GENERAL MARITIME CORP/ - 10-K Annual Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

/X/ Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2002

/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
for the transition period from ______ to _____

Commission file number 001-16531

GENERAL MARITIME CORPORATION
(Exact name of registrant as specified in its charter)

Republic of the Marshall Islands 06-159-7083
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

35 West 56th Street, New York, New York 10019
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code: (212) 763-5600

Securities of the Registrant registered pursuant to Section 12(b) of the Act:

Common Stock, par value $.01 per share

Securities of the Registrant registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /

The aggregate market value of the voting stock of the Registrant held by
non-affiliates of the Registrant as of March 25, 2003 was approximately $341.6
million, based on the closing price of $9.24 per share.

The number of shares outstanding of the Registrant's common stock as of
March 25, 2003 was 36,964,770 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement for the Annual Meeting of Shareholders to be held on May
22, 2003 (Part III)

PART I

ITEM 1. BUSINESS

OVERVIEW

We provide international seaborne crude oil transportation services within
the Atlantic basin. As of March 1, 2003 we had a fleet of 28 tankers, consisting
of 23 Aframax and 5 Suezmax tankers. As discussed in more detail below, in
January of 2003 we agreed to acquire an additional 19 tankers by April 30, 2003.
After giving effect to this proposed acquisition, we would have a fleet of 47
tankers, consisting of 28 Aframax and 19 Suezmax tankers, making us the second
largest mid-sized tanker operator in the world. Our combined fleet would have a
total of 5.6 million dwt, with an average age as of December 31, 2002 of 11.1
years.

During the fiscal year ended December 31, 2002, our fleet generated net
voyage revenues and Adjusted EBITDA(1) of $145.6 million and $78.4 million,
respectively. During the fiscal year ended December 31, 2001, our fleet
generated net voyage revenues and Adjusted EBITDA of $165.0 million and $113.3
million, respectively. The 14 tankers whose results are included in our fiscal
year 2000 financial statements generated $108.0 million in net voyage revenues
and $79.4 million in Adjusted EBITDA during the fiscal year ended December 31,
2000.

We presently have one of the largest mid-sized tanker fleets in the world,
with a total cargo carrying capacity of 3.0 million dwt. With the majority of
our tankers currently operating in the Atlantic basin, we have one of the
largest fleets in this region, which includes ports in the Caribbean, South and
Central America, the United States, Western Africa and the North Sea.
Transportation of crude oil to the U.S. Gulf Coast and other refining centers in
the United States requires tanker owners and operators to meet more stringent
environmental regulations than in other regions of the world. We have focused
our operations in the Atlantic basin because we believe that these stringent
operating and safety standards act as a barrier to entry for potential
competitors. We have established a niche in the region due to our high-quality
tankers, of which 71.4% are either double-hulled or double-sided, our commitment
to safety and many years of experience in the industry. We estimate that for the
year ended December 31, 2002, our tankers transported more than 225.0 million
barrels of crude oil to the United States, accounting for approximately 6.8% of
all U.S. crude oil imports. Although the majority of our tankers operate in the
Atlantic basin, we also currently operate tankers in the Black Sea and in other
regions, which we believe enables us both to take advantage of market
opportunities and to position our tankers in anticipation of drydockings. Our
customers include most of the major international oil companies such as
ChevronTexaco Corporation, CITGO Petroleum Corp., Shell Oil Company, BPAmoco,
Exxon Mobil Corporation, ConocoPhillips and Sun International Ltd.

As of December 31, 2002, the average age of our 23 Aframax tankers was 12.3
years, and the average age of our 5 Suezmax tankers was 12.2 years.

- --------
(1) Adjusted EBITDA represents net voyage revenues less direct vessel expenses
and general and administrative expenses excluding other expenses. Adjusted
EBITDA is included because it is used by certain investors to measure a
company's financial performance. Adjusted EBITDA is not an item recognized
by Generally Accepted Accounting Principles, or GAAP, and should not be
considered as an alternative to net income or any other indicator of a
company's performance required by GAAP. The definition of Adjusted EBITDA
used here may not be comparable to that used by other companies. Please see
Item 6 of this annual report for a reconciliation of Adjusted EBITDA to net
income.

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Our net voyage revenues have grown from $12.0 million in 1997 to $145.6
million in 2002. We have also grown our fleet of tankers from 6 in 1997 to 28
tankers in 2002. We consummated our initial public offering in June 2001.

In January of 2003 we agreed to acquire 19 modern, high-quality tankers
consisting of 5 Aframax and 14 Suezmax tankers from affiliates of Metrostar
Management Corporation, a company based in Athens, Greece, for an aggregate
purchase price of $525.0 million. We anticipate that we will have acquired all
of the tankers by April 30, 2003, as their existing voyages terminate and we
integrate each tanker into our fleet operations. Our acquisition of each tanker
is subject to customary conditions of delivery, including our right to reject a
tanker after inspection. We intend to finance these acquisitions with the net
proceeds of our $250 million senior notes offering that was completed on March
20, 2003, together with senior secured bank borrowings. Unless otherwise
indicated, when we discuss our current fleet in this report, we mean our fleet
of 28 tankers before acquiring the Metrostar vessels, and all of our discussion
of our vessels relate to that current fleet.

Assuming we acquire all 19 tankers, our fleet will be composed of 47
tankers, consisting of 28 Aframax and 19 Suezmax tankers, making us the second
largest mid-sized tanker operator in the world. As of December 31, 2002, these
19 tankers had an average age of 9.8 years and would have provided us with an
additional 2.7 million dwt of carrying capacity. Following the acquisition, our
combined fleet will have a total of 5.6 million dwt, only 23% of which will be
single-hull compared to a worldwide average of 42% single-hull tankers. The
addition of these 19 tankers will also reduce the combined average age of our
fleet as of December 31, 2002 from 12.3 years to 11.1 years. As of December 31,
2002, only 14.9%, or 7 of the tankers in our combined fleet, were older than 15
years of age. Many of the tankers we expect to acquire are "sister ships" that
will provide us with operational and scheduling flexibility, as well as
economies of scale in their operation and maintenance.

We believe that the acquisition of the 19 modern, high-quality tankers from
Metrostar is consistent with our business strategy and will provide us with
significant economies of scale that we believe will reduce daily overhead vessel
costs per tanker. These 19 tankers should provide us with attractive chartering
opportunities while giving us the ability to diversify our customer base and
deploy additional tankers in the Atlantic basin as well as in other regions,
such as the Mediterranean Sea and Black Sea.

OUR COMPETITIVE STRENGTHS

We pursue an intensively customer, and service, focused strategy. Our
strategy is based on what we believe are our key competitive strengths:

- HIGH-QUALITY TANKERS. We operate a fleet of high-quality, mid-sized
tankers. We place great emphasis on ship maintenance and retaining
qualified crew members to operate our tankers. We believe that this
makes it more likely for us to obtain repeat business from customers
and to operate our tankers with greater fuel efficiency and lower
maintenance and operating costs. As of December 31, 2002, only 17.4%,
or 4 of our 23 Aframax tankers, and none of our 5 Suezmax tankers,
were older than 15 years of age. By contrast, 33.2% of the world's
Aframax fleet and 21.7% of the world's Suezmax fleet were older than
15 years of age as of that date. 71.4% of our tankers are either
double-hulled or double-sided. Because of increasingly stringent
operating and safety standards, the age and quality of our fleet have
given us a high level of acceptance by tanker charterers.

- FLEXIBLE, HOMOGENEOUS FLEET. We believe that Aframax and Suezmax
tankers, which make up our entire fleet, are among the most versatile
tankers in the world fleet due to their ability to service virtually
all ports and routes used for crude oil transportation. Additionally,
the

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majority of our tankers have one or two substantially identical
"sister ships" in our fleet which we often use interchangeably. These
sister ships enhance the revenue generating potential of our fleet by
providing operational and scheduling flexibility. The uniform nature
of many ships in the fleet also provides us with cost efficiencies in
maintaining, supplying and crewing our tankers. Finally, Aframax and
Suezmax tanker charter rates have historically been less volatile than
charter rates for VLCCs.

- STRONG CUSTOMER RELATIONSHIPS. We have strong relationships with our
customers, which include most major international oil companies, such
as ChevronTexaco Corporation, CITGO Petroleum Corp., Shell Oil
Company, BPAmoco, Exxon Mobil Corporation, ConocoPhillips and Sun
International Ltd. We believe our strong relationships stem from our
reputation for dependability and for delivering high-quality oil
transportation services. We have consistently maintained our customer
relationships since our inception. During the last few years, our
customer base has expanded due to the growth of our fleet, our
increase in the use of spot market voyage charters and by
opportunistically deploying our tankers into regions outside the
Atlantic basin.

- EXPERIENCED MANAGEMENT TEAM. Our founder, Peter C. Georgiopoulos, and
our other senior executive officers and key employees have on average
more than 20 years of experience in the shipping industry. Our
management team has expertise in all of the commercial, technical and
management areas of our business, promoting a focused marketing
effort, tight quality and cost controls and effective operations and
safety monitoring.

- IN-HOUSE VESSEL MANAGEMENT SERVICES. Unlike many other vessel owning
companies, we provide virtually all of the vessel management services
required to operate our fleet through our wholly-owned subsidiaries.
These services include operational support, tanker maintenance and
technical support, crewing, shipyard supervision, insurance and
financial management services. By performing these services in-house,
we believe that we are able to ensure quality as well as achieve
greater cost efficiencies and economies of scale.

Our high-quality fleet has resulted in an average of 97.3% capacity
utilization for the period from the acquisition of our first tanker in May 1997
through December 2002.

While we strive to maintain our strengths, we operate in a highly
competitive industry which is subject to downturns in regional and global
economies as well as changes in regulations which could adversely affect us and
our industry.

BUSINESS STRATEGY

Our strategy is to employ our existing competitive strengths to continue to
enhance our position within the industry and maximize long-term cash flow. Our
strategic initiatives include:

- MANAGING ENVIRONMENTALLY SAFE, YET COST EFFICIENT OPERATIONS. We
aggressively manage our operating and maintenance costs. At the same
time, our fleet has an excellent safety and environmental record that
we maintain through acquisitions of high-quality tankers and regular
maintenance and inspection of our fleet. We maintain operating
standards for all of our tankers that emphasize operational safety,
quality maintenance, continuous training of our officers and crews and
compliance with U.S. and international environmental and safety
regulations. Our in-house safety staff oversees many of these
services. We believe the age and quality of the tankers in our fleet,
coupled with our excellent safety and environmental record, position
us favorably within the sector with our customers and for future
business opportunities.

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- BALANCING TANKER DEPLOYMENT TO MAXIMIZE FLEET UTILIZATION AND CASH
FLOWS. We actively manage the deployment of our fleet between time
charters and spot market voyage charters. Our tanker deployment
strategy is designed to provide greater cash flow stability through
the use of time charters for part of our fleet, while maintaining the
flexibility to benefit from improvements in market rates by deploying
the balance of our tankers in the spot market. Our goal is to be the
first choice of our clients for crude oil transportation services. We
constantly monitor the market and seek to anticipate our clients'
crude oil transportation needs and to respond quickly when we
recognize attractive chartering opportunities.

- GROWING OUR FLEET AND MAINTAINING A PRUDENT CAPITAL STRUCTURE. We are
an industry consolidator focused on opportunistically acquiring
high-quality, second-hand, mid-sized tankers. During the past six
years, we have grown our fleet from 6 tankers to 28 tankers and expect
to grow to 47 tankers by April 30, 2003. We are continuously and
actively monitoring the market in an effort to take advantage of
expansion and growth opportunities. At the same time, we are committed
to maintaining prudent financial policies aimed at preserving
financial stability and increasing long-term cash flow. During the
year ended December 31, 2002, our net debt to net book capitalization
ratio has declined from 39.4% to 36.5%. After giving effect to the
$525.0 million acquisition of the 19 tankers from Metrostar and the
financing thereof, our net debt to net book capitalization ratio as of
December 31, 2002 would have been 63.0%. We expect the acquisition of
the Metrostar tankers to increase our cash flow generation which will
enable us to reduce this ratio towards our historical levels.

OUR FLEET

OUR EXISTING 28 TANKERS

As of March 1, 2003, we had a fleet of 28 tankers consisting of 23 Aframax
tankers and 5 Suezmax tankers. The following chart provides information
regarding our 28 tankers.

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DH = Double-hull tanker; DS = Double-sided tanker; SH = Single-hull tanker,
TC = Time Chartered
*As of March 1, 2002
** Oil/Bulk/Ore carrier (O/B/O)
1-Collateral for $300 million credit facility
2-Collateral for $165 million credit facility
3-Time charter expiration plus or minus 15 days
4-Time charter expiration plus or minus 30 days
5-Each tanker with the same letter is a "sister ship" of each other tanker with
the same letter

We acquired 29 of our vessels as well as its two management company
subsidiaries in a series of recapitalization transactions outlined below. The
recapitalization transactions consisted of the following:

- - Our acquisition, as of June 12, 2001, of seven limited partnerships owning
14 vessels, in exchange for shares of our common stock.

- - Our acquisition, as of June 15, 2001, of five special purpose entities,
each owning one vessel, in exchange for shares of our common stock.

- - Our acquisition, in June and July 2001, of seven vessels which were owned
and commercially operated by unaffiliated parties, in exchange for cash.

- - Our acquisition, in August 2001, of three vessels which were owned and
commercially operated by unaffiliated parties, in exchange for cash and
shares of our common stock.

- - Our acquisition, as of June 12, 2001, of all the issued and outstanding
shares of common stock of two vessel management companies. One of these
companies was acquired in exchange for cash and the other in exchange for
shares of our common stock.

Our predecessor entities began operations in 1997 and their fleet had grown
to 14 tankers by the time of our initial public offering on June 12, 2001. All
of our historical financial and operating information from before the initial
public offering reflects only those original 14 tankers. In connection with the
initial public offering, we acquired 15 additional tankers. Of those, 5 were
acquired simultaneously with the closing of the offering and the remaining 10
were acquired in the 10 weeks following the offering and successfully integrated
into our fleet. During October 2002, we sold our oldest tanker, Stavanger
Prince, for scrap. At the time of the offering, we also acquired United Overseas
Tankers Ltd., located in Piraeus, Greece which conducts our technical management
operations such as vessel crewing and maintenance. We recently completed an
internal corporate reorganization that both reduced the number of our
subsidiaries and the number of jurisdictions in which they are organized.

FLEET DEPLOYMENT

We strive to optimize the financial performance of our fleet by deploying
our vessels on time charters and in the spot market. We believe that our fleet
deployment strategy provides us with the ability to benefit from increases in
tanker rates while at the same time maintaining a measure of stability through
cycles in the industry. The following table details the percentage of our fleet
operating on time charters and in the spot market during the past three years.

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Tankers operating on time charters may be chartered for several months or
years whereas tankers operating in the spot market typically are chartered for a
single voyage which may last up to several weeks. Tankers operating in the spot
market may generate increased profit margins during improvements in tanker
rates, while tankers operating on time charters generally provide more
predictable cash flows. Accordingly, we actively monitor macroeconomic trends
and governmental rules and regulations that may affect tanker rates in an
attempt to optimize the deployment of our fleet. As of March 1, 2003, we had 6
tankers on time charter contracts expiring on dates between May 2003 and March
2004,

CLASSIFICATION AND INSPECTION

All of our tankers have been certified as being "in-class" by Det Norske
Veritas, the American Bureau of Shipping or Nippon Kaiji Kyokai. Each of these
classification societies is a member of the International Association of
Classification Societies. Every commercial vessel's hull and machinery is
evaluated by a classification society authorized by its country of registry. The
classification society certifies that the vessel has been built and maintained
in accordance with the rules of the classification society and complies with
applicable rules and regulations of the vessel's country of registry and the
international conventions of which that country is a member. Each vessel is
inspected by a surveyor of the classification society in three surveys of
varying frequency and thoroughness: every year for the annual survey, every two
to three years for the intermediate survey and every four to five years for
special surveys. Vessels may be required, as part of the intermediate survey
process, to be drydocked every 24 to 30 months for inspection of the underwater
portions of the vessel and for necessary repair stemming from the inspection.
Special surveys always require drydocking.

In addition to the classification inspections, many of our customers
regularly inspect our tankers as a precondition to chartering them for voyages.
We believe that our well-maintained, high-quality tankers provide us with a
competitive advantage in the current environment of increasing regulation and
customer emphasis on quality.

We have implemented the International Safety Management Code, which was
promulgated by the IMO to establish pollution prevention requirements applicable
to tankers. Prior to July 1, 1998, we obtained documents of compliance for our
offices and safety management certificates for all of our tankers for which the
certificates are required by the IMO.

OPERATIONS AND SHIP MANAGEMENT

We employ experienced management in all functions critical to our
operations, aiming to provide a focused marketing effort, tight quality and cost
controls and effective operations and safety monitoring. Unlike many other
vessel owning companies, we provide virtually all of our own vessel management
services through our wholly owned subsidiaries. These services include
operational support, tanker maintenance and technical support, crewing, shipyard
supervision, insurance and financial management services. By providing these
services in-house, we believe that we are able to achieve greater cost savings
through economies of scale.

Our crews inspect our tankers and perform ordinary course maintenance, both
at sea and in port. We regularly inspect our tankers. We examine each tanker and
make specific notations and recommendations for improvements to the overall
condition of the tanker, maintenance of the tanker and safety and welfare of the
crew. We have an in-house safety staff to oversee these functions and retain
Admiral Robert North (ret.), formerly of the U.S. Coast Guard, as a safety
consultant. Our safety staff provides the following services:

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- supervision of routine maintenance and repair of the tanker required
to keep each tanker in good and efficient condition, including the
preparation of comprehensive drydocking specifications and the
supervision of each drydocking;

- oversight of compliance with applicable regulations, including
licensing and certification requirements, and the required inspections
of each tanker to ensure that it meets the standards set forth by
classification societies and applicable legal jurisdictions as well as
our internal corporate requirements and the standards required by our
customers;

- engagement and provision of qualified crews (masters, officers, cadets
and ratings) and attendance to all matters regarding discipline, wages
and labor relations;

- arrangements to supply the necessary stores and equipment for each
tanker; and

- continual monitoring of fleet performance and the initiation of
necessary remedial actions to ensure that financial and operating
targets are met.

Our chartering staff, located in New York City, monitors fleet operations,
tanker positions and spot market voyage charter rates worldwide. We believe that
monitoring this information is critical to making informed bids on competitive
brokered charters.

CREWING AND EMPLOYEES

As of December 31, 2002, we employed approximately 67 office personnel.
Approximately 34 of these employees are located in New York City and manage the
commercial operations of our business. The other 33 employees are located in
Piraeus, Greece and manage the technical operations of our business. Our 33
employees located in Greece are subject to Greece's national employment
collective bargaining agreement which covers terms and conditions of their
employment.

As of December 31, 2002, we employed approximately 80 seaborne personnel to
crew our fleet of 28 tankers, consisting of captains, chief engineers, chief
officers and first engineers. The balance of each crew is staffed by employees
of a third party to whom we contract for crew management services. We believe
that we could obtain a replacement provider for these services, or could provide
these services internally, without any adverse impact on our operations.

We place great emphasis on attracting qualified crew members for employment
on our tankers. Recruiting qualified senior officers has become an increasingly
difficult task for tanker operators. We pay competitive salaries and provide
competitive benefits to our personnel. We believe that the well-maintained
quarters and equipment on our tankers help to attract and retain motivated and
qualified seamen and officers. Our crew management services contractors have
collective bargaining agreements that cover all the junior officers and seamen
whom they provide to us.

CUSTOMERS

Our customers include most oil companies, oil traders, tanker owners and
others, although during the year ended December 31, 2002, no single customer
accounted for more than 10% of our voyage revenues. During 2001, Skaugen
PetroTrans, Inc., accounted for 12.6% of our voyage revenues.

COMPETITION

International seaborne transportation of crude oil and other petroleum
products is provided by two main types of operators: fleets owned by independent
companies and fleets operated by oil companies (both private and state-owned).
Many oil companies and other oil trading companies, the

7

primary charterers of the tankers we own, also operate their own tankers and
transport oil for themselves and third party charterers in direct competition
with independent owners and operators. Competition for charters is intense and
is based upon price, tanker location, the size, age, condition and acceptability
of the tanker, and the quality and reputation of the tanker's operator.

We compete principally with other Aframax and Suezmax owners. However,
competition in the Aframax and Suezmax markets is also affected by the
availability of alternative size tankers. Panamax size tankers and oil/bulk/ore
carriers (which carry oil or dry bulk cargo) can compete for many of the same
charters for which we compete. Because ULCCs and VLCCs cannot enter the ports we
serve due to their large size, they rarely compete directly with our tankers for
specific charters.

Other significant operators of multiple Aframax and Suezmax tankers in the
Atlantic basin include American Eagle Tankers, Inc. Limited, OMI Corporation,
Overseas Shipholding Group, Inc. and Teekay Shipping Corporation. There are also
numerous, smaller tanker operators in the Atlantic basin.

INSURANCE

The operation of any ocean-going vessel carries an inherent risk of
catastrophic marine disasters and property losses caused by adverse weather
conditions, mechanical failures, human error, war, terrorism and other
circumstances or events. In addition, the transportation of crude oil is subject
to the risk of spills, and business interruptions due to political circumstances
in foreign countries, hostilities, labor strikes and boycotts. OPA has made
liability insurance more expensive for ship owners and operators imposing
potentially unlimited liability upon owners, operators and bareboat charterers
for oil pollution incidents in the 200-mile United States exclusive economic
zone. We believe that our current insurance coverage is adequate to protect us
against the principal accident-related risks that we face in the conduct of our
business.

Our protection and indemnity insurance, or P&I insurance, covers
third-party liabilities and other related expenses from, among other things,
injury or death of crew, passengers and other third parties, claims arising from
collisions, damage to cargo and other third-party property and pollution arising
from oil or other substances. Our current P&I insurance coverage for pollution
is the maximum commercially available amount of $1.0 billion per tanker per
incident and is provided by mutual protection and indemnity associations. Each
of the tankers currently in our fleet is entered in a protection and indemnity
association which is a member of the International Group of Protection and
Indemnity Mutual Assurance Associations. The 14 protection and indemnity
associations that comprise the International Group insure approximately 90% of
the world's commercial tonnage and have entered into a pooling agreement to
reinsure each association's liabilities. Each protection and indemnity
association has capped its exposure to this pooling agreement at $4.3 billion.
As a member of protection and indemnity associations, which are in turn members
of the International Group, we are subject to calls payable to the associations
based on its claim records as well as the claim records of all other members of
the individual associations and members of the pool of protection and indemnity
associations comprising the International Group.

Our hull and machinery insurance covers risks of actual or constructive
loss from collision, fire, grounding and engine breakdown. Our war risk
insurance covers risks of confiscation, seizure, capture, vandalism, sabotage
and other war-related risks. Our loss-of-hire insurance covers loss of revenue
for up to 90 days resulting from tanker off hire for all of our tankers.

