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 December, 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): _____

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;

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

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

• 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), September 30, 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: December 19, 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

SEPTEMBER 30, 2011 AND DECEMBER 31, 2010

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

	September 30, 2011			December 31, 2010
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	231,042		$	276,637
Restricted cash		4,409			6,291
Marketable Securities		2,509			—
Accounts receivable, net		24,286			24,417
Insurance claims		3,534			5,018
Due from related companies (Note 2)		2,592			2,977
Advances and other		8,971			4,789
Vessels held for sale		—			26,986
Inventories		20,558			14,011
Prepaid insurance and other		3,331			2,949
Current portion of financial instruments – Fair value (Note 7)		2,565			3,378
Total current assets		303,797			367,453
INVESTMENTS		1,000			1,000
FINANCIAL INSTRUMENTS – FAIR VALUE, net of current portion (Note 7)		366			498
FIXED ASSETS (Notes 4)
Advances for vessels under construction		19,060			81,882
Vessels		2,780,342			2,638,550
Accumulated depreciation		(478,387	)		(403,485	)
Vessels’ Net Book Value		2,301,955			2,235,065
Total fixed assets		2,321,015			2,316,947
DEFERRED CHARGES, net (Note 5)		16,846			16,362
Total assets	$	2,643,024		$	2,702,260
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt (Note 6)	$	123,461		$	133,819
Payables		27,621			23,914
Due to related companies (Note 2)		2,441			779
Accrued liabilities		15,233			10,576
Accrued bank interest		6,389			6,481
Unearned revenue		10,003			9,189
Current portion of financial instruments – Fair value (Note 7)		32,862			32,486
Total current liabilities		218,010			217,244
LONG-TERM DEBT, net of current portion (Note 6)		1,424,285			1,428,648
FINANCIAL INSTRUMENTS – FAIR VALUE, net of current portion (Note 7)		24,299			36,438
STOCKHOLDERS’ EQUITY:
Common stock, $1.00 par value; 100,000,000 shares authorized; 46,153,987 issued and outstanding at September 30, 2011 and 46,081,487 issued at December 31, 2010.		46,154			46,081
Additional paid-in capital		351,574			350,946
Retained earnings		617,829			671,480
		1,015,557			1,068,507
Accumulated other comprehensive loss		(41,075	)		(52,329	)
Noncontrolling Interest		1,948			3,752
Total stockholders’ equity		976,430			1,019,930
Total liabilities and stockholders’ equity	$	2,643,024		$	2,702,260

The accompanying notes are an integral part of these interim consolidated financial statements.

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TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

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

	Three months ended September 30
	2011			2010
VOYAGE REVENUES:	$	93,862		$	95,519
EXPENSES:
Commissions		3,399			3,536
Voyage expenses		34,849			22,576
Vessel operating expenses		32,978			31,072
Depreciation		25,859			23,953
Amortization of deferred dry-docking costs		1,271			1,082
Management fees (Note 2(a))		3,879			3,721
General and administrative expenses		811			913
Stock compensation expense (Note 9)		73			480
Foreign currency gains		(139	)		(920	)
Loss on sale of vessel		—			520
Total expenses		102,980			86,933
Operating income		(9,118	)		8,586
OTHER INCOME (EXPENSES):
Interest and finance costs, net (Note 7)		(15,502	)		(14,591	)
Interest income		779			687
Other, net		(74	)		(25	)
Total other expenses, net		(14,797	)		(13,929	)
Net loss		(23,915	)		(5,343	)
Less: Net income attributable to the noncontrolling interest		(145	)		(173	)
Net loss attributable to Tsakos Energy Navigation Limited	$	(24,060	)	$	(5,516	)
Loss per share, basic attributable to Tsakos Energy Navigation Limited common shareholders	$	(0.52	)	$	(0.14	)
Loss per share, diluted attributable to Tsakos Energy Navigation Limited common shareholders	$	(0.52	)	$	(0.14	)
Weighted average number of shares, basic		46,153,987			38,183,569
Weighted average number of shares, diluted		46,153,987			38,183,569

The accompanying notes are an integral part of these interim consolidated financial statements.

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TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

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

	Nine months ended September 30
	2011			2010
VOYAGE REVENUES:	$	294,367		$	313,040
EXPENSES:
Commissions		10,473			11,591
Voyage expenses		92,090			67,500
Charter hire expense		—			1,905
Vessel operating expenses		97,712			95,001
Depreciation		74,945			67,851
Amortization of deferred dry-docking costs		3,572			3,532
Management fees (Note 2(a))		11,698			10,318
General and administrative expenses		3,004			2,704
Stock compensation expense (Note 9)		774			1,273
Foreign currency losses / (gains)		500			(707	)
Gain on sale of vessel		(5,001	)		(19,670	)
Total expenses		289,767			241,298
Operating income		4,600			71,742
OTHER INCOME (EXPENSES):
Interest and finance costs, net (Note 7)		(38,872	)		(50,184	)
Interest income		1,967			2,015
Other, net		(205	)		(85	)
Total other expenses, net		(37,110	)		(48,254	)
Net (loss)/income		(32,510	)		23,488
Less: Net income attributable to the noncontrolling interest		(395	)		(1,083	)
Net (loss)/income attributable to Tsakos Energy Navigation Limited	$	(32,905	)	$	22,405
(Loss)/Earnings per share, basic attributable to Tsakos Energy Navigation Limited common shareholders	$	(0.71	)	$	0.59
(Loss)/Earnings per share, diluted attributable to Tsakos Energy Navigation Limited common shareholders	$	(0.71	)	$	0.59
Weighted average number of shares, basic		46,106,185			37,885,747
Weighted average number of shares, diluted		46,106,185			38,219,013

The accompanying notes are an integral part of these interim consolidated financial statements.

