Sophocles N. Zoullas – Chief Executive Officer, Chairman and Director Adir Katzav – Chief Financial Officer

Michael Webber – Wells Fargo Securities LLC

Thank you and good morning. I would like to welcome everyone to Eagle Bulk Shipping’s third quarter 2013 earnings call.

To supplement our remarks today, I encourage participants to access a slide presentation that is available on our website at www.eagleships.com. Please note that part of our discussion today will include forward-looking statements.

These statements are not guarantees of future performance and are inherently subject to risks and uncertainties. You should not place undue reliance on these forward-looking statements.

We refer all of you to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties that may have a direct bearing on our operating results, our performance, and our financial conditions. On Slide 3, you’ll note the agenda for today’s call.

I will first discuss our third quarter 2013 results and highlights. We’ll then proceed with an update on our financial and commercial operations and finally present our current views on the market.

Adir will then give a detailed overview of our financials before we open the call to questions. Please turn to Slide 5 for a review of our financial results and highlights.

The dry bulk market during the third quarter can be characterized as a tale of two halves. The first half of the period was adversely impacted by decreases in both grain exports out of South America and less coal flowing out of Indonesia.

The seasonal low in dry bulk trade during the summer months also negatively impacted the first half of the quarter. All these factors kept rates fairly subdued and ranged down through the first half of the quarter.

After mid-August, however, Chinese iron ore restocking caught the market by surprise helping push Capesize rates higher for the quarter to above operating breakeven for the first time since 2012. This positive sentiment trickled down to the smaller ships towards the end of the quarter as traders began splitting cargoes.

New building deliveries totaled 12 million deadweight tons during the third quarter or approximately 150 vessels representing material decreases of 15% sequentially and 55% year-on-year. The Baltic Dry Index or BDI averaged 1,292 points for the first three months ended September 30.

The primary driver for the BDI’s performance during the period was the recovery in the cape rates. Turning to Eagle Bulk, the company reported a net loss of $38 million or $2.22 per share for the third quarter of 2013.

Net revenue for the quarter was $39 million. EBITDA for the quarter amounted to $3 million, and fleet utilization which is calculated as the number of operating days divided by the number of available days remained at an impressive level of close to 99.7%.

Our results for the quarter also include a non-cash mark-to-market loss of $7.3 million related to our holdings in KLC shares. Please turn to Slide 7 for an update on our commercial operations.

Eagle Bulk’s fleet totaled 45 vessels, comprised of 43 Supramaxes and 2 Handymaxes and is one of the largest and most homogenous in the industry with an average age of just 6.4 years. With trading desks located in both New York and Singapore, we employ an around-the-clock opportunistic and dynamic approach to chartering, utilizing a mix of long-term time charters, contracts of affreightment or COAs, short-term voyages, and index charters.

Currently although rates continue to improve, and interest for longer dated charters is increasing, our commercial objective is to remain relatively short in tenor in order to capitalize on the recovering market and maintain flexibility for when a sustained recovery does materialize. And as charter rates increase, we will look to consider fixing more of our ships on longer-dated business.

As of September 30, our chartering position for the fourth quarter 2013 was as follows: 42% of our fleet was either fixed on time charter or performing COA business, 4.5% was employed in Baltic Supramax Index or BSI charters and approximately 53.5% was open for charter. On Slide 8, we illustrate our cargoes for the third quarter, which totaled almost 4.2 million tons, comprised of 57% in minor bulks and 43% in major bulks.

We performed approximately 85 voyages during the quarter on expanded routes, ton miles increased approximately 20% quarter-on-quarter. Coal remains our top cargo with almost 1.1 million tons carried during the quarter, representing almost 26% of the total product moved.

Other cargoes carried during the quarter included alumina and bauxite, representing over 525,000 tons and sand which totaled about the same amount. We also carried 400,000 tons of iron ore and 350,000 tons of agricultural products.

In total, we carried over 15 different cargoes during the quarter. This can be attributed to the Supramaxes known versatility and being able to load and discharge cargo using onboard cranes, for being able to navigate into smaller ports and for its optimal size in matching cargo stems.

Please turn to Slide 10 for a review of the industry fundamentals. As I mentioned earlier in the call, the dry bulk market during the third quarter was mixed with the first half exhibiting subdued rates on the back of decreasing supply growth and seasonal showing of grain exports out of South America.

In addition, there was short-term weakness experienced in the all-important Asian coal trade. The Ramadan holiday significantly impacted the number of cargoes coming out of Indonesia during the months of July and August.

As a reminder, Indonesia is the world’s largest exporter of thermal coal and is projected to ship over 400 million tons this year. Separately, the sharp sell-off in the rupee during August and early September led to a virtual halt in Indian coal purchases, which tend to be sourced from both Indonesia and South Africa.

The rupee has since recovered approximately 9% bringing back the buyers into the market. India is one of the world’s largest importers of coal, representing approximately 15% of the total.

During the second half of the quarter, Chinese purchases of iron ore pushed rates for Capesizes higher. This positive momentum started to spill over into Supramaxes.

