Arlington Tankers Announces Unaudited Results and Provides Business Up

HAMILTON, Bermuda, Feb. 10 /PRNewswire-FirstCall/ -- Arlington Tankers Ltd today announced unaudited results for the 51-day period from the commencement of vessel operations on November 10, 2004 through the fiscal year end on December 31, 2004.

The Company is releasing unaudited financial information for this period in advance of the release of its fiscal 2004 financial results, to describe for shareholders the sources of cash for the Company's previously declared dividend of $0.39 per common share, which was paid on January 31, 2005. The Company will announce full fiscal 2004 results following completion of the audit.

The Company completed the purchase of its six vessels and commenced operations under its charter contracts on November 10, 2004, the same day that the Company completed its initial public offering. For the 51-day period from November 10, 2004 through December 31, 2004, the Company had total revenues of $9.5 million, of which $7.0 million was basic charter hire and $2.5 million was additional charter hire. The significant increase in revenue as compared to the estimate of revenues in the prospectus for the Company's initial public offering resulted from additional charter hire received from profit sharing arrangements under the time charters for four of the vessels. The estimated revenues in the prospectus did not include any additional charter hire for these four vessels. These four vessels benefited from the exceptionally high tanker spot voyage rates during November and December 2004.

The Company's activities in the 51-day period ended December 31, 2004 generated cash available for distribution to shareholders in the amount of $6.0 million, equivalent to $0.39 per common share. The dividend paid to shareholders in January 2005 represented a 44% increase over the estimated distribution in the initial public offering prospectus.

During this same period, the Company's total cash and accrued expenses were $3.5 million. The increase in expenses over the estimate in the initial public offering prospectus was due to higher than originally anticipated administrative expenditures related to the formation of the Company, as well as full year costs that would normally be charged to operations on a quarterly basis.

Business Update

All of the Company's vessels are currently trading on five-year time charter contracts. The vessels are chartered to subsidiaries of Stena AB and Concordia Maritime AB. The Company was formed to acquire these vessels from Stena and Concordia, who remain shareholders in the Company. All of the time charters continue until 2009, with options for the charterers to extend the terms. Each charter contract provides for fixed rate basic charter hire during the operating period.

In addition to the fixed rate basic charter hire, each of the vessels has the possibility of receiving additional charter hire from the time charterers through profit sharing arrangements. The calculation of additional hire is based on whether the vessels are employed by the time charterers in the spot voyage market or under another time charter. Additional charter hire is not guaranteed and tanker freight rates are extremely volatile.

The additional charter hire received during November and December 2004 was significant for the four vessels that the time charterers employed on the spot voyage market. While the Company believes that generally tanker demand fundamentals will remain favorable in 2005, the Company does not currently anticipate that the exceptionally high rate of additional charter hire received during the abbreviated period of November and December 2004 will continue at the same rate throughout 2005. The Company believes that tanker voyage freight rates in 2005 should continue to benefit from the forecasted continued increase in global oil demand. The trend that tankers generally will transport cargoes resulting from this increase in demand over greater waterborne distances (ton-miles) between producing areas and consuming areas than in the past is expected to continue. This increase in ton-miles is an important component of tanker utilization. The shipbuilding industry's capability to increase the supply of tankers to meet this demand is constrained to a degree by the lack of available capacity, which results in longer lead times for new tankers. The Company believes that international regulations requiring the phased retirement of older single hull vessels will continue to benefit double hull vessels.

Arlington's fleet consists of modern, double-hulled vessels. Therefore, the Company believes it is well positioned to benefit from these trends.

Dividend Policy

Arlington continues to intend to pay quarterly cash dividends in amounts substantially equal to the charter hire revenues it receives, less cash expenses and any reserves established by the Company's board of directors. The Company expects to announce its next dividend on April 25, 2005 and to pay that dividend on or about May 10, 2005.

About Arlington Tankers

Arlington Tankers Ltd is an international seaborne transporter of crude oil and petroleum products. Arlington's fleet consists of six double-hulled vessels and is one of the youngest tanker fleets in the world, with an average vessel age of approximately 1.5 years. The fleet consists of two V-MAX tankers, which are specially designed very large crude carriers, two Panamax tankers and two Product tankers. All of the Company's vessels are employed on long-term time charters. The Company was incorporated in Bermuda in September 2004. The Company's common shares commenced trading on the New York Stock Exchange on November 5, 2004 in connection with the Company's initial public offering.

Safe Harbor Statement

This press release contains assumptions, expectations, projections, intentions and beliefs about future events, in particular the statements regarding the Company's expectations as to tanker industry trends. These statements are intended as "forward-looking statements" within the meaning of the United States federal securities laws. All statements in this press release that are not statements of historical fact are forward-looking statements. When used in this press release, words such as "believe," "intend," "anticipate," "estimate," "project," "forecast," "plan," "potential," "will," "may," "should," and "expect" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

The forward-looking statements contained in this press release are subject to a number of risks, assumptions and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Important factors that could cause actual results to differ materially from those discussed in the forward-looking statements include: the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker market, as a result of changes in OPEC's petroleum production levels and worldwide oil consumption and storage, changes in the Company's operating expenses, including bunker prices, dry-docking and insurance costs, the market for the Company's vessels, the availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events and vessels breakdowns and instances of vessel off- hire. These and other risks are described in greater detail in the "Risk Factors" section of the final prospectus relating to the Company's initial public offering, filed with the United States Securities and Exchange Commission.

Arlington Tankers undertakes no obligation to publicly update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, except as required by law.

Contact: Arlington Tankers Ltd Arthur L. Regan President and Chief Executive Officer 441-292-4456