ENVIRONMENTAL AND OTHER REGULATION

Government regulation significantly affects the ownership and operation of
our tankers. They are subject to international conventions, national, state and
local laws and regulations in force in the countries in which our tankers may
operate or are registered. We cannot predict the ultimate cost of complying with
these requirements, or the impact of these requirements on the resale value or
useful lives of our tankers.

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Various governmental and quasi-governmental agencies require us to obtain
permits, licenses and certificates for the operation of our tankers.

We believe that the heightened level of environmental and quality concerns
among insurance underwriters, regulators and charterers is leading to greater
inspection and safety requirements on all tankers and may accelerate the
scrapping of older tankers throughout the industry. Increasing environmental
concerns have created a demand for tankers that conform to the stricter
environmental standards. We maintain operating standards for all of our tankers
that emphasize operational safety, quality maintenance, continuous training of
our officers and crews and compliance with U.S. and international regulations.

Our tankers are subject to both scheduled and unscheduled inspections by a
variety of governmental and private entities, each of which may have unique
requirements. These entities include the local port authorities (U.S. Coast
Guard, harbor master or equivalent), classification societies, flag state
administration (country of registry) and charterers, particularly terminal
operators and oil companies. Failure to maintain necessary permits or approvals
could require us to incur substantial costs or temporarily suspend operation of
one or more of our tankers.

INTERNATIONAL MARITIME ORGANIZATION

The IMO has adopted regulations which set forth pollution prevention
requirements applicable to tankers. These regulations, which have been
implemented in many jurisdictions in which our tankers operate, provide, in
part, that:

- 25-year old tankers must be of double-hull construction or of a
mid-deck design with double-sided construction, unless:

(1) they have wing tanks or double-bottom spaces not used for the
carriage of oil which cover at least 30% of the length of the
cargo tank section of the hull or bottom; or

(2) they are capable of hydrostatically balanced loading (loading
less cargo into a tanker so that in the event of a breach of the
hull, water flows into the tanker, displacing oil upwards instead
of into the sea);

- 30-year old tankers must be of double-hull construction or mid-deck
design with double-sided construction; and

- all tankers will be subject to enhanced inspections.

Also, under IMO regulations, a tanker must be of double-hull construction
or a mid-deck design with double-sided construction or be of another approved
design ensuring the same level of protection against oil pollution if the
tanker:

- is the subject of a contract for a major conversion or original
construction on or after July 6, 1993;

- commences a major conversion or has its keel laid on or after January
6, 1994; or

- completes a major conversion or is a newbuilding delivered on or after
July 6, 1996.

As of December 31, 2002, we owned 8 single-hull tankers. Under the current
regulations, these tankers will be able to operate for various periods for up to
eight years before being required to be scrapped or retrofitted to conform to
international environmental standards. Although 2 of these tankers

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are 15 years of age or older, the oldest was only 23 years old and, therefore,
the IMO requirements currently in effect regarding 25- and 30-year old tankers
will not begin to affect our fleet until 2005. Compliance with the new
regulations regarding inspections of all tankers, however, could adversely
affect our operations.

The IMO has approved an accelerated time-table for the phase-out of
single-hull oil tankers. The new regulations which took effect in September
2002, require the phase-out of most single-hull oil tankers by 2015 or earlier,
depending on the age of the tanker and whether it has segregated ballast tanks.
Under the new regulations, the maximum permissible age for single-hull tankers
after 2007 will be 26 years, as opposed to 30 years under current regulations.
The 8 single-hull tankers in our fleet, two of which are currently held for sale
during 2003, will be phased-out by 2007 under the new regulations. The remaining
6 single-hull tankers would be phased out by 2015 unless retrofitted with a
second hull. Also, more stringent maritime safety rules are also more likely to
be imposed worldwide as a result of the oil spill in November 2002 relating to
the loss of the M.T. PRESTIGE. The M.T. PRESTIGE was a 26-year old single-hull
tanker owned by a company not affiliated with us. The M.T. PRESTIGE disaster
could lead to proposals to accelerate the phasing out of single-hull tankers.

The requirements contained in the International Safety Management Code, or
ISM Code, promulgated by the IMO, also affect our operations. The ISM Code
requires the party with operational control of a vessel to develop an extensive
safety management system that includes, among other things, the adoption of a
safety and environmental protection policy setting forth instructions and
procedures for operating its vessels safely and describing procedures for
responding to emergencies. We intend to rely upon the safety management system
that we and our third party technical managers have developed.

The ISM Code requires that vessel operators obtain a safety management
certificate for each vessel they operate. This certificate evidences compliance
by a vessel's management with code requirements for a safety management system.
No vessel can obtain a certificate unless its manager has been awarded a
document of compliance, issued by each flag state, under the ISM Code. We have
obtained documents of compliance for our offices and safety management
certificates for all of our tankers for which the certificates are required by
the IMO. We are required to renew these documents of compliance and safety
management certificates annually.

Noncompliance with the ISM Code and other IMO regulations may subject the
shipowner or bareboat charterer to increased liability, may lead to decreases in
available insurance coverage for affected vessels and may result in the denial
of access to, or detention in, some ports. The U.S. Coast Guard and European
Union authorities have indicated that vessels not in compliance with the ISM
Code by the applicable deadlines will be prohibited from trading in U.S. and
European Union ports, as the case may be.

The IMO has negotiated international conventions that impose liability for
oil pollution in international waters and a signatory's territorial waters.
Additional or new conventions, laws and regulations may be adopted which could
limit our ability to do business and which could have a material adverse effect
on our business and results of operations.

U.S. OIL POLLUTION ACT OF 1990 AND COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION AND LIABILITY ACT

OPA established an extensive regulatory and liability regime for
environmental protection and cleanup of oil spills. OPA affects all owners and
operators whose vessels trade with the United States or its territories or
possessions, or whose vessels operate in the waters of the United States, which
include the U.S. territorial sea and the 200 nautical mile exclusive economic
zone around the United States. The Comprehensive Environmental Response,
Compensation and Liability Act, or CERCLA, applies to the

10

discharge of hazardous substances (other than oil) whether on land or at sea.
Both OPA and CERCLA impact our operations.

Under OPA, vessel owners, operators and bareboat charterers are
"responsible parties" who are jointly, severally and strictly liable (unless the
spill results solely from the act or omission of a third party, an act of God or
an act of war) for all containment and clean-up costs and other damages arising
from oil spills from their vessels. These other damages are defined broadly to
include:

- natural resource damages and related assessment costs;

- real and personal property damages;

- net loss of taxes, royalties, rents, profits or earnings capacity;

- net cost of public services necessitated by a spill response, such as
protection from fire, safety or health hazards; and

- loss of subsistence use of natural resources.

OPA limits the liability of responsible parties to the greater of $1,200
per gross ton or $10 million per tanker that is over 3,000 gross tons (subject
to possible adjustment for inflation). The act specifically permits individual
states to impose their own liability regimes with regard to oil pollution
incidents occurring within their boundaries, and some states have enacted
legislation providing for unlimited liability for discharge of pollutants within
their waters. In some cases, states which have enacted this type of legislation
have not yet issued implementing regulations defining tanker owners'
responsibilities under these laws. CERCLA, which applies to owners and operators
of vessels, contains a similar liability regime and provides for cleanup,
removal and natural resource damages. Liability under CERCLA is limited to the
greater of $300 per gross ton or $5 million.

These limits of liability do not apply, however, where the incident is
caused by violation of applicable U.S. federal safety, construction or operating
regulations, or by the responsible party's gross negligence or willful
misconduct. These limits do not apply if the responsible party fails or refuses
to report the incident or to cooperate and assist in connection with the
substance removal activities. OPA and CERCLA each preserve the right to recover
damages under existing law, including maritime tort law. We believe that we are
in substantial compliance with OPA, CERCLA and all applicable state regulations
in the ports where our tankers call.

OPA requires owners and operators of vessels to establish and maintain with
the U.S. Coast Guard evidence of financial responsibility sufficient to meet the
limit of their potential strict liability under the act. The U.S. Coast Guard
has enacted regulations requiring evidence of financial responsibility in the
amount of $1,500 per gross ton for tankers, coupling the OPA limitation on
liability of $1,200 per gross ton with the CERCLA liability limit of $300 per
gross ton. Under the regulations, evidence of financial responsibility may be
demonstrated by insurance, surety bond, self-insurance or guaranty. Under OPA
regulations, an owner or operator of more than one tanker is required to
demonstrate evidence of financial responsibility for the entire fleet in an
amount equal only to the financial responsibility requirement of the tanker
having the greatest maximum strict liability under OPA and CERCLA. We have
provided requisite guarantees and received certificates of financial
responsibility from the U.S. Coast Guard for each of our tankers required to
have one.

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We insure each of our tankers with pollution liability insurance in the
maximum commercially available amount of $1.0 billion. A catastrophic spill
could exceed the insurance coverage available, in which event there could be a
material adverse effect on our business.

Under OPA, with certain limited exceptions, all newly-built or converted
vessels operating in U.S. waters must be built with double-hulls, and existing
vessels that do not comply with the double-hull requirement will be prohibited
from trading in U.S. waters over a 20-year period (1995-2015) based on size, age
and place of discharge, unless retrofitted with double-hulls. Notwithstanding
the prohibition to trade schedule, the act currently permits existing
single-hull and double-sided tankers to operate until the year 2015 if their
operations within U.S. waters are limited to discharging at the Louisiana
Offshore Oil Port or off-loading by lightering within authorized lightering
zones more than 60 miles off-shore. Lightering is the process by which vessels
at sea off-load their cargo to smaller vessels for ultimate delivery to the
discharge port. The prohibition to trade schedule for our 8 single-hull and 6
double-sided tankers is as follows:

(1) Currently held for sale and to be sold during 2003

Of the 19 tankers we agreed to acquire from Metrostar, 9 are double-hull
tankers, 4 are double-sided tankers, 3 are double-bottomed tankers and 3 are
single-hull tankers. These tankers are currently eligible to trade in U.S waters
until the year set forth below at which time they will be subject to the same
restrictions described above.

Owners or operators of tankers operating in the waters of the United States
must file vessel response plans with the U.S. Coast Guard, and their tankers are
required to operate in compliance with their U.S. Coast Guard approved plans.
These response plans must, among other things:

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- address a "worst case" scenario and identify and ensure, through
contract or other approved means, the availability of necessary
private response resources to respond to a "worst case discharge";

- describe crew training and drills; and

- identify a qualified individual with full authority to implement
removal actions.

We have obtained vessel response plans approved by the U.S. Coast Guard for
our tankers operating in the waters of the United States. In addition, the U.S.
Coast Guard has announced it intends to propose similar regulations requiring
certain vessels to prepare response plans for the release of hazardous
substances.

OTHER REGULATION

Although the United States is not a party to these conventions, many
countries have ratified and follow the liability plan adopted by the IMO and set
out in the International Convention on Civil Liability for Oil Pollution Damage
of 1969 and the Convention for the Establishment of an International Fund for
Oil Pollution of 1971. Under these conventions and depending on whether the
country in which the damage results is a party to the 1992 Protocol to the
International Convention on Civil Liability for Oil Pollution Damage, a vessel's
registered owner is strictly liable for pollution damage caused in the
territorial waters of a contracting state by discharge of persistent oil,
subject to certain complete defenses. Under an amendment that will come into
effect on November 1, 2003, for vessels of 5,000 to 140,000 gross tons (a unit
of measurement for the total enclosed spaces within a vessel), liability will be
limited to approximately $6.1 million plus $858 for each additional gross ton
over 5,000. For vessels of over 140,000 gross tons, liability will be limited to
approximately $122.1 million. The current maximum amount under the 1992 protocol
is approximately $81.2 million. As the convention calculates liability in terms
of Special Drawing Rights, or SDRs, a unit of account pegged to a basket of
currencies, these figures are based on a conversion rate on January 13, 2003 of
1 SDR= $1.36025. The right to limit liability is forfeited under the
International Convention on Civil Liability for Oil Pollution Damage where the
spill is caused by the owner's actual fault and under the 1992 Protocol where
the spill is caused by the owner's intentional or reckless conduct. Vessels
trading to states which are parties to these conventions must provide evidence
of insurance covering the liability of the owner. In jurisdictions where the
International Convention on Civil Liability for Oil Pollution Damage has not
been adopted, various legislative schemes or common law govern, and liability is
imposed either on the basis of fault or in a manner similar to that convention.
We believe that our P&I insurance covers the liability under the plan adopted by
the IMO.

The European Union is considering legislation that would: (1) ban
manifestly sub-standard ships (defined as those over 15 years old that have been
detained by port authorities at least twice in the past six months) from
European waters and create an obligation of port states to inspect ships posing
a high risk to maritime safety or the marine environment; (2) provide the
European Commission with greater authority and control over classification
societies, including the ability to seek to suspend or revoke the authority of
negligent societies; and (3) accelerate the phasing in of double-hull tankers on
the same schedule as that required under OPA. The European Union adopted a
legislative resolution confirming an accelerated phase-out schedule for
single-hull tankers in line with the schedule adopted by the IMO. Italy
announced a ban of single-hull crude oil tankers over 5,000 dwt from most
Italian ports, effective April 2001. It is impossible to predict what
legislation or additional regulations, if any, may be promulgated by the
European Union or any other country or authority.

In addition, most U.S. states that border a navigable waterway have enacted
environmental pollution laws that impose strict liability on a person for
removal costs and damages resulting from a

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discharge of oil or a release of a hazardous substance. These laws may be more
stringent than U.S. federal law.

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

The following risk factors and other information included in this report
should be carefully considered. The risks and uncertainties described below are
not the only ones we face. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial also may impair our business
operations. If any of the following risks occur, our business, financial
condition, operating results and cash flows could be materially adversely
affected and the trading price of our common stock could decline.

THE INDENTURE FOR THE NOTES AND OUR CREDIT FACILITIES IMPOSE SIGNIFICANT
OPERATING AND FINANCIAL RESTRICTIONS THAT MAY LIMIT OUR ABILITY TO OPERATE OUR
BUSINESS.

Our existing credit facilities and indenture for our senior notes that we
issued when we completed our private debt placement on March 20, 2003, impose
significant operating and financial restrictions on us. These restrictions limit
our ability to, among other things:

- incur additional debt;

- pay dividends or make other restricted payments;

- create or permit certain liens;

- sell tankers or other assets;

- create or permit restrictions on the ability of our restricted
subsidiaries to pay dividends or make other distributions to us;

- engage in transactions with affiliates; and

- consolidate or merge with or into other companies or sell all or
substantially all of our assets.

These restrictions could limit our ability to finance our future operations
or capital needs, make acquisitions or pursue available business opportunities.

In addition, our credit facilities require us to maintain specified
financial ratios and satisfy financial covenants. We may be required to take
action to reduce our debt or to act in a manner contrary to our business
objectives to meet these ratios and satisfy these covenants. Events beyond our
control, including changes in the economic and business conditions in the
markets in which we operate, may affect our ability to comply with these
covenants. We cannot assure you that we will meet these ratios or satisfy these
covenants or that our lenders will waive any failure to do so. A breach of any
of the covenants in, or our inability to maintain the required financial ratios
under, our credit facilities would prevent us from borrowing additional money
under the facilities and could result in a default under them. If a default
occurs under our credit facilities, the lenders could elect to declare that
debt, together with accrued interest and other fees, to be immediately due and
payable and proceed against the collateral securing that debt, which constitutes
all or substantially all of our assets. Moreover, if the lenders under a credit
facility or other agreement in default were to accelerate the debt outstanding
under that facility, it could result in a default under our other debt
obligations.

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WE ARE A HOLDING COMPANY, AND WE DEPEND ON THE ABILITY OF OUR SUBSIDIARIES TO
DISTRIBUTE FUNDS TO US IN ORDER TO SATISFY OUR FINANCIAL AND OTHER OBLIGATIONS.

We are a holding company, and our subsidiaries conduct all of our
operations and own all of our operating assets. We have no significant assets
other than the equity interests of our subsidiaries. As a result, our ability to
make required payments on our senior notes depends on the performance of our
subsidiaries and their ability to distribute funds to us. The ability of our
subsidiaries to make distributions to us may be restricted by, among other
things, restrictions under our debt facilities, applicable corporate and limited
liability company laws of the jurisdictions of their incorporation or
organization and other laws and regulations. If we are unable to obtain funds
from our subsidiaries, we will not be able to make payment on our credit
facilities or pay interest or principal on our senior notes unless we obtain
funds from other sources. We cannot assure you that we will be able to obtain
the necessary funds from other sources.

AN INCREASE IN THE SUPPLY OF TANKER CAPACITY WITHOUT AN INCREASE IN DEMAND FOR
TANKER CAPACITY COULD CAUSE CHARTER RATES TO DECLINE, WHICH COULD MATERIALLY AND
ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE.

Historically, the tanker industry has been cyclical. The profitability of
companies and asset values in the industry have fluctuated based on changes in
the supply of, and demand for, tanker capacity. The supply of tankers generally
increases with deliveries of new tankers and decreases with the scrapping of
older tankers, conversion of tankers to other uses, such as floating production
and storage facilities, and loss of tonnage as a result of casualties. If the
number of new ships delivered exceeds the number of tankers being scrapped and
lost, tanker capacity will increase. If the supply of tanker capacity increases
and the demand for tanker capacity does not increase correspondingly, the
charter rates paid for our tankers could materially decline.

A DECLINE IN DEMAND FOR CRUDE OIL OR A SHIFT IN OIL TRANSPORT PATTERNS COULD
MATERIALLY AND ADVERSELY AFFECT OUR REVENUES.

The demand for tanker capacity to transport crude oil depends upon world
and regional oil markets. A number of factors influence these markets,
including:

- global and regional economic conditions;

- increases and decreases in production of and demand for crude oil;

- developments in international trade; and

- changes in seaborne and other transportation patterns.

Historically, the crude oil markets have been volatile as a result of the
many conditions and events that can affect the price, demand, production and
transport of oil, as well as competition from alternative energy sources.
Decreased demand for oil transportation may have a material adverse effect on
our revenues, cash flows and profitability.

A DECLINE IN CHARTER RATES OR AN INCREASE IN COSTS COULD MATERIALLY AND
ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE.

Our revenues depend on the rates that charterers pay for transportation of
crude oil by Aframax and Suezmax tankers. Because many of the factors
influencing the supply of and demand for tanker capacity are unpredictable, the
nature, timing and degree of changes in charter rates are unpredictable. For

15

the year ended December 31, 2002, the average daily rate in the spot market for
our Aframax tankers was $13,318 and the average daily rate in the spot market
for our Suezmax tankers was $15,410. In 2001, the average daily rate in the spot
market for our Aframax tankers was $20,118 and the average daily rate in the
spot market for our Suezmax tankers was $27,032. In 2000, the average daily rate
in the spot market for our Aframax tankers was $27,531 and the average daily
rate in the spot market for Suezmax tankers was $35,751. If charter rates fall,
our revenues, cash flows and profitability could be materially and adversely
affected.

Our vessel operating expenses depend on a variety of factors including crew
costs, provisions, deck and engine stores, lubricating oil, insurance,
maintenance and repairs, many of which are beyond our control and affect the
entire shipping industry. Some of these costs, primarily insurance and enhanced
security measures implemented after September 11, 2001, are increasing. The
terrorist attack on the VLCC LIMBURG in Yemen during October 2002 has resulted
in even more emphasis on security and pressure on insurance rates. We expect
these to increase direct vessel operating expenses for 2003. If costs continue
to rise, that could materially and adversely affect our cash flows and
profitability.

THE MARKET FOR CRUDE OIL TRANSPORTATION SERVICES IS HIGHLY COMPETITIVE AND WE
MAY NOT BE ABLE TO EFFECTIVELY COMPETE.

Our tankers are employed in a highly competitive market. Our competitors
include the owners of other Aframax and Suezmax tankers and, to a lesser degree,
owners of other size tankers. Both groups include independent oil tanker
companies as well as oil companies. We do not control a sufficiently large share
of the market to influence the market price charged for crude oil transportation
services.

Our market share may decrease in the future. We may not be able to compete
profitably as we expand our business into new geographic regions or provide new
services. New markets may require different skills, knowledge or strategies than
we use in our current markets, and the competitors in those new markets may have
greater financial strength and capital resources than we do.

FLUCTUATIONS IN THE MARKET VALUE OF OUR FLEET MAY ADVERSELY AFFECT OUR
LIQUIDITY, RESULT IN BREACHES UNDER OUR FINANCING ARRANGEMENTS AND SALES OF OUR
TANKERS AT A LOSS.

The market value of tankers fluctuates depending upon general economic and
market conditions affecting the tanker industry, the number of tankers in the
world fleet, the price of constructing new tankers, or new buildings, types and
sizes of tankers, and the cost of other modes of transportation. The market
value of our fleet may decline as a result of a downswing in the historically
cyclical shipping industry or as a result of the aging of our fleet. Declining
tanker values could affect our ability to raise cash by limiting our ability to
refinance tankers and thereby adversely impact our liquidity. In addition,
declining tanker values could result in a breach of loan covenants, which could
give rise to events of default under our credit facilities. Due to the
cyclicality of the tanker market, the market value of one or more of our tankers
may at various times be lower than their book value, and sales of those tankers
during those times would result in losses. If we determine at any time that a
tanker's future limited useful life and earnings require us to impair its value
on our financial statements, that could result in a charge against our earnings
and the reduction of our shareholder's equity. If for any reason we sell tankers
at a time when tanker prices have fallen, the sale may be at less than the
tanker's carrying amount on our financial statements, with the result that we
would also incur a loss and a reduction in earnings.

COMPLIANCE WITH SAFETY, ENVIRONMENTAL AND OTHER GOVERNMENTAL REQUIREMENTS MAY
ADVERSELY AFFECT OUR OPERATIONS.

16

The shipping industry in general, our business and the operation of our
tankers in particular, are affected by a variety of governmental regulations in
the form of numerous international conventions, national, state and local laws
and national and international regulations in force in the jurisdictions in
which such tankers operate, as well as in the country or countries in which such
tankers are registered. These regulations include:

- OPA, which imposes strict liability for the discharge of oil into the
200-mile United States exclusive economic zone, the obligation to
obtain certificates of financial responsibility for vessels trading in
United States waters and the requirement that newly constructed
tankers that trade in United States waters be constructed with
double-hulls;

- the International Convention on Civil Liability for Oil Pollution
Damage of 1969 entered into by many countries (other than the United
States) relating to strict liability for pollution damage caused by
the discharge of oil;

- the IMO International Convention for the Prevention of Pollution from
Ships with respect to strict technical and operational requirements
for tankers;

- the IMO International Convention for the Safety of Life at Sea of
1974, or SOLAS, with respect to crew and passenger safety; and

- the International Convention on Load Lines of 1966 with respect to the
safeguarding of life and property through limitations on load
capability for vessels on international voyages.