For the full quarter, Supramaxes averaged $9,800 per day. Panamaxes averaged $8,900 per day, while Capesizes averaged $18,900 per day.

Please turn to Slide 11 for an update on the supply fundamentals; Scrapping of older tonnage remains at historically elevated levels. Over 18 million deadweight tons equaling 340 ships has been scrapped between January and October of this year.

Assuming the current pace of demolition, if it continues, we project that almost 22 million deadweight tons or approximately 3% of the fleet will be scrapped this year. Given the massive number of ships which have been scrapped over the past three years, which now total over 1,300, and the improving market fundamentals we expect demolition will continue to come off, but with over 1,300 vessels still over the age of 20, the vast majority of which belong in the Sub-Panamax segment and scrap rates at still historically high levels of over $400 per lightweight ton, there are plenty of ship candidates and incentive for owners to retire older assets.

On the right hand side of this slide, we depict the current profile of scrap candidates by asset class. The sub-Panamax segment remains by far the oldest with over 1,000 vessels being over the age of 20.

On Slide 12, we take a detailed look at past deliveries and future order book. As mentioned earlier in the call, new building supply growth continues to come off with monthly deliveries now at a 4-year low.

Deliveries for the month of October totaled 4.9 million deadweight tons, down 65% from their peak level in June of 2012. On the new order front, there has been a material pick-up in contracts placed during 2013 as compared to last year.

New orders through October totaled 54 million deadweight tons or roughly 624 vessels of which 52% of that relate to Capesizes. The order book as a percent of the fleet outstanding remains at 18%, down 77% since peaking in 2008.

The pickup in new orders over the past year is due to the improved market sentiment, both current and projected. Slots at quality yards are now more or less full through 2015.

Please turn to Slide 13 for a review of the current market fundamentals. Fourth quarter has been very much a continuation of the positive momentum exhibited during September.

Although dry bulk rates have come off from their recent highs, they remain at respectable levels. Reported to date average for Supramaxes is $12,800 per day, an increase of 32% over the prior period.

Panamaxes have been averaging $14,800 per day while Capesizes have been earning $26,900 per day. The recent demand pick-up for vessels has been primarily due to increased Chinese steel production, which drives demand for coal, iron ore, and minor bulks.

Given positive economic readings out of China on GDP growth and urban investment, we believe the demand for steel will continue. The bumper harvest in North America is expected to increase exports for grain products over the next few months providing further support for both Supramaxes and Panamaxes.

Looking forward, we believe the risks related to any serious macroeconomic shocks continue to abate. Vessel supply growth is coming off and overall short-term demand remains firm, but also choppy.

On Slide 14, we discussed long-term demand fundamentals. Our thesis has not changed and we continue to view the fundamentals as healthy, especially for coal.

Global urbanization, as depicted in the chart on the left side of the slide, is expected to drive increased long-term demand for both minor and major bulk dry commodities. Steel production is projected to increase 40% by 2020 leading to increased demand for both iron ore and metallurgical coal.

Over 450 gigawatts of new coal fired power capacity is scheduled to come online by 2017, which equates to over 1.4 billion in incremental coal demand, which will primarily be sourced from Indonesia and Australia. To summarize, we believe the short-term fundamentals for the dry bulk market will remain volatile but improving.

The long-term fundamentals remain healthy. I would now like to turn over the call to Adir, who will review our financial performance.

Thank you, Soph. Please turn to Slide 16.

This is a summary on our third quarter results of operations. Our net revenue for the third quarter was $39 million compared to $46.9 million for the third quarter of 2012.

The year-on-year decrease in revenues is due to a lower spot charter rates. Our operating loss for the quarter was $9.3 million compared to operating loss of $7.9 million for the third quarter of 2012.

Our cash interest expense for the quarter was $11.4 million compared to $12.5 million for the third quarter of 2012. Our non-cash interest expense for the quarter was $9.4 million that included peak interest of $7.3 million and a deferred financing cost of $2.1 million compared to $9.5 million for the third quarter of 2012.

EBITDA, as adjusted for exceptional items, as defined in our credit agreement was $3 million for the quarter compared to $12.5 million in the third quarter of 2012. Net loss for the quarter was $37.6 million or $2.22 per share.

Please turn to Slide 17 for a summary of our balance sheet. Our cash at the end of the quarter was $19.9 million, an increase of $0.3 million quarter-on-quarter.

Please turn to Slide 18 for an update on KLC. In September 2013, KLC completed its financial reorganization.

In October 2013, KLC emerged from bankruptcy. During the quarter, we recognized $3.5 million gain from early prepayment of our long-term receivable from KLC.

On September 30, 2013, the fair value of KLC stock held by the company was 22.1 million. The change in the fair value of our KLC available for sale investment was considered in other than temporary, and therefore the company recorded a non-cash loss of $7.3 million in other expense in the third quarter of 2013.

This concludes our presentation and now we will turn the call to the operator to take your questions.

Hi, good morning. This is Seth in for Chris.

If I could just start off just maybe with a clarification, maybe for you Adir. I just want to make sure I am getting the mechanics of the KLC line item on your balance sheet correct.

