6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR

15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2004

Commission File Number 001-3136

TSAKOS ENERGY NAVIGATION LIMITED

(Translation of registrant’s name into English)

367 Syngrou Avenue, 175 64 P. Faliro, Athens, Greece

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x    Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):     

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):     

Indicate by check mark whether the registrant by furnishing the information contained in the Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨    No   x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                .

This document contains 18 pages. The exhibit index is located on page 2.

EXHIBIT INDEX

99.1 Selected Consolidated Financial and Other Data and Financial and Other Data by Fleet (Unaudited) for the Three Months ended June 30, 2004

99.2 Consolidated Financial Statements (Unaudited), June 30, 2004

99.3 Management’s Discussion and Analysis of Financial Condition and Results of Operations

This report on Form 6-K is hereby incorporated by reference into the following Registration Statements of the Company:

• Registration Statement on Form F-3 (No. 333-110495) filed with the SEC on November 14, 2003;

• Registration Statement on Form F-3 (No. 333-111615) filed with the SEC on December 30, 2003;

• Registration Statement on Form S-8 (No. 333-104062) filed with the SEC on March 27, 2003; and

• Registration Statement on Form S-8 (No. 333-102860) filed with the SEC on January 31, 2003.

SIGNATURES

Pursuant to the requirements 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.

Date: September 16, 2004

TSAKOS ENERGY NAVIGATION LIMITED
By:	/s/ Nikolas P. Tsakos
	Nikolas P. Tsakos
	President

EX-99.1

Exhibit 99.1

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

Selected Consolidated Financial and Other Data (Unaudited)

(In Thousands of U.S. Dollars, except share, per day and fleet data)

	Three months ended June 30						Six months ended June 30
	2004			2003			2004			2003
STATEMENT OF INCOME DATA
Revenue from vessels	$	66,362		$	64,490		$	149,385		$	122,728
Revenue from vessels, net		63,669			61,522			143,193			117,201
Voyage expenses		15,419			15,611			32,435			29,756
Vessel operating expenses		12,338			11,941			26,006			21,927
Depreciation		8,911			8,116			17,603			15,555
Amortization of deferred drydocking charges		2,413			2,291			4,787			4,033
Provision for doubtful receivables		—			—			244			—
Management fees		1,260			1,095			2,505			2,100
General & Administrative expenses		709			394			1,278			834
Operating income		22,620			22,074			58,334			42,996
Interest and finance costs, net		(2,103	)		(3,265	)		(5,257	)		(6,278	)
Interest income		100			115			181			209
Foreign currency losses		(2	)		(115	)		(47	)		(206	)
Share of profits of joint-venture		—			300			—			664
Amortization of deferred gain on sale of vessels		792			—			1,584			—
Gain on sale of vessels		8,755			—			8,755			—
Other income/(expense)		—			(410	)		—			(611	)
Net income	$	30,161		$	18,699		$	63,550		$	36,774
Earnings per share, basic	$	1.62		$	1.09		$	3.55		$	2.15
Earnings per share, diluted	$	1.62		$	1.08		$	3.54		$	2.14
Weighted average number of shares outstanding
Basic		18,592,171			17,230,855			17,893,298			17,119,850
Diluted		18,634,881			17,264,890			17,955,188			17,153,885

	June 30 2004			December 31 2003
BALANCE SHEET DATA
Cash and cash equivalents		94,699			86,813
Current assets, including cash		131,724			116,971
Advances for vessels		81,375			33,420
Vessels at cost		848,948			800,870
Accumulated Depreciation		(163,286	)		(146,208	)
Vessels’ Net Book Value		685,662			654,662
Deferred charges		17,930			20,454
Total assets	$	916,691		$	825,507
Current portion of long-term debt		44,753			41,602
Current liabilities, including current portion of long-term debt		84,337			83,463
Long-term debt, net of current portion		363,644			411,018
Deferred income, net of current portion		14,457			16,457
Total stockholders’ equity		454,253			314,569
Total liabilities and stockholders’ equity	$	916,691		$	825,507

