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 June, 2011

Commission File Number 001-31236

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-            .

TSAKOS ENERGY NAVIGATION LIMITED

FORM 6-K

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. 333-159218) initially filed with the SEC on May 13, 2009, as amended by Pre-Effective Amendment No. 1 filed with the SEC on June 12, 2009, Pre-Effective Amendment No. 2 filed with the SEC on July 1, 2009 and Pre-Effective Amendment No. 3 filed with the SEC on July 10, 2009;

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

• Registration Statement on Form S-8/A (No. 333-134306) filed with the SEC on May 17, 2007;

• Registration Statement on Form S-8 (No. 333-134306) filed with the SEC on May 19, 2006;

• 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.

EXHIBIT INDEX

99.1	Consolidated Financial Statements (Unaudited), March 31, 2011
99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations

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: June 3, 2011

TSAKOS ENERGY NAVIGATION LIMITED
By:	/s/    PAUL DURHAM
	Paul Durham
	Chief Financial Officer

EX-99.1

Exhibit 99.1

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2011 AND DECEMBER 31, 2010

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

	March 31, 2011			December 31, 2010
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	259,626		$	276,637
Restricted cash		4,453			6,291
Marketable securities (Note 3)		2,500			—
Accounts receivable, net		21,044			24,417
Insurance claims		4,129			5,018
Due from related companies (Note 2)		3,413			2,977
Advances and other		5,683			4,789
Vessels held for sale		10,503			26,986
Inventories		18,128			14,011
Prepaid insurance and other		2,938			2,949
Current portion of financial instruments-Fair value (Note 7)		5,106			3,378
Total current assets		337,523			367,453
INVESTMENTS		1,000			1,000
FINANCIAL INSTRUMENTS - FAIR VALUE, net of current portion (Note 7)		1,396			498
FIXED ASSETS (Notes 4)
Advances for vessels under construction		104,925			81,882
Vessels		2,628,327			2,638,550
Accumulated depreciation		(427,677	)		(403,485	)
Vessels’ Net Book Value		2,200,650			2,235,065
Total fixed assets		2,305,575			2,316,947
DEFERRED CHARGES, net (Note 5)		15,115			16,362
Total assets	$	2,660,609		$	2,702,260
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt (Note 6)	$	125,057		$	133,819
Payables		30,147			23,914
Due to related companies (Note 2)		2,432			779
Dividend declared		6,912			—
Accrued liabilities		13,480			10,576
Accrued bank interest		6,109			6,481
Unearned revenue		3,879			9,189
Current portion of financial instruments - Fair value (Note 7)		33,946			32,486
Total current liabilities		221,962			217,244
LONG-TERM DEBT, net of current portion (Note 6)		1,393,170			1,428,648
FINANCIAL INSTRUMENTS - FAIR VALUE, net of current portion (Note 7)		27,520			36,438
STOCKHOLDERS’ EQUITY:
Common stock, $1.00 par value; 100,000,000 shares authorized; 46,081,487 issued and outstanding at March 31, 2011 and 46,081,487 issued at December 31, 2010.		46,081			46,081
Additional paid-in capital		351,244			350,946
Retained earnings		666,942			671,480
		1,064,267			1,068,507
Accumulated other comprehensive loss		(47,999	)		(52,329	)
Noncontrolling interest		1,689			3,752
Total stockholders’ equity		1,017,957			1,019,930
Total liabilities and stockholders’ equity	$	2,660,609		$	2,702,260

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

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

	Three months ended
	March 31,
	2011			2010
VOYAGE REVENUES:	$	99,196		$	104,673
EXPENSES:
Commissions		3,356			3,952
Voyage expenses		23,533			19,448
Charter hire expense		—			516
Vessel operating expenses		31,596			34,542
Depreciation		24,235			21,575
Amortization of deferred dry-docking costs		1,108			1,353
Management fees (Note 2(a))		3,885			3,348
General and administrative expenses		1,139			1,002
Stock compensation expense		371			426
Foreign currency losses / (gains)		397			(188	)
Gain on sale of vessel		(5,802	)		(14,346	)
Total expenses		83,818			71,628
Operating income		15,378			33,045
OTHER INCOME (EXPENSES):
Interest and finance costs, net (Note 7)		(6,425	)		(14,045	)
Interest income		590			645
Other, net		(121	)		12
Total other expenses, net		(5,956	)		(13,388	)
Net income		9,422			19,657
Less: Net income attributable to the noncontrolling interest		(136	)		(203	)
Net income attributable to Tsakos Energy Navigation Limited	$	9,286		$	19,454
Earnings per share, basic attributable to Tsakos Energy Navigation Limited common shareholders	$	0.20		$	0.52
Earnings per share, diluted attributable to Tsakos Energy Navigation Limited common shareholders	$	0.20		$	0.52
Weighted average number of shares, basic		46,081,487			37,439,531
Weighted average number of shares, diluted		46,172,417			37,750,765

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

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

																		Accumulated
						Additional												Other			Tsakos Energy
	Comprehensive			Common		Paid-in			Retained			Treasury Stock						Comprehensive			Navigation			Noncontrolling
	Income (Loss)			Stock		Capital			Earnings			Shares			Amount			Income (Loss)			Limited			Interest			Total
BALANCE, January 1, 2010				$	37,671	$	266,706		$	679,597			754,706		$	(17,863	)	$	(57,731	)	$	908,380		$	5,947		$	914,327
Net income	$	19,657								19,454												19,454			203			19,657
- Proceeds from Stock Issuance Program							(34	)		(4,228	)		(660,206	)		15,626						11,364						11,364
- Cash dividends declared ($0.30 per share)										(11,394	)											(11,394	)					(11,394	)
- Distribution from Subsidiary to noncontrolling interest																									(3,461	)		(3,461	)
- Fair value of financial instruments		(2,819	)																(2,819	)		(2,819	)					(2,819	)
- Amortization of restricted share units							426															426						426
Comprehensive income	$	16,838
BALANCE, March 31, 2010				$	37,671	$	267,098		$	683,429			94,500		$	(2,237	)	$	(60,550	)	$	925,411		$	2,689		$	928,100
BALANCE, January 1, 2011				$	46,081		350,946		$	671,480			—		$	—		$	(52,329	)	$	1,016,178		$	3,752		$	1,019,930
Net income	$	9,422								9,286												9,286			136			9,422
- Expenses of 2010 common stock-offering							(73	)														(73	)					(73	)
- Cash dividends paid ($0.15 per share)										(6,912	)											(6,912	)					(6,912	)
- Cash dividends declared ($0.15 per share)										(6,912	)											(6,912	)					(6,912	)
- Distribution from Subsidiary to noncontrolling interest																						0			(2,199	)		(2,199	)
- Fair value of financial instruments		4,330																	4,330			4,330						4,330
- Amortization of restricted share units							371															371						371
Comprehensive income	$	13,752
BALANCE March 31, 2011				$	46,081	$	351,244		$	666,942			—		$	—		$	(47,999	)	$	1,016,268		$	1,689		$	1,017,957

