Spyros Capralos - President and Chief Executive Officer Simos Spyrou - Chief Financial Officer

Noah Parquette - Global Hunter Securities

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Conference Call on the Fourth Quarter and Year End 2012 Financial Results. We have with us Mr. Spyros Capralos, President and Chief Executive Officer, and Mr. Simos Spyrou, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by question-and-answer session. (Operator Instructions) I must advise you that this conference is being recorded today, Tuesday, March 19, 2013. We now pass the floor to one of your speakers today, Mr. Spyros Capralos. Please go ahead, sir.

Thank you, operator. I am Spyros Capralos, President and Chief Executive Officer of Star Bulk Carriers, and I would like to welcome you to the Star Bulk Carriers’ fourth quarter and 12 months 2012 financial results conference call. Along with me today to discuss our financial results is our CFO, Mr. Simos Spyrou. Before we begin, I kindly ask you to take a moment to read the Safe Harbor statement on slide number two of our presentation. Let us now turn to slide number three of the presentation for a preview of the fourth quarter 2012 financial highlights. In the three months ended December 31, 2012, gross revenues amounted to $17.9 million, representing a 37% reduction versus the same period of 2011. Our revenues were mainly affected by the low freight rate environment and the off hire of the Star Polaris that was undergoing main engine repairs. During the fourth quarter, the Star Polaris was off hire for 45 days nearly half of the quarter. We are trying to recuperate the loss of hire from a claim to the shipyard, which constructed the vessel. General and administrative expenses were reduced by 17% to $2 million in Q4 2012 versus $2.4 million in Q4 2011. Overall, during the fourth quarter of 2012, the company had a net loss of $1.4 million compared to a net loss of $69.9 million in Q4 2011, the latter including an impairment loss on Star Sigma and Star Epsilon. Excluding non-cash items, our net income for the fourth quarter amounted to $300,000 compared to an adjusted net loss of $3.1 million in Q4 2011. Adjusted EBITDA for the fourth quarter 2012 was $6.3 million compared to $12.7 million last year. Our Time Charter Equivalent during this quarter was $14,877 per day compared to $19,557 last year indicative of the loss of hire of the Star Polaris and the low freight rate environment previously mentioned. Furthermore, our operating efficiency continues to yield tangible results as our average daily operating expenses were $5,730 per vessel per day, 5% lower than the same period last year. The adjusted net income of $0.3 million represents an adjusted earnings per share of $0.05 per share basic and diluted. Please turn to slide number four of the presentation for a preview of our 12 months 2012 financial highlights. In the 12 months ended December 31, 2012, gross revenues amounted to $86.2 million, representing a 20% reduction versus the same period of 2011. G&A expenses amounted to $9.3 million versus $12.5 million last year. Net loss for 2012 stood at $314.5 million mainly due to the non-cash impairment charge of $303 million during the third quarter compared to a net loss of $69.6 million in 2011, which was also affected by $62 million impairment charge. Excluding non-cash items, our net loss for the 12 months ended December 12 amounted to $279,000 compared to a net loss of $1 million for 2011. Our adjusted EBITDA for the same period stood at $40.4 million versus an adjusted EBITDA of $54 million last year. Our Time Charter Equivalent during 2012 was $15,390 per day compared to $19,988 in 2011. Our average daily operating expenses were reduced by 5% to $5,361 per vessel. The adjusted net loss of $279,000 represents $0.05 loss per share basic and diluted. Please turn now to slide five to briefly discuss the company’s recent highlights. As most of you read in today’s press release, we have entered into a definitive agreement for the sale of our oldest Capesize vessel, the Star Sigma, for scrap, for a contracted price of around $9 million. In view of the current low freight rate environment, the fact that the vessel was not under a time charter contract and for upcoming scheduled drydock, which was estimated around $2 million, we concluded that selling the vessel would be in the best interest of the company and its shareholders. On the financial side, in early January, we announced that we had reached an agreement with our lenders for the deferral of an estimated $24 million of our principal repayments and the relaxation of the financial covenants during 2013 and 2014. In accordance with these agreements, we made a prepayment of $2 million in late December and $7.4 million of pledged cash in early January and reclassified $7 million of restricted cash to free cash. Furthermore, pursuant to our agreements, the proceeds from the sale of the Star Sigma will be utilized to retire the vessel’s loan, while the remaining proceeds will be applied on a pro rata basis against the remaining principal installments up to the end of 2014 of our HSH facility. We believe these agreements demonstrate our lender support and confidence in Star Bulk, improve the company’s business prospects, secure our strength and competitiveness, and provide a company with significant liquidity and financial flexibility. These agreements