	Three months ended June 30						Six months ended June 30
	2004			2003			2004			2003
OTHER FINANCIAL DATA
Net cash from operating activities	$	23,400		$	29,908		$	66,954		$	47,705
Net cash used in investing activities	$	(3,676	)	$	(32,585	)	$	(87,475	)	$	(126,034	)
Net cash from/(used in) financing activities	$	(4,516	)	$	14,144		$	28,406		$	93,142
FLEET DATA
Vessel overhead costs per ship per day	$	783		$	645		$	751		$	662
Average number of vessels during period		27.6			25.4			27.7			24.5
Number of vessels at end of period		27.0			26.0			27.0			26.0
Average age of fleet at end of period	Years	7.0			6.5			7.0			6.5
Dwt at end of period (in thousands)		2,919.9			2,538.6			2,919.9			2,538.6
Time charter employment	Days	1,372			888			2,561			1,643
Period employment (pool and coa) at market rates	Days	546			387			1,128			837
Spot voyage employment at market rates	Days	547			905			1,207			1,656
Total operating days		2,465			2,180			4,896			4,136
Total available days		2,514			2,307			5,035			4,432
TCE per ship per day	$	23,504		$	24,174		$	26,744		$	24,333
Operating expenses per ship per day	$	5,723		$	5,865		$	5,993		$	5,627

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

FINANCIAL AND OTHER DATA BY FLEET (Unaudited)

	Three Months Ended June 30, 2004
Vessel Type		VLCC		Suezmax		Aframax		Panamax		Product carriers
Average number of vessels		2.0		4.0		10.0		7.6		4.0
Number of vessels at end of period		2.0		4.0		10.0		7.0		4.0
Dwt at end of period (in thousands)	Dwt	600.9		657.2		1,020.7		478.2		162.9
Percentage of total fleet		20.5	%	22.5	%	35.0	%	16.4	%	5.6	%
Average age at end of period	Years	8.2		1.8		8.1		6.7		18.2
TCE per ship per day	$	45,218		25,450		23,460		21,658		13,865
Operating expenses per ship per day	$	7,920		5,756		5,809		5,462		5,462

	Six Months Ended June 30, 2004
Vessel Type	VLCC		Suezmax	Aframax	Panamax	Product carriers
Average number of vessels		1.9	4.0	10.0	7.8	4.0
TCE per ship per day	$	48,713	26,383	28,549	25,691	14,480
Operating expenses per ship per day	$	8,108	6,120	6,226	5,651	5,778

	Three Months Ended June 30, 2004
	Newbuildings			VLCC 2004			Acquired (pre-1997)			Combined
Average number of vessels		16.0			1.0			10.6			27.6
Percentage of total fleet in dwt at end of period		68	%		10	%		22	%		100	%
Average age at end of period (years)		3.3			10.5			17.1			7.0
Utilization in period		100.0	%		100.0	%		94.9	%		98.1	%
TCE per ship per day	$	25,596		$	54,935		$	17,070		$	23,504
Operating expenses per ship per day	$	5,516		$	7,920		$	5,722		$	5,723
Revenue from vessels, net ($ thousand)	$	40,801		$	5,840		$	17,028		$	63,669
Net income, excluding gain on sale - ($ thousand)	$	15,276		$	3,097		$	3,694		$	22,067
Gain on sale of vessels											8,755
Holding and dormant companies											(661	)
Total net income											30,161

	Six Months Ended June 30, 2004
	Newbuildings			VLCC 2004			Acquired (pre-1997)			Combined
Average number of vessels		16.0			0.9			10.8			27.7
Utilization in period		98.9	%		100.0	%		94.5	%		97.2	%
TCE per ship per day	$	28,356		$	64,228		$	21,123		$	26,744
Operating expenses per ship per day	$	5,616		$	8,108		$	6,233		$	5,993
Revenue from vessels, net ($ thousand)	$	88,516		$	11,719		$	42,958		$	143,193
Net income, excluding gain on sale—($ thousand)	$	36,498		$	6,613		$	12,844		$	55,955
Gain on sale of vessels											8,755
Holding and dormant companies											(1,160	)
Total net income											63,550

Newbuildings include all vessels specifically constructed for TEN. These represent all additions to the fleet since 1997.

Vessels acquired includes the VLCC La Madrina for 2004.

TCE represents gross freight revenue less voyage expenses (excluding any charter-in costs). Commission is not deducted.