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars)

	2011			2010
Cash Flows from Operating Activities:
Net income	$	9,422		$	19,657
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		24,235			21,575
Amortization of deferred dry-docking costs		1,108			1,353
Amortization of loan fees		236			288
Stock compensation expense		371			426
Change in fair value of derivative instruments		(5,754	)		1,366
Gain on sale of vessels		(5,802	)		(14,346	)
Payments for dry-docking		(32	)		(451	)
(Increase) Decrease in:
Receivables		2,932			(7,831	)
Inventories		(4,117	)		968
Prepaid insurance and other		11			822
Increase (Decrease) in:
Payables		7,886			(353	)
Accrued liabilities		2,532			410
Unearned revenue		(5,310	)		(3,892	)
Net Cash provided by Operating Activities		27,718			19,992
Cash Flows from Investing Activities:
Advances for vessels under construction and acquisitions		(23,042	)		(39,286	)
Vessel acquisitions and/or improvements		(324	)		(111	)
Purchase of marketable securities		(2,500	)		—
Proceeds from the sale of vessels		32,787			89,415
Net Cash provided by Investing Activities		6,921			50,018
Cash Flows from Financing Activities:
Financing costs		(137	)		(65	)
Payments of long-term debt		(44,240	)		(51,190	)
Decrease in restricted cash		1,838			677
Proceeds from stock issuance program, net		—			11,399
Cash dividend		(6,912	)		—
Distribution from subsidiary to noncontrolling interest owners		(2,199	)		(3,461	)
Net Cash used in Financing Activities		(51,650	)		(42,640	)
Net (decrease)/increase in cash and cash equivalents		(17,011	)		27,370
Cash and cash equivalents at beginning of period		276,637			296,181
Cash and cash equivalents at end of period	$	259,626		$	323,551

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Tsakos Energy Navigation Limited (the “Holding Company”) and subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 6-K and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the three months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

The consolidated balance sheet as of December 31, 2010 has been derived from the audited financial statements at that date, but does not include all of the footnotes required by generally accepted accounting principles for complete financial statements.

A discussion of the Company’s significant accounting policies can be found in the Company’s Consolidated Financial Statements included in the Annual Report on Form 20-F for the year ended December 31, 2010. There have been no material changes to these policies in the three-month period ended March 31, 2011.

2. Transactions with Related Parties

The following amounts were charged by related parties for services rendered:

	Three months ended March 31,
	2011		2010
Tsakos Shipping and Trading S.A. (commissions)		1,652		1,320
Tsakos Energy Management Limited (management fees)		3,810		3,255
Tsakos Columbia Shipmanagement S.A.		296		—
Argosy Insurance Company Limited		2,454		2,444
AirMania Travel S.A.		261		121
Total expenses with related parties		8,473		7,140

Balances due from and to related parties are as follows:

	March 31, 2011		December 31, 2010
Due from related parties
Tsakos Shipping and Trading S.A.		3,413		2,977
Total due from related parties		3,413		2,977
Due to related parties
Tsakos Energy Management Limited		177		75
Tsakos Columbia Shipmanagement S.A.		800		56
Argosy Insurance Company Limited		1,348		612
AirMania Travel S.A.		107		36
Total due to related parties		2,432		779

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

2. Transactions with Related Parties (continued)

(a) Tsakos Energy Management Limited (the “Management Company”): The Holding Company has a Management Agreement (“Management Agreement”) with the Management Company, a Liberian corporation, to provide overall executive and commercial management of its affairs for a monthly fee. Per the Management Agreement of March 8, 2007, effective from January 1, 2008, there is a prorated adjustment if at beginning of each year the Euro has appreciated by 10% or more against the U.S. Dollar since January 1, 2007. In addition, there is an increase each year by a percentage figure reflecting 12 month Euribor, if both parties agree. As a consequence, from January 1, 2010, monthly management fees for operating vessels were $24.0 per owned vessel and $17.7 for chartered in vessels or for owned vessels chartered out on a bare-boat basis. From July 1, 2010, the monthly management fees for operating vessels were increased to $27.0 per owned vessel except for the LNG carrier which bears a monthly fee of $32.0 of which $7.0 is paid to the Management Company and $25.0 to a third party manager. The monthly management fees for chartered-in vessels or for owned vessels chartered out on a bare-boat basis were increased to $20.0. It was agreed that no further increase would be implemented at the beginning of 2011.

The Holding Company and the Management Company have certain officers and directors in common. The President, who is also the Chief Executive Officer and a Director of the Holding Company, is also the sole stockholder of the Management Company. The Management Company may unilaterally terminate its Management Agreement with the Holding Company at any time upon one year’s notice. In addition, if even one director was elected to the Holding Company’s Board of Directors without having been recommended by the existing board, the Management Company would have the right to terminate the Management Agreement on ten days notice, and the Holding Company would be obligated as at March 31, 2011 to pay the Management Company an amount of approximately $142,018 calculated in accordance with the terms of the Management Agreement. Under the terms of the Management Agreement between the Holding Company and the Management Company, the Holding Company may terminate the Management Agreement only under specific circumstances, without the prior approval of the Holding Company’s Board of Directors.

Estimated future management fees payable over the next ten years under the Management Agreement, exclusive of any incentive awards and based on existing vessels and known vessels as at March 31, 2011, scheduled for future delivery, are:

Year	Amount
April to December 2011		11,989
2012		15,972
2013		16,200
2014		16,284
2015		16,284
2016 to 2021		85,944
		162,673

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

2. Transactions with Related Parties (continued)

(a) Tsakos Energy Management Limited (continued): Management fees for vessels are included in the accompanying Consolidated Statements of Income. Also, under the terms of the Management Agreement, the Management Company provides supervisory services for the construction of new vessels for a monthly fee of $17.7 per vessel in the first half of 2010 and $20.0 from July 1, 2010 onwards. These fees in total amounted to $120 and $212 during the three months ended March 31, 2011 and 2010, respectively, and are either accounted for as part of construction costs for delivered vessels or are included in Advances for vessels under construction.

(b) Tsakos Columbia Shipmanagement S.A. (“TCM”): The Management Company appointed TCM to provide technical management to the Company’s vessels from July 1, 2010. TCM is owned jointly and in equal part by related party interests and by a private German Group. TCM, at the consent of the Holding Company, may subcontract all or part of the technical management of any vessel to an alternative unrelated technical manager.

Effective July 1, 2010, the Management Company, at its own expense, pays technical management fees to TCM, and the Company bears and pays directly to TCM most of its operating expenses, including repairs and maintenance, provisioning and crewing of the Company’s vessels, as well as certain charges which are capitalized or deferred, including reimbursement of the costs of TCM personnel sent overseas to supervise repairs and perform inspections on Company vessels.

(c) Tsakos Shipping and Trading S.A. (“Tsakos Shipping”): Until June 30, 2010 the Management Company had appointed Tsakos Shipping to provide technical management to the Company’s vessels. From July 1, 2010 onwards such technical management is performed by TCM, while Tsakos Shipping continues to provide services to the Company’s vessels as described below. Certain members of the Tsakos family are involved in the decision-making processes of Tsakos Shipping and of the Management Company, and are also shareholders of the Holding Company.