More stringent maritime safety rules are also more likely to be imposed
worldwide as a result of the recent oil spill in November 2002 relating to the
loss of the M.T. PRESTIGE, a 26-year old single-hull tanker owned by a company
not affiliated with us. Additional laws and regulations may also be adopted that
could limit our ability to do business or increase the cost of our doing
business and that could have a material adverse effect on our operations. In
addition, we are required by various governmental and quasi-governmental
agencies to obtain certain permits, licenses and certificates with respect to
our operations. In the event of war or national emergency, our tankers may be
subject to requisition by the government of the flag flown by the tanker without
any guarantee of compensation for lost profits. We believe our tankers are
maintained in good condition in compliance with present regulatory requirements,
are operated in compliance with applicable safety/environmental laws and
regulations and are insured against usual risks for such amounts as our
management deems appropriate. The tankers' operating certificates and licenses
are renewed periodically during each tanker's required annual survey. However,
government regulation of tankers, particularly in the areas of safety and
environmental impact may change in the future and require us to incur
significant capital expenditure on our ships to keep them in compliance.

SHIPPING IS AN INHERENTLY RISKY BUSINESS AND OUR INSURANCE MAY NOT BE ADEQUATE.

Our tankers and their cargoes are at risk of being damaged or lost because
of events such as marine disasters, bad weather, mechanical failures, human
error, war, terrorism, piracy and other circumstances or events. In addition,
transporting crude oil creates a risk of business interruptions due to political
circumstances in foreign countries, hostilities, labor strikes and boycotts. For
instance, in Venezuela, an oil industry strike has lessened the flow of oil to
the United States and, therefore, the demand for tankers on that route. Any of
these events may result in loss of revenues, increased costs and decreased cash
flows. In addition, following the terrorist attack in New York City on September
11, 2001, and the military response of the United States, the likelihood of
future acts of terrorism may increase, and our tankers may face higher risks of
attack. Future hostilities or other political instability, as shown by the

17

attack on the LIMBURG in Yemen in October 2002, could affect our trade patterns
and adversely affect our operations and our revenues, cash flows and
profitability.

We carry insurance to protect against most of the accident-related risks
involved in the conduct of our business. We currently maintain the maximum
commercially available amount of $1.0 billion in coverage for each of our
tankers for liability for spillage or leakage of oil or pollution. We also carry
insurance covering lost revenue resulting from tanker off hire for all of our
tankers. Nonetheless, risks may arise against which we are not adequately
insured. For example, a catastrophic spill could exceed our insurance coverage
and have a material adverse effect on our financial condition. In addition, we
may not be able to procure adequate insurance coverage at commercially
reasonable rates in the future and we cannot guarantee that any particular claim
will be paid. In the past, new and stricter environmental regulations have led
to higher costs for insurance covering environmental damage or pollution, and
new regulations could lead to similar increases or even make this type of
insurance unavailable. Furthermore, even if insurance coverage is adequate to
cover our losses, we may not be able to timely obtain a replacement ship in the
event of a loss. We may also be subject to calls, or premiums, in amounts based
not only on our own claim records but also the claim records of all other
members of the protection and indemnity associations through which we receive
indemnity insurance coverage for tort liability. Our payment of these calls
could result in significant expenses to us which, could reduce our cash flows
and place strains on our liquidity and capital resources.

OUR OPERATING RESULTS MAY FLUCTUATE SEASONALLY.

We operate our tankers in markets that have historically exhibited seasonal
variations in tanker demand and, as a result, in charter rates. Tanker markets
are typically stronger in the fall and winter months (the fourth and first
quarters of the calendar year) in anticipation of increased oil consumption in
the northern hemisphere during the winter months. Unpredictable weather patterns
and variations in oil reserves disrupt vessel scheduling. While this seasonality
has not materially affected our operating results since 1997, it could
materially affect our operating results in the future.

WE MAY NOT BE ABLE TO GROW OR TO EFFECTIVELY MANAGE OUR GROWTH.

We may not be able to grow or to effectively manage our growth. A principal
focus of our strategy is to continue to grow by taking advantage of changing
market conditions, which may include expanding our business in the Atlantic
basin, the primary geographic area and market where we operate or expanding into
other regions, or by increasing the number of tankers in our fleet. Our future
growth will depend upon a number of factors, some of which we can control and
some of which we cannot. These factors include our ability to:

- identify businesses engaged in managing, operating or owning tankers
for acquisitions or joint ventures;

- identify tankers and/or shipping companies for acquisitions;

- integrate any acquired businesses or tankers successfully with our
existing operations;

- hire, train and retain qualified personnel to manage and operate our
growing business and fleet;

- identify new markets outside of the Atlantic basin;

- improve our operating and financial systems and controls; and

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- obtain required financing for our existing and new operations.

The failure to effectively identify, purchase, develop and integrate any
tankers or businesses could harm our business, financial condition and results
of operations. In January 2003, we agreed to acquire 19 additional tankers. We
may have difficulty integrating these tankers into our existing operations or
employing qualified personnel to manage and operate these tankers.

IF WE DEFAULT UNDER ANY OF OUR LOAN AGREEMENTS, WE COULD FORFEIT OUR RIGHTS IN
OUR TANKERS AND THEIR CHARTERS.

We have pledged all of our vessels and related collateral as security to
the lenders under our loan agreements. Default under any of these loan
agreements, if not waived or modified, would permit the lenders to foreclose on
the mortgages over the vessels and the related collateral, and we could lose our
rights in the tankers and their charters.

When final payments are due under our loan agreements, we must repay any
borrowings outstanding. To the extent that our cash flows are insufficient to
repay any of these borrowings, we will need to refinance some or all of our loan
agreements or replace them with an alternate credit arrangement. We may not be
able to refinance or replace our loan agreements at the time they become due. In
addition, the terms of any refinancing or alternate credit arrangement may
restrict our financial and operating flexibility.

IF WE LOSE ANY OF OUR CUSTOMERS OR A SIGNIFICANT PORTION OF OUR REVENUES, OUR
OPERATING RESULTS COULD BE MATERIALLY ADVERSELY AFFECTED.

We derive a significant portion of our voyage revenues from a limited
number of customers, although during the year ended December 31, 2002, no single
customer accounted for more than 10% of our voyage revenues. During the year
ended December 31, 2001, Skaugen PetroTrans, Inc. accounted for 12.6% of our
voyage revenues. If we lose a significant customer, or if a significant customer
decreases the amount of business it transacts with us, our revenues, cash flows
and profitability could be materially and adversely affected.

AS OUR FLEET AGES, THE RISKS ASSOCIATED WITH OLDER VESSELS COULD ADVERSELY
AFFECT OUR OPERATIONS.

In general, the costs to maintain a tanker in good operating condition
increase as the tanker ages. As of December 31, 2002, the average age of our
28-tanker fleet was 12.3 years. Due to improvements in engine technology, older
tankers typically are less fuel-efficient than more recently constructed
tankers. Cargo insurance rates increase with the age of a tanker, making older
tankers less desirable to charterers.

Governmental regulations, safety or other equipment standards related to
the age of tankers may require expenditures for alterations or the addition of
new equipment to our tankers, and may restrict the type of activities in which
our tankers may engage. We cannot assure you that, as our tankers age, market
conditions will justify any required expenditures or enable us to operate our
tankers profitably during the remainder of their useful lives.

OUR INABILITY TO OPERATE TWO OF OUR SINGLE-HULL TANKERS IN U.S. WATERS BEGINNING
IN 2003 AND 2004 AND AN ACCELERATION OF THE CURRENT LATER PROHIBITION TO TRADE
DEADLINES FOR OUR OTHER SINGLE-HULL AND DOUBLE-SIDED TANKERS COULD ADVERSELY
AFFECT OUR OPERATIONS.

Under OPA, all oil tankers that do not have double-hulls will not be
permitted to come to U.S. ports or trade in U.S. waters by 2015. Our 28-tanker
fleet consists of 14 double-hull tankers, 6 double-sided

19

tankers and 8 single-hull tankers. Based on the current prohibition to trade
schedule, two of our Aframax tankers, the KENTUCKY and the WEST VIRGINIA,
currently held for sale, which were built in 1980 and 1981, respectively, will
not be eligible to carry oil as cargo within the 200-mile United States
exclusive economic zone starting in 2003 and 2004, except that they may trade in
U.S. waters until 2015 if their operations are limited to discharging their
cargoes at the Louisiana Offshore Oil Port or off-loading by lightering within
authorized lightering zones more than 60 miles off-shore. Our 6 other
single-hull and 6 double-sided tankers, all of which were built in 1985 or
later, are currently eligible to trade in U.S. waters until the year set forth
below when they would be subject to the same restriction:

Of the 19 tankers we agreed to acquire from Metrostar, 9 are double-hull
tankers, 4 are double-sided tankers, 3 are double-bottomed tankers and 3 are
single-hull tankers. The double-sided tankers, the double-bottomed tankers and
the single-hull tankers are currently eligible to trade in U.S waters until the
year set forth below when they would be subject to the same restrictions
described above.

However, the adoption of proposals to accelerate the prohibition to trade
of all non-double-hull tankers following the M.T. PRESTIGE disaster in November
2002 could adversely affect the remaining useful lives of all of our tankers and
our ability to generate income from them.

OUR REVENUES MAY BE ADVERSELY AFFECTED IF WE DO NOT SUCCESSFULLY EMPLOY OUR
TANKERS.

We seek to deploy our tankers between spot market voyage charters and time
charters in a manner that maximizes long-term cash flow. As of March 1, 2003, 6
of our tankers were contractually committed to time charters, with the remaining
terms of these charters expiring on dates between May 2003 and March 2004.
Although these time charters provide reliable revenues, they also limit the
portion of our fleet available for spot market voyages during an upswing in the
tanker industry cycle, when spot market voyages might be more profitable. In
part, due to our recent agreement to acquire 19 additional tankers with as many
as 3 tankers subject to time charters, 38 of the tankers in our fleet following
the proposed acquisition will be available either for entering into new time
charters or trading in the spot market during 2003.

We earned 80.5% of our net voyage revenue from spot market voyage charters
for the year ended December 31, 2002. The spot market is highly competitive, and
spot market voyage charter rates may fluctuate dramatically based on tanker and
oil supply and demand and other factors. We cannot assure you that future spot
market voyage charters will be available at rates that will allow us to operate
our tankers profitably.

20

WE MAY NOT BUY ALL 19 TANKERS FROM METROSTAR.

We have presented combined fleet data in this annual report based on our
agreement to purchase 19 tankers from Metrostar. It is possible, however, that
the seller could breach the agreement, we could reject a vessel after inspection
or the seller and we could not reach satisfactory arrangements with respect to
vessels on time charters. In that case, our combined fleet data presented in
this annual report would have to be adjusted.

WE MAY INCUR UNANTICIPATED CONTINGENT LIABILITIES AS A RESULT OF OUR ACQUISITION
OF THE TANKERS FROM METROSTAR.

Our acquisition of the tankers from Metrostar is expected to include the
direct purchase of most of the tankers and may include the purchase of the
equity of the entities that own some of the tankers in order to allow us to keep
existing time charters in place. We may incur unforeseen environmental, tax,
litigation or other liabilities in connection with our acquisition of the
tankers from Metrostar or we may underestimate the known liabilities. If such
liabilities materialize or are greater than we estimate, they could have a
material adverse effect on us.

WE MAY FACE UNEXPECTED REPAIR COSTS FOR OUR TANKERS.

Repairs and maintenance costs are difficult to predict with certainty and
may be substantial. Many of these expenses are not covered by our insurance.
Large repair expenses could decrease our profits and reduce our liquidity.

ARRESTS OF OUR TANKERS BY MARITIME CLAIMANTS COULD CAUSE A SIGNIFICANT LOSS OF
EARNINGS FOR THE RELATED OFF HIRE PERIOD.

Crew members, suppliers of goods and services to a vessel, shippers of
cargo and other parties may be entitled to a maritime lien against a vessel for
unsatisfied debts, claims or damages. In many jurisdictions, a maritime
lienholder may enforce its lien by "arresting" or "attaching" a vessel through
foreclosure proceedings. The arrest or attachment of one or more of our tankers
could result in a significant loss of earnings for the related off-hire period.

In addition, in jurisdictions where the "sister ship" theory of liability
applies, a claimant may arrest both the vessel which is subject to the
claimant's maritime lien and any "associated" vessel, which is any vessel owned
or controlled by the same owner. In countries with "sister ship" liability laws,
claims might be asserted against us, any of our subsidiaries or our tankers for
liabilities of other vessels that we own.

OUR TANKERS MAY BE REQUISITIONED BY GOVERNMENTS WITHOUT ADEQUATE COMPENSATION.

A government could requisition for title or seize our tankers. Under
requisition for title, a government takes control of a vessel and becomes its
owner. Also, a government could requisition our tankers for hire. Under
requisition for hire, a government takes control of a vessel and effectively
becomes its charterer at dictated charter rates. Generally, requisitions occur
during a period of war or emergency. Although we as owner would be entitled to
compensation in the event of a requisition, the amount and timing of payment
would be uncertain.

WE DEPEND ON OUR KEY PERSONNEL AND MAY HAVE DIFFICULTY ATTRACTING AND RETAINING
SKILLED EMPLOYEES.

21

The loss of the services of any of our key personnel or our inability to
successfully attract and retain qualified personnel, including ships' officers,
in the future could have a material adverse effect on our business, financial
condition and operating results. Our future success depends particularly on the
continued service of Peter C. Georgiopoulos, our Chairman, President and Chief
Executive Officer.

PORTIONS OF OUR INCOME MAY BE SUBJECT TO U.S. TAX.

If we do not qualify for an exemption pursuant to Section 883 of the U.S.
Internal Revenue Code of 1986, or the Code, then we will be subject to U.S.
federal income tax on our shipping income that is derived from U.S. sources. If
we are subject to such tax, our net income and cash flow would be reduced by the
amount of such tax.

We will qualify for exemption under Section 883 if, among other things, our
stock is treated as primarily and regularly traded on an established securities
market in the United States. Under the currently proposed Section 883
regulations, we might not satisfy this publicly-traded requirement for any
taxable year in which 50% or more of our stock is owned at any time during that
year by persons who actually or constructively own 5% or more of our stock, or
5% shareholders.

We believe that based on the ownership of our stock in 2002, we satisfied
the publicly-traded requirement under the currently proposed Section 883
regulations. However, we can give no assurance that future changes and shifts in
the ownership of our stock by 5% shareholders would not preclude us from
qualifying for the Section 883 exemption in 2003 or in the future. Furthermore,
the proposed Section 883 regulations are not yet in effect and the final
regulations, when adopted, could differ from the proposed regulations.

If we do not qualify for the Section 883 exemption, our shipping income
derived from U.S. sources, or 50% of our gross shipping income attributable to
transportation beginning or ending in the United States, would be subject to a
4% tax imposed without allowance for deductions. For fiscal year 2002, the vast
majority of our revenues were attributable to transportation beginning or ending
in the United States. If we had been subject to this 4% tax on our gross
shipping income during 2002, the tax would have been approximately U.S. $4.5
million.

INCREASES IN TONNAGE TAXES ON OUR TANKERS WOULD INCREASE THE COSTS OF OUR
OPERATIONS.

Our tankers are currently registered under the following flags: Liberia,
Malta, and the Republic of the Marshall Islands. These jurisdictions impose
taxes based on the tonnage capacity of each of the vessels registered under
their flag. The tonnage taxes imposed by these countries could increase, which
would cause the costs of our operations would increase.

OUR INCORPORATION UNDER THE LAWS OF THE REPUBLIC OF THE MARSHALL ISLANDS MAY
LIMIT THE ABILITY OF OUR SHAREHOLDERS TO PROTECT THEIR INTERESTS.

Our corporate affairs are governed by our Articles of Incorporation and
Bylaws and by the Marshall Islands Business Corporations Act. The provisions of
the Marshall Islands Business Corporations Act resemble provisions of the
corporation laws of a number of states in the United States. However, there have
been few judicial cases in the Republic of the Marshall Islands interpreting the
Marshall Islands Business Corporations Act. For example, the rights and
fiduciary responsibilities of directors under the laws of the Republic of the
Marshall Islands are not as clearly established as the rights and fiduciary
responsibilities of directors under statutes or judicial precedent in existence
in certain U.S. jurisdictions. Although the Marshall Islands Business
Corporations Act does specifically incorporate the non-statutory law, or
judicial case law, of the State of Delaware and other states with substantially
similar

22

legislative provisions, our public shareholders may have more difficulty in
protecting their interests in the face of actions by management, directors or
controlling shareholders than would shareholders of a corporation incorporated
in a U.S. jurisdiction.

IT MAY NOT BE POSSIBLE FOR OUR INVESTORS TO ENFORCE U.S. JUDGMENTS AGAINST US.

We are incorporated in the Republic of the Marshall Islands and most of our
subsidiaries are organized in the Republic of Liberia and the Marshall Islands.
Substantially all of our assets and those of our subsidiaries are located
outside the United States. As a result, it may be difficult or impossible for
U.S. investors to serve process within the United States upon us or to enforce
judgment upon us for civil liabilities in U.S. courts. In addition, you should
not assume that courts in the countries in which we or our subsidiaries are
incorporated or where our or the assets of our subsidiaries are located (i)
would enforce judgments of U.S. courts obtained in actions against us or our
subsidiaries based upon the civil liability provisions of applicable U.S.
federal and state securities laws or (ii) would enforce, in original actions,
liabilities against us or our subsidiaries based upon these laws.

ANTI-TAKEOVER PROVISIONS IN OUR FINANCING AGREEMENTS AND OUR ORGANIZATIONAL
DOCUMENTS COULD HAVE THE EFFECT OF DISCOURAGING, DELAYING OR PREVENTING A MERGER
OR ACQUISITION, WHICH COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON
STOCK.

Several of our existing financing agreements impose restrictions on changes
of control of our company and our ship-owning subsidiaries. These include
requirements that we obtain the lenders' consent prior to any change of control
and that we make an offer to redeem certain indebtedness before a change of
control can take place.

Several provisions of our amended and restated articles of incorporation
and our bylaws could discourage, delay or prevent a merger or acquisition that.
shareholders may consider favorable. These provisions include:

- authorizing our board of directors to issue "blank check" preferred
stock without shareholder approval;

- providing for a classified board of directors with staggered,
three-year terms;

- prohibiting us from engaging in a "business combination" with an
"interested shareholder" for a period of three years after the date of
the transaction in which the person became an interested shareholder
unless certain provisions are met;

- prohibiting cumulative voting in the election of directors;

- authorizing the removal of directors only for cause and only upon the
affirmative vote of the holders of at least 80% of the outstanding
shares of our common stock entitled to vote for the directors;

- prohibiting shareholder action by written consent unless the written
consent is signed by all shareholders entitled to vote on the action;

- limiting the persons who may call special meetings of shareholders;
and

23

- establishing advance notice requirements for nominations for election
to our board of directors or for proposing matters that can be acted
on by shareholders at shareholder meetings.

OUR COMMON STOCK PRICE MAY BE HIGHLY VOLATILE AND AN INVESTMENT IN OUR COMMON
STOCK COULD DECLINE IN VALUE.

The market price of our common stock may fluctuate significantly in
response to many factors, many of which are beyond our control. Investors in our
common stock may not be able to resell their shares at or above their purchase
price due to those factors, which include the risks and uncertainties set forth
in this report. In the past, following periods of volatility in the market price
of a particular company's securities, securities class action litigation has
often been brought against the company. We may become involved in this type of
litigation in the future. Litigation of this type could be extremely expensive
and divert management's attention and resources from running our company.

FUTURE SALES OF OUR COMMON STOCK COULD CAUSE THE MARKET PRICE OF OUR COMMON
STOCK TO DECLINE.

The market price of our common stock could decline due to sales of a large
number of shares in the market, including sales of shares by our large
shareholders, or the perception that these sales could occur. These sales could
also make it more difficult or impossible for us to sell equity securities in
the future at a time and price that we deem appropriate to raise funds through
future offerings of common stock. We have entered into registration rights
agreements with the securityholders who received shares in our recapitalization
transactions that entitle them to have an aggregate of 29,000,000 shares
registered for sale in the public market. In addition, those shares became
eligible for sale in the public market beginning on June 12, 2002, pursuant to
Rule 144 under the Securities Act. We also registered on Form S-8 an aggregate
of 2,900,000 shares issuable upon exercise of options we have granted to
purchase common stock or reserved for issuance under our equity compensation
plans.

ITEM 2. PROPERTIES

We lease two properties, both of which house offices used in the
administration of our operations: a property of approximately 11,000 square feet
in New York, New York and a property of approximately 7,400 square feet in
Piraeus, Greece. We do not own or lease any production facilities, plants, mines
or similar real properties.

ITEM 3. LEGAL PROCEEDINGS

LEGAL PROCEEDINGS

Except as set forth below, we are not aware of any material pending legal
proceedings, other than ordinary routine litigation incidental to our business,
to which we or our subsidiaries is a party or of which our property is the
subject. In the future, we may be subject to legal proceedings and claims in the
ordinary course of business, principally personal injury and property casualty
claims. Those claims, even if lacking merit, could result in the expenditure by
us of significant financial and managerial resources.

We time chartered one of our tankers, the GENMAR HARRIET, to an affiliate
of OMI Corporation in September 1997, for a period of approximately four years.
Under the charter, we had the right to cancel the balance of the charter at any
time after its second anniversary date upon 90 days' written notice with a
payment of $1.0 million to the charterer, which payment has been made by us. On
October 2, 2000, we gave notice to the charterer that this option was being
exercised. Subsequently, it was calculated that redelivery was to take place on
February 2, 2001. In January 2001, the charterer indicated that it was not

24

possible to complete a laden voyage by such date. The charterer asserted that
the tanker would not have to be redelivered until February 24, 2001, which would
permit it time to conduct an additional voyage. The charterer demanded
arbitration and, under protest, redelivered the tanker to us on January 14,
2001, and demanded damages in the amount of approximately $1.9 million,
exclusive of interest and costs, as a result of its inability to commence and
complete another voyage. Our position was that pursuant to the terms of the
charter and the existing law, the charterer was not entitled to commence another
voyage if the tanker could not reasonably be redelivered prior to the redelivery
date. We counterclaimed that the charterer's anticipatory breach of the charter
has damaged us. The parties presented their claims before a sole arbitrator in
2001. We have settled the arbitration subsequent to December 31, 2002, by making
a payment to the charter in the approximate amount of $400,000 which was
adequately accrued for on our December 31, 2002 balance sheet.