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TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

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

	Comprehensive Income (Loss)			Common Stock		Additional Paid-in Capital			Retained Earnings			Treasury Stock						Accumulated Other Comprehensive Income (Loss)			Tsakos Energy Navigation Limited			Noncontrolling Interest			Total
												Shares			Amount
BALANCE, January 1, 2010				$	37,671	$	266,706		$	679,597			754,706		$	(17,863	)	$	(57,731	)	$	908,380		$	5,947		$	914,327
Net income	$	23,488								22,405												22,405			1,083			23,488
– Proceeds from Stock Issuance Program							(156	)		(5,036	)		(754,706	)		17,863						12,671						12,671
– Issuance of 67,050 shares of restricted share units					67		(67	)														0						0
– Issuance of common stock (445,127 shares)					446		6,600															7,046						7,046
– Cash dividends paid ($0.30 per share)										(17,123	)											(17,123	)					(17,123	)
– Cash dividends declared ($0.15 per share)										(5,728	)											(5,728	)					(5,728	)
– Distribution from Subsidiary to non controlling interest																						0			(3,462	)		(3,462	)
– Fair value of financial instruments		(5,578	)																(5,578	)		(5,578	)					(5,578	)
– Amortization of restricted share units							1,273															1,273						1,273
Comprehensive income	$	17,910
BALANCE, September 30, 2010				$	38,184	$	274,356		$	674,115			—		$	0		$	(63,309	)	$	923,346		$	3,568		$	926,914
BALANCE, January 1, 2011				$	46,081		350,946		$	671,480			—		$	—		$	(52,329	)	$	1,016,178		$	3,752		$	1,019,930
Net income/(loss)	$	(32,510	)							(32,905	)											(32,905	)		395			(32,510	)
– Expenses of 2010 common stock-offering							(73	)														(73	)					(73	)
– Issuance of 72,500 shares of restricted share units					73		(73	)														0						0
– Cash dividends paid ($0.45 per share)										(20,746	)											(20,746	)					(20,746	)
– Distribution from Subsidiary to non controlling interest																						0			(2,199	)		(2,199	)
– Fair value of financial instruments		11,245																	11,245			11,245						11,245
– Fair value of marketable securities		9																	9			9						9
– Amortization of restricted share units							774															774						774
Comprehensive income	$	(21,256	)
BALANCE September 30, 2011				$	46,154	$	351,574		$	617,829			—		$	—		$	(41,075	)	$	974,482		$	1,948		$	976,430

The accompanying notes are an integral part of these interim consolidated financial statements.

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TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Expressed in thousands of U.S. Dollars)

	Nine months ended September 30
	2011			2010
Cash Flows from Operating Activities:
Net income	$	(32,510	)	$	23,488
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation		74,945			67,851
Amortization of deferred dry-docking costs		3,572			3,532
Amortization of loan fees		754			890
Stock compensation expense		774			1,273
Change in fair value of derivative instruments		436			9,226
Change in fair value of marketable securities		(9	)		—
Gain on sale of vessels		(5,001	)		(19,670	)
Payments for dry-docking		(3,957	)		(4,739	)
(Increase) Decrease in:
Receivables		(2,182	)		(8,341	)
Inventories		(6,547	)		(636	)
Prepaid insurance and other		(382	)		(2,245	)
Increase (Decrease) in:
Payables		5,369			(3,772	)
Accrued liabilities		4,565			5,346
Unearned revenue		814			(4,699	)
Net Cash provided by Operating Activities		40,641			67,504
Cash Flows from Investing Activities:
Advances for vessels under construction and acquisitions		(19,060	)		(55,252	)
Vessel acquisitions and/or improvements		(70,455	)		(203,636	)
Purchase of marketable securities		(2,500	)		—
Proceeds from the sale of vessels		42,489			140,548
Net Cash used in Investing Activities		(49,526	)		(118,340	)
Cash Flows from Financing Activities:
Proceeds from long-term debt		96,650			149,000
Financing costs		(925	)		(1,292	)
Payments of long-term debt		(111,372	)		(143,773	)
Decrease in restricted cash		1,882			1,063
Proceeds from stock issuance program, net		—			19,873
Cash dividend		(20,746	)		(17,123	)
Distribution from subsidiary to noncontrolling interest owners		(2,199	)		(3,462	)
Net Cash used in Financing Activities		(36,710	)		4,286
Net (decrease)/increase in cash and cash equivalents		(45,595	)		(46,550	)
Cash and cash equivalents at beginning of period		276,637			296,181
Cash and cash equivalents at end of period	$	231,042		$	249,631

The accompanying notes are an integral part of these interim consolidated financial statements.

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TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 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 nine months ended September 30, 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. In June 2011, the FASB updated its guidance with regards to the presentation of Comprehensive income revising the manner in which entities present comprehensive income in their financial statements. The updated guidance eliminates the current option used by the Company to report other comprehensive income and its components in the statement of changes in equity. Instead, upon adoption, an entity can elect to present items of net income and other comprehensive income in one continuous statement—referred to as the statement of comprehensive income or in two separate, but consecutive statements. The updated guidance should be applied retrospectively, and is effective for fiscal years and interim periods within those years beginning after December 15, 2011. Early adoption is permitted. The updated guidance will be adopted by the Company on January 1, 2012, and is not expected to have any effect on the Company’s consolidated statement of financial position, results of operations or cash flows.

