NEW YORK –
Overseas Shipholding Group, Inc. (OSG) (NYSE:OSG), a provider of
oceangoing energy transportation services, today reported results for
the quarter ended June 30, 2016.

Highlights

• Time charter equivalent (TCE) revenues^(A) for the second
  quarter of 2016 were $215.7 million, down 8% compared with the same
  period in 2015.
• Net income for the second quarter was $29.9 million, or $0.31 per
  diluted share, compared with $58.4 million, or $0.60 per diluted
  share, in the second quarter of 2015.
• Adjusted EBITDA^(B) was $110.1 million, down 15% from $130.2
  million in the same period in 2015.
• Total cash^(C) was $461.4 million as of June 30, 2016,
  growing $44.8 million from the prior quarter.
• Accelerated the payment of $40.0 million in principal amount of
  domestic subsidiary term loan, including $20.0 million in July 2016.
• Repurchased and retired $19 million of Class A common stock and
  warrants at an average share equivalent price of $11.59, in the second
  quarter of 2016.
• On June 28, 2016, rejoined the New York Stock Exchange “Big Board”.

^{A, B, C}Reconciliations of these non-GAAP financial
measures are included in the financial tables attached to this press
release starting on Page 8.

“I am pleased to report strong second quarter and first half results,”
said Captain Ian T. Blackley, OSG’s president and CEO. “In our
international business, spot rates have softened this summer, as global
inventories have climbed, but we believe the fundamentals remain
positive. In our domestic business, we face the challenges of a decline
in U.S crude production, high inventory levels and the delivery of
newbuild tonnage, but the sustained lower oil price environment is also
driving record U.S. gasoline consumption.”

“We continue to make good progress towards separating our international
and domestic businesses. By creating two independent public companies,
with an increased ability to focus on their own business, we believe
each will be better positioned to enhance shareholder value. At the same
time, the cash generated by our 79 vessel fleet gives us flexibility to
further strengthen our balance sheet and consider additional
opportunities to create value for our shareholders” concluded Capt.
Blackley.

Second Quarter 2016 Results

TCE revenues for the second quarter of 2016 were $215.7 million, a
decrease of $19.5 million compared with the second quarter of 2015,
primarily driven by lower daily rates earned by the International Flag
fleet. TCE revenues for the first half of 2016 were $452.6 million, a
decrease of $4.2 million compared with the first half of 2015.

Operating income for the second quarter of 2016 was $67.1 million, a
decrease of $25.2 million compared with the second quarter of 2015,
primarily driven by the decline in TCE revenues and an increase in
depreciation and amortization expenses. Operating income for the first
half of 2016 was $153.3 million, a decrease of $16.6 million compared
with the first half of 2015.

Net income for the second quarter of 2016 was $29.9 million, or $0.31
per diluted share, compared with $58.4 million, or $0.60 per diluted
share, in the second quarter of 2015. The decrease reflects the impact
of lower TCE revenues, increases in depreciation and amortization
expenses, and a higher non-cash deferred tax provision, partially offset
by lower interest expense. Net income for the first half of 2016 was
$80.6 million, or $0.84 per diluted share, compared with $101.3 million,
or $1.05 per diluted share, in the first half of 2015.

Adjusted EBITDA was $110.1 million for the quarter, a decrease of $20.1
million compared with the second quarter of 2015, driven by lower daily
rates earned by the International Flag fleet. Adjusted EBITDA was $239.6
million for the first half of 2016, a decrease of $4.3 million compared
with the first half of 2015.

International Crude Tankers

TCE revenues for the International Crude Tankers segment were $66.5
million for the quarter, down 14% compared with the second quarter of
2015. This decrease resulted from a softening in daily spot rates across
all vessel classes in the segment, with the VLCC spot rate declining to
$47,000 per day in the second quarter, down 7% from the same period in
2015. The Aframax spot rate was $23,500 per day, down a third from the
second quarter of 2015; and the Panamax blended rate was $20,500 per
day, comparable to same period in 2015. TCE revenues for the
International Crude Tankers segment were $153.9 million for the first
half of 2016, an increase of $10.1 million compared with the first half
of 2015.

International Product Carriers

TCE revenues for the International Product Carriers segment were $34.4
million for the quarter, down 19% compared with the second quarter of
2015. This decrease was primarily due to lower average daily blended
rates earned by the MR fleet. Also contributing was a 109-day decrease
in revenue days resulting primarily from the sale of an older vessel in
July 2015. These decreases were partially offset by the LR1 blended rate
increasing to approximately $21,300 in the second quarter, up 10% from
the comparable 2015 period. TCE revenues for the International Product
Carriers segment were $71.8 million for the first half of 2016, a
decrease of $14.1 million compared with the first half of 2015.