will now let us focus on what we do best that is owning and operating dry bulk vessels. On the operational side, during the fourth quarter, Star Bulk undertook the operational and technical management of two additional third-party vessels, one Supramax and one Capesize bulk carrier earning a daily management fee of $750 per vessel. I would like to note that these two vessels are expected to add a total of $550,000 of revenues in form of management fees on an annualized basis. We therefore have a total of three third-party vessels managed, which will secure us a total of $800,000 in revenues per year. You can see that our strategy of having wholly-owned in-house management company has started to payoff not only in terms of increased efficiency flexibility and transparency, but also in the form of additional revenues. Please turn now to slide six to discuss our balance sheet profile. First of all, I would like to point out that in a period when cash reserves are extremely valuable, we have zero capital expenditure commitments related to new buildings as well as no exposure to interest rate swaps. In other words, we have and continued to take the full advantage of the prevailing low interest rate environments. As of today, our total debt stands at $211.4 million, our current cash position stands at $26.1 million, and our net debt stands at around 4.6 times 2012 EBITDA. These debt and cash balances are exclusive of any repayments of the Star Sigma outstanding loan balance following its sale. Following the agreements with our lenders, this cash in the previous slide and excluding the principal repayment related to the sale of the Star Sigma, our remaining principal repayment obligations for 2013 stand at $13.2 million. As you can see in the graph, our principal repayment so far this year stand at over $12 million, while our scheduled principal repayments for 2014 and ‘15 stand at $18 million and $28 million respectively. So, as you can see we have a smooth loan repayment schedule with no balloon payments for the next three years. Please turn to slide seven for an overview of our fleet employment and our charter counterparties. Currently, we have secured 64% of our operating days in 2013 and 20% for 2014 with most of the open days in the Supramax category. Specifically, our time charter coverage in the Capesize segment is 88% for 2013 and 52% for 2014, while our Supramax coverage stands at 49% for 2013. In addition, the average fixed rate of our Capesize vessels is $23,650 per day significantly higher compared to current market levels. We refer especially to the Cape’s as this segment has been the most volatile and the most negatively affected so far. On the Supramaxes, our current strategy mostly focuses on short-term time charter employment. Overall, our total contracted revenue amounts approximately $128 million, while it’s worth noting that we no longer have legacy charters. That would be extremely difficult for our charters to service. Lastly, I would like to highlight the high quality credit profile of our non-short-term charters with blue chip companies like Rio Tinto, Cargill, Louis Dreyfus, and Norden among our counterparties. Please turn to slide eight, year-after-year we continued to improve our operational performance. Our cost-cutting efforts in our operating and G&A expenses have played an important role in our financial and operating performance in these challenging market environments. On the top right graph, you can see that while the weighted average size of our vessels increased slightly during the 12 months of 2012, our average daily operating expenses declined by 5%. To put these into perspective, since 2009, our daily operating expenses have been reduced from $6,903 in 2009 to $5,361 in 2012, a 22% cumulative decrease. At the same time, our average vessel size increased by 15% on a cumulative basis from 92,000 deadweight tons to 106,000 deadweight tons. On the bottom right graph, you can see that while the average number of employees increased by 29% from 42 people during the 12 months of 2011 to 54 people in the 12 months of 2012. Our G&A expenses, excluding the one-off severance payments and stock-based compensation decreased by 5% from $8.2 million to $7.8 million. We have been consistently monitoring our management efficiency performance to determine the actual benefit from the management of third-party vessels. The way we compare our performance is subtracting the management fees we received which are shown as other revenues on our income statement from the core G&A expenses, meaning we exclude non-cash and non-recurring items and divide the results by the total days in our own fleet. According to this metric, daily fourth quarter expenses per owned vessel were reduced by 23% year-on-year. While we have been prudently containing our expenses, our ship management quality standards have been maintained at high levels. The lower left hand side graph shows Star Bulk’s average deficiencies per port state control inspection versus the industry average. As you can see, we have consistently outperformed the industry and we tried to improve our quality standards every year. Moving forward, we remain focused on further optimizing operating costs and implementing our quality objectives. And now, I’ll ask Mr. Simos Spyrou, our CFO to discuss on the financials and give you an update of the market developments. Please go ahead, Simos.