2. Transactions with Related Parties

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

	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Tsakos Shipping and Trading S.A. (commissions)		1,173		1,280		4,196		5,125
Tsakos Energy Management Limited (management fees)		3,804		3,646		11,473		10,093
Tsakos Columbia Shipmanagement S.A.		315		—		920		—
Argosy Insurance Company Limited		2,686		2,454		7,673		6,966
AirMania Travel S.A.		425		76		1,284		299
Total expenses with related parties		8,403		7,456		25,546		22,483

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TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 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)

Balances due from and due to related parties are as follows:

	September 30, 2011		December 31, 2010
Due from related parties
Tsakos Shipping and Trading S.A.		122		2,977
Tsakos Columbia Shipmanagement S.A.		2,470		—
Total due from related parties		2,592		2,977
Due to related parties
Tsakos Energy Management Limited		11		75
Tsakos Columbia Shipmanagement S.A.		—		56
Argosy Insurance Company Limited		2,216		612
AirMania Travel S.A.		214		36
Total due to related parties		2,441		779

(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 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 increased to $20.0. There has been no further increase since July 1, 2010.

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 September 30, 2011 to pay the Management Company an amount of approximately $137,769 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.

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TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 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)): 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 September 30, 2011, scheduled for future delivery are:

Year	Amount
October to December 2011		3,927
2012		15,729
2013		15,876
2014		15,960
2015		15,960
2016 to 2021		85,863
		153,315

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 $468, and $501 during the nine months ended September 30, 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. The Company also pays to TCM certain fees to cover expenses relating to internal control procedures and I.T. services which are borne by TCM on behalf of the Company.

(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.

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TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 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): 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 new-building vessel in payment for the cost of design and supervision of the new-building by Tsakos Shipping. In the first nine months of 2011, $2,800 has been charged for fourteen vessels delivered between 2007 and September 2011. This amount was added to the cost of the vessels concerned and is being amortised over the remaining life of the vessels.

Up to June 30, 2010, the Management Company, at its own expense, 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 offset 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. The fair value of these marketable securities as of September 30, 2011 was $2,509, and the change in fair value amounting to $9 (positive) is included in Accumulated other comprehensive loss.

4. Vessels

Acquisitions

In the first nine months of 2011, there were two scheduled deliveries of the newly constructed suezmaxes Spyros K and Dimitris P at a total cost of $148,390 of which $66,508 was paid within 2011. In the first nine months of 2010, the Company took delivery of the newbuildings Sapporo Princess and Uraga Princess at a total cost of $128,580, and acquired the panamax tankers World Harmony and Chantal for a total cost of $109,002.

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TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 2011 AND 2010

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

4. Vessels (continued)

Under Construction

As at September 30, 2011, the Company had under construction two suezmax DP2 shuttle tankers. The contracts for their construction were signed on March 21, 2011 with a major Korean shipyard at a total cost of $184,000 with expected delivery in the first quarter of 2013 and in the second quarter of 2013, respectively. During the nine months period ended September 30, 2011, the Company paid $19,060 as new building advances including mainly yard installments, plus extras, supervision fees and capitalized interest, for the construction of these vessels.

Sales

In the first nine months of 2011, the Company sold the aframax tankers Opal Queen for $34,000 realizing a gain of $5,802 and Vergina II for $10,925 realizing a loss of $801, which is separately reflected in the accompanying Consolidated Statements of Income. During the first nine months of 2010, the Company sold five vessels, the suezmax Decathlon, the aframaxes Parthenon and Marathon and the panamax tankers Hesnes and Victory III realizing a net gain of $19,670.

Held for Sale

There were no vessels held for sale at September 30, 2011, while at December 31, 2010, the aframax tanker Opal Queen was classified as held for sale.

5. Deferred Charges

Deferred charges, consisted of dry-docking and special survey costs, net of accumulated amortization, amounted to $12,607 and $12,221, at September 30, 2011 and December 31, 2010, respectively, and loan fees, net of accumulated amortization, amounted to $4,239 and $4,141 at September 30, 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	September 30, 2011			December 31, 2010
(a) Credit Facilities		1,055,189			1,127,925
(b) Term Bank Loans		492,557			434,542
Total		1,547,746			1,562,467
Less – current portion		(123,461	)		(133,819	)
Long-term portion		1,424,285			1,428,648

(a) Credit facilities

As at September 30, 2011, 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 September 30, 2011 is $32,522. Interest is payable at a rate based on LIBOR plus a spread. At September 30, 2011, interest on these facilities ranged from 0.93% to 5.19%.

10

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 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)

(b) Term bank loans

In May 2011, the Company drew down $48,000 on a ten-year term loan related to the financing of the vessel Spyros K. In July 2011, the Company drew down $48,650 on a nine-year term loan related to the financing of the vessel Dimitris P.

Term loan balances outstanding at September 30, 2011 amounted to $492,557. 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 September 30, 2011, are based on LIBOR plus a spread.

At September 30, 2011, interest on these term bank loans ranged from 0.93% to 3.00%.