On March 14, 2001, the GENMAR HECTOR experienced severe weather while
unloading at the BPAmoco Co. terminal in Texas City, Texas. As a result of heavy
winds, the tanker became separated from the terminal. The terminal's loading
arms were damaged and there was a discharge of approximately 200 to 300 barrels
of oil. The U.S. Coast Guard has determined that this oil originated from the
terminal and that BPAmoco is the responsible party for the discharge under OPA,
although BPAmoco retains a right of contribution against the tanker. On March
16, 2001, BPAmoco Corporation, BPAmoco Oil Co. and Amoco Oil Company filed a
lawsuit in the United States District Court for the Southern District of Texas,
Galveston Division, against the GENMAR HECTOR IN REM, seeking damages in the
amount of $1.5 million. The protection and indemnity association for this
tanker, which provides insurance coverage for such incidents, issued a letter to
BPAmoco Co., et al. guaranteeing the payment of up to $1.5 million for any
damages for which this tanker may be found liable in order to prevent the arrest
of the tanker. On July 31, 2001, the plaintiffs filed an amended complaint which
added as defendants United Overseas Tankers Ltd., (a subsidiary of ours) and us.
On or about August 3, 2001, Valero Refining Company-Texas and Valero Marketing &
Supply Co., co-lessors with BPAmoco of the BPAmoco terminal and the voyage
charterer of the tanker, intervened in the above-referenced lawsuit, asserting
claims against the tanker, Genmar Hector Ltd., United Overseas Tankers Ltd., us
and BPAmoco in the aggregate amount of approximately $3.2 million. On or about
September 28, 2001, BPAmoco filed a second amended complaint, increasing the
aggregate amount of its claims against the defendants, including us, from $1.5
million to approximately $3.2 million. BPAmoco asserted that such increase is
due to subsequent demurrage claims made against BPAmoco by other vessels whose
voyages were delayed or otherwise affected by the incident. We believe that the
claims asserted by BPAmoco are generally the same as those asserted by Valero
Refining Company-Texas and Valero Marketing & Supply Co. and that, as a result,
the aggregate amount of such claims taken together will be approximately $3.2
million. A counterclaim has been filed on behalf of us and the other defendants
against the BPAmoco and Valero plaintiffs for approximately $25,000. On October
30, 2001, these two civil actions were consolidated and on December 26, 2001, a
complaint for damages in an unspecified amount due to personal injuries from the
inhalation of oil fumes was filed by certain individuals against our tanker,
BPAmoco, United Overseas Tankers Ltd., and General Maritime Corporation. These
personal injury plaintiffs filed an amended complaint on January 24, 2002,
adding another individual as a plaintiff and asserting a claim against United
Overseas Tankers Ltd. and General Maritime Corporation for punitive damages. We
believe that the claim for punitive damages is without merit. On February 27,
2002, Southern States Offshore, Inc. filed an independent suit against BPAmoco,
us, United Overseas Tankers Ltd. and Valero seeking damages sustained by the M/V
SABINE SEAL, which is owned and operated by Southern States Offshore and was
located adjacent to the BPAmoco dock on the day of the spill, and for
maintenance and cure paid to the individual personal injury claimants who were
members of the crew of the SABINE SEAL. The amount of the claim is estimated to
be approximately $100,000. This action has now been consolidated with the other
claims. With the possible exception of the claim for punitive damages, all of
the claims asserted against us appear to be covered by insurance. The parties
have now agreed to a settlement in principle which would involve a payment by us
that is wholly covered by insurance. Accordingly, we believe that

25

this incident will have no material effect on our operating results.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year ended December 31, 2002.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION, HOLDERS AND DIVIDENDS

Our common stock has traded on the New York Stock Exchange under the symbol
"GMR" since our initial public offering on June 12, 2001. The following table
sets forth for the periods indicated the high and low prices for the common
stock as of the close of trading as reported on the New York Stock Exchange:

As of December 31, 2002, there were approximately 250 holders of our
common stock.

We have never declared or paid any cash dividends on our capital stock.
General Maritime currently intends to retain all available earnings for use in
its business and does not anticipate paying any cash dividends in the
foreseeable future. The credit facilities and indenture for our senior notes
impose limitations or prohibitions on the payment of dividends without the
lenders' consent or in conjunction with a subsidiary's failure to comply with
various financial covenants.

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ITEM 6. SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

Set forth below are selected historical consolidated and other data of
General Maritime Corporation at the dates and for the fiscal years shown.

** During 1998 our vessels operated 143 days on bareboat contracts which are
included in time charter days

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(1) Adjusted EBITDA represents net voyage revenues less direct vessel
expenses and general and administrative expenses excluding non-cash or
one-time charges as well as other income or expenses. Adjusted EBITDA
is included because it is used by certain investors to measure a
company's financial performance. Adjusted EBITDA is not an item
recognized by GAAP, and should not be considered as an alternative to
net income or any other indicator of a company's performance required
by GAAP. The definition of Adjusted EBITDA used here may not be
comparable to that used by other companies.
(2) Average number of vessels is the number of vessels that constituted our
fleet for the relevant period, as measured by the sum of the number of
days each vessel was a part of our fleet during the period divided by
the number of calendar days in that period.
(3) Voyage days for fleet are the total days the vessels were in our
possession for the relevant period net of off hire days associated with
major repairs, drydocks or special or intermediate surveys.
(4) Calendar days are the total days the vessels were in our possession for
the relevant period including off hire days associated with major
repairs, drydockings or special or intermediate surveys.
(5) Fleet utilization is the percentage of time that our vessels were
available for revenue generating voyage days, and is determined by
dividing voyage days by fleet calendar days for the relevant period.
(6) Time charter equivalent, or TCE, is a measure of the average daily
revenue performance of a vessel on a per voyage basis. Our method of
calculating TCE is consistent with industry standards and is determined
by dividing net voyage revenue by voyage days for the relevant time
period. Net voyage revenues are voyage revenues minus voyage expenses.
Voyage expenses primarily consist of port, canal and fuel costs that
are unique to a particular voyage, which would otherwise be paid by the
charterer under a time charter contract.
(7) Daily direct vessel operating expenses is calculated by dividing DVOE,
which includes crew costs, provisions, deck and engine stores,
lubricating oil, insurance, maintenance and repairs, by fleet calendar
days for the relevant time period.
(8) Daily general and administrative expense is calculated by dividing
general and administrative expenses, adjusted to exclude non-recurring
organizational, legal, other one-time fees and non-cash expenses, by
fleet calendar days for the relevant time period.
(9) Total vessel operating expenses, or TVOE, is a measurement of our total
expenses associated with operating our vessels. Daily TVOE is the sum
of daily direct vessel operating expenses, or daily DVOE, and daily
general and administrative expenses, or G&A, adjusted to exclude
certain expenses. Our method of calculating daily DVOE is dividing
DVOE, which include crew costs, provisions, deck and engine stores,
lubricating oil, insurance, maintenance and repairs, by fleet calendar
days for the relevant time period. Our method of calculating daily G&A
is dividing general and administrative expenses adjusted to exclude
non-recurring organizational, legal, other one-time fees and non-cash
expenses, by fleet calendar days for the relevant time period.

(10) Adjusted EBITDA per vessel is Adjusted EBITDA divided by fleet calendar
days for the relevant time period.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

The following is a discussion of our financial condition and results of
operations for the years ended December 31, 2002 and 2001 and for the years
ended December 31, 2001and 2000. You should consider the foregoing when
reviewing the consolidated financial statements and this discussion. You should
read this section together with the consolidated financial statements including
the notes to those financial statements for the years mentioned above.

We are a leading provider of international seaborne crude oil transportation
services with one of the largest mid-sized tanker fleets in the world. As of
December 31, 2002 our fleet consisted of 28 tankers, 23 Aframax and 5 Suezmax
tankers, with a total cargo carrying capacity of 3.0 million deadweight tons.

On January 29, 2003 the Company agreed to acquire 19 tankers consisting of 5
Aframax and 14 Suezmax tankers from Metrostar Management Corporation, a
world-class quality operator of tankers based in Athens, Greece for $525.0
million. The acquisition of the tankers is expected to conclude by April 30,
2003 during which time the tankers will be integrated into General Maritime's
fleet operations as they complete their existing voyages. On a combined basis,
the Company's new fleet will be composed of 47 tankers including 28 Aframax and
19 Suezmax tankers with a total cargo carrying capacity of 5.6 million
deadweight tons.

We actively manage the deployment of our fleet between spot market voyage
charters, which generally last from several days to several weeks, and time
charters, which can last up to several years. A spot market voyage charter is
generally a contract to carry a specific cargo from a load port to a discharge
port for an agreed upon total amount. Under spot market voyage charters, we pay
voyage expenses such as port, canal and fuel costs. A time charter is generally
a contract to charter a vessel for a fixed period of time at a set daily rate.
Under time charters, the charterer pays voyage expenses such as port, canal and
fuel costs.

Vessels operating on time charters provide more predictable cash flows, but can
yield lower profit margins than vessels operating in the spot market during
periods characterized by favorable market conditions. Vessels operating in the
spot market generate revenues that are less predictable but may enable us to
capture increased profit margins during periods of improvements in tanker rates
although we are exposed to the risk of declining tanker rates. We are constantly
evaluating opportunities to increase the number of our tankers deployed on time
charters, but only expect to enter into additional time charters if we can
obtain contract terms that satisfy our criteria.

We primarily operate in the Atlantic basin, which includes ports in the
Caribbean, South and Central America, the United States, Western Africa and the
North Sea. We also currently operate tankers in the Black Sea and in other
regions worldwide which we believe enable us to take advantage of market
opportunities and to position our tankers in anticipation of drydockings.

We employ experienced management in all functions critical to our operations,
aiming to provide a focused marketing effort, tight quality and cost controls
and effective operations and safety monitoring. Through our subsidiaries,
General Maritime Management LLC and United Overseas Tankers Ltd., we currently
provide the commercial and technical management necessary for the operations of
our tankers, which include ship maintenance, officer staffing, technical
support, shipyard supervision, insurance and financial management services
through our wholly owned subsidiaries.

For discussion and analysis purposes only, we evaluate performance using net
voyage revenues. Net voyage revenues are voyage revenues minus voyage expenses.
Voyage expenses primarily consist of port,

29

canal and fuel costs that are unique to a particular voyage, which would
otherwise be paid by a charterer under a time charter. We believe that
presenting voyage revenues, net of voyage expenses, neutralizes the variability
created by unique costs associated with particular voyages or the deployment of
tankers on time charter or on the spot market and presents a more accurate
representation of the revenues generated by our tankers.

Our voyage revenues and voyage expenses are recognized ratably over the duration
of the voyages and the lives of the charters, while direct vessel expenses are
recognized when incurred. We recognize the revenues of time charters that
contain rate escalation schedules at the average rate during the life of the
contract. We calculate time charter equivalent, or "TCE," rates by dividing net
voyage revenue by voyage days for the relevant time period. We also generate
demurrage revenue, which represents fees charged to charterers associated with
our spot market voyages when the charterer exceeds the agreed upon time required
to load or discharge a cargo. We allocate corporate income and expenses, which
include general and administrative and net interest expense, to tankers on a pro
rata basis based on the number of months that we owned a tanker. We calculate
daily direct vessel operating expenses and daily general and administrative
expenses for the relevant period by dividing the total expenses by the aggregate
number of calendar days that we owned each tanker for the period.

We depreciate our tankers on a straight-line basis over their estimated useful
lives determined to be 25 years from the date of their initial delivery from the
shipyard. Depreciation is based on cost less the estimated residual scrap value
of $125 per lightweight ton. We capitalize the total costs associated with a
drydock and amortize these costs on a straight-line basis over the period
between drydockings, which is typically 30 to 60 months and usually expense
total costs associated with intermediate surveys during the period in which they
occur. If these intermediate survey costs are capitalized, they will be
amortized over an approximate 30-month period until the tanker's next
drydocking. In such a case any unamortized costs associated with the tanker's
previous drydocking will be expensed during the period in which the intermediate
survey occurred. We capitalize our expenditures for major maintenance and
repairs if the work extends the operating life of the tanker or improves the
tanker's performance, otherwise we expense those costs as incurred. In instances
where capitalization is appropriate, we capitalize total expenditures associated
with replaced parts, less the depreciated value of the old part being replaced,
and we depreciate them on a straight line basis over the shorter of the
remaining life of the new part or tanker.

30

RESULTS OF OPERATIONS

Margin analysis for the indicated items as a percentage of net voyage revenues
for years ended December 31, 2002, 2001 and 2000 are set forth in the table
below.

INCOME STATEMENT MARGIN ANALYSIS
(% OF NET VOYAGE REVENUES)

(1) Net voyage revenues are voyage revenues minus voyage expenses. Voyage
expenses primarily consist of port, canal and fuel costs that are
unique to a particular voyage, which would otherwise be paid by a
charterer under a time charter.

"Same Fleet" data consists of financial and operational data only from those
tankers that were part of our fleet for both complete periods under comparison.
Management believes that this presentation facilitates analysis of operational
and financial performance of tankers after they have been completely integrated
into our operations. Same Fleet data set forth in the table below is provided
for comparison of the periods for the years ended: December 31, 2002 and 2001
and the years ended December 31, 2001 and 2000. The tankers which comprise the
Same Fleet for periods not directly compared are not necessarily the same. As a
result, comparison of Same Fleet data provided for periods which are not
directly compared in the table below will not yield meaningful results.

31

SAME FLEET ANALYSIS

YEAR ENDED DECEMBER 31, 2002 COMPARED TO THE YEAR ENDED DECEMBER 31, 2001

VOYAGE REVENUES-Voyage revenues increased by $9.2 million, or 4.3%, to $226.4
million for the year ended December 31, 2002 compared to $217.1 million for the
prior year. This increase is due to the increase in the average number of
tankers in our fleet during the year ended December 31, 2002 compared to the
prior year due to a weaker spot market during the year ended December 31, 2002
compared to the prior year. The average size of our fleet increased 37.5% to
28.9 tankers (23.9 Aframax, 5.0 Suezmax) during 2002 compared to 21.0 tankers
(16.0 Aframax, 5.0 Suezmax) during the prior year. This increase in voyage
revenues is also due to changes in the deployment of our tankers operating on
time charter contracts or in the spot market. The number of days that our
tankers operated in the spot market increased to 8,520 for the year ended
December 31, 2002 compared to 5,383 days for the prior year. Typically tankers
operating on the spot market generate higher voyage revenues than those
operating on time charter, as the owner not the charterer is responsible for
voyage expenses.

VOYAGE EXPENSES-Voyage expenses increased $28.7 million, or 55.1%, to $80.8
million for the year ended December 31, 2002 compared to $52.1 million for the
prior year. This increase is primarily due to the increase in the average number
of tankers in our fleet for the year ended December 31, 2002 compared to the
prior year, as well as the mix of deployment of our tankers operating on time
charter contracts or in the spot market. Typically, tankers operating on the
spot market incur higher voyage expenses than those operating on time charter
contract, as the owner not the charterer are responsible for voyage expenses.

NET VOYAGE REVENUES-Net voyage revenues, which are voyage revenues minus voyage
expenses, decreased by $19.5 million, or 11.8%, to $145.6 million for the year
ended December 31, 2002 compared

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to $165.0 million for the prior year. This decrease is the result of the overall
weaker spot market during the year ended December 31, 2002 compared to the prior
year. The magnitude of the decrease in net voyage revenues was mitigated by the
growth in the average number of tankers in our fleet. The average size of our
fleet increased 37.5% to 28.9 tankers (23.9 Aframax, 5.0 Suezmax) for the year
ended December 31, 2002 compared to 21.0 tankers (16.0 Aframax, 5.0 Suezmax) for
the prior year, while our average TCE rates declined 35.0% to $14,542 compared
to $22,380 for these same periods. The total decrease in our net voyage revenues
of $19.5 million resulted from a decrease of $44.9 million in our Same Fleet
revenues, to $79.8 million from $124.7 million, and an increase of $25.5
million, to $65.8 million from $40.3 million, from tankers that we acquired
during 2001 that are not considered Same Fleet. Tankers that are not considered
Same Fleet tankers are the tankers we acquired after December 31, 2000: During
2001, we acquired the GENMAR ALEXANDRA, GENMAR HECTOR, GENMAR PERICLES, WEST
VIRGINIA, KENTUCKY, GENMAR SPIRIT in June, the STAVANGER PRINCE, GENMAR NESTOR,
GENMAR STAR, GENMAR TRUST, GENMAR CHAMPION and GENMAR LEONIDAS in July, and the
GENMAR TRADER, GENMAR ENDURANCE and GENMAR CHALLENGER in August. We disposed of
the STAVANGER PRINCE during October 2002 and sold it for scrap (see Write Down
of Vessels below). Our fleet consisted of 28 tankers (23 Aframax, 5 Suezmax) on
December 31, 2002 and 29 tankers (24 Aframax, 5 Suezmax) on December 31, 2001.
On an overall fleet basis:

- Average daily time charter equivalent rate per tanker decreased by
$7,838, or 35.0%, to $14,542 ($14,352 Aframax, $15,410 Suezmax) for
the year ended December 31, 2002 compared to $22,380 ($21,053 Aframax,
$26,905 Suezmax) for the prior year.

- 28.3 million, or 19.5%, of net voyage revenue was generated by time
charter contracts ($28.3 million Aframax, Suezmax tankers did not
operate on time charter during this period) and $117.2 million, or
80.5%, was generated in the spot market ($89.5 million Aframax, $27.7
million Suezmax) for the year ended December 31, 2002, compared to
$45.8 million, or 27.8%, of our net voyage revenue generated by time
charter contracts ($43.4 million Aframax, $2.4 million Suezmax), and
$119.2 million, or 72.2%, generated in the spot market ($76.6 million
Aframax, $42.6 million Suezmax) for the prior year.

- Tankers operated an aggregate of 1,490 days, or 14.9%, on time charter
contracts (1,490 days Aframax, 0 days Suezmax) and 8,520 days, or
85.1%, in the spot market (6,722 days Aframax, 1,798 days Suezmax) for
the year ended December 31, 2002, compared to 1,991 days, or 27.0%, on
time charter contracts (1,894 days Aframax, 97 days Suezmax) and 5,383
days, or 73.0%, in the spot market (3,808 days Aframax, 1,575 days
Suezmax) for the prior year.

- Average daily time charter rates were $19,017 ($19,017 Aframax,
Suezmax tankers did not operate on time charter during this period)
for the year ended December 31, 2002 compared to average daily time
charter rates of $23,025 ($22,932 Aframax, $24,851 Suezmax) for the
prior year. This decrease is primarily due to the expiration of some
of our time charter contracts and the rates associated with our
remaining time charter contracts.

- Average daily spot rates were $13,760 ($13,318 Aframax, $15,410
Suezmax) for the year ended December 31, 2002, compared to average
daily spot rates of $22,141 ($20,118 Aframax, $27,032 Suezmax) for the
prior year.

We are constantly evaluating opportunities to increase the number of our tankers
deployed on time charters, but only expect to enter into additional time
charters if we can obtain contract terms that satisfy our criteria. The
following table summarizes the portion of the our fleet on time charter as of
March 1, 2003:

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* "Same Fleet" vessel

(1) Includes brokers' commissions of 1.25%
(2) Termination date is plus or minus 15 days
(3) The charter provides for a floating rate based on weekly spot market rates
which can be no less than $16,000 per day and no more than $22,000 per day.
(4) Termination is plus or minus 30 days

Of our net voyage revenues of $145.6 million for the year ended December 31,
2002, $79.8 million was attributable to our Same Fleet. Same Fleet for the year
ended December 31, 2002 and 2001 consisted of 14 tankers (9 Aframax, 5 Suezmax).
Same Fleet net voyage revenues decreased by $44.9 million, or 36.0%, to $79.8
million for the year ended December 31, 2002 compared to $124.7 million for the
prior year. This decrease is attributable to decreases in our average spot and
time charter tanker rates for the year ended December 31, 2002 compared to those
rates for the prior year.

ON A SAME FLEET BASIS:

- Average daily time charter equivalent rate per tanker decreased by
$9,068, or 35.5%, to $16,444 ($17,053 Aframax, $15,410 Suezmax) for
the year ended December 31, 2002 compared to $25,512 ($24,788 Aframax,
$26,905 Suezmax) for the prior year.

- $23.0 million, or 29.0%, of net voyage revenue was generated by time
charter contracts ($23.0 million Aframax, Suezmax tankers did not
operate on time charter during this period) and $56.7 million, or
71.0%, was generated in the spot market ($29.0 million Aframax, $27.7
million Suezmax) for the year ended December 31, 2002, compared to
approximately $40.8 million, or 33.0%, of our net voyage revenue
generated by time charter contracts ($38.4 million Aframax, $2.4
million Suezmax), and $83.9 million, or 67.0%, generated in the spot
market ($41.3 million Aframax, $42.6 million Suezmax) for the prior
year.

- Tankers operated an aggregate of 1,193 days, or 24.6%, on time charter
contracts (1,193 days Aframax, 0 days Suezmax) and 3,659 days, or
75.4%, in the spot market (1,861 days Aframax, 1,798 days Suezmax) for
the year ended December 31, 2002, compared to 1,677 days, or 34.3%, on
time charter contracts (1,580 days Aframax, 97 days Suezmax) and 3,209
days, or 65.7%, in the spot market (1,634 days Aframax, 1,575 days
Suezmax) for the prior year.

- Average daily time charter rates were $19,314 ($19,314 Aframax,
Suezmax tankers did not operate on time charter during this period)
for the year ended December 31, 2002 compared to average daily time
charter rates of $24,311 ($24,278 Aframax, $24,851 Suezmax) for the
prior year. This decrease is due to the expiration of some of our time
charter contracts, and the rates associated with our remaining time
charter contracts.

- Average daily spot rates were $15,508 ($15,603 Aframax, $15,410
Suezmax) for the year ended

34

December 31, 2002, compared to average daily spot rates of $26,140
($25,281 Aframax, $27,032 Suezmax) for the prior year.

DIRECT VESSEL EXPENSES-Direct vessel expenses, which include crew costs,
provisions, deck and engine stores, lubricating oil, insurance, maintenance and
repairs increased by $13.1 million, or 31.1%, to $55.2 million for the year
ended December 31, 2002 compared to $42.1 million for the prior year. This
increase is primarily due to the growth in the average number of tankers in our
fleet, which increased 37.5% for these same periods. On a daily basis, direct
vessel expenses per tanker decreased by $256, or 4.6%, to $5,243 ($5,090
Aframax, $5,973 Suezmax) for the year ended December 31, 2002 compared to $5,499
($5,171 Aframax, $6,547 Suezmax) for the prior year. This decrease is primarily
the result of the timing of purchases, repairs and services within the period.
Same Fleet direct vessel expenses decreased $1.1 million, or 3.8%, to $28.9
million for the year ended December 31, 2002 compared to $30.1 million for the
prior year. This decrease is primarily the result of the timing of purchases,
services and repairs within the period. On a daily basis, Same Fleet direct
vessel expenses per tanker decreased $224, or 3.8%, to $5,666 ($5,496 Aframax,
$5,973 Suezmax) for the year ended December 31, 2002 compared to $5,890 ($5,525
Aframax, $6,547 Suezmax) for the prior year. We anticipate that direct vessel
operating expenses will increase during 2003 as a result of our agreement to
acquire 19 additional tankers and integrate them into our fleet. We anticipate
that daily direct vessel operating expenses will increase in the future
primarily due to increases in insurance costs and enhanced security measures, as
well as an increase in maintenance and repairs. We anticipate that our
acquisition of the 19 tankers from Metrostar will further increase our direct
vessel operating expenses overall and on a daily basis. The overall increase in
direct vessel expenses will be the result of the overall growth of our fleet as
a result of the acquisition. The increase in daily direct vessel expenses will
be the result of the increase in the percentage of Suezmax tankers that comprise
our fleet as a result of the acquisition. Suezmax tankers are larger and
inherently more expensive to operate than Aframax tankers. Our direct vessel
expenses depend on a variety of factors, many of which are beyond our control
and affect the entire shipping industry.