Tsakos Shipping provides chartering services for the Company’s vessels by communicating with third party brokers to solicit research and propose charters. For this service, the Company pays to Tsakos Shipping a chartering commission of approximately 1.25% on all freights, hires and demurrages. Such commissions are included in Commissions in the accompanying Consolidated Statements of Income. Tsakos Shipping also provides sale and purchase of vessels brokerage service. For this service, Tsakos Shipping may charge brokerage commission. In 2011 and 2010 this commission was approximately 1% of the sale price of a vessel. Tsakos Shipping may also charge a fee of $200 (or such other sum as may be agreed) on delivery of each newbuilding vessel in payment for the cost of design and supervision of the newbuilding by Tsakos Shipping. To date no such fee has been charged.

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

2. Transactions with Related Parties (continued)

(c) Tsakos Shipping and Trading S.A. (continued): Up to June 30, 2010, the Management Company, at its own expenses, paid technical management fees to Tsakos Shipping, and the Company paid directly to Tsakos Shipping most of its operating expenses, including repairs and maintenance, provisioning and crewing of the Company’s vessels, as well as certain charges which are capitalized or deferred, including reimbursement of the costs of Tsakos Shipping personnel sent overseas to supervise repairs and perform inspections on Company vessels. Commissions due to Tsakos Shipping by the Company have been netted-off against amounts due from Tsakos Shipping for advances made, and the net amount is included in Due from related Companies.

(d) Argosy Insurance Company Limited (“Argosy”): The Company places its hull and machinery insurance, increased value insurance and war risk and certain other insurance through Argosy, a captive insurance company affiliated with Tsakos Shipping.

(e) AirMania Travel S.A. (“AirMania”): Apart from third-party agents, the Company also uses an affiliated company, AirMania, for travel services.

3. Marketable Securities

In March 2011, the Company placed $2,500 in highly liquid, low risk marketable securities which are considered to be available-for-sale for reporting purposes.

4. Vessels

Under Construction

As at December 31, 2010, the Company had under construction two suezmax tankers. The total contracted amount remaining to be paid for the two vessels under construction, plus the extra costs agreed as at December 31, 2010 was $61,580 of which $21,600 was paid during the three-month period ended March 31, 2011.

On March 21, 2011 the Company signed contracts for the construction of two DP2 suezmax shuttle tankers, with a major Korean shipyard at a total cost of $184,000 with expected delivery in the fourth quarter of 2012 and in the first quarter of 2013 respectively.

Sales

In the first quarter of 2011, the Company sold the aframax tanker Opal Queen for $34,000 realizing a gain of $5,802, which is separately reflected in the accompanying Consolidated Statements of Income. During the first quarter of 2010, the Company sold two vessels, the aframax Parthenon and the suezmax Decathlon realizing total gains of $14,346.

Held for Sale

At March 31, 2011, the aframax tanker Vergina II was classified as held for sale, while at December 31, 2010, the aframax tanker Opal Queen was classified as held for sale.

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

4. Vessels (continued)

Charters-out

The future minimum revenues of vessels in operation at March 31, 2011, before reduction for brokerage commissions, expected to be recognized on non-cancelable time charters are as follows:

Year	Amount
April to December 2011		111,243
2012		64,487
2013		23,160
2014		438
Net minimum charter payments		199,328

These amounts do not assume any off-hire.

On December 9, 2010, the Company signed two charter-party agreements with the same charterer, each for the charter of a DP 2 suezmax shuttle tanker for a period of fifteen years to commence on delivery of the vessels, expected in the fourth quarter of 2012 and in the first quarter of 2013 respectively. On May 9, 2011, the Company announced two long-term charters with fixed minimum hire plus profit-share, for the two suezmaxes to be delivered in 2011. The charters commence on delivery of the vessels. The first of the two, Spyros K, was delivered on May 12, 2011. The revenue to be generated by these four vessels has not been included in the above table.

5. Deferred Charges

Deferred charges, consisted of dry-docking and special survey costs, net of accumulated amortization, amounted to $11,146 and $12,221, at March 31, 2011 and December 31, 2010, respectively, and loan fees, net of accumulated amortization, amounted to $3,969 and $4,141 at March 31, 2011 and December 31, 2010, respectively. Amortization of deferred dry-docking costs is separately reflected in the accompanying Consolidated Statements of Income, while amortization of loan fees is included in Interest and finance costs, net.

6. Long –Term Debt

Facility	March 31, 2011			December 31, 2010
(a) Credit Facilities		1,107,770			1,127,925
(b) Term Bank Loans		410,457			434,542
Total		1,518,227			1,562,467
Less – current portion		(125,057	)		(133,819	)
Long-term portion		1,393,170			1,428,648

(a) Credit facilities

As at March 31, 2010, the Company had seven open reducing revolving credit facilities, all of which are reduced in semi-annual installments, and two open facilities which have both a reducing revolving credit component and a term bank loan component. The aggregate available unused amount under these facilities at March 31, 2011 is $32,522.

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

6. Long –Term Debt (continued)

(a) Credit facilities (continued)

The Company classified the vessel Vergina II as Held for Sale at March 31, 2011; and accordingly, an amount of $7,947 related to the credit facility under which this vessel is secured is shown as current.

Interest is payable at a rate based on LIBOR plus a spread. At March 31, 2011, interest on these facilities ranged from 0.95% to 5.19%.

(b) Term bank loans

Term loan balances outstanding at March 31, 2011 amounted to $410,457. These bank loans are payable in U.S. Dollars in semi-annual installments with balloon payments due at maturity between October 2016 and April 2022. Interest rates on the outstanding loans as at March 31, 2011, are based on LIBOR plus a spread.

At March 31, 2011, interest on these term bank loans ranged from 0.94% to 2.96%.

The weighted-average interest rates on the above executed loans for the applicable periods were:

Three months ended March 31, 2011	1.64	%
Three months ended March 31, 2010	1.58	%

The above revolving credit facilities and term bank loans are secured by first priority mortgages on substantially all vessels, and to assignments of earnings and insurances of the respectively mortgaged vessels, and by corporate guarantees of the relevant ship-owning subsidiaries.

The loan agreements include, among other covenants, covenants requiring the Company to obtain the lenders’ prior consent in order to incur or issue any financial indebtedness, additional borrowings, pay dividends in an amount more than 50% of cumulative net income (as defined in the related agreements), sell vessels and assets, and change the beneficial ownership or management of the vessels. Also, the covenants require the Company to maintain a minimum liquidity, a minimum hull value in connection with the vessels’ outstanding loans, insurance coverage of the vessels against all customary risks and maintenance of operating bank accounts with minimum balances.