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

Three months ended September 30, 2011	1.64	%
Three months ended September 30, 2010	1.67	%

Nine months ended September 30, 2011	1.64	%
Nine months ended September 30, 2010	1.59	%

The above revolving credit facilities and term bank loans are secured by first priority mortgages on 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 September 30, 2011, including balloon payments totaling $776,882 due through April 2022, are as follows:

Period/Year	Amount
October to December 2011		32,082
2012		123,461
2013		155,988
2014		114,610
2015		243,754
2016		220,974
2017 and thereafter		656,877
		1,547,746

11

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 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

	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
Interest expense		14,571			14,697			44,401			43,696
Less: Interest capitalized		(379	)		(599	)		(2,204	)		(1,782	)
Interest expense, net		14,192			14,098			42,197			41,914
Bunkers swap cash settlements		(1,812	)		(632	)		(4,726	)		(2,049	)
Amortization of loan fees		272			283			754			890
Bank charges		88			68			220			203
Sub-total		12,740			13,817			38,445			40,958
Amortization of deferred loss on termination of financial instruments		371			794			1,649			1,699
Change in fair value of non-hedging financial instruments		2,391			(20	)		(1,222	)		7,527
Sub-total		2,762			774			427			9,226
Net total		15,502			14,591			38,872			50,184

At September 30, 2011, the Company was committed to fourteen floating-to-fixed interest rate swaps with major financial institutions covering notional amounts aggregating to $848,163 on which it pays fixed rates averaging 4.59% and receives floating rates based on the six-month London interbank offered rate (“LIBOR”) (Note 11).

At September 30, 2011, the Company held eleven of the fourteen interest rate swap agreements in order to hedge its exposure to interest rate fluctuations associated with its debt covering notional amounts aggregating to $624,813. The fair value of such financial instruments as of September 30, 2011 and December 31, 2010 in aggregate amounted to $37,509 (negative) and $47,105 (negative), respectively.

At September 30, 2011 and 2010, the Company held three interest rate swaps that did not meet hedge accounting criteria. As such, the changes in their fair values during the first nine months of 2011 and 2010 have been included in change in fair value of non-hedging financial instruments in the table above, and amounted to $2,167 (positive) and $4,841 (negative), respectively. In March 2010, one of these swaps that previously met hedge accounting criteria 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 ($3,575 at September 30, 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 first nine months of 2011 and 2010 was $1,143 and $891, respectively and for the next year up to September 30, 2012, amortization is expected to be $1,475. In addition, in June 2011, a vessel financed by the loan previously hedged by the de-designated swap, was sold and the loss within Accumulated other comprehensive loss of $506 that was considered to be directly associated with future cash flows, which were not probable of occurring was immediately reclassified to income. In the first nine months of 2010 an aggregate loss of $808 due to the de-designation of the swap in March 2010 and a sale of a second vessel in July 2010 was reclassified to income for the same reasons.

12

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 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)

During the first nine months of 2011 and 2010, the Company held six and seven bunker swap agreements, respectively, in order to hedge its exposure to bunker price fluctuations associated with the consumption of bunkers by its vessels. During the third quarter of 2011, the Company entered into one bunker swap agreement and disposed it of prior to maturity resulting in a realized gain of $115 which is included in Bunker swap cash settlements in the table above. The fair value of these financial instruments as of September 30, 2011 and December 31, 2010 was $2,931 (positive) and $3,876 (positive), respectively.

The changes in their fair values during the nine months of 2011 and 2010 amounting to $945 (negative) and $2,545 (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 nine-month period ended September 30, 2011 the Company declared and paid dividends of $20,746 in aggregate of which $6,912 were paid on February 1, 2011 and $6,911 were paid on April 28, 2011 and $6,923 were paid on August 10 2011.

In the first nine months of 2011, Accumulated other comprehensive loss decreased with unrealized gains of $11,254 of which $9,596 (gain) resulted from changes in fair value of financial instruments, $506 of losses were reclassified to income on the sale of a vessel and $1,143 related to losses which were amortized to income on the de-designation of one interest rate swap. Also in the above gains are included $9 which resulted from changes in the fair value of marketable securities. In the first nine months of 2010, Accumulated other comprehensive loss increased with unrealized losses of $5,578 of which $7,277 (loss) resulted from changes in the fair value of financial instruments, $808 of losses were reclassified to income on sale of vessels and $891 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.

	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
Net (loss)/income available to common stockholders	$	(24,060	)	$	(5,516	)	$	(32,905	)	$	22,405
Weighted average common shares outstanding		46,153,987			38,183,569			46,106,185			37,885,747
Dilutive effect of RSUs		—			—			—			333,266
Weighted average common shares – diluted		46,153,987			38,183,569			46,106,185			38,219,013
Basic (loss)/earnings per common share	$	(0.52	)	$	(0.14	)	$	(0.71	)	$	0.59
Diluted (loss)/earnings per common share	$	(0.52	)	$	(0.14	)	$	(0.71	)	$	0.59

13

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 2011 AND 2010

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

9. Earnings per Common Share (continued)

For the three and nine months ended September 30, 2011, the RSUs are considered anti-dilutive due to the loss from continuing operations which have resulted in their exclusion from the computation of diluted earnings per common share. For the three months ended September 30, 2010, the RSUs are also considered anti-dilutive for the same reason and are excluded from the computation of diluted earnings per common share, whereas for the nine months ended September 30, 2010, there were no RSUs considered anti-dilutive and therefore they are all included in the computation of diluted earnings per common share.

10. Commitments and Contingencies

As at September 30, 2011, the Company had under construction two DP2 suezmax shuttle tankers. The total contracted amount remaining to be paid for the two vessels under construction, was $165,600. Scheduled remaining payments as of September 30, 2011 were $18,400 payable in October 2011, $55,200 in 2012 and $92,000 in 2013.

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.

