 to 91 million TEU in 2003, representing a compound annual growth rate of 9.4%. The container shipping sector is highly competitive and fragmented. Competition for container vessels is intense and depends on price, location, size, age, condition and acceptability of vessels and operators to the charterers. The container shipping sector has recently undergone a period of consolidation, and many of the largest carriers have also expanded through internal growth. As a result, there has been increased concentration among the largest 20 carriers worldwide. Based on data released by container shipping companies, Braemar Container Shipping and Chartering estimates that in 2003 the 10 largest carriers accounted for approximately 60% of global container capacity.

A principal function of the tanker sector is to transport crude oil from oil production and export facilities to oil terminals, storage facilities, pipeline systems and oil refineries internationally. According to Braemar Seascope, tankers are responsible for carrying over 60% of the world’s crude oil. In addition, tankers are also involved in the carriage of refined petroleum products, such as gasoline, diesel, jet fuel and naphtha, from refineries to storage and distribution systems, industrial plants and other consumers. Braemar Seascope estimates that tankers transport approximately 12% of the world’s refined petroleum products. Tankers generally are a more cost-effective alternative to pipelines and their advantages increase over distance. Pipelines are also considered to be more vulnerable to political instability, sabotage, economic blockade and the risk of environmental disaster. From 1999 to 2004, world oil demand is estimated to have increased by 10.0% in absolute terms, or an average compounded annual growth rate of 1.8%. During 2004, global oil consumption grew by 2.64 million barrels of oil per day (mbd), or 3.3%, one of the strongest growth rates in recent years.

The Company owns five container vessels (including the two vessels that the Company has the option to purchase), which range in capacity from 1,799 to 2,917 TEU and have an average age of 15.6 years. Container vessels of this size are generally utilized in the North/South trade routes that link Europe and Asia with Latin America, Africa, India, Australia and New Zealand. The Company’s four largest container vessels are also utilized in the East/West trade routes that link Europe with the Far East and the United States. The Company’s smaller container vessel may be employed on the same trade routes or may serve as a feeder vessel trading between hub ports, where larger vessels call, and smaller regional ports. All of the Company’s container vessels are currently employed under time charters with remaining terms ranging from approximately two to five years.

The Company’s products tankers and container vessels are currently committed under long-term agreements with national, regional and international companies. Pursuant to these agreements, known as charterparties, the Company provides these companies, or charterers, with a vessel and crew at a fixed, per-day rate for a specified term.

The charterers under the time charters are generally responsible for, among other things, the cost of all fuels with respect to the vessels (with certain exceptions, including during off-hire periods), port charges, costs related to towage, pilotage, mooring expenses at loading and discharging facilities and certain operating expenses. The charterers are not obligated to pay the Company charterhire for off-hire days, which include days a vessel is out of service due to, among other things, repairs or drydockings. Under the time charters, the Company is generally required to keep the related vessels seaworthy, to crew and maintain the vessels and to comply with applicable regulations. The Company is also required to provide protection and indemnity, hull and machinery, war risk and oil pollution insurance cover.

Chartering commissions increased by approximately 700% to $1.2 million in the year ended December 31, 2004, compared to $0.15 million in the period ended December 31, 2003.

Total vessel operating expenses increased by approximately 363% to $12.5 million during the year ended December 31, 2004, compared to $2.7 million during the period ended December 31, 2003.

Total interest expense increased by approximately 473% to $8.6 million during the year ended December 31, 2004, compared to $1.5 million during the period ended December 31, 2003.

Net income was $25.3 million in the year ended December 31, 2004, compared to $0.5 million in the period ended December 31, 2003, an increase of 4.960%.