It appears from last quarter the credit to you guys was $25.6 million you had a $7 million loss in the new third quarter number for KLC is $22 million, so it only decreased $3 million, but you took a $7 million loss. I realized you had another $3.5 million gain in the quarter, but does that accrete to that line item account?

I just want to make sure I am tracking this line item correct.

The KLC cost in our balance sheets by the end of last quarter was $29.4 million that’s the initial cost we recognized when received the shares. The fair value of those shares by the end of this quarter is $22.1 million and that’s the reduction of $7.3 million as other than temporary loss in this quarter.

The $25.6 that you’re referring that was the gain – that recognized that’s the P&L impact not the balance sheet amount.

Okay, I got you. Thank you for that.

And then I guess if I can switch on to just more general industry question. You’ve seen rates in the third quarter increase and demand pick up a bit, scrapping continues.

And but we’ve been watching the sales volumes of smaller vessels tick-up quite significantly from call it late or early September through strong through October and into the first part of November here. I’m just wondering do you see in the industry right now that the rate environment and the forward outlook is compelling enough to attract incremental capital that could potentially offset the scrapping rates.

I just want to get your sense of how you view threat from incremental capital coming into the States now as the rate environment has improved.

Sure. I commented briefly on this point in my remarks.

And after a couple of year low, we’ve definitely seen an increase in new building orders from January of this year. However, if you look at the capacity of shipyards, which we track, and also I mentioned this, through 2015 for the next two years high quality shipyards are pretty much full, because they’re also is ordering from other sectors outside of dry bulk.

So I would say the way to think of it is relatively good visibility on supply for the next two years, but beyond that we’re still monitoring it, because there is capacity at the shipyards. So it’s a double edged sword because attracting capital to a market is a sign that there is interest in recovering market, but then the flip side is that capacity at some point a couple of years later could result in the downturn of the market.

But for the next two years, we have good visibility, beyond that we’re tracking it.

Okay, and then finally I will just switch gears a bit; you mentioned in the press release that you’re entertaining the potential for asset sales to raise capital. I know you probably don’t want to get into specific vessels, but I’m just wondering if you could maybe comment on what you maybe think the optimal size of a sale would be if you went that route what types of vessels does it makes sense to get – to sell newer or older tonnage?

We have a very young fleet; I mean it’s a six year old fleet which is very desirable in today’s market. But we have some older smaller vessels.

But our general view is that 2014 market will be better than 2013 and asset prices should continue to reflect an improvement as we’ve seen throughout the second half of this year. So we don’t have any candidates for sale that need to be sold as with owners that have assets that are getting to the end of their useful life.

If anything, it would be a sale more that would be opportunistic rather than necessary.

Okay. All right, thanks.

I’ll turn it over.

Hey, good morning guys. How are you?

Yes, hi. Well, thanks.

I just joined late on the call. If you’ve already touched on this, but you guys pretty publicly last week or so your bank [debt sold a] strategic investors.

I am curious whether or not you guys have started conversations with them around special amendments to your credit facilities and how it’s going to impact those ongoing negotiations you guys were having with RBS?

We’re aware of a lot of the chatter in the market about what you just mentioned. But our position is right now we’re looking to our agent which is RBS to officially advise us.

And at that point, we’ll make certain steps. But right now, until the agent officially advises us, we’re not in a position to really discuss it.

Okay maybe backing off just from a theoretical perspective, how do you think about the introduction of strategic lending – strategic investors to your lending base in terms of keeping Eagle as a going concern and amending your facility. So just in general we’ve seen there is another companies and how do you think about it?

Well, I mean in terms of, do we welcome in strategic investors who are aligned with our stakeholders? We would say we welcome them.

Because we have quite a platform here that we believe represents good value. So, we do welcome strategic investors and we welcome discussions with them.

Okay, great. And forgive me I think you might have mentioned this already.

But the KLC equity I believe you’re locked up on that ends this month, have you guys thought about when you’re going to monetize that: I know it was mark down this quarter. What was your thought process there?

Yes, you’re right. KLC shows now available for sale starting this week.

We’re monitoring the KLC situation on a daily basis and once we believe that we can maximize the value, we’ll do it, but that’s the situation as of today.

Okay. And just a follow-up on one of the earlier questions; in the release, you mentioned some of the other liquidity measures you guys may or may not be looking at.

Can you maybe list those in order of preference with a degree of apparent likelihood baked in there? How do you guys prioritize those going forward?

You faded in and out of it, so I’m not sure we’ve got the full question.

My apologies, I am at a pocket. But you mentioned in the press release some of the liquidity measures you guys are looking at and I know you just touched on it.

But can you maybe order those in terms of preference kind of hinged with likelihood so maybe just your preference in terms of looking at those options and then what would be your first option there?

Well, I would say we are looking at all the options, but they change week to week so at any given time, the options change in priority. So I would say we’re considering all options but the situation changes from time to time.

So the option preferences will change. So I think that’s our view today.

Okay, alright. Thanks for the time guys.

Thank you everyone for joining us for our third quarter 2013 earnings call. We look forward to keeping you updated on new developments in the future.