Charters-out

The future minimum revenues of vessels in operation at September 30, 2011, before reduction for brokerage commissions, expected to be recognized on non-cancelable time charters are as follows:

Year	Amount
October to December 2011		46,423
2012		161,800
2013		115,541
2014		76,985
2015 to 2022		167,602
Net minimum charter payments		568,351

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 suezmax DP2 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. The revenue to be generated by those vessels not delivered as at September 30, 2011 has not been included in the above table.

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, marketable securities, investments, and derivatives. The Company places its temporary cash investments, consisting mostly of

14

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 2011 AND 2010

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

11. Financial Instruments (continued)

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 $72,522 as compared to its carrying amount of $75,790 (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.

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 September 30, 2011 and December 31, 2010 are as follows:

	Carrying Amount September 30, 2011			Fair Value September 30, 2011			Carrying Amount December 31, 2010			Fair Value December 31, 2010
Financial assets/(liabilities)
Cash and cash equivalents		231,042			231,042			276,637			276,637
Restricted cash		4,409			4,409			6,291			6,291
Marketable securities		2,509			2,509			—			—
Investments		1,000			1,000			1,000			1,000
Debt		(1,547,746	)		(1,544,478	)		(1,562,467	)		(1,555,374	)

15

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 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)

Tabular Disclosure of Derivatives Location

Derivatives are recorded in the balance sheet on a net basis by counterparty when a legal right of set-off 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
		September 30, 2011		December 31, 2010		September 30, 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		—		—		24,060		23,053
	FINANCIAL INSTRUMENTS - FAIR VALUE, net of current portion		—		—		13,450		24,052
	Subtotal		—		—		37,510		47,105
Derivatives not designated as hedging instruments
Interest rate swaps	Current portion of financial instruments - Fair value		—		—		8,801		9,433
	FINANCIAL INSTRUMENTS - FAIR VALUE, net of current portion		—		—		10,850		12,386
Bunker swaps	Current portion of financial instruments - Fair value		2,565		3,378		—		—
	FINANCIAL INSTRUMENTS - FAIR VALUE, net of current portion		366		498		—		—
	Subtotal		2,931		3,876		19,651		21,819
	Total derivatives		2,931		3,876		57,161		68,924

16

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 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 Effect of Derivative Instruments on the Statement of Financial Performance for the three and nine month periods ended September 30, 2011, and 2010

Derivatives in Cash Flow Hedging Relationships

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

Derivative	Amount Three months ended September 30,					Amount Nine months ended September 30,
	2011		2010			2011		2010
Interest rate swaps		1,127		(3,811	)		9,596		(7,276	)
Total		1,127		(3,811	)		9,596		(7,276	)

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

Derivative	Location	Amount Three months ended September 30,						Amount Nine months ended September 30,
		2011			2010			2011			2010
Interest rate swaps	Interest and finance costs, net		(371	)		(794	)		(1,649	)		(1,699	)
Total			(371	)		(794	)		(1,649	)		(1,699	)

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

Derivative	Location	Amount Three months ended September 30,				Amount Nine months ended September 30,
		2011		2010		2011		2010
Interest rate swaps	Interest and finance costs, net		—		—		—		(143	)
Total			—		—		—		(143	)

17

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 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)

Derivatives Not Designated as Hedging Instruments

Gain (Loss) Recognized on Derivative

Derivative	Location	Amount Three months ended September 30,						Amount Nine months ended September 30,
		2011			2010			2011			2010
Interest rate swaps	Interest and finance costs, net		(3,553	)		(4,415	)		(5,450	)		(10,771	)
Bunker swaps	Interest and finance costs, net		(271	)		1,350			3,781			(496	)
Total			(3,824	)		(3,065	)		(1,669	)		(11,267	)

The following table summarizes the fair values for assets and liabilities measured on a recurring basis as of September 30, 2011:

Recurring measurements	September 30, 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		(57,161	)		—		(57,161	)		—
Marketable Securities		2,509			2,509					—
Bunker swaps		2,931			—		2,931			—
		(51,721	)		2,509		(54,230	)		—

12. Subsequent Events

(a) On October 18, 2011, the Company announced a quarterly dividend of $0.15 per share which was paid on November 30, 2011.

18

EX-99.2

Exhibit 99.2

TSAKOS ENERGY NAVIGATION LIMITED

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011

Results of operations – management discussion & analysis

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

Voyage revenues

Voyage revenue earned for the three months ended September 30, 2011 and 2010:

	2011					2010
	$ million		% of total			$ million		% of total
Time charter-fixed rate		17.0		18	%		15.1		16	%
Time charter-variable rate (profit-share)		30.2		32	%		37.1		39	%
Time charter-bareboat		2.3		2	%		2.3		2	%
Voyage charter-spot market		39.5		42	%		26.9		28	%
Voyage charter-contract of affreightment		1.2		1	%		10.1		11	%
Pool arrangement		3.7		4	%		4.0		4	%
Total voyage revenue		93.9		100	%		95.5		100	%

Voyage revenue earned for the nine months ended September 30, 2011 and 2010:

	2011					2010
	$ million		% of total			$ million		% of total
Time charter-fixed rate		46.6		16	%		53.4		17	%
Time charter-variable rate		98.6		33	%		124.3		40	%
Time charter-bareboat		7.0		2	%		7.0		2	%
Voyage charter-spot market		110.9		38	%		85.9		27	%
Voyage charter-contract of affreightment		13.0		4	%		32.0		10	%
Pool arrangement		18.3		6	%		10.4		3	%
Total voyage revenue		294.4		100	%		313.0		100	%

Voyage revenue earned during the three months ended September 30, 2011 was $93.9 million, or 1.7% less than in the three months ended September 30, 2010. The decrease was due to average lower rates achieved for all vessel categories, apart from the LNG carrier (as indicated in the table below) mainly as a result of the difficult freight market resulting from global tanker fleet overcapacity.

