Ocean Shipping and
Transportation
Securities

Shipping Securities have become BIG yield plays in the last number of years because of their corporate structure.

WE MUST understand the tax laws under which these companies operate.  This is critical because to pay out the very
high dividends (yields) the company must be exempted from Federal Income taxes

Here is the basis of the tax advantage most of these companies have--

Section 883 of the Internal Revenue Code of 1986 states -- qualified income derived from International
Operations of ships is excluded from gross income and exempt from U.S. Federal Income Taxes if a company
engaged in the International operation of ships meets certain requirements.

A key item is that the company must be incorporated in a country that grants like exemption to U.S.
Corporations

This requirement is KEY.  Without the tax exemption the high dividends (high yields) WILL NOT be able to be paid.

BELOW we note the tax status of the corporation next to the country of incorporation


It is the intention of most of the companies listed below to pay out all--or most of their operating income in
the form of dividends.  Of course this can mean a very high dividend yield.


Before investing in any of the corporations listed below be aware of the other key research items you need to check up
on
.

1--Ship 'day rates' for the type of ships owned by a company.  Is the trend up or down?  What is the forecasted demand

2--Economic conditions---i.e. fuel prices--i.e. the need for feed grains around the world

3--The amount of time any given ship will be in dry dock for maintenance---does a company have a large share of their
fleet needing repairs that have previously been delayed?

4--the length of time the companies ships are chartered for and at what rates?

Information Current as of 2/9/2010

NOTE---Form 20F is an annual report for certain foreign companies
Diana Shipping
Marshall Islands-Tax Exempt
20F for Period End 12/31/2008

Diana Shipping Inc., through its subsidiaries, provides shipping transportation services. The company focuses on
the transportation of dry bulk cargoes, such as iron ore, coal, grain, and other materials along worldwide shipping
routes. As of December 31, 2008, its shipping fleet consisted of 13 Panamax dry bulk carriers and 6 Capesize dry bulk
carriers with a combined carrying capacity of approximately 2 million deadweight tonnage. Diana Shipping charters
its vessels to various national, regional, and international chartering companies. The company was formerly known
as Diana Shipping Investments Corp. and changed its name to Diana Shipping Inc. in February 2005. Diana Shipping
was founded in 1999 and is based in Athens, Greece.
Double Hull Tankers                            DHT                         10.35                 14.2%                 Channel Islands--Tax Exempt

10Q for Period End 6/30/2007
Eagle Bulk Shipping                             EGLE                       20.97                 9.1%                   Marshall Islands--Tax Exempt

10Q for Period End 6/30/2007
Frontline LTD                                        FRO                         42.08                 14.3 %                  Bermuda--Tax Exempt

20F for Period End 12/31/2006
Genco Shipping and Trading             GNK                         36.90                  6.4 %                  Bermuda--Tax Exempt

10Q for Period End 6/30/2007
Excel Maritime Carriers                      EXM                         30.29                  2.6%                  Bermuda--Tax Exempt

20F for Period End 12/31/2007
Knightsbridge Tankers                       VLCCF                     25.78                  8.7 %                  Bermuda--Tax Exempt

20F for Period End 12/31/2006
Nordic America Tanker Shipping       NAT                          31.54                  5.3 %                Bermuda--Tax Exempt

10Q for Period End 6/30/2007
Ship Finance INternational                 SFL                         26.57                   8.3 %                  Bermuda--Tax Exempt

20F for Period End 12/31/2007
Top Tankers                                         TOPT                        5.83                   N/A                     Marshall Islands--Tax Exempt

20F for Period End 12/30/2006
Dryships                                                DRYS                      52.43                  1.3%                  Channel Islands--Tax Exempt

10Q for Period End 6/30/2007
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