The annual principal payments required to be made after March 31, 2011, including balloon payments totaling $741,903 due through April 2022, are as follows:

Period/Year	Amount
April to December 2011		96,985
2012		117,110
2013		149,936
2014		108,177
2015		237,446
2016 and thereafter		808,573
		1,518,227

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

7. Interest and Finance Costs, net

	March 31, 2011			March 31, 2010
Interest expense		14,063			13,537
Less: Interest capitalized		(898	)		(458	)
Interest expense, net		13,165			13,079
Bunkers swap cash settlements		(1,249	)		(732	)
Amortization of loan fees		236			288
Bank charges		26			43
Sub-total		12,178			12,678
Amortization of deferred loss on termination of financial instruments		405			462
Change in fair value of non-hedging financial instruments		(6,158	)		905
Sub-total		(5,753	)		1,367
Net total		6,425			14,045

At March 31, 2011, the Company was committed to thirteen floating-to-fixed interest rate swaps with major financial institutions covering notional amounts aggregating to $842,243 on which it pays fixed rates averaging 4.57% and receives floating rates based on the six-month London interbank offered rate (“LIBOR”) (Note 11).

At March 31, 2011, the Company held ten of the thirteen interest rate swap agreements in order to hedge its exposure to interest rate fluctuations associated with its debt covering notional amounts aggregating to $605,149. The fair value of such financial instruments as of March 31, 2011 and December 31, 2010 in aggregate amounted to $43,180 (negative) and $47,105 (negative), respectively.

At March 31, 2011, the Company held three interest rate swaps (two interest rate swaps at March 31, 2010) that did not meet hedge accounting criteria. As such, the changes in their fair values during the quarters ended March 31, 2011 and 2010 have been included in change in fair value of non-hedging financial instruments, in the table above and amounted to $3,533 (positive) and $188 (negative), respectively. During 2010, one of these swaps was de-designated as a hedging swap and the remaining loss included in Accumulated other comprehensive loss, and for which the associated future cash flows are deemed probable of occurring ($4,819 at March 31, 2011), is being amortized to income over the term of the original hedge provided that the variable-rate interest obligations continue. The amount of such loss amortized during the quarters ended March 31, 2011 and 2010 was $405 and $34, respectively and for the next year up to March 31, 2012, amortization is expected to be $1,648. In addition, the loss within Accumulated other comprehensive loss of $428 that was considered to be directly associated with future cash flows, which were not probable of occurring at the de-designation date was immediately reclassified to income in the quarter ended March 31, 2010.

During the first quarter of 2011 and 2010, the Company had six and five bunker swap agreements, respectively, in order to hedge its exposure to bunker price fluctuations associated with the consumption of bunkers by its vessels. The fair value of these financial instruments as of March 31, 2011 and 2010 was $6,502 (positive) and $5,728 (positive), respectively.

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

7. Interest and Finance Costs, net (continued)

The changes in their fair values during the first quarter of 2011 and 2010 amounting to $2,625 (positive) and $718 (negative) respectively have been included in Change in fair value of non-hedging financial instruments in the table above, as such agreements do not meet the hedging criteria.

8. Stockholders’ Equity

During the three-month period ended March 31, 2011 the Company declared dividends of $13,824 in aggregate, of which $6,912 were paid on February 1, 2011, and $6,912 were paid on April 28, 2011.

In the first quarter of 2011, Accumulated other comprehensive loss decreased with unrealized gains of $4,330 of which $3,925 resulted from changes in fair value of financial instruments and $405 related to losses which were amortized to income on the de-designation of one interest rate swap. In the first quarter of 2010, Accumulated other comprehensive loss increased with unrealized losses of $2,819 of which $3,281 (loss) resulted from changes in the fair value of financial instruments, $428 of losses were reclassified to income on sale of vessels and $34 related to losses which were amortized to income on the de-designation of one interest rate swap.

9. Earnings per Common Share

The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share assumes the foregoing and the exercise of all RSUs using the treasury stock method.

	2011		2010
Net income available to common stockholders	$	9,286	$	19,454
Weighted average common shares outstanding		46,081,487		37,439,531
Dilutive effect of RSUs		90,930		311,234
Weighted average common shares – diluted		46,172,417		37,750,765
Basic earnings per common share	$	0.20	$	0.52
Diluted earnings per common share	$	0.20	$	0.52

For the three months ended March 31, 2011 and 2010, there were no RSUs considered anti-dilutive which would have resulted in their exclusion from the computation of diluted earnings per common share.

10. Commitments and Contingencies

As at March 31, 2011, the Company had under construction two suezmax tankers and two DP2 suezmax shuttle tankers. The total contracted amount remaining to be paid for the four vessels under construction, plus the extra costs agreed as at March 31, 2011 was $223,980. Scheduled remaining payments as of March 31, 2011 were $76,780 from April to December 2011, $101,200 in 2012 and $46,000 in 2013.

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

10. Commitments and Contingencies (continued)

In the ordinary course of the shipping business, various claims and losses may arise from disputes with charterers, agents and other suppliers relating to the operations of the Company’s vessels. Management believes that all such matters are either adequately covered by insurance or are not expected to have a material adverse effect on the Company’s results from operations or financial condition.

11. Financial Instruments

(a) Interest rate risk: The Company’s interest rates and loan repayment terms are described in Notes 6 and 7.

(b) Concentration of credit risk: Financial Instruments consist principally of cash, trade accounts receivable, investments and derivatives. The Company places its temporary cash investments, consisting mostly of deposits, and its marketable securities primarily with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk. The Company limits the exposure of non-performance by counterparties to derivative instruments by diversifying among counterparties with high credit ratings, and performing periodic evaluations of the relative credit standing of the counterparties.

(c) Fair value: The carrying amounts reflected in the accompanying Consolidated Balance Sheet of financial assets and accounts payable approximate their respective fair values due to the short maturity of these instruments. The fair value of long-term bank loans with variable interest rates approximate the recorded values, generally due to their variable interest rates. The present value of the future cash flows of the portion of one long-term bank loan with a fixed interest rate is estimated to be approximately $73,844 as compared to its carrying amount of $81,067 (Note 6). The fair value of the investment equates to the amount that would be received by the Company in the event of sale of that investment.

The fair values of the marketable securities are determined through Level 1 of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements, while the fair values of the one long-term bank loan with a fixed interest rate and the interest rate swap agreements and bunker swap agreements discussed in Note 7 above are determined through Level 2 of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements and are derived principally from or corroborated by observable market data, interest rates, yield curves and other items that allow value to be determined. The fair value of the investment is determined through Level 3 of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements and is determined by the Company’s own data.

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

11. Financial Instruments (continued)

(c) Fair value (continued): The fair value of the vessel held for sale at March 31, 2011 (Vergina II) is determined through Level 3 of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements and is based on management estimates and assumptions and by making use of available market data and taking into consideration third party valuations. However, the fair value of the vessel held for sale at December 31, 2010 (Opal Queen) was determined through Level 1 based on the sales price per the Memorandum of Agreement.