TCE rate given for the the VLCC Millennium, which is chartered out on a bare-boat basis, takes into account a notional operating cost per day.

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

FOR THE THREE MONTHS ENDED JUNE 30, 2004 AND 2003

(Expressed in thousands of U.S. Dollars - except per share data)

	Three months ended June 30,
	2004			2003
REVENUES:
Revenue from vessels	$	66,362		$	64,490
Commissions		(2,693	)		(2,968	)
Revenue from vessels, net		63,669			61,522
EXPENSES:
Voyage expenses		15,419			15,611
Vessel operating expenses		12,338			11,941
Depreciation		8,911			8,116
Amortization of deferred charges		2,413			2,291
Management fees		1,260			1,095
General and administrative expenses		709			394
Operating income		22,620			22,074
OTHER INCOME (EXPENSES):
Interest and finance costs, net		(2,103	)		(3,265	)
Interest income		100			115
Foreign currency losses		(2	)		(115	)
Share of profits of joint-venture		—			300
Amortization of deferred gain on sale of vessels		792			—
Gain on sale of vessels		8,755			—
Other, net		—			(410	)
Total other income (expenses), net		7,542			(3,375	)
Net Income	$	30,161		$	18,699
Earnings per share, basic	$	1.62		$	1.09
Earnings per share, diluted	$	1.62		$	1.08
Weighted average number of shares, basic		18,592,171			17,230,855
Weighted average number of shares, diluted		18,634,881			17,264,890

EX-99.2

Exhibit 99.2

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

(Expressed in thousands of U.S. Dollars - except per share data)

	Six months ended June 30,
	2004			2003
REVENUES:
Revenue from vessels	$	149,385		$	122,728
Commissions		(6,192	)		(5,527	)
Revenue from vessels, net		143,193			117,201
EXPENSES:
Voyage expenses		32,435			29,756
Vessel operating expenses		26,006			21,927
Depreciation		17,603			15,555
Amortization of deferred charges		4,787			4,033
Provision for doubtful receivables		244			—
Management fees		2,505			2,100
General and administrative expenses		1,278			834
Operating income		58,334			42,996
OTHER INCOME (EXPENSES):
Interest and finance costs, net		(5,257	)		(6,278	)
Interest income		181			209
Foreign currency losses		(47	)		(206	)
Share of profits of joint-venture		—			664
Amortization of deferred gain on sale of vessels		1,584			—
Gain on sale of vessels		8,755			—
Other, net		—			(611	)
Total other income (expenses), net		5,216			(6,222	)
Net Income	$	63,550		$	36,774
Earnings per share, basic	$	3.55		$	2.15
Earnings per share, diluted	$	3.54		$	2.14
Weighted average number of shares, basic		17,893,298			17,119,850
Weighted average number of shares, diluted		17,955,188			17,153,885

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2004 and DECEMBER 31, 2003

(Expressed in thousands of U.S. Dollars - except per share data)

	June 30, 2004			December 31, 2003
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	94,699		86,813
Receivables-
Trade accounts receivable, net		11,998		13,401
Insurance claims		2,732		2,749
Due from related companies		5,465		3,836
Advances and other		7,946		5,586
		28,141		25,572
Financial instruments - Fair value		2,767		—
Inventories		3,611		3,381
Prepaid insurance and other		2,506		1,205
Total current assets		131,724		116,971
FIXED ASSETS:
Advances for vessels under construction		81,375		33,420
Vessels		848,948		800,870
Accumulated depreciation		(163,286	)	(146,208	)
Vessels’ Net Book Value		685,662		654,662
Total fixed assets		767,037		688,082
DEFERRED CHARGES, net		17,930		20,454
Total assets	$	916,691		825,507
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	44,753		41,602
Accounts payable-
Trade		16,573		15,609
Due to related companies		157		3,326
Other		1,715		1,825
		18,445		20,760
Accrued liabilities		8,768		6,112
Accrued bank interest		2,984		2,276
Financial instruments - Fair value		2,699		5,097
Unearned revenue		2,683		3,611
Deferred income, current portion		4,005		4,005
Total current liabilities		84,337		83,463
LONG-TERM DEBT, net of current portion		363,644		411,018
DEFERRED INCOME, net of current portion		14,457		16,457
STOCKHOLDERS’ EQUITY:
Common stock, $ 1.00 par value;40,000,000 shares authorized at June 30, 2004 and December 31, 2003 ; 20,132,006 and 17,151,623 issued and outstanding at June 30, 2004 and December 31, 2003, respectively.		20,132		17,152
Additional paid-in capital		282,079		203,631
Other comprehensive income/(loss)		1,906		(1,431	)
Retained earnings		150,136		95,217
Total stockholders’ equity		454,253		314,569
Total liabilities and stockholders’ equity	$	916,691		825,507