U.S. Flag

TCE revenues for the U.S. Flag segment were $114.7 million for the
quarter, down 1% compared with the second quarter of 2015, primarily due
to a decline in Jones Act spot market revenue related to incremental
coastwise voyage opportunities that were available to the ATBs
principally employed in Delaware Bay lightering in the second quarter
2015, but not in the second quarter 2016. This decrease was largely
offset by Delaware Bay lightering volumes more than doubling to 180,000
barrels per day during the quarter from the comparable 2015 period, as
the pricing spread between Brent and West Texas Intermediate narrowed
making it more attractive for U.S. Northeast refineries to import crude
oil, as well as a 76-day increase in revenue days resulting from fewer
drydock and repair days. TCE revenues for the U.S. Flag segment were
$227.0 million for the first half of 2016, essentially the same as the
first half of 2015.

Conference Call

The Company will host a conference call to discuss its second quarter
2016 results at 9:00 a.m. ET on Tuesday, August 9, 2016.

To access the call, participants should dial (866) 490-3149 for domestic
callers and (707) 294-1567 for international callers. Please dial in ten
minutes prior to the start of the call and enter Conference ID 56297147.

A live webcast of the conference call will be available from the
Investor Relations section of the Company’s website at http://www.osg.com/

An audio replay of the conference call will be available starting at
12:00 p.m. ET on Tuesday, August 9, 2016 through 11:59 p.m. ET on
Tuesday, August 16, 2016 by dialing (855) 859-2056 for domestic callers
and (404) 537-3406 for international callers, and entering Conference ID
56297147.

About OSG

Overseas Shipholding Group, Inc. (NYSE: OSG) is a publicly traded tanker
company providing energy transportation services for crude oil and
petroleum products in the U.S. and International Flag markets. OSG is
committed to setting high standards of excellence for its quality,
safety and environmental programs. OSG is recognized as one of the
world’s most customer-focused marine transportation companies and is
headquartered in New York City, NY. More information is available at www.osg.com.

Forward-Looking Statements

This release contains forward-looking statements. In addition, the
Company may make or approve certain statements in future filings with
the Securities and Exchange Commission (SEC), in press releases, or in
oral or written presentations by representatives of the Company. All
statements other than statements of historical facts should be
considered forward-looking statements. These matters or statements may
relate to the Company’s plans to issue dividends and make payments to
securityholders, its prospects, including statements regarding trends in
the tanker and articulated tug/barge markets, and possibilities of
spin-offs or certain strategic alliances and investments.
Forward-looking statements are based on the Company’s current plans,
estimates and projections, and are subject to change based on a number
of factors. Investors should carefully consider the risk factors
outlined in more detail in the Company’s Annual Report for 2015 on Form
10-K under the caption “Risk Factors” and in similar sections of other
filings made by the Company with the SEC from time to time. The Company
assumes no obligation to update or revise any forward-looking
statements. Forward-looking statements and written and oral forward
looking statements attributable to the Company or its representatives
after the date of this release are qualified in their entirety by the
cautionary statements contained in this paragraph and in other reports
previously or hereafter filed by the Company with the SEC.

Consolidated Statements of Operations
($ in thousands, except per share amounts)		Three Months Ended June 30,						Six Months Ended June 30,
		2016			2015			2016			2015
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Shipping Revenues:
Pool revenues		$66,705			$90,591			$157,234			$169,360
Time and bareboat charter revenues		126,073			109,754			246,446			217,696
Voyage charter revenues		28,668			45,142			61,522			91,973
Total Shipping Revenues		221,446			245,487			465,202			479,029
Operating Expenses:
Voyage expenses		5,751			10,284			12,585			22,184
Vessel expenses		69,010			68,279			140,052			137,518
Charter hire expenses		31,479			31,127			62,536			63,025
Depreciation and amortization		42,592			37,869			85,675			74,988
General and administrative		17,367			17,471			34,716			36,753
Technical management transition costs		–			–			–			40
Severance and relocation costs		–			–			–			5
(Gain)/loss on disposal of vessels and other property		112			–			(45)			(1,073)
Total Operating Expenses		166,311			165,030			335,519			333,440
Income from vessel operations		55,135			80,457			129,683			145,589
Equity in income of affiliated companies		11,985			11,830			23,590			24,242
Operating income		67,120			92,287			153,273			169,831
Other income/(expense)		(599)			48			1,975			121
Income before interest expense, reorganization items and income taxes		66,521			92,335			155,248			169,952
Interest expense		(20,552)			(28,931)			(43,211)			(57,500)
Income before reorganization items and income taxes		45,969			63,404			112,037			112,452
Reorganization items, net		(860)			(1,437)			17,050			(4,924)
Income before income taxes		45,109			61,967			129,087			107,528
Income tax provision		(15,248)			(3,529)			(48,487)			(6,189)
Net Income		$29,861			$58,438			$80,600			$101,339
Weighted Average Number of Common Shares Outstanding:
Basic – Class A		92,255,692			95,576,283			93,496,651			95,574,356
Diluted – Class A		92,321,359			95,621,824			93,531,462			95,598,518
Basic and Diluted – Class B		826,794			1,320,467			1,073,382			1,320,644
Per Share Amounts:
Basic and Diluted net income – Class A		$0.31			$0.60			$0.84			$1.05
Basic and Diluted net income – Class B		$1.92			$0.60			$2.21			$1.05
Cash dividends declared – Class A		$ –			$ –			$0.48			$ –
Cash dividends declared – Class B		$1.08			$ –			$1.56			$ –