The decline in gross revenue was offset by an average of two more vessels operating in the third quarter of 2011 than were operating during the third quarter of 2010. The Company operated on average 47.7 vessels compared to 45.7 in the third quarter of 2010. 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 third quarter of 2011 was 97.3%, compared to 96.0% in the third quarter of 2010. The days lost in the third quarter of 2011 relate to the dry-docking of Proteas, Amphitrite and Alaska, and off-hire on Asahi Princess and the VLCC’s La Prudencia and La Madrina which both finished their 5 year time charters in the first quarter of 2011 and since then have been trading in the difficult spot market encountering extensive repositioning legs. In the third quarter of 2010, days lost related to the dry-docking of Propontis and Euronike and off-hire on Victory III, Aegeas, Neo Energy and Bosporos.

1

Operating days on pure time-charter without profit share increased by 211 days or 29.0% between the third quarters of 2011 and 2010, and the amount of revenue earned under this type of employment increased by 13%. This change arose as a result of the renewal of two time charters at lower rates (Socrates, Selecao), off set by the addition of three new time charters at relatively good rates. There was an 8% decrease in the number of days utilized in profit-share arrangements which totaled 1,675 compared to 1,817 in the third quarter of 2010, while revenue earned in profit sharing arrangements decreased by 19%. The decrease in revenue is higher than the effect of the decrease in days employed under time charter with profit share arrangements as the aframaxes Proteas and Promitheas and the VLCC’s La Madrina and La Prudencia have entered the spot market in 2011 whereas the newly delivered vessels Dimitris P and Spyros K that were chartered under profit sharing arrangements contributed with lower gross revenue. Also during the third quarter of 2011, all vessels were earning only the minimum revenue due to the weak market. The number of days in the third quarter 2011 that vessels were employed on spot, contract of affreightment and pool voyages increased to 1,659 from 1,497 in the third quarter of 2010, with a commensurate increase in total revenue earned for these three categories.

Average daily TCE rate earned for the three and nine month periods ended September 30, 2011 and 2010 were:

	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
	$		$		$		$
LNG carrier		34,272		20,904		26,796		32,422
VLCC		11,386		30,908		19,238		34,776
Suezmax		23,025		27,653		23,727		28,508
Aframax		9,828		16,334		13,894		21,028
Panamax		13,945		18,632		15,351		16,693
Handymax		10,156		11,740		11,520		11,168
Handysize		10,173		11,956		13,195		13,978

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 shipping 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):

2

	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2010			2010
Voyage revenues	$	93,862		$	95,519		$	294,367		$	313,040
Less: Voyage Expenses		(34,849	)		(22,576	)		(92,090	)		(67,500	)
Add: Representative operating expenses for bareboat charter ($10,000 daily)		920			920			2,730			2,730
Time charter equivalent revenues	$	59,933		$	73,863		$	205,007		$	248,270
Divided by: net earnings (operating) days		4,264			4,033			12,697			12,194
Average TCE per vessel per day	$	14,055		$	18,315		$	16,146		$	20,360

The third quarter is traditionally the lowest demand quarter for energy transportation in any given year. This year rates were even more challenging, especially for crude carriers, due to tonnage overcapacity, and the decision made by the International Energy Agency (IEA) to release 60 million barrels of oil from stockpiles, with 30 million released in the USA, and the lack of Libyan cargoes due to the civil war in Libya, which put further downward pressure on tanker demand and rates.

As a result of the above and coupled with bunker prices at the 2008 high levels, average time charter equivalent or TCE revenue earned per vessel (see definition and table above) within the third quarter of 2011 was $14,055, significantly lower than the $18,315 earned in the previous year’s third quarter. The LNG sector is the only exception to this weak market as our LNG carrier finished a one year time-charter in August this year, and subsequently entered in a six-month extension at the same charterer’s option at a higher rate. TEN took advantage of the strong LNG market and fixed the LNG for another four years from February 2012 at a lucrative rate. The VLCC’s La Madrina and La Prudencia were operating in the spot market during the third quarter of 2011 earning historically low TCE revenues due to the weak freight market, while in the third quarter of 2010 they were still under their long time charters. Earnings of the smaller product carriers remained at comparable levels with the third quarter of 2010 as four out of the fourteen vessels, were on profit-sharing arrangements earning the fixed minimum rate and protecting the overall income stream as actual market rates were often considerably below the fixed minimums, three were on time charter earning similar rates with the prior year third quarter and the remaining were at spot or period contracts at market rates earning significantly lower TCE. The suezmaxes earned on average lower but healthy TCE rate in the third quarter of 2011 as all suezmaxes were under profit sharing arrangements earning only the minimum rate in the quarter whereas in the third quarter 2010 average suezmax rates were boosted by certain vessels earning profit share during a stronger market. The aframaxes were the category most hit by the weak market as most of the vessels were on spot or period employment at market rates, for both periods and therefore, were mostly affected by the market drop. Panamax average rates earned were also lower, most of these vessels being on a minimum charter with profit-share, but actually earning no profit, while in the third quarter of 2010, some profit was earned.