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

FOR THE SIX MONTHS AND THREE MONTHS ENDED JUNE 30, 2004 AND 2003

(Expressed in thousands of U.S. Dollars)

	Six months ended June 30,						Three months ended June 30,
	2004			2003			2004			2003
Cash Flows from Operating Activities:
Net income	$	63,550		$	36,774		$	30,161		$	18,699
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of vessels		(8,755	)		—			(8,755	)		—
Depreciation		17,603			15,555			8,911			8,116
Amortization of deferred dry-docking costs		4,787			4,033			2,413			2,290
Amortization of loan fees		193			183			103			102
Amortization of deferred income		(2,000	)		(419	)		(994	)		(209	)
Change in fair value of financial instruments		(1,828	)		(2,255	)		(664	)		(737	)
Share of profits of joint venture		—			(664	)		—			(300	)
Payments for dry-docking		(2,616	)		(6,801	)		(2,220	)		(1,908	)
(Increase) Decrease in:
Receivables		(2,569	)		(3,156	)		(4,765	)		3,038
Inventories		(230	)		(2,085	)		342			876
Prepayments and other		(1,301	)		(215	)		114			(372	)
Increase (Decrease) in:
Accounts payable		(2,315	)		2,262			(1,691	)		(4,653	)
Accrued liabilities		3,364			3,000			1,804			3,696
Unearned revenue		(928	)		1,493			(1,359	)		1,270
Net Cash from Operating Activities		66,954			47,705			23,400			29,908
Cash Flows from Investing Activities:
Advances for vessels under construction		(56,038	)		(11,005	)		(21,522	)		(7,297	)
Vessel acquisitions and/or improvements		(70,344	)		(118,212	)		(21,061	)		(28,484	)
Payments for investment in joint venture		—			(17	)		—			(4	)
Proceeds from sale of vessels		38,907			—			38,907			—
Restricted cash for performance guarantee		—			3,200			—			3,200
Net Cash used in Investing Activities		(87,475	)		(126,034	)		(3,676	)		(32,585	)
Cash Flows from Financing Activities:
Proceeds from long-term debt		40,000			108,360			—			26,000
Exercise of stock options		1,228			2,844			0			2,844
Financing costs		(169	)		(604	)		(0	)		(80	)
Payments of long-term debt		(84,222	)		(13,356	)		(76,085	)		(10,882	)
Repurchase and cancellation of common stock		—			(646	)		—			(282	)
Proceeds from public offering, net of related costs		80,200			—			80,200			—
Cash dividend		(8,631	)		(3,456	)		(8,631	)		(3,456	)
Net Cash from/(used in) Financing Activities		28,406			93,142			(4,516	)		14,144
Net increase in cash and cash equivalents		7,886			14,813			15,208			11,467
Cash and cash equivalents at beginning of period		86,813			39,674			79,491			43,020
Cash and cash equivalents at end of period	$	94,699		$	54,487		$	94,699		$	54,487

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2002, 2003 AND SIX MONTHS ENDED JUNE 30, 2004

(Expressed in thousands of U.S. Dollars - except per share data)