GENERAL AND ADMINISTRATIVE EXPENSES-General and administrative expenses
increased by $2.4 million, or 25.9%, to $12.0 million for the year ended
December 31, 2002 compared to $9.6 million for the prior year. This increase is
primarily due to an increase in payroll expenses including the increase in the
number of personnel in connection with the growth in average number of tankers
in our fleet, which increased 37.5%, for year ended December 31, 2002 compared
to the prior year. Daily general and administrative expenses per tanker
decreased $110, or 8.8%, to $1,136 for the year ended December 31, 2002 compared
to $1,246 for the prior year. We anticipate that general and administrative
expenses will increase during 2003 primarily as a result of our agreement to
acquire an additional 19 tankers and the need to increase staff and
infrastructure to manage these tankers as well as the non-cash expense
associated with the issuance of restricted stock during the fourth quarter of
2002. Daily general and administrative expenses per tanker is anticipated to
decrease during 2003 as a result of our agreement to acquire 19 tankers and the
economies of scale associated with operating a larger fleet. The non-cash
expense associated with the issuance of restricted stock will result in a
pro-rated annual charge through November 2009 of $541,000. The non-cash expense
associated with the issuance of restricted stock was $52,600 for the year ended
December 31, 2002. For purposes of consistency with past results this non-cash
charge is excluded from our calculation of daily general and administrative
expenses, daily total vessel operating expenses and Adjusted EBITDA.

WRITE DOWN OF VESSELS-During the year ended December 31, 2002, we recognized an
expense of $13.1 million as a result of our decision to: retire one tanker, the
STAVANGER PRINCE, a 1979 single-hull Aframax tanker, and sell it for scrap; and
transfer two tankers, the KENTUCKY, a 1980 single-hull Aframax tanker, and the
WEST VIRGINIA, a 1981 single-hull Aframax tanker, from long term assets to
assets held for sale. This decision was based on management's assessment of the
projected costs associated with each tanker's next drydocking, which was
originally scheduled to occur during 2003, and the estimated operating

35

revenues for the tankers over their normal remaining operating life. The expense
associated with the STAVANGER PRINCE was calculated based on the difference
between the carrying value of the tanker and management's estimate of the net
present value of the projected operating income and its net proceeds to be
received upon disposal. The expense associated with the KENTUCKY and WEST
VIRGINIA is the difference between each tanker's book value and the estimated
proceeds from its anticipated sale for scrap. No such expense occurred during
the prior year.

DEPRECIATION AND AMORTIZATION-Depreciation and amortization, which include
depreciation of tankers as well as amortization of drydocking and other repair
costs and loan fees, increased by $17.6 million, or 41.1%, to $60.4 million for
the year ended December 31, 2002 compared to $42.8 million for the prior year.
This increase is primarily due to the growth in the average number of tankers in
our fleet, which increased 37.5%, and the increase in the book value of our
fleet for the year ended December 31, 2002 compared to the prior year.
Depreciation and amortization is anticipated to increase during 2003 as a result
of our agreement to acquire 19 tankers.

Amortization of drydocking and other repair costs increased by $2.0 million, or
81.7%, to $4.3 million for the year ended December 31, 2002 compared to $2.4
million for the prior year. This increase includes amortization associated with
$13.5 million of capitalized expenditures relating to our tankers for the year
ended December 31, 2002 compared to $3.3 million of capitalized drydocking or
other repair expenditures for the prior year. Our capitalized expenditures of
$13.5 million for 2002 have a weighted average amortization period of
approximately 3.5 years, $9.4 million of which relate to tankers which we are
drydocking or capitalizing other repair costs for the first time since we
acquired them which have a weighted average amortization period of approximately
4.1 years. We anticipate that the amortization associated with surveys or
drydocks will increase in the future due to the growth of our fleet, as these
projected costs will increase and we will be performing surveys or drydocking
for the first time for tankers that are now part of our fleet. We have updated
our projected survey and drydocking costs. See the chart showing estimated
survey and drydocking expenditures under "Liquidity and capital resources." This
change reflects management's estimate of potential increases in drydocking and
other repair costs both overall and with respect to particular tankers.

NET INTEREST EXPENSE-Net interest expense decreased by $1.8 million, or 10.9%,
to $14.5 million for the year ended December 31, 2002 compared to $16.3 million
for the prior year. This decrease occurred although we had a 10.9% increase in
our weighted average outstanding debt of $314.0 million for the year ended
December 31, 2002 compared to $283.0 million for the prior year. The refinancing
of our previous credit facilities in June, 2001 and the overall lower interest
rate environment during the year ended December 31, 2002 compared to the prior
year offset the effect of the increase of our weighted average outstanding debt
on our net interest expense. Net interest expense is anticipated to increase
during 2003 as a result of the increased debt that we will assume in connection
with our agreement to acquire 19 tankers.

OTHER EXPENSES-We incurred non-recurring expenses of $3.0 million during the
year ended December 31, 2001. Of the $3.0 million in non-recurring expenses,
$1.8 million related to the termination of interest rate swap agreements
associated with certain prior loans, which were refinanced by our two existing
credit facilities and $1.2 million related to the write off of remaining
capitalized loan costs associated with existing loans, which were refinanced by
our two existing credit facilities. No such expense occurred during the year
ended December 31, 2002.

NET INCOME-Net loss was $9.7 million for the year ended December 31, 2002
compared to net income of $51.2 million for the prior year.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO THE YEAR ENDED DECEMBER 31, 2000

36

VOYAGE REVENUES-Voyage revenues increased by $85.1 million, or 64.5%, to $217.1
million for the year ended December 31, 2001 compared to $132.0 million for the
year ended December 31, 2000. This increase is due to the increase in the number
of vessels in our fleet during 2001 compared to 2000. The average size of our
fleet increased 66.8% to 21.0 tankers during 2001 compared to 12.6 tankers
during 2000.

VOYAGE EXPENSES-Voyage expenses increased $28.1 million, or 117%, to $52.1
million for the year ended December 31, 2001 compared to $24.0 million for the
year ended December 31, 2000. This increase is primarily due to the increase in
the number of vessels in our fleet as well as the mix of deployment of our
vessels operating on time charter contracts or in the spot market. The increase
in our voyage expenses is primarily the result of the increase in revenues
generated on the spot market and the number of days that our vessels operated in
the spot market for the year ended December 31, 2001 compared to the year ended
December 31, 2000. Under spot voyages, we are responsible for voyage expenses,
which are otherwise borne by the charterer under a time charter contract.

NET VOYAGE REVENUES-Net voyage revenues, which are voyage revenues minus voyage
expenses, increased by $57.0 million, or 52.8%, to $165.0 million for the year
ended December 31, 2001 compared to $108.0 million for the year ended December
31, 2000. This increase is due to the overall growth of our fleet. The average
size of our fleet increased 66.8% to 21.0 tankers during 2001 compared to 12.6
tankers during 2000, while our average TCE rates declined 7.3% to $22,380 during
2001 compared to $24,143 during 2000. Our average TCE rates declined in the
fourth quarter of 2001 as compared to the third quarter, and we continued to
experience downward pressure on our average TCE rates during January and
February 2002. The total increase in our net voyage revenues of $57.0 million
resulted from an increase of $7.7 million in our Same Fleet revenues, an
increase of $9.0 million from the full year of operations of three vessels
acquire during 2000 and are not considered Same Fleet, and $40.3 million from
vessels that we acquired during 2001. During 2000 we acquired the GENMAR ZOE in
May, the GENMAR MACEDON in June and the GENMAR SPARTIATE in July. During 2001 we
acquired the GENMAR ALEXANDRA, GENMAR HECTOR, GENMAR PERICLES, WEST VIRGINIA,
KENTUCKY and GENMAR SPIRIT in June, the STAVANGER PRINCE, GENMAR NESTOR, GENMAR
STAR, GENMAR TRUST, GENMAR CHAMPION and GENMAR LEONIDAS in July, and the GENMAR
TRADER, GENMAR ENDURANCE and GENMAR CHALLENGER in August. Our fleet consisted of
29 vessels (24 Aframax, five Suezmax) for the year ended December 31, 2001
compared to 14 vessels (nine Aframax, five Suezmax) for the year ended December
31, 2000. The average size of our fleet increased 66.8% to 21.0 vessels (16.0
Aframax, 5.0 Suezmax) for the year ended December 31, 2001 compared to 12.6
vessels (9.0 Aframax, 3.6 Suezmax) for the year ended December 31, 2000.

ON AN OVERALL FLEET BASIS:

- Average daily time charter equivalent rate per vessel decreased by
$1,763, or 7.3%, to $22,380 for the year ended December 31, 2001
($21,053 Aframax, $26,905 Suezmax) compared to $24,143 for the year
ended December 31, 2000 ($22,294 Aframax, $28,975 Suezmax).

- $45.8 million, or 27.8%, of net voyage revenue was generated by time
charter contracts ($43.4 million Aframax, $2.4 million Suezmax) and
$119.2 million, or 72.2%, was generated in the spot market ($76.6
million Aframax, $42.6 million Suezmax) for the year ended December
31, 2001, compared to $39.8 million, or 36.9%, of our net voyage
revenue generated by time charter contracts ($25.3 million Aframax,
$14.5 million Suezmax), and $68.2 million, or 63.1%, generated in the
spot market ($46.9 million Aframax, $21.3 million Suezmax) for the
year ended December 31, 2000.

- Vessels operated an aggregate of 1,991 days, or 27.0%, on time charter
contracts (1,894 days Aframax, 97 days Suezmax) and 5,383 days, or
73.0%, in the spot market (3,808 days Aframax, 1,575 days Suezmax) for
the year ended December 31, 2001, compared to 2,174 days, or 48.6%, on

37

time charter contracts (1,533 days Aframax, 641 days Suezmax) and
2,300 days, or 51.4%, in the spot market (1,703 days Aframax, 597 days
Suezmax) for the year ended December 31, 2000.

- Average daily time charter rates were $23,025 for the year ended
December 31, 2001 ($22,932 Aframax, $24,851 Suezmax) compared to
average daily time charter rates of $18,302 for the year ended
December 31, 2000 ($16,477 Aframax, $22,665 Suezmax). This increase is
due to the expiration of some of our time charter contracts and the
introduction of new contracts that reflect the time charter rates
prevalent at that time.

- Average daily spot rates were $22,141 for the year ended December 31,
2001 ($20,118 Aframax, $27,032 Suezmax), compared to average daily
spot rates of $29,665 for the year ended December 31, 2000 ($27,531
Aframax, $35,751 Suezmax).

The following table summarizes the portion of our fleet that was on time charter
as of March 1, 2002:

* "Same Fleet" vessel
(1) Includes brokers' commissions of 1.25%
(2) Termination date is plus or minus 15 days
(3) The charter provides for a floating rate based on weekly spot market related
rates
(4) The charter provides for a floating rate based on weekly spot market
rates which can be no less than $16,000 per day and no more than $22,000 per
day.
(5) Termination is plus or minus 30 days

Since September 30, 2001, the time charter contracts of three of our vessels
have expired and those vessels are now operating on the spot market. The time
charter contracts for the STAVANGER PRINCE, GENMAR COMMANDER and GENMAR SUN
expired on January 7, February 5, and February 25, 2002, respectively, and those
vessels are currently operating on the spot market. We continually evaluate the
time charter market for available contracts and are seeking attractive
opportunities to place additional vessels on time charter contracts. To date,
current available contracts have not in our judgment provided favorable
opportunities.

Of our net voyage revenues for the year ended December 31, 2001 of $165.0
million, $95.6 million was attributable to our Same Fleet. Same Fleet for the
year ended December 31, 2001 and 2000 consisted of 11 vessels (9 Aframax, 2
Suezmax). Same Fleet net voyage revenues increased by $7.7 million, or 8.7%, to
$95.6 million for the year ended December 31, 2001 compared to $87.9 million for
the year ended December 31, 2000. This increase is attributable to changes in
our average spot and time charter tanker rates for the year ended December 31,
2001 compared to those for the year ended December 31, 2000 and changes in the
deployment of our fleet.

ON A SAME FLEET BASIS:

- Average daily time charter equivalent rate per vessel increased by
$2,256, or 10.1%, to $24,690 for the year ended December 31, 2001
($24,788 Aframax, $24,214 Suezmax) compared to $22,434 for the year
ended December 31, 2000 ($22,294 Aframax, $23,095 Suezmax).

38

- $40.8 million, or 42.7%, of net voyage revenue was generated by time
charter contracts ($38.4 million Aframax, $2.4 million Suezmax) and
$54.8 million, or 57.3%, was generated in the spot market ($41.3
million Aframax, $13.5 million Suezmax) for the year ended December
31, 2001, compared to approximately $39.8 million, or 45.3%, of our
net voyage revenue generated by time charter contracts ($25.3 million
Aframax, $14.5 million Suezmax), and $48.1 million, or 54.7%,
generated in the spot market ($46.9 million Aframax, $1.2 million
Suezmax) for the year ended December 31, 2000.

- Vessels operated an aggregate of 1,677 days, or 43.3%, on time charter
contracts (1,580 days Aframax, 97 days Suezmax) and 2,194 days or
56.7%, in the spot market (1,634 days Aframax, 560 days Suezmax) for
the year ended December 31, 2001, compared to 2,174 days, or 55.5%, on
time charter contracts (1,553 days Aframax, 641 days Suezmax) and
1,744 days, or 44.5%, in the spot market (1,703 days Aframax, 41 days
Suezmax) for the year ended December 31, 2000.

- Average daily time charter rates were $24,311 for the year ended
December 31, 2001 ($24,278 Aframax, $24,851 Suezmax) compared to
average daily time charter rates of $18,302 for the year ended
December 31, 2000 ($16,477 Aframax, $22,665 Suezmax). This increase is
due to the expiration of some or our time charter contracts and the
introduction of new contracts that reflect the time charter rates
prevalent at that time.

- Average daily spot rates were $24,980 for the year ended December 31,
2001 ($25,281 Aframax, $24,103 Suezmax), compared to average daily
spot rates of $27,585 for the year ended December 31, 2000 ($27,531
Aframax, $29,824 Suezmax).

DIRECT VESSEL EXPENSES-Direct vessel expenses, which include crew costs,
provisions, deck and engine stores, lubricating oil, insurance, maintenance and
repairs increased by $18.2 million, or 76.2% to $42.1 million for the year ended
December 31, 2001 compared to $23.9 million for the year ended December 31,
2000. This increase is primarily due to the growth of our fleet. On a daily
basis, direct vessel expenses per vessel increased by $312, or 6.0% to $5,499
for the year ended December 31, 2001 ($5,171 Aframax, $6,547 Suezmax) compared
to $5,187 for the year ended December 31, 2000 ($4,989 Aframax, $5,688 Suezmax)
primarily as the result of an increase in maintenance and repairs of newly
acquired vessels. Same Fleet direct vessel expenses increased $2.2 million, or
10.6%, to approximately $23.0 million for the year ended December 31, 2001
compared to $20.8 million the year ended December 31, 2000. This increase is
primarily the result of higher crew costs and expenses associated with
restocking the provisions and stores of these vessels upon assuming of technical
management of them from an unrelated third party management company, as well as
a supplemental insurance call associated with our protection and indemnity
insurance club. On a daily basis, Same Fleet direct vessel expenses per vessel
increased $564, or 10.9% to $5,739 ($5,525 Aframax, $6,702 Suezmax) compared to
$5,175 ($4,989 Aframax, $6,011 Suezmax) for the year ended December 31, 2001
compared to the year ended December 31, 2000. Our direct vessel expenses depend
on a variety of factors, many of which are beyond our control and affect the
entire shipping industry. We anticipate that daily direct vessel operating
expenses will increase during 2002 primarily due to increases in insurance costs
and enhanced security measures implemented after September 11, 2001 as well as
increases in maintenance and repairs. See below under the heading "Liquidity and
capital resources."

GENERAL AND ADMINISTRATIVE EXPENSES-General and administrative expenses
increased by $4.8 million, or 100%, to $9.6 million for the year ended December
31, 2001 compared to $4.8 million for the year ended December 31, 2000. This
increase is primarily due to an increase in payroll expenses including the
increase in the number of personnel in connection with the growth of our fleet
for year ended

39

December 31, 2001 compared to the year ended December 31, 2000. Daily general
and administrative expenses increased $204, or 19.6% to $1,246 for the year
ended December 31, 2001 compared to $1,042 for the year ended December 31, 2000,
primarily as a result of an increase in payroll expenses including an increase
in the number of personnel in connection with the growth of our fleet for year
ended December 31, 2001 compared to the year ended December 31, 2000, as well as
the effect of building our infrastructure in preparation for future growth of
the fleet. General and administrative expenses are incurred prior to the
acquisition and subsequent to the sale of a vessel; therefore, during periods of
changes in the size of our fleet these daily expenses increase relative to the
number of days that a vessel is owned.

OTHER OPERATING EXPENSES-During the year ended December 31, 2000, we expensed
$5.3 million in contract termination fees and other related costs associated
with the termination of three of our time charter contracts relating to one
Aframax tanker and two Suezmax tankers. We replaced the Aframax time charter,
which was chartered through February 2002 at a rate of $18,750 per day, with a
new time charter, which is chartered through the same period at a rate of
$24,300 per day. The two Suezmax tankers were chartered through September 2001
and May 2002 at $22,250 and $24,200 per day, respectively. The termination of
these two time charters enabled us to operate these vessels in the spot market
upon their redelivery in January and March 2001. During the fourth quarter of
the year ended December 31, 2000, when this termination was effected, our
Suezmax vessels operating in the spot market generated an average rate of
approximately $42,500 per day. We had no such expense during the year ended
December 31, 2001.

DEPRECIATION AND AMORTIZATION-Depreciation and amortization, which includes
depreciation of vessels as well as amortization of drydocking, special survey
costs and loan fees, increased by $18.0 million, or 72.6%, to $42.8 million for
the year ended December 31, 2001 compared to $24.8 million for the year ended
December 31, 2000. This increase is primarily due to the growth of our fleet as
well as an additional amortization of approximately $0.7 million in drydocking
costs for the year ended December 31, 2001 compared to the year ended December
31, 2000.

NET INTEREST EXPENSE-Net interest expense decreased by $2.7 million, or 14.3%,
to $16.3 million for the year ended December 31, 2001 compared to $19.0 million
for the year ended December 31, 2000. This decrease is the result of the lower
interest rate environment as well as the refinancing of our previous loans into
our existing two credit facilities associated with our variable interest rate
debt. Our weighted average debt increased 21.6% to approximately $283.3 million
during 2001 compared to approximately $233.0 million during 2000.

OTHER EXPENSES-We incurred non-recurring expenses of $3.0 million during the
year ended December 31, 2001. Of the $3.0 million in non-recurring expenses,
$1.8 million related to the termination of interest rate swap agreements
associated with certain prior loans, which were refinanced by our two existing
credit facilities and $1.2 million related to the write off of remaining
capitalized loan costs associated with existing loans, which were refinanced by
our two existing credit facilities. No such expense occurred during the year
ended December 31, 2000.

NET INCOME-Net income was $51.2 million for the year ended December 31, 2001
compared to net income of $30.3 million for the year ended December 31, 2000.

LIQUIDITY AND CAPITAL RESOURCES

Since our formation, our principal source of funds has been equity financings,
operating cash flows and long-term borrowings. Our principal use of funds has
been capital expenditures to establish and grow our fleet, maintain the quality
of our tankers, comply with international shipping standards and environmental
laws and regulations, fund working capital requirements and make principal
repayments on outstanding loan facilities. We expect to rely upon operating cash
flows as well as long-term borrowings, and future offerings

40

to implement our growth plan. We believe that our current cash balance as well
as operating cash flows and available borrowings under our credit facilities
will be sufficient to meet our liquidity needs for the next year.

Our practice has been to acquire tankers using a combination of funds received
from equity investors and bank debt secured by mortgages on our tankers, as well
as shares of the common stock of our shipowning subsidiaries. Our business is
capital intensive and its future success will depend on our ability to maintain
a high-quality fleet through the acquisition of newer tankers and the selective
sale of older tankers. These acquisitions will be principally subject to
management's expectation of future market conditions as well as our ability to
acquire tankers on favorable terms.

Cash decreased to $2.7 million as of December 31, 2002 compared to $17.2 million
as of December 31, 2001. Working capital is current assets minus current
liabilities, including the current portion of long-term debt. Working capital
deficit was $33.7 million as of December 31, 2002, compared to a working capital
deficit of $39.3 million as of December 31, 2001. The current portion of
long-term debt included in our current liabilities was $62.0 million and $73.0
million as of December 31, 2002 and December 31, 2001, respectively.

Adjusted EBITDA, as defined in FOOTNOTE 1 to the "Selected consolidated
financial and operating data" table above, decreased by $35.0 million, or 30.9%,
to $78.4 million for the year ended December 31, 2002 from $113.4 million for
the prior year; this decrease is due to the weaker spot market. On a daily
basis, Adjusted EBITDA per tanker decreased by $7,351, or 49.7%, to $7,437 for
the year ended December 31, 2002 from $14,788 for the prior year as a result of
the lower annual average TCE rates that our tankers generated during those
periods. Same Fleet Adjusted EBITDA decreased by $43.4 million, or 49.1%, to
$45.0 million for the year ended December 31, 2002 from $88.4 million for the
prior year. Same Fleet daily Adjusted EBITDA decreased to $8,813 from $17,301
for those same periods.

Adjusted EBITDA, increased by $33.9 million, or 42.7%, to $113.4 million for the
year ended December 31, 2001 from $79.4 million for the prior year; this
increase is due to the growth of our fleet for the year ended December 31, 2001
compared to the prior year. On a daily basis, Adjusted EBITDA per tanker
decreased by $2,469, or 14.3%, to $14,788 for the year ended December 31, 2001
from $17,257 for the prior year, as a result of the lower annual average TCE
rates that our tankers generated during 2001 compared to the prior year. Same
Fleet Adjusted EBITDA increased by $4.8 million, or 7.6%, to $67.7 million for
the year ended December 31, 2001 from $62.9 million for the prior year. Same
Fleet daily Adjusted EBITDA increased to $16,863 from $15,631 for those same
periods.

We have three credit facilities. The first ("First") closed on June 15, 2001,
the second ("Second") closed on June 27, 2001 and the third ("Third") closed on
March 11, 2003. The First and Second loan facilities are comprised of a term
loan and a revolving loan and the Third is comprised of a term loan. The terms
and conditions of the credit facilities require compliance with certain
restrictive covenants based on aggregate values and financial data for the
tankers associated with each credit facility. Under the financial covenants of
each of the credit facilities, the Company is required to maintain certain
ratios such as: tanker market value to loan commitment, EBITDA (as defined in
each credit facility) to net interest expense and to maintain minimum levels of
working capital. Under the general covenants, subject to certain exceptions, we
and our subsidiaries are not permitted to pay dividends.

