American Petroleum Tankers Parent LLC Announces Preliminary Fiscal Year Ended 2012 Selected Results and Intention to Refinance

  American Petroleum Tankers Parent LLC Announces Preliminary Fiscal Year
  Ended 2012 Selected Results and Intention to Refinance

Business Wire

PLYMOUTH MEETING, Pa. -- March 15, 2013

American Petroleum Tankers Parent LLC (“APT” or the “Company”) today reported
preliminary unaudited selected results for the fiscal year ended 2012 in
conjunction with a proposed refinancing. The Company has not finalized its
financial statement closing process for the fourth quarter and fiscal year
ended 2012 and as a result, the information that follows is preliminary and
based upon information available to the Company as of the date of this press
release. During the course of that process, the Company may identify items
that would require it to make adjustments, which may be material, to the
amounts described below. As a result, the estimates and rates below constitute
forward-looking statements and are subject to risks and uncertainties,
including possible adjustments to the preliminary operating results. The
Company is providing this preliminary information and certain financial
metrics on a one-time basis only.

APT is contemplating $280 million of new senior secured credit facilities
(“Credit Facilities”) consisting of a $10 million, 5-year revolving credit
facility and a $270 million 6.5-year term loan. Proceeds from the new Credit
Facilities would be used to redeem APT’s existing 10.25% first priority senior
secured notes due 2015 (the “Notes”), including paying the redemption premium
associated with the Notes redemption and paying fees and expenses associated
with the transaction. Concurrent with entering into the Credit Facilities, all
outstanding amounts under the $455.5 million second lien credit agreement with
the Class A members of American Petroleum Tankers Holding LLC, as lenders,
Blackstone Corporate Debt Administration L.L.C., as administrative agent, and
The Bank of New York Mellon, as security agent (the “Sponsor Facility”) will
be converted to equity of American Petroleum Tankers Holding LLC.

2012 revenues were approximately $94.8 million, with total operating expenses
of approximately $64.7 million, resulting in operating income of approximately
$30.1 million and Adjusted EBITDA of approximately $54.1 million. See below
for a reconciliation of Adjusted EBITDA to operating income. Interest expense
was approximately $80.2 million and derivative losses were approximately $0.2
million. The Company also recorded a one-time charge of approximately $1.5
million related to its application for government guaranteed financing under
the U.S. Title XI Federal Ship Financing Program (“Title XI Program”), which
was denied in November 2012. As a result of the foregoing factors, net loss
was approximately $51.9 million for 2012. Comparisons to the prior year’s
operating results are provided below.

The Company had approximately $61.1 million in cash at December 31, 2012. The
net book value of our vessels and equipment was $645.6 million. Long term debt
consisted of $258.0 million in Notes and $455.5 million for the Sponsor
Facility. The book value of the equity was approximately $2.1 million. The
Company did not have any capital expenditures in 2012.

Comparison of Year Ended December31, 2012 Versus Year Ended December31, 2011

Revenues

In 2012, vessel revenues were approximately $94.8 million compared to $106.3
million. This decrease is due to lower charter rates for the Empire State and
Evergreen State. Overall utilization in 2012 was 99% based on 1,808 operating
days and 1,830 ownership days while utilization in 2011 was 100% based on
1,825 operating days and 1,825 ownership days.

Our current customers are BP West Coast Products LLC, Shell Trading (U.S.)
Company, an affiliate of Chevron Corporation, and the Military Sealift Command
department of the U.S. Navy. For the year ended December 31, 2012, these four
customers represented approximately 22%, 10%, 15% and 43% of our revenues.
Marathon Petroleum Company LLC, a prior customer, accounted for 10% of our
revenues in 2012.

Vessel Operating Expenses

In 2012, vessel operating expenses were approximately $35.4 million compared
to $34.3 million in 2011. Vessel operating expenses increased in 2012
primarily due to higher crew and insurance expenses.

General and Administrative Expenses

General and administrative expenses increased to $2.8 million in 2012 from
$2.2 million in 2011, due to higher legal and professional fees, including
$0.3 million for litigation with the U.S. Department of Transportation’s
Maritime Administration (“MarAd”) in connection with the Title XI Program.

Depreciation and Amortization

Depreciation expense increased to approximately $23.8 million in 2012 from
$23.7 million in 2011. The change was due to a full year of software
amortization in 2012.

Management Fees

Management fees decreased to approximately $2.8 million in 2012 from $3.0
million in 2011, primarily as a result of the transition of accounting
services from certain affiliates of Crowley Maritime Corporation to APT in
2011.

Interest Expense

Interest expense increased to approximately $80.2 million during 2012,
compared to $75.7 million in 2011. The increase was primarily the result of a
higher weighted-average outstanding balance of our Sponsor Facility due to the
capitalization of paid-in-kind interest.

Debt Extinguishment Expense

Debt extinguishment expense was $2.2 million in 2011 due to the prepayment of
$27.0 million of the Notes in April 2011. No debt was prepaid in 2012.

Write-off of Title XI Deferred Financing Fees

Write-off of Title XI Program deferred financing costs was $1.5 million in
2012. This loss was due to the write-off of costs related to our application
for Title XI Program financing guarantees, which was denied in November 2012.