		Comprehensive Income (Loss)			Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stock- Holders’ Equity
BALANCE, January 1, 2001					$	9,629		$	108,603		$	52,836		$	—			171,068
Net income			3,894									3,894						3,894
-	Issuance of common stock					7,350			102,900									110,250
-	Expenses related to the issuance of common stock								(9,868	)								(9,868	)
-	Issuance of common stock on acquisition of shares in LauriTen Ltd.					217			3,033									3,250
-	Repurchase and cancellation of common stock ( 172,800 shares)					(173	)		(1,806	)								(1,979	)
-	Cash dividends declared and paid ($0.50 per share)											(8,542	)					(8,542	)
-	Fair value of financial instruments		(629	)											(629	)		(629	)
Comprehensive income		$	3,265
BALANCE, December 31, 2002					$	17,023		$	202,862		$	48,188		$	(629	)	$	267,444
Net income			59,052									59,052						59,052
-	Exercise of stock options					269			2,421									2,690
-	Repurchase and cancellation of common stock ( 140,100 shares)					(140	)		(1,652	)								(1,792	)
-	Cash dividends declared and paid ($ 0.70 per share)											(12,023	)					(12,023	)
-	Fair value of financial instruments		(802	)											(802	)		(802	)
Comprehensive income		$	58,250
BALANCE, December 31, 2003					$	17,152		$	203,631		$	95,217		$	(1,431	)	$	314,569
Net income			63,550			—			—			63,550						63,550
-	Issuance of common stock					2,875			78,143									81,018
-	Expenses related to the issuance of common stock								(818	)								(818	)
-	Exercise of stock options					105			1,123									1,228
-	Cash dividends declared and paid ($0.50 per share)											(8,631	)					(8,631	)
-	Fair value of financial instruments		3,337												3,337			3,337
Comprehensive income		$	66,887
BALANCE, June 30, 2004					$	20,132			282,079			150,136			1,906			454,253

EX-99.3

Exhibit 99.3

TSAKOS ENERGY NAVIGATION LIMITED

THREE MONTHS ENDED JUNE 30, 2004

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Three months ended June 30, 2004 versus three months ended June 30, 2003

Revenue from vessels, net. Net revenue from vessels (freight less brokerage commission) was $63.7 million during the quarter ended June 30, 2004 as compared to $61.5 million during the quarter ended June 30, 2003, an increase of 3.5%. The number of available days increased by 9% due to an increase in the number of vessels from an average of 25.4 vessels in the second quarter 2003 to an average of 27.6 vessels in the second quarter 2004. However, 484 more days were employed in time charters than the equivalent period, which earn a stable but lower rate than spot related charters. Nevertheless, the quarter was unexpectedly buoyant in terms of rates, due to continued demand from the Far East and increases in oil supply.

The average time charter equivalent rate per vessel for the quarter was $23,504 per day, compared to $24,174 for the previous year. All tanker categories achieved good rates as follows - VLCCs earned an average $45,218 ($35,500), Suezmaxes $25,450 ($32,517), Aframaxes $23,460 ($23,099), Panamaxes $21,658 ($24,373), and Product Carriers $13,865 ($11,572). Suezmax rates were reduced because during the second quarter of 2003, three of the four new Suezmaxes were earning high spot rates, while the same three vessels were earning time charter rates in 2004.

The VLCC La Madrina, which was acquired in January, continued operating in the spot market still earning relatively high rates for a second quarter. In all, the vessel achieved an average TCE of $54,935 during the quarter, representing $5.8 million or 9% of the total net revenue of the Company.

The additional contribution to net revenue in the second quarter 2004 of those vessels that were delivered during or after the second quarter of 2003 was $6.1 million, nearly 10% of total net revenue.

Total productivity achieved by the fleet in the second quarter 2004 was 98.1%, compared to 94.5% for the second quarter of 2003. The Aframax Tamyra, completed its dry dockings in April losing a further 17 days trading. In the same quarter last year, three vessels were at some stage undergoing survey related dry docking repairs.

Commissions. Commissions were $2.7 million, or 4.1% of revenue from vessels, during the quarter ended June 30, 2004, compared to $3.0 million, which was 4.6% of revenue from vessels, for the quarter ended June 30, 2003. The decrease was due to changes in employment of three vessels to where only one broker was required, and to the increased employment of vessels in pool operations under which direct commission payable is lower.