The estimated fair values of the Company’s financial instruments, other than derivatives at March 31, 2011 and December 31, 2010. are as follows:

	Carrying Amount March 31, 2011		Fair Value March 31, 2011		Carrying Amount December 31, 2010		Fair Value December 31, 2010
Financial assets/(liabilities)
Cash and cash equivalents		259,626		259,626		276,637		276,637
Restricted cash		4,453		4,453		6,291		6,291
Marketable securities		2,500		2,500		—		—
Short-term investments		1,000		1,000		1,000		1,000
Debt		1,518,227		1,511,004		1,562,467		1,555,374

Tabular Disclosure of Derivatives Location

Derivatives are recorded in the balance sheet on a net basis by counterparty when a legal right of setoff exists. The following tables present information with respect to the fair values of derivatives reflected in the balance sheet on a gross basis by transaction. The tables also present information with respect to gains and losses on derivative positions reflected in the statement of operations or in the balance sheet, as a component of Accumulated other comprehensive loss.

Fair Value of Derivative Instruments

		Asset Derivatives				Liability Derivatives
		March 31, 2011		December 31, 2010		March 31, 2011		December 31, 2010
Derivative	Balance Sheet Location	Fair Value		Fair Value		Fair Value		Fair Value
Derivatives designated as hedging instruments
Interest rate swaps	Current portion of financial instruments - Fair value		—		—		25,288		23,053
	FINANCIAL INSTRUMENTS - FAIR VALUE, net of current portion		—		—		17,892		24,052
	Subtotal		—		—		43,180		47,105

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

11. Financial Instruments (continued)

(c) Fair value: (continued)

		Asset Derivatives				Liability Derivatives
		March 31, 2011		December 31, 2010		March 31, 2011		December 31, 2010
Derivative	Balance Sheet Location	Fair Value		Fair Value		Fair Value		Fair Value
Derivatives not designated as hedging instruments
Interest rate swaps	Current portion of financial instruments - Fair value		—		—		8,658		9,433
	FINANCIAL INSTRUMENTS - FAIR VALUE, net of current portion		—		—		9,628		12,386
Bunker swaps	Current portion of financial instruments-Fair value		5,106		3,378		—		—
	FINANCIAL INSTRUMENTS - FAIR VALUE, net of current portion		1,396		498		—		—
	Subtotal		6,502		3,876		18,286		21,819
	Total derivatives		6,502		3,876		61,466		68,924

The Effect of Derivative Instruments on the Statement of Financial Performance for the three month periods ended March 31, 2011, and 2010

Derivatives in Cash Flow Hedging Relationships

Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)

Derivative	Amount Three months ended March 31,
	2011		2010
Interest rate swaps		3,925		(3,281	)
Total		3,925		(3,281	)

Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)

Derivative	Location	Amount Three months ended March 31,
		2011			2010
Interest rate swaps	Interest and finance costs, net		(405	)		(462	)
Total			(405	)		(462	)

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2011 AND 2010

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

11. Financial Instruments (continued)

(c) Fair value: (continued)

Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)

Derivative	Location	Amount Three months ended March 31,
		2011		2010
Interest rate swaps	Interest and finance costs, net		—		(143	)
Total			—		(143	)

Derivatives Not Designated as Hedging Instruments

Gain (Loss) Recognized on Derivative

Derivative	Location	Amount Three months ended March 31,
		2011		2010
Interest rate swaps	Interest and finance costs, net		142		(1,255	)
Bunker swaps	Interest and finance costs, net		3,875		14
Total			4,017		(1,241	)

The following table summarizes the fair values for assets and liabilities measured on a recurring basis as of March 31, 2011:

Recurring measurements	March 31, 2010			Quoted Prices in Active Markets for Identical Assets/(Liabilities) (Level 1)		Significant Other Observable Inputs Assets/(Liabilities) (Level 2)			Unobservable Inputs Assets/(Liabilities) (Level 3)
Interest rate swaps		(61,466	)		—		(61,466	)		—
Marketable Securities		2,500			2,500					—
Bunker swaps		6,502			—		6,502			—
		(52,464	)		2,500		(54,964	)		—

12. Subsequent Events

On May 12, 2011, the Company took delivery of the suezmax tanker Spyros K and drew down $48,000 on a new credit facility arranged on April 4, 2011.

EX-99.2

Exhibit 99.2

TSAKOS ENERGY NAVIGATION LIMITED

THREE MONTHS ENDED MARCH 31, 2011

Results of operations – management discussion & analysis

Three months ended March 31, 2011 versus three months ended March 31, 2010

(Percentage changes are based on the actual amounts shown in the accompanying consolidated financial statements)

Voyage revenues

Voyage revenues earned in the first quarter of 2011 and 2010 per charter category were as follows:

	Three months ended March 31,
	2011					2010
	$ million		% of total			$ million		% of total
Time charter-bareboat		2.3		2	%		2.3		2	%
Time charter-fixed rate		15.0		15	%		21.5		21	%
Time charter-variable rate (profit share)		38.2		39	%		43.0		41	%
Pool arrangement		7.2		7	%		3.4		3	%
Voyage charter-contract of affreightment		6.5		7	%		11.8		11	%
Voyage charter-spot market		30.0		30	%		22.7		22	%
Total voyage revenue		99.2		100	%		104.7		100	%

Voyage revenues from vessels were $99.2 million during the quarter ended March 31, 2011 compared to $104.7 million during the quarter ended March 31, 2010, a decrease of $5.5 million or 5.2%. The decrease was primarily due to a softer freight market compared to the previous year’s first quarter caused primarily by a market over-supply of tankers despite the relatively strong demand for oil compared to the first quarter of 2010. The decrease in revenue was to some extent off-set by a small increase in the number of vessels by the equivalent of 1.3 vessels or, in terms of days available for trading, an increase of 103 days compared to the same quarter in 2010. The average number of vessels during the first quarter 2011 was 47.9 compared to 46.6 in the first quarter of 2010. Since the beginning of 2010 to March 31, 2011 the Company took delivery of the newly designed aframaxes Sapporo Princess and Uraga Princess and acquired the modern panamaxes World Harmony, Chantal, Selini and Salamina. During the same period, the Company sold the suezmax Decathlon and the aframax tankers Parthenon, Marathon and Opal Queen. Also sold, and eventually demolished, were the aged double-hull panamax tankers Hesnes and Victory III.

As a consequence of the market over-capacity, revenue earned per vessel on average within the first quarter of 2011 was lower than in the previous year’s first quarter, although certain of our vessels outperformed the general market. Specifically, our three ice-class aframax LR2s enjoyed extra profit-share as a result of weather conditions in the Baltic, certain of our aframaxes benefitted from a spike in Mediterranean spot rates at the outset of the Libyan crisis and generally the product sector saw a modest boost to rates after a prolonged period of low rates. The average daily revenue per vessel for the quarter, after deducting voyage

expenses (time charter equivalent or TCE, see definition below) was $17,964 per day compared to $20,708 for the previous year’s first quarter.