On December 17, 2015, all shareholders of record of the Company’s
Class A and B common stock as of December 3, 2015, received a dividend
of one-tenth of one share of Class A common stock for each share of
Class A common stock and Class B common stock held by them as of the
record date.

On June 13, 2016, the Company effected a one (1) for six (6) reverse
stock split and corresponding reduction of the number of authorized
shares of common stock, par value $0.01 per share.

In accordance with the relevant accounting guidance, the Company is
required to adjust the computations of basic and diluted earnings per
share retroactively for all periods presented to reflect the above two
changes in capital structure.

Consolidated Balance Sheets ($ in thousands)
		June 30,		December 31,
		2016		2015
ASSETS		(Unaudited)
Current Assets:
Cash and cash equivalents		$455,826		$502,836
Restricted cash		5,589		10,583
Voyage receivables		60,902		81,612
Income tax recoverable		1,126		1,664
Other receivables		3,790		7,195
Inventories, prepaid expenses and other current assets		19,681		20,041
Total Current Assets		546,914		623,931
Restricted cash – non current		–		8,989
Vessels and other property, less accumulated depreciation		2,021,500		2,084,859
Deferred drydock expenditures, net		76,117		95,241
Total Vessels, Deferred Drydock and Other Property		2,097,617		2,180,100
Investments in and advances to affiliated companies		344,886		348,718
Intangible assets, less accumulated amortization		47,917		50,217
Other assets		19,865		18,455
Total Assets		$3,057,199		$3,230,410
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities		$74,725		$91,233
Income taxes payable		1,415		13
Current installments of long-term debt		46,183		63,039
Total Current Liabilities		122,323		154,285
Reserve for uncertain tax positions		2,542		2,520
Long-term debt		1,070,728		1,223,224
Deferred income taxes		253,843		208,195
Other liabilities		59,785		61,698
Total Liabilities		1,509,221		1,649,922
Equity:
Total Equity		1,547,978		1,580,488
Total Liabilities and Equity		$3,057,199		$3,230,410

Consolidated Statements of Cash Flows
($ in thousands)
			Six Months Ended June 30,
			2016		2015
			(Unaudited)		(Unaudited)
Cash Flows from Operating Activities:
Net Income			$80,600		$101,339
Items included in net income not affecting cash flows:
Depreciation and amortization			85,675		74,988
Amortization of debt discount and other deferred financing costs			6,311		5,119
Compensation relating to restricted stock/stock unit and stock option grants			2,244		981
Deferred income tax provision/(benefit)			45,666		2,269
Undistributed earnings of affiliated companies			(20,441)		(19,056)
Reorganization items, non-cash			327		812
Other – net			(842)		549
Items included in net income related to investing and financing activities:
Gain on disposal of vessels and other property, net			(45)		(1,073)
Gain on repurchase of debt			(1,511)		–
Payments for drydocking			(7,103)		(25,394)
Bankruptcy claim payments			(7,136)		(3,436)
Deferred financing costs paid for loan modification			–		(6,187)
Changes in operating assets and liabilities			20,095		8,710
Net cash provided by operating activities			203,840		139,621
Cash Flows from Investing Activities:
Change in restricted cash			13,982		100,933
Expenditures for vessels and vessel improvements			(81)		(440)
Proceeds from disposal of vessels and other property			–		7,757
Expenditures for other property			(279)		(69)
Investments in and advances to affiliated companies			(987)		(1,506)
Repayments of advances from affiliated companies			18,500		17,000
Net cash provided by investing activities			31,135		123,675
Cash Flows from Financing Activities:
Cash dividend paid			(31,910)		–
Payments on debt			(64,641)		(6,257)
Extinguishment of debt			(109,046)		–
Repurchases of common stock and common stock warrants			(76,388)		–
Net cash used in financing activities			(281,985)		(6,257)
Net (decrease)/increase in cash and cash equivalents			(47,010)		257,039
Cash and cash equivalents at beginning of year			502,836		389,226
Cash and cash equivalents at end of period			$455,826		$646,265