Voyage expenses. Voyage expenses include costs that are directly related to a voyage, such as port charges, canal dues and bunker (fuel) costs. They are borne by the Company in the case of spot market single voyages or for voyages under contract of affreightment. Otherwise, in the case of time and bare-boat charters they are borne by the charterer. For vessels trading under a pool arrangement, allocation of revenue to pool members is determined after accounting for total voyage expenses by the pool managers. Voyage expenses were $15.4 million during the quarter ended June 30, 2004, compared to $15.6 million during the prior year, a 1.2% increase. However, total operating days on spot charter and contract of affreightment actually decreased from 1,163 days in the second quarter of 2003 to 820 days in the second quarter of 2004, a 42% decrease. Bunker prices were at comparable levels to the previous year’s period.

Total voyage expenses did not decrease in line with operating days in which voyage expenses are incurred because of the impact of charter-in rates on the two suezmaxes that were sold and leased back as the Cape Baker and Cape Balboa in the fourth quarter of 2003. Charter-in freight is accounted for as a voyage expense. The cost of chartering in the two suezmaxes amounted to $4.1 million in the second quarter, 2004. In the previous year’s quarter, there was a $1 million cost of chartering in the product carrier Capella, which was released in September 2003. In both quarters, the charter-in costs for the Olympia were approximately $1.9 million.

Vessel operating expenses. Vessel operating expenses include crew costs, maintenance repairs and spares, stores, lubricants, insurance and sundry expenses such as tonnage tax, registration fees, and communications costs. They are borne by the Company for all vessels of the fleet except for the one vessel on bare-boat charter (Millennium), and the three vessels which are chartered-in (Cape Baker, Cape Balboa and Olympia). Total operating costs were $12.3 million during the quarter ended June 30, 2004 as compared to $11.9 million during quarter ended June 30, 2003, an increase of 3.3%. However, there was an increase in operating days of approximately 285 days or 14%, over the previous year, in vessels bearing operating expenses, which is equivalent to almost 3.1 vessels. In effect, therefore, there was a decrease in operating expenses per vessel during the period.

Vessel operating expenses per ship per day for the fleet actually decreased from $5,865 for the quarter ended June 30, 2003 to $5,723 for the quarter ended June 30, 2004, a 2% decrease, despite the continued pressure of the fall in value of the dollar against the Euro over the year, which especially impacted the cost of crew. There has been a marked reduction in spares and maintenance costs compared to the preceding quarters, when expenditure was particularly high, especially with regard to the older vessels. There has been a specific effort to bring operating costs on these vessels to more manageable levels, but this required expense to achieve economies. The impact of the newly delivered cost effective vessels, especially the recently acquired panamaxes, has had a beneficial effect.

Depreciation. Depreciation was $8.9 million during the quarter ended June 30, 2004, compared to $8.1 million during the quarter ended June 30, 2003, an increase of 9.8%, due primarily to the addition of four new vessels between the middle of the second quarter of 2003 to the middle of the second quarter 2004. This was set off by the sale of the aforementioned suezmaxes in the fourth quarter 2003, which are now operating as chartered-in vessels.

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Amortization of deferred charges. We amortize the cost of drydocking and special surveys over the period to the next special survey and this amortization is included as part of the normal costs we incur in connection with the operation of our vessels. During the quarter ended June 30, 2004, amortization of deferred drydocking charges was $2.4 million as compared to $2.3 million during the quarter ended June 30, 2003, an increase of 5.3 %, due to seven vessels undergoing dry-docking between the second quarter of 2003 to the second quarter of 2004 at a total cost of approximately $11 million, giving rise to extra quarterly amortization of $0.5 million, less amortization periods ending for four vessels which were incurring amortization of deferred dry-dock charges amounting to $0.4 million per quarter.

Provision for doubtful receivables. There was no increase in the provision for doubtful receivables in either quarter.

Management fees. The Company pays to Tsakos Energy Management Ltd. fixed fees per vessel under a management agreement between the companies. Since January 1, 2002 all vessels (excluding temporarily chartered-in vessels) bear a management fee of $15,000 per month, of which $10,000 per month is payable to Tsakos Shipping and Trading S.A. for the technical management of the fleet. Management believes this to be a very competitive fee to pay for such services. The remaining $5,000 per vessel is retained by Tsakos Energy Management to cover the costs associated with the administration of Tsakos Energy Navigation Ltd. Management fees totaled $1.3 million during the quarter ended June 30, 2004, compared to $1.1 million for the quarter ended June 30, 2003, an increase of 15.1%, relating to the four vessels newly acquired since mid-second quarter 2003.