The First credit facility is a $300 million facility, currently comprised of a
$200 million term loan and a $98.8 million revolving loan and is collateralized
by 19 tankers. The Second credit facility is a $165 million facility comprised
of a $115 million term loan and a $50 million revolving loan and is
collateralized by 9 tankers. The Third credit facility is comprised of a $350
million term loan and is collateralized by 19 tankers. All credit facilities
have a five-year maturity with the term loans requiring quarterly principal

41

repayments. The principal of each revolving loan is payable upon maturity. The
First and Second term loans and the revolving loans bear interest at a rate of
1.5% over LIBOR payable on the outstanding principal amount. We are required to
pay an annual fee of 0.625% for the unused portion of each of the revolving
loans on a quarterly basis. The Third term loan bears interest at a rate of
1.625% over LIBOR payable on the outstanding principal amount. The subsidiaries
that own the tankers that collateralize each credit facility have guaranteed the
loans made under the appropriate credit facility, and we have pledged the shares
of those subsidiaries. We use interest rate swaps to manage the impact of
interest rate changes on earnings and cash flows.

On March 20, 2003 we closed a private offering of face amount $250 million in
10% senior notes due 2013. Interest on the senior notes, which are unsecured,
accrues at the rate of 10% per annum, and is payable semi-annually. The senior
notes, which do not amortize, are due on March 15, 2013. The senior notes are
guaranteed by all of our present subsidiaries and our future "restricted"
subsidiaries. The senior notes contain incurrence covenants which, among other
things, restrict our future ability to incur future indebtedness and liens, to
apply the proceeds of asset sales freely, to merge or undergo other changes of
control and to pay dividends, and require us to apply a portion of our cash flow
during 2003 to the reduction of our debt under our First, Second and Third
facilities. We intend to apply the proceeds of the senior notes offering
together with proceeds of our Third facility, to the purchase of the Metrostar
tankers.

The total outstanding amounts as of December 31, 2002 associated with our First
and Second credit facilities as well as their maturity dates are as follows:

TOTAL OUTSTANDING DEBT
(DOLLARS IN MILLIONS)
AND MATURITY DATE

Our scheduled principal payments for each of the term loans under our First and
Second credit facilities (which does not include the outstanding balance as of
December 31, 2002 of $76.1 million drawn from our two revolving credit
facilities that is payable upon maturity), our Third credit facility as well as
the coupon payment associated with our Notes are as follows:

PRINCIPAL AND COUPON PAYMENTS (DOLLARS IN MILLIONS)

42

2003 TOTAL PRINCIPAL AND COUPON PAYMENTS (DOLLARS IN MILLIONS)

The sale of the STAVANGER PRINCE during November 2002 resulted in net cash
proceeds of $2.3 million of which we were required to use $1.7 million to repay
long term debt of our first credit facility associated with the tanker pursuant
to our loan agreements. The sale also reduced the amount that we can draw under
our revolving credit facility by $1.2 million. Upon the sale of the KENTUCKY and
WEST VIRGINIA, the company will be required to repay approximately 2.9% of the
outstanding balance of the first credit facility, or approximately $3.8 million
as of December 31, 2002, as well as reduce the amount that we can draw under our
revolving credit facility by approximately $2.9 million.

In addition to tanker acquisition, other major capital expenditures include
funding our maintenance program of regularly scheduled in-water survey or
drydocking necessary to preserve the quality of our tankers as well as to comply
with international shipping standards and environmental laws and regulations.
Although we have some flexibility regarding the timing of this maintenance, the
costs are relatively predictable. Management anticipates that tankers which are
younger than 15 years are required to undergo in-water surveys 2.5 years after a
drydock and that tankers are to be drydocked every five years, while tankers 15
years or older are to be drydocked every 2.5 years in which case the additional
drydocks take the place of these in-water surveys. The table below indicates the
estimated in water survey and drydocking costs through 2007 for our 26-tanker
fleet, which excludes the KENTUCKY and WEST VIRGINIA which we are not
anticipating to drydock.

SURVEY AND DRYDOCK EXPENDITURES (DOLLARS IN MILLIONS)

During the year ended December 31, 2002 we had 432 off hire days associated with
12 drydockings. The table below indicates on a quarterly basis the number of off
hire days and number of drydockings that commenced during 2002.

43

Each in-water survey is estimated to require approximately 7 days and each
drydocking is estimated to require approximately 35 days. In addition to the
incurrence of costs described above, an in-water survey or drydocking results in
off hire time for a tanker, during which the tanker is unable to generate
revenue. Off hire time includes the actual time the tanker is in the shipyard as
well as ballast time to the shipyard from the port of last discharge. The
ability to meet this maintenance schedule will depend on our ability to generate
sufficient cash flows from operations or to secure additional financing. The
table below indicates the estimated in-water survey and drydocking schedule
through 2007 for our 26-tanker fleet, which excludes the KENTUCKY and WEST
VIRGINIA which we are not anticipating to drydock.

26 TANKER FLEET

The chart below indicates on a quarterly basis the estimated number of tankers
commencing in-water surveys or drydocking and the approximate number of
associated off hire days during 2003 for our 26-tanker fleet.

Net cash provided by operating activities decreased 47.7% to $43.6 million for
the year ended December 31, 2002, compared to $83.4 million for the prior year.
This decrease is primarily attributable to a net loss of $9.7 million and
depreciation and amortization of $60.4 million for the year ended December 31,
2002 compared to net income of $51.2 million and depreciation and amortization
of $42.8 million for the prior year.

Net cash provided by investing activities was $2.0 million for the year ended
December 31, 2002 compared to net cash used by investing activities of $261.8
million for the prior year. During the year ended December 31, 2001, we expended
$256.1 million for the purchase of 10 tankers, and $5.4 million for the purchase
of United Overseas Tankers.

44

Net cash used by financing activities was $60.2 million for the year ended
December 31, 2002 compared to net cash provided by financing activities of
$172.0 million for the prior year. The change in cash used by financing
activities relates to the following:

- - Net proceeds used from borrowing under long-term debt was $15.0 million
which was drawn from our revolving credit facility for the year ended
December 31, 2002 compared to $386.1 million which was associated with our
new credit facilities in connection with the refinancing of our prior loans
for the prior year.

- - Principal repayments of long-term debt was $74.6 million for the year ended
December 31, 2002 associated with the payment of debt associated with the
STAVANGER PRINCE as well as the principal repayment schedule of the term
loans of our First and Second credit facilities compared to $334.1 million
for the prior year associated with the refinancing of our prior loans, the
repayment of loans associated with five tankers which we acquired, and the
scheduled principal repayments of our current first and second credit
facilities.

- - Proceeds from the issuance of common stock from our initial public offering
were $126.3 million during the year ended December 31, 2001. We had no such
proceeds during 2002.

Net cash provided by operating activities increased 74.9% to $83.4 million for
the year ended December 31, 2001, compared to $47.7 million for the prior year.
This increase is primarily attributable to our increase in net income. We had
net income of $51.2 million and depreciation and amortization of $42.8 million
for the year ended December 31, 2001 compared to net income of $30.3 million and
depreciation and amortization of $24.8 million for the prior year.

Net cash used in investing activities increased 205% to $261.8 million for the
year ended December 31, 2001 compared to $85.9 million for the prior year. This
increase is primarily due to the use of cash for the purchase of ten tankers
during the year ended December 31, 2001 compared to the purchase of three
tankers during the prior year.

Net cash provided by financing activities increased 214% to $172.0 million for
the year ended December 31, 2001 compared to $54.8 million provided by financing
activities for the prior year. The increase in cash provided by financing
activity relates to the following:

- - Net proceeds from borrowings under long-term debt were $386.1 million for
the year ended December 31, 2001, compared to $70.5 million during the
prior year.

- - Principal repayments of long-term debt were $334.1 million for the year
ended December 31, 2001 compared to $30.7 million for the prior year. This
change is the result of refinancing our prior loans as well as the
repayment of loans associated with five tankers, which we acquired.

- - Proceeds from the issuance of common stock in our initial public offering
were $126.3 million during the year ended December 31, 2001, compared to
capital contributions from a shareholder of $15.5 million during the prior
year.

In June 2002, we agreed with several participants in our plan of
recapitalization (see Note 1 to our consolidated financial statements) to adjust
the number of shares to which they would be entitled under the plan. In
connection with this adjustment we reduced the number of shares of common stock
allocated to these participants by 35,230 shares (which we retired and
cancelled), and the participants retained approximately $634,000 of charter hire
that they had received. The plan has been completely effectuated

45

and we do not believe there will be any other adjustments to it.

Our operation of ocean-going tankers carries an inherent risk of catastrophic
marine disasters and property losses caused by adverse severe weather
conditions, mechanical failures, human error, war, terrorism and other
circumstances or events. In addition, the transportation of crude oil is subject
to business interruptions due to political circumstances, hostilities among
nations, labor strikes and boycotts. Our current insurance coverage includes (1)
protection and indemnity insurance coverage for tort liability, which is
provided by mutual protection and indemnity associations, (2) hull and machinery
insurance for actual or constructive loss from collision, fire, grounding and
engine breakdown, (3) war risk insurance for confiscation, seizure, capture,
vandalism, sabotage and other war-related risks and (4) loss of hire insurance
for loss of revenue for up to 90 days resulting from tanker off hire for all of
our tankers. In light of overall economic conditions as well as recent
international events, including the attack on the VLCC LIMBURG in Yemen in
October 2002, and the related risks with respect to the operation of ocean-going
tankers and transportation of crude oil, we expect that we will be required to
pay higher premiums with respect to our insurance coverage in 2003 and will be
subject to increased supplemental calls with respect to its protection and
indemnity insurance coverage payable to protection and indemnity associations in
amounts based on our own claim records as well as the claim records of the other
members of those associations related to prior years of operations. We believe
that the increase in insurance premiums and supplemental calls is industry wide
and do not foresee that it will have a material adverse impact on our tanker
operations or overall financial performance. To the extent such costs cannot be
passed along to our customers, such costs will reduce our operating income.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations
is based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States,
or GAAP. The preparation of those financial statements requires us to make
estimates and judgments that affect the reported amount of assets and
liabilities, revenues and expenses and related disclosure of contingent assets
and liabilities at the date of our financial statements. Actual results may
differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significant judgments or
uncertainties, and potentially result in materially different results under
different assumptions and conditions. We have described below what we believe
are our most critical accounting policies. We believe that there has been no
change in or additions to our critical accounting policies since December 2001.

ALLOWANCE FOR DOUBTFUL ACCOUNTS. We do not provide any reserve for doubtful
accounts associated with our voyage revenues because we believe that our
customers are of high creditworthiness and there are no serious issues
concerning collectibility. We have had an excellent collection record during the
past three years ended December 31, 2002. To the extent that some voyage
revenues become uncollectable, the amounts of these revenues would be expensed
at that time. We provide a reserve for our demurrage revenues based upon our
historical record of collecting these amounts. As of December 31, 2002, we
provided a reserve of 10% for these claims, which we believe is adequate in
light of our collection history. We periodically review the adequacy of this
reserve so that it properly reflects our collection history. To the extent that
our collection experience warrants a greater reserve we will incur an expense as
to increase of this amount in that period.

DEPRECIATION AND AMORTIZATION. We record the value of our tankers at their cost
(which includes acquisition costs directly attributable to the tanker and
expenditures made to prepare the tanker for its initial voyage) less accumulated
depreciation. We depreciate our tankers on a straight-line basis over their
estimated useful lives, estimated to be 25 years from date of initial delivery
from the shipyard. We believe that a 25-year depreciable life is consistent with
that of other ship owners. Depreciation is based on cost less the estimated

46

residual scrap value. We estimate residual scrap value as the lightweight
tonnage of each tanker multiplied by $125 scrap value per ton, which we believe
approximates the historical average price of scrap steel. An increase in the
useful life of the tanker would have the effect of decreasing the annual
depreciation charge and extending it into later periods. A increase in the
residual value would decrease the amount of the annual depreciation charge. A
decrease in the useful life of the tanker would have the effect of increasing
the annual depreciation charge. A decrease in the residual value would increase
the amount of the annual depreciation charge.

REPLACEMENTS, RENEWALS AND BETTERMENTS. We capitalize and depreciate the costs
of significant replacements, renewals and betterments to our tankers over the
shorter of the tanker's remaining useful life or the life of the renewal or
betterment. The amount capitalized is based on our judgment as to expenditures
that extend a tanker's useful life or increase the operational efficiency of a
tanker. We believe that these criteria are consistent with GAAP and that our
policy of capitalization reflects the economics and market values of our
tankers. Costs that are not depreciated are written off as a component of direct
vessel operating expense during the period incurred. Expenditures for routine
maintenance and repairs are expensed as incurred. If the amount of the
expenditures we capitalize for replacements, renewals and betterments to our
tankers were reduced, we would recognize the amount of the difference as an
expense.

DEFERRED DRYDOCK COSTS. Our tankers are required to be drydocked for major
repairs and maintenance that cannot be performed while the tankers are operating
approximately every 30 to 60 months. We capitalize the costs associated with the
drydocks as they occur and amortize these costs on a straight line basis over
the period between drydocks. Costs capitalized as part of the drydock include
actual costs incurred at the drydock yard; cost of fuel consumed between the
tanker's last discharge port prior to the drydock and the time the tanker leaves
the drydock yard; cost of hiring riding crews to effect repairs on a ship and
parts used in making such repairs that are reasonably made in anticipation of
reducing the duration or cost of the drydock; cost of travel, lodging and
subsistence of our personnel sent to the drydock site to supervise; and the cost
of hiring a third party to oversee a drydock. We believe that these criteria are
consistent with GAAP guidelines and industry practice, and that our policy of
capitalization reflect the economics and market values of the tankers.

IMPAIRMENT OF LONG-LIVED ASSETS. We evaluate the carrying amounts and periods
over which long-lived assets are depreciated to determine if events have
occurred which would require modification to their carrying values or useful
lives. In evaluating useful lives and carrying values of long-lived assets, we
review certain indicators of potential impairment, such as undiscounted
projected operating cash flows, tanker sales and purchases, business plans and
overall market conditions. We determine undiscounted projected net operating
cash flows for each tanker and compare it to the tanker carrying value. In the
event that impairment occurred, we would determine the fair value of the related
asset and we record a charge to operations calculated by comparing the asset's
carrying value to the estimated fair value. We estimate fair value primarily
through the use of third party valuations performed on an individual tanker
basis.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

INTEREST RATE RISK

We are exposed to various market risks, including changes in interest rates. The
exposure to interest rate risk relates primarily to our debt. At December 31,
2002, we had $280.0 million of floating rate debt with a margin over LIBOR of
1.5% compared to $339.6 million for the prior year. We use interest rate swaps
to manage the impact of interest rate changes on earnings and cash flows. The
differential to be paid or received under these swap agreements is accrued as
interest rates change and is recognized as an adjustment to interest expense. As
of December 31, 2002 and December 31, 2001, we were party to interest rate swap
agreements having aggregate notional amounts of $102.8 million and $139.3
million, respectively, which

47

effectively fixed LIBOR on a like amount of principal at rates ranging from
3.985% to 4.75%. If we terminate these swap agreements prior to their maturity,
we may be required to pay or receive an amount upon termination based on the
prevailing interest rate, time to maturity and outstanding notional principal
amount at the time of termination. As of December 31, 2002 the fair value of
these swaps was a net liability to us of $4.5 million. A one percent increase in
LIBOR would increase interest expense on the portion of our $177.2 million
outstanding floating rate indebtedness that is not hedged by approximately $1.8
million per year from December 31, 2002.

FOREIGN EXCHANGE RATE RISK

The international tanker industry's functional currency is the U.S. dollar. As
virtually all of our revenues and most of our operating costs are in U.S.
dollars, we believe that our exposure to foreign exchange rate risk is
insignificant.

48

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
GENERAL MARITIME CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

- ----------------------------------------------------------------------
PAGE
- ----------------------------------------------------------------------

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2002
AND 2001, AND FOR THE YEARS ENDED DECEMBER 31, 2002, 2001
AND 2000.

Report of Independent Auditors.............................. F-2

Consolidated Balance Sheets................................. F-3

Consolidated Statements of Operations....................... F-4

Consolidated Statement of Shareholders' Equity.............. F-5

Consolidated Statements of Cash Flows....................... F-6

Notes to Consolidated Financial Statements.................. F-7
- ----------------------------------------------------------------------

F-1

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of
General Maritime Corporation

We have audited the consolidated balance sheets of General Maritime Corporation
and its subsidiaries (the "Company") as of December 31, 2002 and December 31,
2001, and the related consolidated statements of operations, shareholders'
equity, and cash flows for the three years in the period ended December 31,
2002. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of General Maritime Corporation and
its subsidiaries at December 31, 2002 and December 31, 2001, and the results of
their operations and their cash flows for the three years in the period ended
December 31, 2002, in conformity with accounting principles generally accepted
in the United States of America.

Deloitte & Touche LLP
New York, New York
February 20, 2003
(February 25, 2003 as to note 17)

F-2

GENERAL MARITIME CORPORATION
CONSOLIDATED BALANCE SHEETS

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-3

GENERAL MARITIME CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------

(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-4

GENERAL MARITIME CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001, 2000
- --------------------------------------------------------------------------------

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-5

GENERAL MARITIME CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-6

GENERAL MARITIME
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS. General Maritime Corporation (the "Company") is a provider
of international transportation services of seaborne crude oil. The Company's
fleet is comprised of both Aframax and Suezmax tankers. The Company operates its
business in one business segment, which is the transportation of international
seaborne crude oil.

The Company's vessels are primarily available for charter on a spot voyage or
time charter basis. Under a spot voyage charter, which generally lasts between
two to ten weeks, the operator of a vessel agrees to provide the vessel for the
transport of specific goods between specific ports in return for the payment of
an agreed upon freight per ton of cargo or, alternatively, for a specified total
amount. All operating and specified voyage costs are paid by the owner.

A time charter involves placing a vessel at the charterer's disposal for a set
period of time during which the charterer may use the vessel in return for the
payment by the charterer of a specified daily or monthly hire rate. In time
charters, operating costs such as for crews, maintenance and insurance are
typically paid by the owner of the vessel and specified voyage costs such as
fuel and port charges are paid by the charterer.

RECAPITALIZATION PLAN. The Company's recapitalization was completed as to 14
vessels on June 12, 2001 and is described below. These 14 vessels were owned
directly or indirectly by various limited partnerships. The managing general
partners of the limited partnerships were various companies wholly owned by
Peter C. Georgiopoulos, Chairman and Chief Executive Officer of the Company. The
commercial operations for all of these vessels were conducted by the old General
Maritime Corporation, a Subchapter S Corporation also wholly owned by
Mr. Georgiopoulos.

As part of the Company's recapitalization, Mr. Georgiopoulos transferred the
equity interests in the old General Maritime Corporation to the Company along
with the general partnership interests in the vessel owning limited partnerships
in exchange for equity interests in the Company.

In addition, each vessel owner entered into an agreement with the Company with
respect to the recapitalization. Pursuant to these agreements, the vessel owners
delivered the entire equity interest in each vessel to the Company. In exchange,
the Company issued to each vessel owner shares of common stock of the Company.

Accordingly, the financial statements have been prepared as if the
recapitalization had occurred at February 1, 1997, representing the commencement
of operations of the old General Maritime Corporation. It is accounted for in a
manner similar to a pooling of interests as all of the equity interests
delivered in the recapitalization are under common control. The financial
information included herein does not necessarily reflect the consolidated
results of operations, financial position, changes in shareholders' equity and
cash flows of the Company as if the Company operated as a legal consolidated
entity for the years presented.

For the purposes of determining the number of shares outstanding with respect to
the accompanying financial statements, the Company used the initial public
offering price of $18.00 per share. Under the terms of the Recapitalization Plan
there were certain provisions, which required a post-closing

F-7

reallocation of issued shares between the respective limited partners. This
post-closing reallocation did not result in a material change to the outstanding
shares in any of the years presented.

BASIS OF PRESENTATION. The financial statements of the Company have been
prepared on the accrual basis of accounting. A summary of the significant
accounting policies followed in the preparation of the accompanying financial
statements, which conform to accounting principles generally accepted in the
United States of America, is presented below.

Certain reclassifications have been made to prior years to conform to 2002
presentation.

BUSINESS GEOGRAPHICS. Non-U.S. operations accounted for 100% of revenues and
net income. Vessels regularly move between countries in international waters
over hundreds of trade routes. It is therefore impractical to assign revenues or
earnings from the transportation of international seaborne crude oil products by
geographical area.

SEGMENT REPORTING. The Company reports financial information and evaluates its
operations by charter revenues and not by the type of vessel, length of ship
employment for its customers or type of charter. The Company does not have
discrete financial information to evaluate the operating results for each such
type of charter. Although revenue can be identified for these types of charters,
management cannot and does not identify expenses, profitability or other
financial information for these charters. As a result, management, including the
chief operating decision makers, reviews operating results solely by revenue per
day and operating results of the fleet and thus the Company has determined that
it operates under one reportable segment.

PRINCIPLES OF CONSOLIDATION. The accompanying consolidated financial statements
include the accounts of General Maritime Corporation and its wholly owned
subsidiaries. All intercompany accounts and transactions have been eliminated on
consolidation.

REVENUE AND EXPENSE RECOGNITION. Revenue and expense recognition policies for
voyage and time charter agreements are as follows:

VOYAGE CHARTERS. Voyage revenues and voyage expenses are recognized on a
pro rata basis based on the relative transit time in each period.
Estimated losses on voyages are provided for in full at the time such
losses become evident. A voyage is deemed to commence upon the completion
of discharge of the vessel's previous cargo and is deemed to end upon the
completion of discharge of the current cargo. Voyage expenses primarily
include only those specific costs which are borne by the Company in
connection with voyage charters which would otherwise have been borne by
the charterer under time charter agreements. These expenses principally
consist of fuel and port charges. Demurrage income represents payments by
the charterer to the vessel owner when loading and discharging time
exceed the stipulated time in the voyage charter. Demurrage income is
measured in accordance with the provisions of the respective charter
agreements and the circumstances under which demurrage claims arise and
is recognized on a pro rata basis over the length of the voyage to which
it pertains. At December 31, 2002 and 2001, the Company has a reserve of
approximately $513 and $300, respectively, against its due from
charterers balance associated with demurrage revenues.

TIME CHARTERS. Revenue from time charters are recognized on a straight
line basis as the average revenue over the term of the respective time
charter agreement. Direct vessel expenses are recognized when incurred.

OTHER OPERATING EXPENSES. Other operating expenses is comprised entirely of
time charterer termination costs. During 2000 the Company incurred costs of
approximately $5,272 to terminate three time charter agreements which is
included on the statement of operations as a component of operating income. The
Company terminated these agreements in order to charter the respective vessels
on more profitable terms. No charter agreements were terminated during 2002 and
2001.