The number of days utilized in profit-share arrangements totaled 1,841 compared to 1,965 in the first quarter of 2010. The number of days employed on spot and contract of affreightment increased to 1,082 from 793, and days that vessels operated in a pool during the first quarter of 2011 totaled 540 compared to 528 days in the first quarter of 2010. Operating days on pure time-charter without profit share fell to 799 days from 873 days between the two first quarters. Overall, therefore, there was a slight increase in the total number of days that the fleet was employed under charters that included a variable element to rate earned. This arose partly as a result of the expiration of previous time-charters within 2010 and placement of vessels in the spot market in anticipation of securing more lucrative time-charters in the future, in anticipation of improved market conditions.

Average daily TCE rate earned for the three month periods ended March 31, 2011 and March 31, 2010 were as follows:

	Q1 2011		Q1 2010
	$		$
LNG carrier		23,000		46,000
VLCC		25,940		30,833
Suezmax		25,162		28,223
Aframax		17,854		21,256
Panamax		16,524		14,660
Handymax		11,254		11,398
Handysize		14,463		16,118

TCE is calculated by taking voyage revenue less voyage costs divided by the number of operating days. We do not deduct commission, as commission is payable on all types of charter. In the case of the bare-boat charter, we add an estimate of operating expenses of $10,000 per day in order to render the bare-boat charter comparable to a time-charter.

Time charter equivalent revenue and TCE rate are not measures of financial performance under U.S. GAAP and may not be comparable to similarly titled measures of other companies. However, TCE is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping industry performance despite changes in the mix of charter types (i.e. spot voyage charters, time charters and bareboat charters) under which the vessels may be employed between the periods. The following table reflects the calculation of our TCE rate for the period presented (amount in thousands of U.S. dollars, except for TCE rate, which is expressed in U.S. dollars and available days):

	Three months ended March 31,
	2011			2010
	$’000			$’000
Voyage revenues		99,196			104,673
Less: Voyage Expenses		(23,533	)		(19,448	)
Add: Representative operating expenses for bareboat charter ($10,000 daily)		900			900
Time charter equivalent revenues		76,563			86,125
Divided by: net earnings (operating) days		4,262			4,159
Average TCE per vessel per day		17,964			20,708

With the exception of the panamax tankers which enjoyed a boost in rates, the earnings of all the other sectors during the first quarter of 2011 were lower than in the previous year’s first quarter. In particular, the LNG carrier was on a short-term time charter at a hire rate half that of the first quarter of 2010. The VLCCs, La Prudencia and La Madrina, came off time-charter during the first quarter of 2011 at a time when VLCC freight rates were exceptionally low. Both vessels undertook repositioning voyages, incurring high voyage expenses. The markets for the suezmax and aframax tankers were also difficult compared to the previous year, but regional spikes in rates, as mentioned above, helped achieve better rates than originally anticipated for the quarter. Product carriers on profit-sharing arrangements were slightly above the fixed minimum rate, which helped protect the overall income stream.

Total utilization (total days that the vessels were actually employed as a percentage of total days in the period that we owned or controlled the vessels) achieved by the fleet in the first quarter, 2011 was 98.9% compared to 99.2% for the first quarter of 2010, thereby effectively achieving full employment in both quarters. The days lost in the first quarter of 2011 primarily relate to the dry-docking of Archangel and repositioning voyages of the La Madrina and La Prudencia following their release from time-charters.

Commissions

Commissions amounted to $3.4 million, or 3.4% of revenue from vessels, during the quarter ended March 31, 2011, compared to $4.0 million or 3.8% of revenue from vessels, for the quarter ended March 31, 2010. The overall decrease was due to reduced revenues and changes in employment of several vessels to employment contracts, especially pool arrangements, on which lower commission was charged.

Voyage expenses

	Total voyage expenses per category							Average daily voyage expenses per vessel
	Three months ended March 31,				% increase/ (decrease)			Three months ended March 31,				% increase/ (decrease)
	2011		2010					2011		2010
	$ million		$ million					$		$
Bunkering expenses		15.6		11.4		36.0	%		14,393		14,436		(0.3	)%
Port and other expenses		8.0		8.0		(0.5	)%		7,357		10,089		(27.1	)%
Total voyage expenses		23.5		19.4		21.0	%		21,750		24,525		(11.3	)%
Days on spot and Contract of Affreightment (COA) employment									1,082		793		36.4	%

Voyage expenses include costs that are directly related to a voyage, such as port charges, agency fees, 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-charters and bare-boat charters they are borne by the charterer, or, in the case of vessels in a pool, by the pool operators. Voyage expenses were $23.5 million during the quarter ended March 31, 2011, compared to $19.4 million during the prior year’s first quarter, a 21.0% increase.

Although voyage expenses are highly dependent on the voyage patterns followed, part of the change between quarters can usually be explained by changes in the total operating days the fleet operated on spot charter and contract of affreightment. The number of days that vessels were employed on these types of charter in the first quarter of 2011 increased by 36.4% compared to the first quarter of 2010. In addition, bunker prices increased by approximately 30% between the two first quarters.

Charter hire expense

There was no charter-hire expense in the first quarter of 2011. Charter hire expense incurred during the first quarter of 2010 amounted to $0.5 million and related primarily to the suezmax Decathlon, which was sold in February 2010 to a third-party and immediately re-chartered at market rate for a limited period in order to fulfill its obligations to the charter that the vessel was employed on at the time of sale.

Vessel operating expenses

	Operating expenses per category							Average daily operating expenses per vessel
	Q1 2011		Q1 2010		% increase/ (decrease)			Q1 2011		Q1 2010		% increase/ (decrease)
	U.S.$ million		U.S.$ million					U.S.$		U.S.$
Crew expenses		19.3		19.5		(1.3	)%		4,565		4,758		(4.1	)%
Insurances		3.7		3.8		(2.4	)%		881		928		(5.1	)%
Repairs and maintenance, and spares		2.6		4.1		(38.8	)%		614		1,030		(40.4	)%
Stores		1.9		2.2		(11.1	)%		458		529		(13.4	)%
Lubricants		1.4		1.8		(23.3	)%		319		428		(25.5	)%
Quality and Safety		0.3		0.6		(40.4	)%		81		140		(42.1	)%
Other (taxes, registration fees, communications)		2.4		2.5		(3.6	)%		564		601		(6.2	)%
Total operating expenses		31.6		34.5		(8.5	)%		7,482		8,414		(11.1	)%
Earnings capacity days excluding vessel on bare-boat charter									4,221		4,103

Vessel operating expenses are borne by the Company for all vessels of the fleet except for the one vessel on bare-boat charter (Millennium). Total operating costs were $31.6 million during the quarter ended March 31, 2011 as compared to $34.5 million during quarter ended March 31, 2010, a decrease of 8.5%, despite an extra vessel in the fleet. This is due to cost savings in certain expense categories as described below.

Vessel operating expenses per ship per day for those vessels in the fleet incurring operating expenses decreased to $7,482 for the quarter ended March 31, 2011 from $8,414 for the quarter ended March 31, 2010, an 11.1% decrease.