Thank you, Spyros. Let us now move to slide 10 for an overview of our balance sheet as of December 31, 2012. Our total cash balance stood at $31.8 million, other current assets were $15.7 million, and our fixed assets following the $303 million impairment loss during the third quarter amounted to $291.2 million. Fair value of above market acquired time charters stood at $14.3 million, and other non-current assets at $1.6 million. Summing up the above, total assets amounted to $354.7 million. Total debt stood at $224.1 million, while other liabilities were $13.8 million and stockholders’ equity was at $116.7 million. If we can now turn to slide 11 to discuss our fourth quarter 2012 income statement, I would like to point out that our results include non-cash items, which are depicted in the middle column while the adjusted figures exclude them. For the fourth quarter of 2012, non-cash adjusted revenues amounted to $19.5 million compared to $30.2 million in the same period last year. In particular, non-cash items include a $1.6 million related to the amortization of above market acquired time charters. Voyage expenses amounted to $2.1 million for the fourth quarter 2012 from $5.5 million in the same quarter last year. Adjusted revenues net of voyage expenses amounted to $17.4 million this quarter compared to $24.8 million the same period last year, a reduction of 30%. I believe that this number is the most accurate measure of our actual comparable revenue as it nets out the effect of the voyage charters on the revenue and the voyage expenses lines. This 30% reduction was mainly due to the off hire related to the Star Polaris and our higher spot market exposure under a low freight rate environment plus the fact that we repositioned part of our Supramax fleet to the Atlantic. Vessel operating expenses stood at $7.4 million versus $8.1 million last year. It is worth noting that on a per vessel basis operating expenses were reduced by 5% year-on-year from $6,028 daily in the fourth quarter 2011 to $5,730 daily in the fourth quarter of 2012. Drydocking expenses amounted to approximately $2.7 million versus $1.5 million last year. However, these numbers are not comparable as they mainly relate to the number of vessels drydocked each period. General and administrative expenses, adjusted for non-cash stock-based compensation, totaled $1.9 million during the fourth quarter 2012 compared to $2.3 million during the fourth quarter of 2011. Excluding last year’s non-recurring severance payment of $254,000, G&A expenses were 5% lower year-on-year. Using the methodology, Spyros described earlier on our management efficiency, our fourth quarter 2012 daily G&A expenses per owned vessel were reduced by 23% year-on-year. I would like to underline that this decrease was accompanied by a 5% increase in the number of our employees. Other operational loss and other operational gain represent mainly commercial claims that the company had initiated in 2009 in our non-recurring items. Nonetheless, the company had the cash inflow of $0.9 million that partially offset the non-recurring loss of hire resulted from Star Polaris grounding and engine failure. Overall, the company’s adjusted net income amounted to $0.3 million compared to an adjusted net loss of $3.1 million same quarter last year. Please turn now to slide 12 to discuss our 12 months 2012 income statement. Again, non-cash items are depicted in the middle column and the adjusted figures exclude them. I will briefly go through this slide as the most important elements were explained in the previous slide. For the 12 months 2012, non-cash adjusted revenues amounted to $92.5 million. While subtracting the voyage expenses, net adjusted revenues stood at $72.9 million compared to $86.8 million in the same period last year. Vessel operating expenses were higher. However, on a per vessel basis, they were 5% lower from $5,642 daily in 2011 to $5,361 daily in 2012. G&A expenses adjusted for non-cash stock-based compensation totaled $7.8 million during 2012 compared to $11.1 million during 2011. Excluding last year’s non-recurring severance payment, G&A expenses were 6% lower year-on-year. I would like to underline again that this decrease was accompanied by a 36% increase in the number of our employees, year-on-year. Using our management efficiency monitoring, our 2012 daily G&A expenses per owned vessel were reduced by 43% year-on-year. As we explained during last quarter’s conference call, during the third quarter, we recognized the non-cash impairment loss of $303 million, which directly reduced the book values of Polaris Supramax vessel and our oldest Capesize vessel. This does not have any effect, whatsoever in the company’s operation. What this number indicates is how much asset values have dropped in the last few years? I am sure that this is no news to anyone following the dry bulk shipping industry. I also believe that the market has been constantly pricing the effect of the asset values changes on our share price as our current share price is only a fraction of the loss we incurred. In my view, the impairment loss will have a cleansing effect as our current balance sheet is much more consistent with current market conditions and provides a much more accurate presentation of our company’s current asset and equity value. The gain on time charter agreement termination and the loss on sale of vessel referred to the Star Sigma and the sale of Star Epsilon respectively. Both events took place earlier this year. I would like now to give you a brief update on the dry bulk markets. Please turn to slide 14. After four years of consecutive record high deliveries, the dry bulk fleet has outstripped demand forcing rates to plummet. There is no doubt that the dry bulk market is currently in difficult position with freight rates often below running expenses, low asset values, and all the consequential difficulties for the old shipping companies. We are undoubtedly in one of the worst possible positions in terms of supply and demand balance. Just to put this growth into perspective, the dry bulk fleet has grown from 418 million deadweight tons in the beginning of 2009 to 688 million deadweight tons in the beginning of this month. This represents a massive cumulative net growth of around 65%. Also, keep in mind that these numbers have taken into account more than 78 million deadweight tons of scrapping during this period. In my view, this magnitude of supply growth would be almost impossible to be met