Shipinvest4004 The leading ship finance software

1. Shipinvest4004The leading ship finance software Norwegian Maritime Solutions John Colletts alle 117 0870 Oslo, Norway Tel: + 47 22 95 08 70 e-mail: erikst@online.no www.shipstrategy.com

2. Shipinvest4004 is a unique tool for analysis and appraisal of ship and rig investments

3. Shipinvest4004 comprises of three modules INVESTMENT ANALYZER FAST PROJECT Equivalent to ”back-of-an-envelope” calculation. Produces a calculation in 30 seconds STANDARD PROJECT Allows a tailormade input with a whole range of options: several loans, equity payments and dividends, type of loan, loan details etc CORPORATE CONSOLIDATION Calculating numbers for a range of vessel investments. This will show consolidated figures for cashflow, loan payments and other. To be used for corporate consolidation or ”individual consolidation” for e.g. KS investors having various % equity in the ships HISTORICAL ANALYSIS User can specify his own timeseries for various ship types: TC rate, oper cost, NB cost, S/H values, scrap prices etc in order to calculate how good or bad certain investments have been on a historical basis. Also useful to compare statistical expectation of return in various segments

4. What is Shipinvest4004 ? • Shipinvest4004 is a program for investment analysis of shipping projects. Asset management functions include: • When to buy • When to sell • How to finance • Shipinvest4004 will quickly calculate key figures such as: • Annual cash flow projects • Break even tc rates • Required sales prices at end of a cp period • Internal rate of return • NPV • Sensitivity • Additionally Shipinvest4004 includes two modules that handle: • Corporate Consolidation • Allow the user to consolidate single ship investment projects to explore consolidation effects • Historical analysis • Users can add their own time series for different ship types where one can analyze the historical return on investments. This feature is useful to dtusy statistical expectations and variances in the sectors.

5. Fast Project – all input on one screen – Results in 30 seconds !

6. Annual cashflow

7. Monthly cashflow – if you need it

8. Required TC rates to yield 12 % (*) IRREQ (*) If 12 % is what the user has specified as target return

9. Internal Rate of Return as a function of Residual value IRR – Three numbers: IRR on TOTAL capital: Is the rate of return for the investment calculated as if the entire ship is purchased on a cash basis (i.e. no financing) IRR on EQUITY The rate of return based on the equity put into the project. This will often show the effect of gearing up the project. IRR on EQUITY modified This assumes that cash generated by the project is NOT taken out of the project but that proceeds are kept in a bankaccount where it earns the interest rate that is specified input. This method is a lot more ”sober” than the standard IRREQ.

10. Value of vessel = Discounted value of operating results + expected residual value

11. Banker’s report: Bank net exposure in vessel

12. Pro forma Balance sheet and P&L statements

13. Visual presentation: Annual operating result

14. Visual presentation: Required sales price

15. Break even tc rates versus forecasted rates

16. Visual presentation: NPV

17. Visual presentation: Major Cost Items

18. Visual presentation: Required TC rates for the 10 years period

19. Visual presentation: Return on Capital employed

20. Historical analysis: IRR for a Panmax BC

21. Historical analysis: NPV for a panmax BC

23. Historical analysis: 10 years old in % of NB price for a panmax BC

24. Historical analysis: Payback period for a panmax BC

25. Historical analysis: 12 months tc rate

26. Historical analysis: Database for sales

27. Corporate consolidation: Individual ship investments to be consolidated

28. Corporate consolidation: Graphical results

29. Corporate consolidation: Annual cashflows

30. Corporate consolidation: Break down on the individual investments

31. Investment case: Buying a supramax ‘Free Lady’ • Major importance • Size: 50,000 dwt • Built: 1993 (I.e. vessel is 18 years old) • Date of purchase: October 2011 • Lifetime: Assume 25 years (i.e. 7 years remaining life) • Purchase price: Between 22 and 23 mill USD • Scrap value estimate: 5 mill USD (at the end of 7 years operation) • Finance: 70 % / 7 years repayment / 5 % interest rate • Operating costs: 5,000 USD/day (including allocation for drydocking • Increase in operating costs: 3 % p.a. • Minor importance: • Operating days p.a.: 350 days • Interest rate on cashflow: 3 % p.a. • Nr of installments/interests terms p.a.: 2 (i.e. every 6 months)

32. Investment case: Buying a supramax ‘Free Lady’ Key questions to answer: • Major issues to address: • Is this a ‘good’ investment ? • What is a ‘good investment’ ? • What tc rate do I need to get my required internal rate of return. Assume I need IRR on equity of 12 % p.a. • Can I obtain the required tc rate in today’s market ? • If I cannot get the required tc rate today, can I hope for an increase in the value after 2,3 or 4 years, and in such case what price do I need to recover my investment • Minor issues • Do I run into periods with negative cash, and if so, how can I cover such deficits (additional lending ?) • Do I get a positive NPV ? • How sensitive are some of my assumptions ?