3

During the nine months ended September 30, 2011, voyage revenue decreased by $18.7 million, or 6.0%, compared to revenue achieved in the nine months ended September 30, 2010. The decrease was primarily due to a generally softer freight market compared to the previous year’s equivalent period caused by the slowdown of trading activity exacerbated by increasing vessel supply. For the nine months of 2011, on average 47.7 vessels were operated compared to 45.7 in the first nine months of 2010. Since the end of the third quarter of 2010 to September 30, 2011, the Company has taken delivery of the panamaxes Selini and Salamina and the suezmaxes Spyros K and Dimitris P and sold the aframaxes Opal Queen and Vergina II. For the nine month periods the utilization achieved was almost the same, 97.6% in 2011 and 97.7% in 2010. Apart from the lost days of the third quarter (as described above), the nine month period of 2011 also includes the dry-docking of Archangel, Alaska and Promitheas, off-hire on Vergina II en route for delivery to its new owners and off-hire days for Sapporo Princess, Asahi Princess, Maria Princess, La Madrina and Nippon Princess en route to replace Vergina II.

Commissions

Commissions amounted to $3.4 million, or 3.6% of revenue from vessels, during the quarter ended September 30, 2011, compared to $3.5 million, or 3.7% of revenue, for the quarter ended September 30, 2010. For the nine month period, commissions amounted to $10.5 million, or 3.6% of revenue in 2011, compared to $11.6 million, or 3.7% of revenue in 2010. The overall decrease in both periods was primarily due to reduced revenues. Changes in employment of several vessels, especially pool arrangements, on which lower commission was charged also contributed.

Voyage expenses

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 for the three months ended September 30, 2011 and 2010:

	Voyage expenses							Average daily voyage expenses per vessel (spot and CoA)
	2011		2010		increase/ (decrease)			2011		2010		increase/ (decrease)
	$ million		$ million					$		$
Bunker expenses		25.1		14.3		76.2	%		22,711		12,640		79.7	%
Port and other expenses		9.7		8.3		16.9	%		8,770		7,357		19.2	%
Total		34.8		22.6		54.4	%		31,481		19,997		57.4	%

4

Voyage expenses for the nine months ended September 30, 2011 and 2010:

	Voyage expenses							Average daily voyage expenses per vessel (spot and CoA)
	2011		2010		increase/ (decrease)			2011		2010		increase/ (decrease)
	$ million		$ million					$		$
Bunker expenses		66.2		43.3		53.1	%		19,904		14,242		39.8	%
Port and other expenses		25.9		24.2		6.7	%		7,775		7,984		(2.6	)%
Total		92.1		67.5		36.4	%		27,679		22,226		24.5	%

The amount of voyage expenses is highly dependent on the voyage patterns followed and part of the change between quarters may 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 third quarter of 2011 was 1,107 compared to 1,129 in the third quarter of 2010, a 2.0% decrease. In the first nine months of 2011, there was a 9.5% decrease. The increase in bunkering expenses is mostly due to the increase in the average price of bunkers by approximately 45.9% between the quarters and 36.6% for the nine month periods and partly because the two VLCCs La Prudencia and La Madrina were trading in the spot market for most of the third quarter of 2011, having been obliged to perform long repositioning voyages, therefore increasing the volume of bunkers by 62.7% compared to prior year third quarter. Port and other expenses have increased by 16.9% between the three month periods and by 6.7% between the nine month periods, but their average daily cost decreased by 2.6% between the two nine month periods.

Charter hire expense

In the first nine months of 2011 there were no chartered-in vessels. For the first nine months of 2010, total charter-hire expense amounted to $1.9 million, relating to the suezmax Decathlon, which was sold in February and immediately time-chartered back (renamed Nordic Passat) in order to continue the charter obligations of the Company until redelivery in mid-June 2010. In addition, a handysize product carrier was chartered-in to cover the obligations of Didimon while in dry-dock.

Vessel operating expenses

Operating expenses for the three months ending September 30, 2011 and 2010:

	Operating expenses							Average daily operating expenses per vessel
	2011		2010		increase/ (decrease)			2011		2010		increase/ (decrease)
	$ million		$ million					$		$
Crew expenses		19.2		17.9		7.5	%		4,474		4,347		2.9	%
Insurances		4.1		3.7		9.1	%		944		903		4.5	%
Repairs and maintenance, and spares		3.8		3.8		1.5	%		893		918		(2.7	)%
Stores		1.7		1.6		2.3	%		382		390		(2.1	)%
Lubricants		1.6		1.7		(2.3	)%		376		402		(6.5	)%
Other (quality and safety, taxes, registration fees, communications)		2.6		2.4		7.3	%		612		595		2.9	%
Total		33.0		31.1		6.1	%		7,681		7,555		1.7	%
Earnings capacity days excluding vessel on bare-boat charter									4,292		4,111

5

Operating expenses for the nine months ending September 30, 2011 and 2010:

	Operating expenses							Average daily operating expenses per vessel
	2011		2010		increase/ (decrease)			2011		2010		increase/ (decrease)
	$ million		$ million					$		$
Crew expenses		57.4		55.3		3.8	%		4,500		4,524		(0.5	)%
Insurances		12.0		11.2		7.3	%		938		911		3.0	%
Repairs and maintenance, and spares		10.7		10.5		1.8	%		840		862		(2.6	)%
Stores		5.1		5.6		(9.1	)%		400		458		(12.7	)%
Lubricants		4.5		4.6		(1.9	)%		356		379		(6.1	)%
Other (quality and safety, taxes, registration fees, communications)		8.0		7.8		2.6	%		629		640		(1.7	)%
Total operating expenses		97.7		95.0		2.9	%		7,663		7,774		(1.4	)%
Earnings capacity days excluding vessel on bare-boat charter									12,742		12,214

Vessel operating expenses include crew expenses, insurances, repairs and maintenance, spares, stores, lubricants, and other expenses such as quality and safety, 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).