Spot and Fixed TCE Rates Achieved and Revenue Days

The following tables provides a breakdown of TCE rates achieved for spot
and fixed charters and the related revenue days for the three months
ended June 30, 2016 and the comparable period of 2015. Revenue days in
the quarter ended June 30, 2016 totaled 6,536 compared with 6,554 in the
prior year quarter. A summary fleet list by vessel class can be found
later in this press release.

		Three Months Ended June 30, 2016						Three Months Ended June 30, 2015
		Spot		Fixed		Total		Spot		Fixed		Total
International Crude Tankers
ULCC
Average TCE Rate		$ –		$44,850				$ –		$39,000
Number of Revenue Days		–		91		91		–		91		91
VLCC
Average TCE Rate		$46,983		$40,127				$50,586		$ –
Number of Revenue Days		443		271		714		676		–		676
Aframax
Average TCE Rate		$23,488		$ –				$34,792		$ –
Number of Revenue Days		636		–		636		631		–		631
Panamax
Average TCE Rate		$20,123		$21,134				$28,211		$15,204
Number of Revenue Days		406		263		669		354		354		708
Other Intl. Crude Tankers Revenue Days1		11		–		11		–		–		–
Total Intl. Crude Tankers Revenue Days		1,496		625		2,121		1,661		445		2,106
International Product Carriers
LR2
Average TCE Rate		$21,740		$ –				$25,756		$ –
Number of Revenue Days		91		–		91		91		–		91
LR1
Average TCE Rate		$21,058		$21,320				$29,205		$15,922
Number of Revenue Days		86		257		343		91		273		364
MR
Average TCE Rate		$14,692		$11,528				$18,469		$5,294
Number of Revenue Days		1,630		182		1,812		1,809		91		1,900
Total Intl. Product Carriers Revenue Days		1,807		439		2,246		1,991		364		2,355
U.S. Flag
Jones Act Handysize Product Carriers
Average TCE Rate		$26,483		$64,830				$ –		$64,673
Number of Revenue Days		24		1,057		1,081		–		1,054		1,054
Non-Jones Act Handysize Product Carriers
Average TCE Rate		$30,492		$17,556				$27,328		$15,472
Number of Revenue Days		125		57		182		166		2		168
ATBs
Average TCE Rate		$ –		$37,054				$ –		$37,995
Number of Revenue Days		–		724		724		–		697		697
Lightering
Average TCE Rate		$76,555		$ –				$95,272		$ –
Number of Revenue Days		182		–		182		174		–		174
Total U.S. Flag Revenue Days		331		1,838		2,169		340		1,753		2,093
TOTAL REVENUE DAYS		3,634		2,902		6,536		3,992		2,562		6,554

¹ Other International Crude Tankers revenue
days consists of the company’s International Flag Lightering full
service revenue days for the quarters ended June 30, 2016 and June 30,
2015.

Fleet Information

As of June 30, 2016, OSG’s owned and operated fleet totaled 79
International Flag and U.S. Flag vessels (62 vessels owned and 17
chartered-in) compared with 79 at December 31, 2015. Those figures
include vessels in which the Company has a partial ownership interest
through its participation in joint ventures.

		Vessels Owned				Vessels Chartered-in				Total at June 30, 2016
Vessel Type		Number		Weighted by Ownership		Number		Weighted by Ownership		Total Vessels		Vessels Weighted by Ownership		Total Dwt2
Operating Fleet
FSO		2		1.0		–		–		2		1.0		873,916
VLCC and ULCC		9		9.0		–		–		9		9.0		2,875,775
Aframax		7		7.0		–		–		7		7.0		787,859
Panamax		8		8.0		–		–		8		8.0		555,504
International Flag Crude Tankers		26		25.0		–		–		26		25.0		5,093,054
LR2		1		1.0		–		–		1		1.0		109,999
LR1		4		4.0		–		–		4		4.0		297,710
MR		13		13.0		7		7.0		20		20.0		955,968
International Flag Product Carriers		18		18.0		7		7.0		25		25.0		1,363,677
Total Int’l Flag Operating Fleet		44		43.0		7		7.0		51		50.0		6,456,731
Handysize Product Carriers 1		4		4.0		10		10.0		14		14.0		664,490
Clean ATBs		8		8.0		–		–		8		8.0		226,064
Lightering ATBs		2		2.0		–		–		2		2.0		91,112
Total U.S. Flag Operating Fleet		14		14.0		10		10.0		24		24.0		981,666
LNG Fleet		4		2.0		–		–		4		2.0		864,800 cbm
Total Operating Fleet		62		59.0		17		17.0		79		76.0		7,438,397 and 864,800 cbm