F-8

VESSELS, NET. Vessels, net is stated at cost less accumulated depreciation.
Included in vessel cost are acquisition costs directly attributable to the
vessel and expenditures made to prepare the vessel for its initial voyage.
Vessels are depreciated on a straight-line basis over their estimated useful
lives, determined to be 25 years from date of initial delivery from the
shipyard. Depreciation is based on cost less the estimated residual scrap value.
The costs of significant replacements, renewals and betterments are capitalized
and depreciated over the shorter of the vessel's remaining useful life or the
life of the renewal or betterment. Undepreciated cost of the any asset component
is written off as a component of direct vessel operating expense. Expenditures
for routine maintenance and repairs are expensed as incurred.

OTHER FIXED ASSETS, NET. Other fixed assets, net is stated at cost less
accumulated depreciation. Depreciation is computed using the straight-line
method over the following estimated useful lives:

RECOVERABILITY OF LONG-LIVED ASSETS. The Company evaluates the carrying amounts
and periods over which long-lived assets are depreciated to determine if events
have occurred which would require modification to the carrying values or the
useful lives. In evaluating useful lives and carrying values of long-lived
assets, the Company reviews certain indicators of potential impairment, such as
undiscounted projected cash flows, appraisals, business plans and overall market
conditions. In the event that an impairment occurs, the fair value of the
related asset would be determined and the Company would record a charge to
operations calculated by comparing the asset's carrying value to the estimated
fair value. The Company estimates fair value primarily through the use of third
party valuations performed on an individual vessel basis.

DEFERRED DRYDOCK COSTS, NET. Approximately every 30 to 60 months the Company's
vessels are required to be drydocked for major repairs and maintenance, which
cannot be performed while the vessels are operating. The Company capitalizes
costs associated with the drydocks as they occur and amortizes these costs on a
straight line basis over the period between drydocks. Amortization of drydock
costs is included in depreciation and amortization in the statement of
operations. For the years ended December 31, 2002, 2001 and 2000, amortization
was $4,340, $2,389 and $1,651, respectively. Accumulated amortization as of
December 31, 2002 and 2001 were $6,276 and $4,215, respectively.

DEFERRED FINANCING COSTS, NET. Deferred finance costs include fees, commissions
and legal expenses associated with securing loan facilities. These costs
amortized over the life of the related debt, which is included in depreciation
and amortization. Amortization was $1,492, $890 and $691 for the years ended
December 31, 2002, 2001 and 2000, respectively. Accumulated amortization as of
December 31, 2002 and 2001 were $2,099 and $608, respectively.

INCOME TAXES. The Company is incorporated in the Republic of the Marshall
Islands. Pursuant to the income tax laws of the Marshall Islands, the Company is
not subject to Marshall Islands income tax. Additionally, pursuant to the U.S.
Internal Revenue Code, the Company is exempt from U.S. income tax on its income
attributable to the operation of vessels in international commerce. Therefore,
no provision for income taxes is required.

The Company is a Marshall Islands corporation. Pursuant to various tax treaties
and pursuant to the U.S. Internal Revenue Code, the Company's shipping
operations are not subject to foreign or U.S. income taxes.

F-9

DEFERRED VOYAGE REVENUE. Deferred voyage revenue primarily relates to cash
received from charterers prior to it being earned. These amounts are recognized
as income in the appropriate future periods.

COMPREHENSIVE INCOME. The Company follows Statement of Financial Accounting
Standards No. 130 "Reporting Comprehensive Income", which establishes standards
for reporting and displaying comprehensive income and its components in
financial statements. Comprehensive income is comprised of net income less
charges related to the adoption and implementation of SFAS No. 133.

ACCOUNTING ESTIMATES. The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

EARNINGS PER SHARE. Basic earnings/(loss) per share are computed by dividing
net income/(loss) by the weighted average number of common shares outstanding
during the year. Diluted income/(loss) per share reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised.

STOCK BASED COMPENSATION. The Company accounts for accounts for stock based
employee compensation arrangements in accordance with Accounting Principles
Board Opinion ("APB") No. 25, Accounting for Stock Issued to Employees, and
complies with the disclosure provisions of SFAS No. 123, Accounting for
Stock-Based Compensation. Under APB 25, compensation expense is based on the
difference, if any, between the fair value of the Company's stock and the
exercise price of the option. Options are generally granted at the fair market
value at the date of grant.

FAIR VALUE OF FINANCIAL INSTRUMENTS. The estimated fair values of the Company's
financial instruments approximate their individual carrying amounts as of
December 31, 2002 and 2001 due to their short-term maturity or the variable-rate
nature of the respective borrowings.

DERIVATIVE FINANCIAL INSTRUMENTS. To manage its exposure to fluctuating
interest rates, the Company uses interest rate swap agreements. Interest rate
differentials to be paid or received under these agreements are accrued and
recognized as an adjustment of interest expense related to the designated debt.
The fair values of interest rate swap agreements and changes in fair value are
recognized in the financial statements as noncurrent assets or liabilities.

Amounts receivable or payable arising at the settlement of interest rate swaps
are deferred and amortized as an adjustment to interest expense over the period
of interest rate exposure provided the designated liability continues to exist.

INTEREST RATE RISK MANAGEMENT. The Company is exposed to the impact of interest
rate changes. The Company's objective is to manage the impact of interest rate
changes on earnings and cash flows of its borrowings. The Company uses interest
rate swaps to manage net exposure to interest rate changes related to its
borrowings and to lower its overall borrowing costs. Significant interest rate
risk management instruments held by the Company during the year included
pay-fixed swaps. Pay-fixed swaps, which expire in June 2006, effectively convert
floating rate obligations to fixed rate instruments.

F-10

CONCENTRATION OF CREDIT RISK. Financial instruments that potentially subject
the Company to concentrations of credit risk are trade receivables. With respect
to accounts receivable, the Company limits its credit risk by performing ongoing
credit evaluations and, when deemed necessary, requiring letters of credit,
guarantees or collateral. Management does not believe significant risk exists in
connection with the Company's concentrations of credit at December 31, 2002.

RECENT ACCOUNTING PRONOUNCEMENTS. Effective January 1, 2001, the Company
adopted Statement of Financial Standards ("SFAS") No. 133, ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES ("SFAS 133"), and its
corresponding amendments under SFAS No. 138. SFAS 133 requires the Company to
measure all derivatives, including certain derivatives embedded in other
contracts, at fair value and to recognize them in the Consolidated Balance Sheet
as an asset or liability, depending on the Company's rights or obligations under
the applicable derivative contract. For derivatives designated as fair value
hedges in the fair value of both the derivative instrument and the hedged item
are recorded in earnings. For derivatives designated as cash flow hedges, the
effective portions of changes in fair value of the derivative are reported in
the other comprehensive income ("OCI") and are subsequently reclassified into
earnings when the hedged item affects earnings. Changes in fair value of
derivative instruments not designated as hedging instruments and ineffective
portions of hedges are recognized in earnings in the current period. The
adoption of SFAS 133 as of January 1, 2001 did not have a material impact on the
Company's results of operations or financial position. The Company recognized a
charge to OCI of $662 as a result of cumulative effect in accounting change in
relation to the adoption of SFAS No. 133. During June 2001, the Company
terminated its interest rate swap agreements, which resulted in the reversal of
the entire OCI balance. Pursuant to the termination of these interest rate swap
agreements, the Company made an aggregate cash payment of approximately $1,822
to counterparties. This amount is included in the statement of operations as a
component of other expense. In August and October 2001, the Company entered into
interest rate swap agreement (see Note 9). During the years ended December 31,
2002 and 2001, the Company recognized a charge to OCI of $3,263 and $1,107,
respectively. The total liability in connection with the Company's cash flow
hedges as of December 31, 2002 and 2001 were $4,370 and $1,338, respectively,
and is presented separately on the balance sheet as a noncurrent liability. The
total asset in connection with the Company's cash flow hedges as of
December 31, 2002 and 2001 were $0 and $231, respectively, and is presented
separately on the balance sheet as a noncurrent asset.

During July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 141 requires the use of the purchase method of accounting for
all business combinations initiated after June 30, 2001. Additionally, this
statement further clarifies the criteria for recognition of intangible assets
separately from goodwill for all business combinations completed after June 30,
2001, as well as requires additional disclosures for business combinations.

The Company adopted SFAS No. 142, Goodwill and Other Intangible Assets. This
Standard eliminates goodwill amortization from the Consolidated Statement of
Operations and requires an evaluation of goodwill for impairment (at the
reporting unit level) upon adoption of this Standard, as well as subsequent
evaluations on an annual basis, and more frequently if circumstances indicate a
possible impairment. This impairment test is comprised of two steps. The initial
step is designed to identify potential goodwill impairment by comparing an
estimate of the fair value of the applicable reporting unit to its carrying
value, including goodwill. If the carrying value exceeds fair value, a second
step is performed, which compares the implied fair value of the applicable
reporting unit's goodwill with the carrying amount of that goodwill, to measure
the amount of goodwill impairment, if any. The Company's only reporting unit
with goodwill is its technical management business, which is not a reportable
segment. Goodwill must be tested for impairment as of the beginning of the
fiscal year in which SFAS No. 142 is adopted. The Company has completed its
testing of goodwill and has determined that there is no impairment.

F-11

The Company's measurement of fair value was based on an evaluation of future
discounted cash flows. This evaluation utilized the best information available
in the circumstances, including reasonable and supportable assumptions and
projections. Collectively, this evaluation was management's best estimate of
projected future cash flows. The Company's discounted cash flow evaluation used
discount rates that correspond to the Company's weighted-average cost of
capital. If actual results differ from these assumptions and estimates
underlying this goodwill impairment evaluation, the ultimate amount of the
goodwill impairment could be adversely affected.

Upon adoption of SFAS No. 142, the transition provisions of SFAS No. 141,
Business Combinations, also became effective. These transition provisions
specify criteria for determining whether an acquired intangible asset should be
recognized separately from goodwill. Intangible assets that meet certain
criteria will qualify for recording on the balance sheet and will continue to be
amortized in the income statement. Such intangible assets will be subject to a
periodic impairment test based on estimated fair value. The Company determined
that the transition provisions had no impact on its results of operations or
financial position.

Prior to the Company's adoption of SFAS No. 142, goodwill was amortized over its
estimated useful life, and was tested periodically to determine if it was
recoverable from operating earnings on an undiscounted basis over its useful
lives and to evaluate the related amortization periods. If it was probable that
undiscounted projected operating income (before amortization of goodwill and
other acquired intangible assets) was not sufficient to recover the carrying
value of the asset, the carrying value was written down through results of
operations and, if necessary, the amortization period was adjusted.

The following table reflects consolidated results adjusted as though the
adoption of SFAS Nos. 141 and 142 occurred as of the beginning of the years
ended December 31, 2002 and 2001:

The following table reflects the components of goodwill as of December 31, 2002:

Prior to the adoption of SFAS No. 142, amortization expense for each of the five
succeeding fiscal years would have been $397.

SFAS No. 143, "Accounting for Asset Retirement Obligations" was issued in
September 2001. This statement addresses financial accounting and reporting for
the obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. This statement is effective for financial
statements issued for fiscal years beginning after September 15, 2002. The

F-12

adoption of this standard did not have a material effect on the Company's
financial position and results of operations.

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
was issued in October 2001. SFAS No. 144 replaces SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of." SFAS No. 144 requires that held for use long-lived assets whose carrying
amount is not recoverable from its undiscounted cash flows be measured at the
lower of carrying amount or fair value. Held for sale long lived assets shall be
measured at the lower of their carrying amount or fair value less cost to sell,
whether reported in continuing operations or in discontinued operations.
Therefore, discontinued operations will no longer be measured at net realizable
or include amounts for operating losses that have not yet occurred. SFAS
No. 144 also broadens the reporting of discontinued operations to include all
components of an entity with operations that can be distinguished from the rest
of the entity and that will be eliminated from the ongoing operations of the
entity in a disposal transaction. The provisions of SFAS No. 144 are effective
for financial statements issued for fiscal years beginning after December 15,
2001 and are to be applied prospectively. The adoption of this standard did not
have a material effect on the Company's financial position and results of
operations.

In April 2002, the Financial Accounting Standards Board issued SFAS No. 145,
Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement
No. 13, and Technical Corrections. In addition to rescinding FASB Statements
No. 4, 44 and 64, this Statement amends FASB Statement No. 13, Accounting for
Leases, to eliminate an inconsistency between the required accounting for
sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. This Statement also amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings, or
describe their applicability under changed conditions. The adoption of this
standard did not have a material effect on the Company's financial position and
results of operations. Due to the adoption of SFAS No. 145, the extraordinary
expense recorded during 2001 was reclassified to a component of other expenses.

In July 2002, the Financial Accounting Standards Board issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities. This standard
requires companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a commitment to an
exit or disposal plan. SFAS No. 146 nullifies Emerging Issues Task Force Issue
No 94-3, Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including certain costs incurred in a
restructuring). SFAS No. 146 is to be applied prospectively to exit or disposal
activities initiated after December 31, 2002. The Company is currently
evaluating the impact of adopting SFAS No. 146.

2. ACQUISITIONS

As part of the Company's recapitalization, the Company acquired United Overseas
Tankers, Ltd. ("UOT"), a Greek company providing technical management services
exclusively to the Company, for

F-13

$5,979. The Company recorded goodwill of $5,954 which reflected the excess of
purchase price over fair value of net assets acquired. The composition of the
fair value of net assets acquired are as follows:

Goodwill is being amortized over a 15 year period. For the year ended
December 31, 2001, amortization was $201. Effective January 1, 2002,
amortization of goodwill is no longer permitted. The acquisition was accounted
for as a purchase and results of operations have been included in the
consolidated financial statements from the date of acquisition. Pro forma net
assets and results of operations of this acquisition had the acquisition
occurred at the beginning of 2001 were not material and accordingly, have not
been provided. Results of UOT's operations for the period from January 1, 2001
through June 12, 2001 were not significant to the Company's operations for the
year ended December 31, 2001.

Prior to the acquisition, the Company paid management fees to UOT of $547 and
$388 for the years ended December 31, 2001 and 2000, respectively.

On June 15, 2001, in accordance with the Company's recapitalization, the Company
purchased five vessels for an aggregate purchase price of approximately $145,050
and also purchased certain other assets. Consideration in this transaction
consisted of approximately 5,675,000 shares of common stock at an initial public
offering price of $18.00 per share, subject to post closing adjustment, and the
assumption of indebtedness. On June 14, 2002, an adjustment was made to the
purchase price of some of the vessels which we acquired for shares at the time
of the Company's initial public offering whereby the Company received 35,230
shares of common stock valued at $18.00 per share as settlement of $634 owed to
the Company by the sellers as of June 15, 2001. These shares have been retired
and are shown on the Company's statement of shareholders' equity as a reduction
of paid-in capital.

From June 27, 2001 through August 24, 2001, the Company acquired ten vessels for
an aggregate purchase price of approximately $283,636. Included in this purchase
price are 1,680,000 shares of common stock at an initial public offering price
of $18.00 per share, subject to post closing adjustment, valued at $30,243.

3. EARNINGS (LOSS) PER COMMON SHARE

The computation of basic earnings (loss) per share is based on the weighted
average number of common shares outstanding during the year. The computation of
diluted earnings (loss) per share assumes the exercise of all stock options (see
Note 15) using the treasury stock method and the granting of unvested restricted
stock awards (see Note 16), for which the assumed proceeds upon grant are deemed
to be the amount of compensation cost attributable to future services and not
yet recognized using the treasury stock method, to the extent dilutive.

The components of the denominator for the calculation of basic earnings per
share and diluted earnings per share is as follows:

F-14

4. WRITEDOWN OF VESSELS

During September 2002, the Company decided to retire a 1979-built single-hull
Aframax tanker through its sale for scrap. This decision was based on
management's assessment of estimated charter rates for the vessel and the
estimated daily operating costs as well as the cost of this vessel's next
drydocking which is scheduled for April 2003. The vessel was sold in
November 2002. An expense of $4,254 has been recognized during the year ended
December 31, 2002, which was the amount by which the vessel's carrying value
exceeded the net proceeds received upon disposal.

During December 2002, the Company decided to sell a 1980-built and 1981-built
single-hull Aframax tankers. This decision was based on management's assessment
of the projected cost associated with the associated with the vessels' next
drydockings which were scheduled to occur during 2003 and the estimated
operating revenues for the vessels over their remaining operating lives. The
expense of $8,846 has been recognized during the year ended December 31, 2002
that is the difference between the vessels' book values and the proceeds from
their anticipated sale. These vessels have been written down to their estimated
net selling price of $2,000 per vessel, and have been reclassified on the
balance sheet from vessels to vessels held for sale.

5. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

6. OTHER FIXED ASSETS

Other fixed assets consist of the following:

F-15

7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

8. NOTE PAYABLE TO SHAREHOLDER

In connection with the purchase of a vessel during the third quarter of 1999,
one of the Company's subsidiaries entered into a loan agreement with a
shareholder. The loan was evidenced by a note bearing interest at 10% and was
due on March 31, 2000. Interest expense under this loan was $617 and $458 for
the years ended December 31, 2000 and 1999, respectively. The loan was secured
by a pledge of a vessel, which had a net book value of $17,888 at December 31,
1999. Subsequent to December 31, 1999, one of the Company's subsidiaries
negotiated a new loan facility with a bank for the purchase of additional
vessels. In connection with obtaining this financing, the shareholder
contributed to capital the note payable of $15,000 and accrued interest of $250,
which was incurred during the year ended December 31, 2000.

9. LONG-TERM DEBT

At the time of the Company's recapitalization on June 12, 2001, the Company's
subsidiaries were party to 12 loan facilities, which consisted of senior and
junior facilities, with aggregate outstanding principal balances of
approximately $217,850. Interest rates under these loan facilities were adjusted
quarterly and ranged from 1.125% to 3.0% above the London Interbank Offered Rate
("LIBOR"). Interest rates during the year ended December 31, 2001 ranged from
5.2% to 8.4% and 7.0% to 10.0% under the senior and junior loan facilities,
respectively.

The Company had entered into interest rate swap agreements to manage interest
costs and the risk associated with changing interest rates. The Company had
outstanding ten interest rate swap agreements with foreign banks at January 1,
2001. These agreements effectively fixed the Company's interest rate exposure on
its senior and junior loan facilities, which are based on LIBOR to fixed rates
ranging from 6.2% to 7.0%. The differential to be paid or received was
recognized as an adjustment to interest expense as incurred.

On June 15, 2001, all 12 loan facilities were fully repaid, $70,100 from the
proceeds of the Company's Initial Public Offering and the remainder with
borrowings made under a new credit facility (the "First

F-16

Credit Facility"). The Company wrote off the unamortized deferred loan costs
aggregating $1,184 associated with those facilities as a component of other
expenses. In June 2001, the Company terminated all of its interest rate swap
agreements by paying the counterparties an aggregate amount of $1,822. This
termination has been recorded in the statement of operations as a component of
other expenses.

In June 2001 the Company entered into two new credit facilities. The First
Credit Facility is comprised of a $200,000 term loan and a $100,000 revolving
loan. The First Credit Facility matures on June 15, 2006. The term loan is
repayable in quarterly installments. The principal of the revolving loan is
payable at maturity. The First Credit Facility bears interest at LIBOR plus
1.5%. The Company must pay a fee of 0.625% per annum on the unused portion of
the revolving loan on a quarterly basis. At the time of sale of the Aframax
tanker in November 2002 (see Note 4), the revolving loan facility was reduced to
$98,787. As of December 31, 2002, the Company had $129,411 outstanding on the
term loan and $54,100 outstanding on the revolving loan. The Company's
obligations under the First Credit Facility are secured by 19 vessels, with an
aggregate carrying value of $464,337 at December 31, 2002.

On June 27, 2001, the Company entered into an additional credit facility (the
"Second Credit Facility") consisting of a $115,000 term loan and a $50,000
revolving loan. The Second Credit Facility maturity date is June 27, 2006. The
term loan is repayable in quarterly installments. The principal of the revolving
loan is payable at maturity. The Second Credit Facility bears interest at LIBOR
plus 1.5%. The Company must pay a fee of 0.625% per annum on the unused portion
of the revolving loan on a quarterly basis. As of December 31, 2002, the Company
had $74,500 outstanding on the term loan and $22,000 outstanding on the
revolving loan. The Company's obligations under the Second Credit facility
agreements are secured by nine vessels with a carrying value of $250,996 at
December 31, 2002.

Interest rates during the year ended December 31, 2002 ranged from 2.94% to
3.56% on the First and Second Credit Facilities.

In August 2001, the Company entered into an interest rate swap agreement with a
foreign bank to manage interest costs and the risk associated with changing
interest rates. This swap had a notional principal amount of $65,500 and fixed
the interest rate exposure on 50% of its First Credit Facility to a fixed rate
of 6.25%. The differential to be paid or received is recognized as an adjustment
to interest expense as incurred from the interest rate swap's effective date of
September 15, 2001. The swap agreement terminates on June 15, 2006. In
October 2001, the Company entered into a second interest rate swap agreement
with a foreign bank with a notional principal amount of $37,250 which fixed the
interest rate exposure on 50% of its Second Credit Facility to a fixed rate of
5.485%. The changes in the notional principal amounts of the swaps of
December 31, 2002 and 2001 are as follows:

The Company would have paid approximately $4,370 and $1,107 to settle all
outstanding swap agreements based upon their aggregate fair values as of
December 31, 2002 and 2001, respectively. This fair value is based upon
estimates received from financial institutions.

Interest (expense) income pertaining to interest rate swaps for the years ended
December 31, 2002, 2001 and 2000 was $(3,223), $(943) and $141, respectively.

Interest expense under all of the Company's credit facilities was $14,748,
$17,728 and $19,414 for the years ended December 31, 2002, 2001 and 2000,
respectively.

F-17

The terms and conditions of the First and Second Credit Facilities require
compliance with certain restrictive covenants, which the Company feels are
consistent with loan facilities incurred by other shipping companies. Under the
credit facilities, the Company is required to maintain certain ratios such as:
vessel market value to loan outstanding, EBITDA to net interest expense and to
maintain minimum levels of working capital. The loan facility agreements also
contain, among other things, prohibitions against additional borrowing,
guarantees, and payments of dividends. As of December 31, 2002, the Company was
in compliance with its covenants.

Based on borrowings as of December 31, aggregate maturities without any
mandatory prepayments under the First Credit Facility and Second Credit Facility
are the following:

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of the Company's financial instruments are as follows:

The fair value of long-term debt is estimated based on current rates offered to
the Company for similar debt of the same remaining maturities. The carrying
value approximates the fair market value for the variable rate loans. The fair
value of interest rate swaps (used for purposes other than trading) is the
estimated amount the Company would pay to terminate swap agreements at the
reporting date, taking into account current interest rates and the current
credit-worthiness of the swap counter-parties.

11. REVENUE FROM TIME CHARTERS

Total revenue earned on time charters for the years ended December 31, 2002,
2001 and 2000 was $28,293, $47,520 and $41,512, respectively. Future minimum
time charter revenue, based on vessels committed to non-cancelable time charter
contracts excluding time charters that are subject to a market rate adjustment
with no minimum daily rate as of December 31, 2002 will be $13,262 during 2003
and $960 during 2004.