Most significantly there were reductions on repair and maintenance expenditure mainly as a result of reduced repair activity and partly due to the recovery of prior year repair costs through claims. There were also savings in lubricants through more efficient logistics and pricing achieved by the new technical managers, Tsakos Columbia Shipmanagement Ltd., since July 1, 2010, although co-operation with the 50% owners, Columbia Shipmanagement

Ltd. started from early 2010. Crewing expenses were also reduced due to changes in the crew composition of certain vessels over the prior eighteen months.

Depreciation

Depreciation was $24.2 million during the quarter ended March 31, 2011 compared to $21.6 million during the quarter ended March 31, 2010, an increase of 12.3%. This was primarily due to addition of six new high-value vessels in 2010. Five vessels were sold in 2010, but as they were all accounted for as held-for-sale from the end of 2009, they bore no depreciation during 2010.

Amortization of deferred charges

During the quarter ended March 31, 2011, amortization of deferred dry-docking charges was $1.1 million compared to $1.4 million during the quarter ended March 31, 2010. For the most part the total quarterly charge for the respective quarters relate to the same charges for the same vessels. The difference between the quarters is primarily the difference between new quarterly amortization for more recent dry-dockings and the amortization relating to earlier dry-dockings where the deferred charges have been totally amortized in the intervening period.

Impairment

Our tests did not indicate that an impairment charge was required for any particular vessel at March 31, 2011. At December 31, 2010, it was determined that the carrying value of the aframax tanker Vergina II was in excess of its estimated fair market value and that the vessel would not generate adequate cash flow over its expected remaining life in excess of its carrying value. As a result, the carrying value was reduced to fair market at December 31, 2010. In the first quarter 2011, plans were activated to sell the vessel before its next dry-docking, scheduled for July 2011, and the vessel was accounted for as held-for-sale. Tests were performed in the first quarter of 2011 to assess whether this vessel’s fair market value had again fallen below carrying value and it was determined that its fair market value was in excess of carrying value.

Management fees

Management fees totaled $3.9 million during the quarter ended March 31, 2011, a 16.0% increase over the quarter ended March 31, 2010. Apart from a 2.8% growth in fleet number, the main reason was the increase in fees during 2010.

The Company pays to Tsakos Energy Management Ltd. fixed fees per vessel under a management agreement between the companies. The fee pays for services that cover both the management of the individual vessels and of the enterprise as a whole. According to the amended management agreement (from January 2007), there is a prorated adjustment if at beginning of the year the Euro has appreciated by 10% or more against the U.S. Dollar since January 1, 2007, and an increase each year by a percentage figure reflecting 12 month Euribor, if both parties agree.

As a consequence, from January 1, 2010, monthly fees for operating vessels were $24,000 and for operating vessels chartered out on bare-boat, were $17,700. From July 1, 2010, most of the fleet is managed by TCM, apart from four vessels which continued to be managed by Columbia Shipmanagement Ltd. (three of these since passing to TCM management in 2011) and three by other third-party ship managers. From July 2010 vessel monthly fees increased by $3,000 to $27,000 for owned operating vessels or approximately $99 per day per vessel, substantially less than the savings achieved from the creation of the new ship management company. The monthly fee relating chartered-in or chartered out on a bareboat basis or for

vessels under construction increased to $20,000 and for the LNG carrier to $32,000. Total fees include fees paid directly to a third-party ship manager in the case of the LNG carrier. Fees paid relating to vessels under construction are capitalized as part of the vessels’ costs.

General and administrative expenses

General and administrative expenses consist primarily of professional fees, office supplies, investor relations, advertising costs, directors’ liability insurance, directors’ fees and travel-related expenses. General and administrative expenses were $1.1 million during the quarter ended March 31, 2011 compared to $1.0 million during the previous year’s first quarter, an increase of 13.7% mainly due to an increase in directors’ fees and the addition of one director to the Board of Directors, plus minor increases in road-show and sundry expenses.

General and administrative expenses plus the management fees and the stock compensation expense (see below), represent the overhead of the Company. On a per vessel basis, the daily overhead was $1,251 for the first quarter of 2011, compared to $1,139 in the first quarter of 2010. The increase was primarily due to the increase in management fees and administrative expenses as described above, moderated by the addition of one extra vessel.

Stock compensation expense

The compensation expense in the first quarter of 2011 amounted to $0.4 million and represents the amortization of the value of restricted share units (“RSUs”) in the quarter. A similar amount of $0.4 million was amortized in the first quarter of 2010. There were no movements (issuances, vesting and forfeits) in the quarter, so the number of outstanding RSUs at March 31, 2011 remained 199,750, as at December 31, 2010. These outstanding RSU’s will vest at various dates until June 30, 2012. The amortization charge for RSUs awarded to directors, officers and seafarers is based on their fair value which is based on the Company’s share price on issuance of the RSUs. For non-employees, the amortization rate is based on the share price at the vesting date and therefore the valuation is adjusted quarterly in line with movements in the share price until the vesting date.

Gain on sale of vessels

During the first quarter of 2011, the Company sold the aframax Opal Queen for $34.0 million realizing a gain of $5.8 million. In the first quarter of 2010, two vessels were sold realizing gains of $14.3 million.

Operating income

Income from vessel operations was $15.4 million, (including a gain on the sale of vessel amounting to $5.8 million,) during the first quarter 2011 compared to $33.0 million (with gains on the sale of vessels amounting to $14.3 million) during the first quarter of 2010.

Interest and finance costs

	Three months ended March  31,
	2011			2010
	$ million			$ million
Loan interest expense		6.4			5.9
Swap interest expense		7.7			7.7
Less: Interest capitalized		(0.9	)		(0.5	)
Interest expense, net		13.2			13.1
Bunkers swap cash settlements		(1.3	)		(0.7	)

	Three months ended March  31,
	2011			2010
Change in fair value of non-hedging bunker swaps		(2.6	)		0.7
Amortization of deferred loss on de-designated interest rate swap		0.4			—
Expense of portion of accumulated negative valuation of de-designated interest rate swap		—			0.4
Change in fair value of non-hedging interest rate swaps		(3.5	)		0.2
Amortization of loan expenses		0.2			0.3
Bank loan charges		—			—
Net total		6.4			14.0

Interest and finance costs were $6.4 million for the first quarter of 2011 compared to $14.0 million for the quarter ended March 31, 2010, a decrease of 54.3%. Loan interest in the first quarter 2011 increased by 8.4% to $6.4 million from $5.9 million in the first quarter of 2010. The average balance of outstanding debt was approximately $1,548 million for the first quarter of 2011 compared to $1,484 million for the previous year’s first quarter and average loan interest rate increased slightly to 1.64% from 1.58%. Similarly, the average all-in loan finance cost in the first quarter of 2011, taking account of net swap interest paid, was 3.63% compared to 3.61% in the previous year’s first quarter. Interest paid on swaps amounted to $7.7 million in both first quarters.

There was a positive movement of $3.5 million in the fair value (mark-to-market) of the non-hedging interest rate swaps in the first quarter of 2011, compared to a negative movement of $0.2 million in the first quarter of 2010. In addition, amortization of a deferred loss on a swap which became ineffective during 2010 and was de-designated as a non- hedging swap amounted to $0.4 million.