by an equal demand growth, especially during the period of global financial turmoil. While deliveries have dropped to more sustainable levels these last couple of months, it remains to be seen how this will develop going forward. An encouraging element in the supply side is a reduction of the average speed of the fleet or slow-steaming, which effectively reduces the available fleet carrying capacity. High fuel prices and low time charter rates make it more economical for ships to save fuel and knot time and therefore to operate at the lower more eco-friendly speed. According to Fearnley’s, the average speed of the dry bulk fleet stood at 11.1 knots in 2012, compared to 14 knots in 2009. On the other side, there is demand. Dry bulk demand is very much dependent on global economic growth, higher lending costs, unavailability of funds due to the bank’s de-leveraging, disappointing growth rates in the developed economies, the government’s inability to address structural issues strongly and efficiently, and finally, the general uncertainty that dampens investor sentiment around the globe have managed to bring global growth down to lower levels. As you can see on the right graph, China, India, and the Eurozone countries have witnessed a significant slowdown in terms of their GDP growth. Even though, we believe the dry bulk demand growth will by far outperform GDP growth going forward, the global slowdown definitely prevents ton-mile demand from un-leasing its potential. On the positive side, Chinese GDP rose to 7.9% in the fourth quarter while PMIs for U.S., Japan and the Euro area have been rising for the last three, four months. Overall, we believe that the global economy will recover in the coming quarters, which will help global trade growth. Please turn now to slide 15 for an update on the supply side. Dry bulk vessel deliveries have continued at the record high pace and have been keeping the DBI under pressure. We expect deliveries in the remaining months of 2013 to continue at a slower pace compared to the last two years and should slowdown further going forward. As you can see on the top right hand graph, deliveries in the period 2008 to 2012 had an average slippage rate of around 30%. On the bottom right hand graph, we provide the order book for the remainder of 2013, 2014 and 2015. As you can see, while the dry bulk industry still has to go through a process of absorbing a very large number of new vessels that has to come into the market in 2013 and 2014, the current order book stands at significant lower levels. What is important and encouraging is the fact that bulk carriers’ demolition has stayed at record high levels the last couple of years. 2011 all-time record of 22.3 million deadweight tons was by far been surpassed by 2012’s scrapping activity of 33.7 million deadweight tons. During the first two months of 2013, scrapping activity stood at around 4.8 million deadweight tons. A continued strength in scrapping activity should slowdown the fleet’s net growth rate, which effectively could provide some relief to supply pressure. Please turn to slide 16. In my opinion, these two graphs sum up the long-term demand trends for dry bulk industry. As most of you know, iron ore and coal are the two most important commodities for dry bulk shipping accounting for more than half of the seaborne dry bulk trade. On the left graph, you can see how Chinese iron ore imports have evolved in the last eight years. As we have explained many times in previous presentations, Chinese domestic iron ore is of very low quality compared to international commercial mining standards. Therefore, we believe that the substitution of the expensive Chinese iron ore production with imported ore can provide a significant support to iron ore trade even with zero steel production growth. From the breakdown of Chinese iron ore imports by source, we can see that Indian exports have plummeted. Taking into account that India is China’s closest major iron ore exporter, we expect this will have a positive effect on ton miles as China will be forced to import from other more different sources. On the right graph, you can see how Chinese coal trade has evolved for the last eight years. The growth of this trade has been fully remarkable. China’s increased energy needs has turned the country from a traditional coal exporter to the single biggest coal importer in the world in half a decade. From significant coal trade surpluses up until 2005, China had a coal trade deficit of around 300 million tons during the last 12 months. What is even more impressive is the growth potential of this trade? China’s coal production during the last 12 months was more around 3.65 billion tons. So, as you can understand, the 300 million tons of net imports represents only around 8% of the total. As China continues growing, we expect the need for energy in general and coal-fired energy, in particular, to continue growing as well. We believe the potential for additional coal imports is large and so long as additional mining capacity comes online we will continue rapid growth in this trade. Recently, due to persistently low natural gas prices in the U.S., coal producers have been increasing turning to overseas buyers. This development is quite positive for the dry bulk industry as it has positive ton-mile implications. Please turn now to slide 17. On the left graph, you can see annualized Chinese iron ore imports versus steel production. In both cases, the upward trend is totally clear. Iron ore imports grew by healthy 9% in 2012 while January’s imports were up 10% year-on-year. Crude steel production grew 4% in 2012 and 9% in January on a year-on-year basis. Another factor that is expected to have a positive effect on the dry bulk industry is the low iron ore stockpiles in Chinese ports. From a high of over 100 million tons in January 2012, stockpiles have fallen to below 70 million tons. We expect that demand will see a considerable improvement when steel mills start restocking. Looking forward, we expect a significant amount of iron ore export capacity to come online towards the end of the year, while many analysts believe that the dry bulk demand growth could outfit supply growth towards the end of the year. Overall, we remain optimistic on the long-term outlook of the dry bulk industry and we believe that dry bulk demand prospects remained positive despite the adverse economic environment. I would like now to pass the floor back to Mr. Capralos for his closing remarks.