12. SIGNIFICANT CUSTOMERS

For the year ended December 31, 2002, the Company did not earn 10% or more of
its voyage revenues from any single customer. For the year ended December 31,
2001, the Company earned $27,389 from

F-18

one customer which represented 12.6% of voyage revenues. For the year ended
December 31, 2000, the Company earned approximately $19,376 and $14,902 from two
customers which represented 14.7% and 11.3% of voyage revenues, respectively.

13. RELATED PARTY TRANSACTIONS

The following are related party transactions not disclosed elsewhere in these
financial statements:

The Company rents office space as its principal executive offices in a building
currently leased by GenMar Realty LLC, a company wholly owned by Peter C.
Georgiopoulos, the Chairman and Chief Executive Officer of the Company. There is
no lease agreement between the Company and GenMar Realty LLC. The Company
currently pays an occupancy fee on a month to month basis in the amount of $55.
For the period from April 1, 2000 to December 31, 2000, the Company expensed
$495 for occupancy fees. For the years ended December 31, 2002 and 2001, the
Company's occupancy fees were $660 in each year.

Included in prepaid expenses and other current assets are net advances to
Mr. Georgiopoulos, which amounted to $486 at December 31, 2002 and
December 2001.

During 2002, 2001 and 2000, the Company paid approximately $181, $10 and $104 to
Poles, Tublin, Patestides & Stratakis LLP, a law firm with which the father of
Mr. Georgiopoulous is affiliated. Included in accounts payable and accrued
expenses as of December 31, 2002 and 2001, are unpaid fees to this law firm of
$0 and $181, respectively.

14. SAVINGS PLAN

In November 2001, the Company established a 401(k) Plan (the "Plan") which is
available to full-time employees who meet the Plan's eligibility requirements.
This Plan is a defined contribution plan, which permits employees to make
contributions up to 15 percent of their annual salaries with the Company
matching up to the first three percent. The matching contribution vests over a
four year period, retroactive to date of hire. During 2002 and 2001, the
Company's matching contribution to the Plan was $90 and $26, respectively.

15. STOCK OPTION PLAN

On June 10, 2001, the Company adopted the General Maritime Corporation 2001
Stock Incentive Plan. Under this plan the Company's compensation committee,
designated the board of directors or the board of directors, may grant a variety
of stock based incentive awards to employees, directors and consultants whom the
compensation committee (or other committee or the board of directors) believes
are key to the Company's success. The compensation committee may award incentive
stock options, nonqualified stock options, stock appreciation rights, dividend
equivalent rights, restricted stock, unrestricted stock and performance shares.

The aggregate number of shares of common stock available for award under the
2001 Stock Incentive Plan is 2,900,000 shares. As of June 30, 2001, the Company
granted incentive stock options and nonqualified stock options to purchase
860,000 shares of common stock at an exercise price of $18 per share under the
provisions of the 2001 Stock Incentive Plan. These options expire in 10 years.
Options to purchase 110,000 shares of common stock vested immediately on
June 12, 2001, the date of the grant. 25% of the remaining 750,000 options will
vest on each of the first four anniversaries of the grant date. All options
granted under this plan will vest upon a change of control, as defined. These
options will be incentive stock options to the extent allowable under the
Internal Revenue Code.

F-19

On November 26, 2002, the Company's chief executive officer and chief operating
officer surrendered to the Company outstanding options to purchase an aggregate
of 590,000 shares of common stock. Also on November 26, 2002, options to
purchase 143,500 were granted to other employees at an exercise price of $6.06
(the closing price on the date of grant). These options will generally vest in
four equal installments on each of the first four anniversaries of the date of
grant.

The Company follows the provisions of APB 25 to account for its stock option
plan. The fair value of the options were determined on the date of grant using a
Black-Scholes option pricing model. These options were valued based on the
following assumptions: an estimated life of five years for options granted
during both 2002 and 2001, volatility of 63% and 54% for options granted during
2002 and 2001, respectively, risk free interest rate of 4.0% and 5.5% for
options granted duing 2002 and 2001, respectively, and no dividend yield for
options granted in both 2002 and 2001. The fair value of the 860,000 options to
purchase common stock granted on June 12, 2001 is $8.50 per share. The fair
value of the options to purchase common stock granted on November 26, 2002 is
$3.42 per share.

The following table summarizes stock option activity for the three years ended
December 31, 2002:

The following table summarizes certain information about stock options
outstanding as of December 31, 2002:

Had compensation cost for the Company's stock option plans been determined based
on the fair value at the grant dates for awards under those plans consistent
with the methods recommended by SFAS

F-20

No. 123, the Company's net income and net income per share for the years ended
December 31, 2002 and 2001, would have been stated at the pro forma amounts
indicated below:

16. RESTRICTED STOCK AWARDS

On November 26, 2002, the Company made grants of restricted common stock in the
amount of 500,000 shares to its chief executive officer, and 125,000 shares to
its president and chief operating officer. The shares will vest, if at all, in
seven years from the date of grant (or earlier upon the death, disability,
dismissal without cause or resignation for good reason of the recipient or upon
a change of control of the Company). The restricted stock grants are expected to
result in a non-cash charge to general and administrative expenses of $541,000
per annum (pro rata for the remainder of 2002).

17. LEGAL PROCEEDINGS

The Company or its subsidiaries are party to the following legal proceedings
which arose from matters incidental to its business.

The Company time chartered one of its vessels to an affiliate of OMI Corporation
in September 1997, for a period of approximately four years. Under the charter,
the Company had the right to cancel the balance of the charter at any time after
its second anniversary date upon 90 days' written notice with a payment of
$1,000 to the charterer, which payment has been made by the Company. On
October 2, 2000, the Company gave notice to the charterer that this option was
being exercised. Subsequently, it was calculated that redelivery was to take
place on February 2, 2001. In January 2001, the charterer indicated that it was
not possible to complete a laden voyage by such date. The charterer asserted
that the vessel would not have to be redelivered until February 24, 2001, which
would permit it time to conduct an additional voyage. The charterer demanded
arbitration and, under protest, redelivered the vessel to the Company on
January 14, 2001. The charterer has alleged that it is entitled to damages in
the amount of approximately $1,900, exclusive of interest and costs, as a result
of its inability to commence and complete another voyage. The Company's position
is that pursuant to the terms of the charter and the existing law, the charterer
was not entitled to commence another voyage if the vessel could not reasonably
be redelivered prior to the redelivery date. The Company believes that the
charterer's anticipatory breach of the charter has damaged it. The parties
agreed to arbitration in the State of New York and nominated a sole arbitrator.
The parties have exchanged correspondence expressing differing views of the law
and the facts of the matter and have made various settlement offers. At a
hearing held before the arbitrator on October 3, 2001, the charterer presented
witnesses and other evidence in support of its claim. A second hearing was held
on November 20, 2001, at which the Company presented witnesses in support of its
claim. On February 25, 2003, the arbitrator awarded the charterer an amount that
the Company adequately accrued for as of December 31, 2002. Consequently, the
resolution of this arbitration did not have a material adverse effect on the
Company's results of operations.

F-21

On March 14, 2001, the GENMAR HECTOR experienced severe weather while unloading
at the BPAmoco Co. terminal in Texas City, Texas. As a result of heavy winds,
the vessel became separated from the terminal. The terminal's loading arms were
damaged and there was a discharge of approximately 200 to 300 barrels of oil.
The U.S. Coast Guard has determined that this oil originated from the terminal
and that BPAmoco is the responsible party for the discharge under OPA, although
BPAmoco retains a right of contribution against the vessel. On March 16, 2001,
BPAmoco Corporation, BPAmoco Oil Co. and Amoco Oil Company filed a lawsuit in
the United States District Court for the Southern District of Texas, Galveston
Division, against the GENMAR HECTOR IN REM, seeking damages in the amount of
$1,500. The protection and indemnity association for this vessel, which provides
insurance coverage for such incidents, issued a letter to BPAmoco Co., et al.
guaranteeing the payment of up to $1,500 for any damages for which this vessel
may be found liable in order to prevent the arrest of the vessel. On July 31,
2001, the plaintiffs filed a an amended complaint which added as defendants the
Company and UOT. On or about August 3, 2001, Valero Refining Company-Texas and
Valero Marketing & Supply Co., co-lessors with BPAmoco of the BPAmoco terminal
and the voyage charterer of the vessel, intervened in the above-referenced
lawsuit, asserting claims against the vessel, Genmar Hector Ltd., UOT, the
Company and BPAmoco in the aggregate amount of approximately $3,200. On
September 28, 2001, BPAmoco filed a second amended complaint, increasing the
aggregate amount of its claims against the defendants, from $1,500 to
approximately $3,200. BPAmoco asserted that such increase is due to subsequent
demurrage claims made against BPAmoco by other vessels whose voyages were
delayed or otherwise affected by the incident. The Company believes that the
claims asserted by BPAmoco are generally the same as those asserted by Valero
Refining Company-Texas and Valero Marketing & Supply Co. and that, as a result,
the aggregate amount of such claims taken together will be approximately $3,200.
A counterclaim has been filed on behalf of the Compnay and the other defendants
against the BPAmoco and Valero plaintiffs for approximately $25. On October 30,
2001, these two civil actions were consolidated and on December 26, 2001, a
complaint for damages in an unspecified amount due to personal injuries from the
inhalation of oil fumes was filed by certain individuals against the vessel,
BPAmoco, UOT, and the Company. These personal injury plaintiffs filed an amended
complaint on January 24, 2002, adding another individual as a plaintiff and
asserting a claim against the Company and UOT for punitive damages. The Company
believes that the claim for punitive damages is without merit. On February 27,
2002, Southern States Offshore, Inc. filed an independent suit against BPAmoco,
the Company, UOT and Valero seeking damages sustained by the M/V SABINE SEAL,
which is owned and operated by Southern States Offshore and was located adjacent
to the BPAmoco dock on the day of the spill, and for maintenance and cure paid
to the individual personal injury claimants who were members of the crew of the
SABINE SEAL. The amount of the claim is estimated to be approximately $100. This
action has now been consolidated with the other claims. With the possible
exception of the claim for punitive damages, all of the claims asserted against
the Company appear to be covered by insurance. In February 2003, the parties
have now agreed to a settlement in principle which would involve a payment by
the Company that is wholly covered by insurance. Accordingly, the Company
believes that this incident will have no material effect on the Company's
results of operations.

18. SUBSEQUENT EVENTS

Effective January 1, 2003, the Company completed an internal corporate
restructuring which reduced the number of the Company's subsidiaries and the
number of jurisdictions in which these subsidiaries are organized. The
restructuring is intended to achieve tax efficiencies and promote regulatory
compliance. In addition, the restucturing clearly separates the Company's ship
owning subsidiaries from its ship management subsidiaries.

In January 2003, the Company agreed to acquire 19 tankers consisting of 14
Suezmax tankers and five Aframax tankers. These vessels are expected to be added
to the Company's fleet during March and April 2003. The aggregate purchase price
will be $525,000, which will be financed through the use of cash on hand and
reserve borrowing power under the Company's existing revolving credit facilities

F-22

together with the incurrence of additional bank debt. On February 3, 2003, the
Company borrowed $32,500 under its First Credit Facility and $20,000 under its
Second Credit Facilities and paid the $52,500 proceeds to the seller of the 19
tankers as a deposit.

F-23

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

No changes were made to, nor was there any disagreement with the Company's
independent auditors regarding, the Company's accounting or financial
disclosure.

50

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information regarding General Maritime's directors and executive officers
is incorporated by reference herein to General Maritime's Proxy Statement for
its Annual Meeting of Shareholders to be held on May [22], 2003 (the "2003 Proxy
Statement").

ITEM 11. EXECUTIVE COMPENSATION

Information regarding compensation of General Maritime's executive officers
is incorporated by reference herein to the 2003 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information regarding the beneficial ownership of shares of General
Maritime's common stock by certain persons is incorporated by reference herein
to the 2003 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information regarding certain transactions of General Maritime is
incorporated by reference herein to the 2003 Proxy Statement.

ITEM 14. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in alerting them timely to material information
relating to the Company required to be included in the Company's periodic SEC
filings.

CHANGES IN INTERNAL CONTROLS

There have been no significant changes in our internal controls or in other
factors that could have significantly affected those controls subsequent to the
date of our most recent evaluation of internal controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following documents are filed as a part of this report:

51

1. The financial statements listed in the "Index to Consolidated
Financial Statements."

2. The financial statement schedules listed in the "Index to Financial
Statement Schedules."

3. Exhibits:

2.1 Plan of Recapitalization.(1)

2.2 Contribution Agreement, dated May 25, 2001, among General
Maritime Ship Holdings Ltd. (subsequently renamed General
Maritime Corporation), Ajax Limited Partnership, the
limited partners of Ajax Limited Partnership, Genmar Ajax
Ltd., Peter C. Georgiopoulos, Genmar Ajax Corporation and
GMC Administration Ltd.(3)

2.3 Contribution Agreement, dated May 25, 2001, among General
Maritime Ship Holdings, Ltd., Ajax II, L.P., the limited
partners of Ajax II, L.P., Ajax II LLC, Peter C.
Georgiopoulos, Genmar Ajax II Corporation and GMC
Administration Ltd.(3)

2.4 Contribution Agreement, dated May 25, 2001, among General
Maritime Ship Holdings Ltd., Ajax II, L.P., the limited
partners of Boss, L.P., Genmar Boss Ltd., Peter C.
Georgiopoulos, Genmar Boss Corporation and GMC
Administration Ltd.(3)

2.5 Contribution Agreement, dated May 25, 2001, among General
Maritime Ship Holdings Ltd., General Maritime I, L.P., the
limited partners of General Maritime I, L.P., General
Maritime I Corporation, Peter C. Georgiopoulos, Genmar
Maritime I Corporation and GMC Administration Ltd., and
amendment thereto.(1)

2.6 Contribution Agreement, dated May 25, 2001, among General
Maritime Ship Holdings Ltd., General Maritime II, L.P., the
limited partners of General Maritime II, L.P., General
Maritime II Corporation, Peter C. Georgiopoulos, Genmar
Maritime II Corporation and GMC Administration Ltd.(3)

2.7 Contribution Agreement, dated May 25, 2001, among General
Maritime Ship Holdings Ltd., Harriet, L.P., the limited
partners of Harriet, L.P., General Maritime III
Corporation, Peter C. Georgiopoulos, Genmar Harriet
Corporation and GMC Administration Ltd.(3)

2.8 Contribution Agreement, dated May 25, 2001, among General
Maritime Ship Holdings Ltd., and Pacific Tankship, L.P.,
the limited partners of Pacific Tankship, L.P., Genmar
Pacific Ltd., Peter C. Georgiopoulos, Genmar Pacific
Corporation and GMC Administration Ltd.(3)

2.9 Contribution Agreement, dated May 25, 2001, among General
Maritime Ship Holdings Ltd., Genmar Alexandra, LLC Genmar
II, LLC, Equili Company, L.P., Equili Company, LLC, Equili
Company II, L.P. and Equili Company II, LLC.(3)

2.10 Vessel Contribution Agreement, dated April 26, 2001,
between General Maritime Ship Holdings Ltd. and Blystad
Shipholding Inc., Liberia.(3)

2.11 Memorandum of Agreement, dated April 26, 2001, between
Blystad Shipholding Inc., Liberia and General Maritime Ship
Holdings Ltd.(3)

52

2.12 Memorandum of Agreement, dated April 26, 2001, between
Blystad Shipholding Inc., Liberia and General Maritime Ship
Holdings Ltd.(3)

2.13 Vessel Contribution Agreement, dated May 25, 2001, between
General Maritime Ship Holdings Ltd. and KS Stavanger
Prince.(3)

2.14 Memorandum of Agreement, dated May 4, 2001, between KS
Stavanger Prince and General Maritime Ship Holdings Ltd.
(3)

2.15 Letter Agreement, dated May 25, 2001, between General
Maritime Ship Holdings, Ltd. and Peter C. Georgiopoulos
relating to the acquisition of the old Maritime
Corporation.(3)

2.16 Reorganization Agreement, dated as of September 9, 2002,
between General Maritime Corporation and certain of its
then existing subsidiaries relating to the reorganization
of General Maritime Corporation and its various
subsidiaries.3.1 Amended and Restated Articles of
Incorporation of General Maritime Ship Holdings Ltd.(1)

3.2 Articles of Amendment to Amended and Restated Articles of
Incorporation, changing name from General Maritime Ship
Holdings Ltd. to General Maritime Corporation.(1)

3.3 Amended and Restated By-Laws of General Maritime Ship
Holdings Ltd.(1)

4.1 Form of Common Stock Certificate of General Maritime
Corporation.(2)

4.2 Form of Registration Rights Agreement.(3)

10.1 $300,000,000 Credit Agreement dated June 12, 2001 among
General Maritime Corporation, Christiania Bank og
KreditKasse ASA, New York Branch and various Lenders.(2)

10.2 Form of First Preferred Ship Mortgage on Marshall Islands
Flag Vessel, related to $300,000,000 Credit Agreement.(1)

10.3 Form of First Preferred Ship Mortgage on Liberian Flag
Vessel, related to $300,000,000 Credit Agreement.(1)

10.4 Form of Deed of Covenants to accompany a First Preferred
Statutory Mortgage on Malta Flag Vessel, related to
$300,000,000 Credit Agreement.(1)

10.5 Form of Deed of Covenants to accompany a First Preferred
Statutory Mortgage on Norwegian Flag Vessel, related to
$300,000,000 Credit Agreement.(1)

10.6 Form of Insurance Assignment, related to $300,000,000
Credit Agreement.(1)

10.7 Form of Earnings Assignment, related to $300,000,000 Credit
Agreement.(1)

10.8 Form of Master Vessel and Collateral Trust Agreement,
related to $300,000,000 Credit Agreement.(1)

10.9 Form of Subsidiaries Guaranty, related to $300,000,000
Credit Agreement.(1)

10.10 Form of Pledge and Security Agreement, related to
$300,000,000 Credit Agreement.(1)

10.11 [reserved]

53

10.12 Form of Insurance Assignment, related to $165,000,000
Credit Agreement.(4)

10.13 Form of Earnings Assignment, related to $165,000,000 Credit
Agreement.(4)

10.14 Form of Subsidiaries Guaranty, related to $165,000,000
Credit Agreement.(4)

10.15 Form of Pledge and Security Agreement, related to
$165,000,000 Credit Agreement.(4)

10.16 Form of Master Vessel and Collateral Trust Agreement,
related to $165,000,000 Credit Agreement.(4)

10.17 Form of First Preferred Ship Mortgage on Marshall Islands
Flag Vessel, related to $165,000,000 Credit Agreement.(4)

10.18 Form of First Preferred Ship Mortgage on Liberian Flag
Vessel, related to $165,000,000 Credit Agreement.(4)

10.19 Form of Deed of Covenants to accompany a First Preferred
Statutory Mortgage on Malta Flag Vessel, related to
$165,000,000 Credit Agreement.(4)

10.20 Escrow Agreement dated June 11, 2001 between General
Maritime Ship Holdings Ltd., the Recipients and
Partnerships listed therein and Mellon Investor Services
LLC.(1)

10.21 Management Rights Agreement dated June 11, 2001 between
General Maritime Corporation and OCM Principal
Opportunities Fund, L.P.(2)

10.22 Employment Agreement dated June 12, 2001 between General
Maritime Ship Holdings Ltd. and Peter C. Georgiopoulous.
(2)

10.23 Employment Agreement dated June 12, 2001 between General
Maritime Ship Holdings Ltd. and John P. Tavlarios.(2)

10.24 Employment Agreement dated June 12, 2001 between General
Maritime Ship Holdings Ltd. and James C. Christodoulou.(2)

10.25 Employment Agreement dated June 12, 2001 between General
Maritime Ship Holdings Ltd. and John C. Georgiopoulos.(2)

10.26 Form of General Maritime 2001 Stock Incentive Plan, as
amended and restated, effective December 12, 2002.

10.27 Form of Outside Director Stock Option Grant Certificate.
(1)

10.28 Incentive Stock Option Agreement dated June 12, 2001
between General Maritime Corporation and Peter C.
Georgiopoulos.(1)

10.29 Incentive Stock Option Agreement dated June 12, 2001
between General Maritime Corporation and John P. Tavlarios.
(1)

10.30 Incentive Stock Option Agreement dated June 12, 2001
between General Maritime Corporation and James C.
Christodoulou.(1)

10.31 Incentive Stock Option Agreement dated June 12, 2001
between General Maritime Corporation and John C.
Georgiopoulos.(1)

10.32 Form of Incentive Stock Option Grant Certificate.(2)

54

21.1 Subsidiaries of General Maritime Corporation.

99.1 Section 906 Certification of Chief Executive Officer.

99.2 Section 906 Certification of Chief Financial Officer.

- ----------
(1) Incorporated by reference to Amendment No. 5 to General Maritime's
Registration Statement on Form S-1, filed with the Securities and Exchange
Commission on June 12, 2001.
(2) Incorporated by reference to Amendment No. 4 to General Maritime's
Registration Statement on Form S-1, filed with the Securities and Exchange
Commission on June 6, 2001.
(3) Incorporated by reference to Amendment No. 3 to General Maritime's
Registration Statement on Form S-1, filed with the Securities and Exchange
Commission on May 25, 2001.
(4) Incorporated by reference to General Maritime's Quarterly Report on Form
10-Q, filed with the Securities and Exchange Commission on August 14, 2001.

(b) Current Reports on Form 8-K

During the three months ended December 31, 2002, the Registrant filed one
report on Form 8-K. The report was filed on December 2, 2002, and reported the
grant of 500,000 shares of restricted common stock to Peter C. Georgiopoulos,
the Company's chairman, chief executive officer, and president, and 125,000
shares of restricted common stock to John P. Tavlarios, the Company's then
President and Chief Operating Officer.

55

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on March 28, 2003.

GENERAL MARITIME CORPORATION

By: /s/ Peter C. Georgiopoulos
---------------------------------------------
Name: Peter C. Georgiopoulos
Title: Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed on March 28, 2003, by the following persons in
the capacities indicated:

/s/ Rex W. Harrington
------------------------------- DIRECTOR
Rex W. Harrington

/s/ Stephen A. Kaplan
------------------------------- DIRECTOR
Stephen A. Kaplan

/s/ Peter S. Shaerf
------------------------------- DIRECTOR
Peter S. Shaerf

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Peter C. Georgiopoulos, certify that:

1. I have reviewed this annual report on Form 10-K of General Maritime
Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the a registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as
of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely a affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

Date: March 28, 2003

/s/ Peter C. Georgiopoulos
- --------------------------
Peter C. Georgiopoulos

Chairman, Chief Executive
Officer, and President

CHIEF FINANCIAL OFFICER CERTIFICATION

I, James C. Christodoulou, certify that:

1. I have reviewed this annual report on Form 10-K of General Maritime
Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the a registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as
of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely a affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

Date: March 28, 2003

/s/ James C. Christodoulou
- --------------------------
James C. Christodoulou

Vice President, Secretary and
Chief Financial Officer