General and administrative expenses. G&A expenses consist primarily of professional fees, office supplies, investor relations, advertising costs, directors’ liability insurance, and travel-related expenses. General and administrative expenses were $0.7 million during the quarter ended June 30, 2004, compared to $0.4 million during the previous year quarter 2003, an increase of 79.9 % primarily due to additional expenditures relating to investor relations and the significant new requirements for legal and audit services as a result of new corporate governance regulations for public companies. The sum of these expenses, together with the management fees payable to Tsakos Energy Management Ltd., represents the overheads of the Company. On a per vessel basis, daily overhead costs were $783 for the second quarter of 2004, compared to $645 for the second quarter of 2003 and an average $734 for the year 2003.

Operating income. As a result of the reasons stated above, income from vessel operations was $22.6 million during the quarter ended June 30, 2004 versus $22.1 million during the quarter ended June 30, 2003, representing a 2.5% increase.

Interest and finance costs. Interest and finance costs were $2.1 million for the quarter ended June 30, 2004, compared to $3.3 million for the quarter ended June 30, 2003. Actual loan interest fell from $3.1 million to $2.8 million, an 11.3% decrease. Although total average bank loans were approximately $475.8 million for the second

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quarter of 2004, compared to $474.7 million for the previous year quarter, a similar level, the average interest rate for the current quarter borne on the Company’s loans was approximately 2.36 %, compared to 2.53% for the second quarter of 2003. Interest due on the hedging swaps amounted to $0.4 million in the second quarter of 2004, although none was due in the second quarter of 2003.

There was a positive movement of $0.4 million in the fair value (mark-to-market) of the non-hedging interest rate swaps in the second quarter of 2004, which is accounted for through the income statement and is included in Interest and finance costs, compared to a negative movement of $0.4 million in the second quarter of 2003.

Capitalized interest in the second quarter of 2004 was $0.6 million, compared to $0.1 million in the previous year, due to the extra number of vessels under construction during the past year, offset by the modest decrease in average interest rates.

Interest income. Interest income was $0.1 million during the second quarter of 2004 and $0.1 million during the second quarter of 2003, despite much higher average bank deposits, because of lower time deposit interest rates in 2004 compared to 2003.

Foreign exchange losses. There were no significant foreign exchange losses in the second quarter of 2004 and approximately $0.1 million in the second quarter of 2003.

Share of profits of joint venture. The joint venture LauriTen Ltd. was terminated in August 2003. The share of net income due to TEN Ltd. from the joint venture for the quarter ended June 30, 2003 was $0.3 million.

Amortization of the deferred gain on the sale of vessels. The Company sold two suezmaxes in a sale and leaseback transaction in the fourth quarter of 2003. The total gain of $15.8 million has been deferred and is being amortized over the five year minimum charter period. The amortization of this gain amounted to $0.8 million for the second quarter of 2004.

Gain on sale of vessels. The Company sold two vessels during the quarter ended June 30, 2004. The newly-built product carrier Delos was sold on delivery to the Royal Australian navy for a price of $35.7 million. The book cost of the vessel including pre-delivery expenses was $26.7 million and sales costs amounted to $1.1 million, resulting in a net gain of $7.9 million. The Liberty, a single-hull panamax built in 1981, was sold for scrap purposes for $4.8 million. The net book value (including non-amortized deferred charges) of the vessel was $3.4 million. Associated sales costs were $0.5 million leaving a net profit of $0.9 million.

Other, net. There were no other costs or income in the period. For the second quarter of 2003, the Company incurred non-recurring charges amounting to $0.4 million relating to the investigation of companies for possible acquisition purposes.

As a result of the foregoing, net income for the quarter ended June 30, 2004 was $30.2 million, or $ 1.62 per share, basic, versus $1.09 per share, basic, during the quarter ended June 30, 2003, an increase of 61.3%.

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Liquidity and capital resources

Liquidity requirements relate to servicing debt, funding the equity portion of investments in vessels, funding working capital and controlling fluctuations in cash flow. Net cash flow generated by continuing operations is the main source of liquidity. Additional sources, apart from raising equity, include proceeds from asset sales and borrowings, although all borrowing arrangements to date have specifically related to the acquisition of vessels.