¹ Includes two owned shuttle tankers, one chartered in
shuttle tanker and two owned U.S. Flag Product Carriers that trade
internationally.

² Total Dwt is defined as the total deadweight of all 79
vessels.

Reconciliation to Non-GAAP Financial Information

The Company believes that, in addition to conventional measures prepared
in accordance with GAAP, the following non-GAAP measures may provide
certain investors with additional information that will better enable
them to evaluate the Company’s performance. Accordingly, these non-GAAP
measures are intended to provide supplemental information, and should
not be considered in isolation or as a substitute for measures of
performance prepared with GAAP.

⁽¹⁾ Time Charter Equivalent (TCE) Revenues

Consistent with general practice in the shipping industry, the Company
uses TCE revenues, which represents shipping revenues less voyage
expenses, as a measure to compare revenue generated from a voyage
charter to revenue generated from a time charter. Time charter
equivalent revenues, a non-GAAP measure, provides additional meaningful
information in conjunction with shipping revenues, the most directly
comparable GAAP measure, because it assists Company management in making
decisions regarding the deployment and use of its vessels and in
evaluating their financial performance. Reconciliation of TCE revenues
of the segments to shipping revenues as reported in the consolidated
statements of operations follow:

		Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)		2016		2015		2016		2015
TCE revenues		$215,695		$235,203		$452,617		$456,845
Add: Voyage Expenses		5,751		10,284		12,585		22,184
Shipping revenues		$221,446		$245,487		$465,202		$479,029

⁽²⁾ EBITDA and Adjusted EBITDA

EBITDA represents net income before interest expense, income taxes and
depreciation and amortization expense. Adjusted EBITDA consists of
EBITDA adjusted for the impact of certain items that we do not consider
indicative of our ongoing operating performance. EBITDA and Adjusted
EBITDA do not represent, and should not be a substitute for, net income
or cash flows from operations as determined in accordance with GAAP.
Some of the limitations are: (i) EBITDA and Adjusted EBITDA do not
reflect our cash expenditures, or future requirements for capital
expenditures or contractual commitments; (ii) EBITDA and Adjusted EBITDA
do not reflect changes in, or cash requirements for, our working capital
needs; and (iii) EBITDA and Adjusted EBITDA do not reflect the
significant interest expense, or the cash requirements necessary to
service interest or principal payments, on our debt. While EBITDA and
Adjusted EBITDA are frequently used as a measure of operating results
and performance, neither of them is necessarily comparable to other
similarly titled captions of other companies due to differences in
methods of calculation. The following table reconciles net income as
reflected in the consolidated statements of operations, to EBITDA and
Adjusted EBITDA:

		Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)		2016		2015		2016		2015
Net Income		$29,861		$58,438		$80,600		$101,339
Income tax provision		15,248		3,529		48,487		6,189
Interest expense		20,552		28,931		43,211		57,500
Depreciation and amortization		42,592		37,869		85,675		74,988
EBITDA		108,253		128,767		257,973		240,016
Technical management transition costs		–		–		–		40
Severance and relocation costs		–		–		–		5
(Gain)/loss on disposal of vessels and other property		112		–		(45)		(1,073)
(Gain)/loss on repurchase of debt		871		–		(1,461)		(12)
Other costs associated with repurchase of debt		–		–		217		–
Reorganization items, net		861		1,437		(17,049)		4,924
Adjusted EBITDA		$110,096		$130,204		$239,634		$243,900

⁽³⁾ Total Cash

($ in thousands)		June 30, 2016		December 31, 2015
Cash and cash equivalents		$455,826		$502,836
Restricted cash		5,589		19,572
Total Cash		$461,415		$522,408

View source version on businesswire.com: http://www.businesswire.com/news/home/20160809005521/en/

Investor Relations & Media:
Overseas Shipholding Group,
Inc.
Brian Tanner, 212-578-1645
btanner@osg.com