Also in the first quarter of 2011 there was a positive movement of $2.6 million on bunker swaps, which do not qualify as hedging instruments. An amount of $1.2 million in actual cash was received on the swaps in the first quarter of 2011. In 2010, there was a negative movement of $0.7 million on these swaps and $0.7 million was received in cash.

Capitalized interest is based on expenditure incurred to date on vessels under construction. In the first quarter of 2011, capitalized interest was $0.9 million compared to $0.5 million in the previous year’s first quarter, the increase being due to the additional yard installments having been paid on the two new suezmaxes under construction for delivery in May and July of 2011.

Interest income

Total income derived from bank deposits was $0.6 million during the first quarter of 2011 and 2010.

Net income attributable to the noncontrolling interest

There is a noncontrolling interest of 49% in the subsidiary Mare Success S.A., which owns 100% of each of the companies that own the panamax vessels Maya and Inca. Income attributable to the noncontrolling interest in the first quarter 2011 amounted to $0.1 million compared to $0.2 million in the first quarter 2010, the reduction being primarily due to the fall in revenue generated by the two vessels because of the softer market.

Net income attributable to Tsakos Energy Navigation Limited

As a result of the foregoing, net income attributable to Tsakos Energy Navigation Limited for the quarter ended March 31, 2011 was $9.3 million, or $0.20 per share, diluted, versus $19.5 million, or $0.52 earnings per share, diluted, for the quarter ended March 31, 2010. The weighted average number of shares (diluted) during the first quarter of 2011 was 46,172,417, compared to 37,750,765 during the first quarter of 2010.

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. In addition, our newbuilding program, dry-docking schedule and possible vessel acquisitions will require us to expend cash in 2011 and in future years. Net cash flow generated by continuing operations is the main source of liquidity. Apart from the possibility of raising further equity, additional sources of cash include proceeds from asset sales and borrowings, although all borrowing arrangements to date have specifically related to the acquisition of vessels.

Given our cash holdings (approximately $250 million as at May 17, 2011) and the number of vessels we have on time charter, we believe that, even if there is a further major and sustained downturn in market conditions, our financial resources, including the cash expected to be generated within the year, will be sufficient to meet our liquidity and working capital needs through January 1, 2012, taking into account both our existing capital commitments and the minimum debt service requirements.

Working capital (non-restricted net current assets) amounted to approximately $111.1 million at March 31, 2011, compared to $174.4 million as at March 31, 2010. Much of the difference is due to the reduction in non-restricted cash balances, which at March 31, 2011 were $259.6 million compared to $323.6 million at March 31, 2010.

Net cash provided by operating activities was $27.7 million in the quarter ended March 31, 2011 compared to $20.0 million in the previous year’s first quarter. Although the operational results in the first quarter of 2011 were slightly lower than the operational results of the first quarter 2010, positive movements in the constituent parts of working capital contributed to a modest increase in cash.

Expenditure incurred for dry-dockings for survey purposes, which are deferred and amortized to expense over the period from the dry-docking to the date of the next scheduled dry-docking, is deducted from net income to calculate cash generated by operating activities. In the first quarter of 2011, no significant payments were made on survey work, while in the first quarter of 2010 an amount of almost $0.5 million was expended on dry-docking.

Net cash from investing activities was $6.9 million for the quarter ended March 31, 2011, compared to net cash from investing activities of $50.0 million for the quarter ended March 31, 2010. During the first quarter of 2011, the Company purchased highly liquid low-risk marketable securities for $2.5 million. These are accounted for as available for sale investments included in current assets. In the first quarter of 2011, net funds for improvements on existing vessels amounted to $0.3 million. In the equivalent period of 2010, net funds paid for improvements of vessels amounted to $0.1 million. In the first quarter of 2011, the aframax tanker Opal Queen was sold generating net proceeds of $32.8 million, while in the first quarter of 2010 the vessels Parthenon and Decathlon were sold generating $89.4 million.

In the first quarter of 2011, advances for vessels under construction amounted to $23.0 million compared to $39.3 million in the first quarter of 2010. There were a total of four vessels on order as at March 31, 2011 and four on order as at March 31, 2010. The suezmax Spyros K was delivered on May 12, 2011 and a second suezmax, Dimitris P, is expected to be delivered in July, 2011. On March 21, 2011, contracts were signed with Sungdong Yard of South Korea for the construction of two suezmax DP2 shuttle tankers at a contract price of $92 million each.

In total, at March 31, 2011, $224.0 million remained to be paid, of which $18.4 million was paid in April as the first installments of the two newly contracted shuttle tankers and $14.6 million was paid on delivery of the Spyros K on May 12, 2011, for which new debt of $48 million was utilized. A further $25.4 million is to be paid on Dimitris P in the second and third quarters, again mostly with new debt of $48.3 million to be drawn down on delivery in July, 2011. For the shuttle tankers, second installments totaling $18.4 million will also be paid in the third quarter of 2011. A further $101.2 million will be paid in 2012 for the two shuttle tankers and a final $46 million in 2013. We are in discussion with banks as to the partial financing of these two shuttle suezmaxes.

Net cash used in financing activities was $51.7 million in the quarter ended March 31, 2011, compared to $42.6 million during the quarter ending March 31, 2010. No new debt was drawn down in either quarter as there were no vessel deliveries in the first quarter of 2011 or 2010. There were loan repayments of $28.6 million and a prepayment of $15.6 million relating to the sale of the Opal Queen in the first quarter of 2011, compared to $22.7 million repayments and $28.5 million prepayments in the first quarter of 2010.

Total debt outstanding decreased from $1,562.5 million at the beginning of the first quarter 2011 to $1,518.2 million by the quarter end. The debt to capital (equity plus debt) ratio was 59.9% at March 31, 2011 (or 55.2% on a net of cash basis). No new interest rate swaps were arranged during the first quarter. Interest rate swap coverage on outstanding loans was approximately 56%.

The more significant of the financial covenants included in the bank loan agreements are the requirements to maintain an agreed upon minimum liquidity, a minimum hull value per vessel as compared with the outstanding loan of such vessel and to maintain a (leverage) ratio of debt to net assets (adjusted by the fair value of vessels) less than 70%. At March 31, 2011, the Company was compliant with the financial covenants included in all of the bank loan agreements.

There was no issuance of stock in the first quarter of 2011, whereas in the first quarter of 2010, 660,206 shares were issued out of Treasury Stock, as part of an “at-the-market” equity offering program which ended in May 2010.

A quarterly cash dividend of $0.15 was paid on February 1, 2011, amounting in total to $6.9 million. A further dividend was declared on March 14, 2011 and paid on April 28, 2011, again totaling $6.9 million. The dividend policy of the Company was amended in May 2010 to pay dividends on a quarterly basis, but still depending on cash availability and requirements, and with a target of between 25% and 50% of the net income in any given year, although even in the absence of adequate net income, a dividend is still payable given the level of retained earnings. During the first quarter of 2010, no dividend was paid, but a semi-annual dividend of $0.30 was declared for payment in April 2010.