Thank you, Simos. In conclusion, as you can see on slide 19, we believe that Star Bulk is positioned to sustain through the current challenging environments. On top of our high-quality modern fleet, Star Bulk also has a diverse group of high-quality charters. As we discussed earlier in our presentation, our in-house management has provided tangible results as it has led to a meaningful increase in our efficiency and transparency, a consistent decrease in operating costs, and lastly, in an increase in our revenues going forward due to the management of third-party vessels. We have an experienced and dedicated management team and moderately leveraged balance sheet and a healthy liquidity profile compared to the industry. We have secured our lenders’ trust and support for the next two years. We currently have no capital expenditures related to new buildings, and we have $26.1 million of cash in the banks. From a commercial perspective, our Capesize fleet is mostly covered for the next two years and at above market charter levels, while our operating expenses are being continuously optimized. We believe Star Bulk has a good set of characteristics that placed the company among the most promising in the dry bulk industry. Closing, I would like to thank our shareholders for their support and loyalty and reassure them that we will continue to do everything in our power to ensure the company’s long-term viability and navigate safely through this challenging low freight environment. Without taking any more of your time, I will now pass the floor over to the operator. In case you have any questions, both Simos and myself, will be happy to answer them.

Thank you. (Operator Instructions) Your first question today comes from the line of Noah Parquette from Global Hunter Securities. Please go ahead. Noah Parquette - Global Hunter Securities: Good afternoon. I just want to ask about the Supramax fleet, you have been very vocal about keeping that open, and you don’t want to fix at the bottom right now, but what kind of rates would you want to see before you start putting some ships away for six months to a year or something like that?