We believe that, unless there is a major and sustained downturn in market conditions, our financial resources are sufficient to meet our liquidity needs through January 1, 2005, taking into account both our existing capital commitments and the minimum debt service requirements as defined by our bank loan covenants.

Working capital (non-restricted net current assets) amounted to approximately $47.4 million at June 30, 2004, compared to $7.8 million as at June 30, 2003. Total cash balances as at June 30, 2004 amounted to $94.7 million, compared to $58.3 million a year previously. Cash includes an amount on $15.0 million relating to three three-year cash investments of $5.0 million each.

Net cash provided by operating activities was $23.4 million in the quarter ended June 30, 2004, compared to $29.9 million in the previous year, a 21.8% decrease. Despite an increase in profits (excluding the gain on vessels sold), the decrease is due to more favorable movements in working capital constituents during the second quarter 2003, compared to the second quarter 2004.

Expenditure on dry-dockings is deducted from cash generated by operating activities. Total expenditure during the quarter on dry-dockings amounted to $2.2 million, compared to $1.9 million in the previous year’s quarter. Programmed expenditure on dry-dockings is much reduced due to the intensive survey repair program over the preceding two years. Only three vessels have been scheduled for dry-docking within 2004, of which one was completed during the first quarter. Work relating to the Tamyra commenced in the first quarter, but was completed in the second and most expenditure was incurred, therefore, in the second quarter. The panamax Bregen is scheduled for drydocking during the fourth quarter.

Net cash used in investing activities was $3.7 million for the quarter ended June 30, 2004, compared to $32.6 million for the quarter ended June 30, 2003. $21.1 million relates to the final installments payable on the acquisition of the Delos. A further $21.5 million was paid as installments as part of the newbuilding program. Against this expenditure an amount of $38.9 million was received as net sale proceeds on the sale of the Delos and the Liberty.

During the period between April 1, 2004 and June 30, 2004, the Company entered into a contract to construct an LNG carrier for a contracted price of $173.5 million, with a 10% first installment payable immediately on signing of the contract. Following the sale of the Delos, the total number of vessels on order remained at thirteen to be delivered between January 2005 and June 2007 with a total contract value of $652.5 million of which $78.5 million had been paid by June 30, 2004.

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Net cash used in financing activities was $4.5 million in quarter ended June 30, 2004, compared to $14.1 million derived from financing activities in June 30, 2004. There were no new proceeds from new bank loans in the quarter, compared to proceeds of $26.0 million in the previous year’s quarter. On the contrary, there were repayments of $12.4 million, and a prepayment of $63.6 million relating to amounts drawn on a revolving credit facility which may be redrawn in accordance with the schedule of remaining available amounts at any time. Repayments in the second quarter of 2003 amounted to $10.9 million.

During the quarter ended June 30, 2004, the Company initiated a public offering by issuing 2,875,000 shares at $28.18 each, raising a net amount of $82.2 million. In the previous year’s quarter an amount of $2.8 million was raised from the exercise of share options. No options were exercised within the second quarter of 2004.

A final 50 cent dividend for the fiscal year 2003 was declared in February 2004 and was paid on April 29, 2004. The total amount paid was $8.6 million. The dividend policy of the Company is to pay, depending on cash availability and requirements, between 25% and 50% of the net income in any given year, payable in two installments, the first prior to the end of the year based on expected earnings and cash requirements, and the final portion in the early part of the following year based on final earnings and cash requirements. The first installment of the 2003 dividend, amounting to 50 cent per share was paid in November, 2003. During the second quarter of 2003, a 20 cent dividend was paid amounting to $3.5 million.

Total net debt outstanding decreased from $484 million at the beginning of the quarter to $408 million by the end of the quarter. The average debt to capital ratio was approximately 47% by June 30, 2004. Four new five-year interest rate swap were arranged during the quarter for a notional amount of $40 million, $24.5 million, $24.6 million and $23.6 million respectively. All meet hedging criteria and bring the total notional amount of loans covered to $374 million or 92% of the total, although the two remaining swaps which do not meet hedging criteria and cover a notional $100 million will expire in August 2004, bringing coverage down to approximately 70%.

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