Derivative Losses

Derivative losses decreased to approximately $0.2 million during 2012,
compared with losses of $0.7 million during 2011 due to decreases in the fair
value of our interest rate cap.

Net Loss

As a result of the foregoing factors, net loss was approximately $51.9 million
for 2012, compared to a net loss of $35.6 million for 2011.

About American Petroleum Tankers LLC:

American Petroleum Tankers Parent LLC and its subsidiaries is a U.S. based
provider of Jones Act marine transportation services for refined petroleum
products, crude oil and chemicals in the U.S. domestic “coastwise” trade. The
Company’s fleet consists of five modern, double-hulled product tankers which
were delivered from the National Steel and Shipbuilding Company (NASSCO) in
2009 and 2010.

Forward Looking Statements

This press release contains “forward-looking statements.” All statements other
than statements of historical fact are “forward-looking statements” for
purposes of federal and state securities laws. Forward-looking statements may
include the words “may,” “plans,” “estimates,” “anticipates,” “believes,”
“expects,” “intends” and similar expressions. Although we believe that these
statements are based on reasonable assumptions, they are subject to numerous
factors, risks and uncertainties that could cause actual outcomes and results
to be materially different from those projected or assumed in our
forward-looking statements. These factors, risks and uncertainties include,
among others, the following:

• our substantial level of indebtedness;

• our ability to refinance our debt obligations;

• general economic and business conditions in the United States;

• our dependence on a limited number of customers;

• capital expenditures required to maintain the operating capacity of our
fleet;

• competitive pressures and trends;

• fluctuations in shipping volume; and

• modifications to, or repeal or waiver of, the Jones Act or OPA 90.

These forward-looking statements involve a number of risks and uncertainties
that could cause actual results to differ materially from those suggested by
the forward-looking statements. Forward-looking statements should, therefore,
be considered in light of various factors, including those set forth in our
documents filed with the Securities Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended. In light of such risks and
uncertainties, we caution you not to place undue reliance on these
forward-looking statements. We do not undertake any obligation to publicly
release any revisions to these forward looking statements to reflect events or
circumstances after the date of this press release or to reflect the
occurrence of unanticipated events.

Reconciliation of EBITDA and Adjusted EBITDA to Operating Income

The Company reports its financial results in accordance with generally
accepted accounting principles in the United States of America (“U.S. GAAP”).
EBITDA and Adjusted EBITDA are not measures computed in accordance with U.S.
GAAP. A non-U.S. GAAP financial measure is a numerical measure of historical
or future financial performance, financial position or cash flows that
excludes amounts, or is subject to adjustments that have the effect of
excluding amounts, that are included in the most directly comparable measure
calculated and presented in accordance with U.S. GAAP or includes amounts, or
is subject to adjustments that have the effect of including amounts, that are
excluded from the most directly comparable measure so calculated and
presented.

EBITDA and Adjusted EBITDA are presented and discussed in this press release
because management believes they enhance understanding by investors and
lenders of the Company’s financial performance. As a complement to financial
measures provided in accordance with U.S. GAAP, management believes that
EBITDA and Adjusted EBITDA assist investors and lenders who follow the
practice of some investment analysts who adjust U.S. GAAP financial measures
to exclude items that may obscure underlying performance outlook and trends
and distort comparability. In addition, management believes that a
presentation of EBITDA and Adjusted EBITDA enhances overall understanding of
our performance by providing a level of disclosure that helps investors
understand how management plans, measures and evaluates our financial
performance by providing a level of disclosure that helps investors understand
how management plans, measures and evaluates our financial performance and
allocates capital. Since EBITDA and Adjusted EBITDA are not measures computed
in accordance with U.S. GAAP, they are not intended to be presented herein as
substitutes to net earnings as indicators of the Company’s financial
performance. In addition, the indenture governing the Notes and the credit
agreement governing the Credit Facilities contain debt incurrence ratios that
are calculated by reference to Adjusted EBITDA. Non-compliance with the debt
incurrence ratios contained in the indenture governing the Notes and the
credit agreement governing the Credit Facilities would prohibit the Company
from being able to incur additional indebtedness other than pursuant to
specified exceptions.

The Company calculates EBITDA as earnings before interest expense, income tax
expense depreciation and amortization and it calculates Adjusted EBITDA as
EBITDA, adjusted to remove or add back one-time MarAd expenses. These items
are identified below in the reconciliation of EBITDA and Adjusted EBITDA to
operating income, the U.S. GAAP measure most directly comparable to EBITDA and
Adjusted EBITDA. The Company’s calculation of EBITDA and Adjusted EBITDA may
be different from the calculation used by other companies; therefore, they may
not be comparable to other companies.

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to
operating income for the year ended December 31, 2012 (unaudited, in
millions).

                                 
                                      Year Ended

                                      December 31, 2012
Operating income                      $       30.1
Depreciation and amortization                23.8
EBITDA                                $       53.8
MarAd expenses (1)                           0.3
Adjusted EBITDA                       $       54.1

__________________

(1) MarAd expenses are related to our litigation efforts after the denial of
our Title XI Program application in November 2012.

Contact:

For American Petroleum Tankers Parent LLC
Robert K. Kurz, CEO
or
Philip J. Doherty, CFO
610-940-1677
 
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