Hi, Noah. Listen, for the time being, we don’t see those rates, therefore, we are chartering our Supramax fleet with short-term charters, and I think we have done quite well in this low freight environment. Supramaxes have done much better than the Capesize vessels and now we are enjoying in the last month or so an improved market environment that has permitted us now to see and experience five digit numbers on the daily charter rates. Noah Parquette - Global Hunter Securities: Really, I was just going to follow up with you are repositioning those ships last quarter where they are now, have you been able to kind of take advantage of this little pop in rates?

Yes, we have because some vessels that were in the Atlantic experienced much higher rates, going forward, I can give you an example for one of our vessels we are getting rate of $19,000 per day, which is much higher than what we have seen up to now. At the same time, I think the Atlantic is doing much better. The grain season in Brazil seems to be doing very well. And I think there is lot of business in the Atlantic that will permit us to obtain higher rates. We sacrificed some of the rates that we would be getting in the Pacific by going to the Atlantic what this is paying off now. Noah Parquette - Global Hunter Securities: Okay. And then on the cost side, I just had two questions. You have done a good job of getting your G&A expenses and your vessel OpEx down, as you see further substantial gains here or are we at the bottom?

I think that we’ll continue our efforts to reduce further our expenses. Of course, as the company is growing and we are growing because we are taking under management more vessels. Of course, some of our expenses will grow, but they will grow less than the amount that we’ll be getting from the revenues that we receive for managing those third-party vessels. Noah Parquette - Global Hunter Securities: Okay. And then do you have any visibility on 2014 drydocking right now?

Well, we do have a few vessels that will go through drydocking. Even this year in the fourth quarter, it’s scheduled and programmed to go through the various drydockings that we have. Right now, I don’t have it on top of my head, but I think for this year we have, I think three Supramax vessels and one Cape, the Aurora that will go with drydock in the third quarter and the Supramaxes will go with the drydock in the last quarter, third and fourth quarter. And then next year, we have again and we can provide you a list if you want with all the drydockings that we have. Noah Parquette - Global Hunter Securities: That sounds great. Thank you.

Thank you. Your next question today comes from the line of (indiscernible) from Gleacher. Please go ahead.

Good afternoon gentlemen.

Hello, good afternoon.

Great quarter, great job with the cost-cutting and also the fleet strategy, I think it’s been clearly shown that your strategy in the past was good and it’s paying off right now. My question is in line with the last analyst on what room is left on the cost side with daily operating expenses? Can we similar drops or we are getting close to that bottom level?

I think that there is always room for improvement. We by managing third-party vessels what we managed to obtain is additional synergies that reduce the cost not only for those third-party vessels, but also for our fleet by getting a much larger fleet, we can obtain economies of scale, especially on the prices that we pay when we buy spare stores and other or paints, lubricants, so I think that there is still room to further improve.

Great. And again, fantastic job, we expect no less from top management in the sector. So, thank you.

Thank you very much.

Thank you. (Operator Instructions) It appears we have no further questions at this time. Sir, please continue.

Well, for all of you, thank you very much for taking the time to joining us today for our earnings conference call. Our 2013 first quarter results are scheduled sometime in May. And we look forward to have you at that time as well. Thank you very much and have a good day.

Thank you. That does conclude our conference for today. Thank you all for participating. You may now disconnect.