Earnings capacity days for the three months period ended September 30, 2011, excluding Millennium, increased by 181 days, or the equivalent of 2.0 more vessels. For the nine months period ended September 30, 2011 earnings capacity days, excluding Millennium, increased by 528 days or 1.9 vessels.

There was a 9% weakening of the U.S. dollar, in the third quarter of 2011 compared to the third quarter of 2010, and a 7% weakening of the U.S. dollar between the equivalent nine months periods. This depreciation mainly impacted crew costs, as approximately 50% of crew expenses, relating mainly to Greek vessel officers, are paid in Euro. For the three months period ended September 30, 2011, daily crew costs increased by 2.9%, whereas for the nine month period ended September 30, 2011, they remained almost the same. Insurance costs increased for the three and nine months periods of 2011 compared to 2010 due to increased premiums.

Repairs, spares and maintenance expenses remained in the same levels for the three and nine month periods ended September 30, 2011, and declined on a daily basis, despite the weakening of the US dollar. This is mostly due to economies of scale achieved by the new managers, TCM (see discussion below). In the first nine months of 2011 five vessels (Amphitrite, Proteas, Archangel, Alaska and Promitheas) performed dry-docking, four of them in European yards, compared to four vessels (Euronike, Eurochampion, Propontis, and Didimon) in the equivalent period of 2010. Expenses incurred during dry-docking which were not deferred, were approximately the same in both periods.

6

Tsakos family private interests and the German owned ship management company Columbia ShipManagement Ltd, jointly created a new ship management company known as Tsakos Columbia ShipManagement S.A. (“TCM”) which, from July 1, 2010, started to manage virtually all the vessels owned by TEN and Tsakos private clients. Even since January 2010, there was cooperation between the joint owners of TCM (Tsakos interests and those of a private German company) in procurement of supplies and parts for vessels. As a result, operating expenses per vessel have fallen from an average of $8,677 for the year 2009 to $7,774 for the first nine months of 2010 and to further decline to $7,663 in the first nine months of 2011. A large part of the decline is attributable to TCM using its purchasing power to obtain better prices in the categories of repairs and maintenance, spares, stores, and lubricants.

Depreciation

Depreciation was $25.9 million during the quarter ended September 30, 2011 compared to $24.0 million during the quarter ended September 30, 2010, an increase of 8.0%. For the first nine months of 2011, depreciation was $75.0 million compared to $67.9 million in the prior year first nine months, a 10.5% increase. The increase in the depreciation expense was due to the addition of four new vessels since the third quarter of 2010.

Amortization of deferred charges

During the quarter ended September 30, 2011, amortization of deferred dry-docking charges was $1.3 million compared to $1.1 million during the quarter ended September 30, 2010. For the most part the total quarterly charge for the respective quarters relates 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 do not indicate that an impairment charge is required for any particular vessel at September 30, 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 value at December 31, 2010 resulting in an impairment charge of $3,077. 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 at March 31, 2011. The vessel was sold in June 2011 prior to dry-docking. The current poor market conditions in the tanker market have negatively affected vessel valuations. Should existing market conditions continue, the possibility will increase that both the market value of the two older VLCCs and the future undiscounted cash flow they are likely to earn over their remaining useful lives will be less than their carrying values and an impairment loss will occur.

7

Management fees

Management fees totaled $3.9 million during the quarter ended September 30, 2011, compared to $3.7 million for the quarter ended September 30, 2010, a 4.2% increase. For the nine months ended September 30, 2011, management fees were $11.7 million compared to $10.3 million in the previous year’s first nine months, a 13.4% increase. Apart from the growth in fleet number, the main reason for the increase was the fee increase in fees on July 1, 2010. There has been no further increase since that date.

The Company pays to Tsakos Energy Management Limited. 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. From July 1, 2010, vessel monthly fees were increased by $3,000 to $27,000 for owned operating vessels or approximately $99 per day per vessel, and to $32,000 in the case of the LNG carrier.

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 $0.8 million during the quarter ended September 30, 2011 compared to $0.9 million during the previous year’s third quarter, a decrease of 11.2% mainly due to reduced investor relations and professional costs set off by increased costs relating to subscription to maritime organizations and sponsorship of maritime conferences. For the nine months to September 30, 2011, general and administrative expenses were $3.0 million compared to $2.7 million during the previous year’s first nine months, an increase of 11.1% mainly due to new project costs and IT expenses relating to new SEC XBRL requirements and upgrading of the Company’s reporting system.

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 $1,086 for the third quarter of 2011, compared to $1,217 in the third quarter of 2010. The decrease is due to almost unchanged total general and administrative expenses spread over a larger number of vessels in the third quarter of 2011.

Stock compensation expense

The amortization charge (stock compensation expense) for the third quarter of 2011 amounted to less than $0.1 million while for the third quarter of 2010 amounted to $0.5 million. For the first nine months of 2011, the charge was $0.8 million compared to $1.3 million for the first nine months of 2010, the decrease being due to the vesting of 274,600 restricted share units (RSUs) at December 31, 2010 and 72,500 RSU’s at June 30, 2011 offset by the issuance of 12,000 RSU’s to the Board of Directors on June 30, 2011. The number of outstanding RSUs has dropped from 476,450 at September 30, 2010 to 139,250 at September 30, 2011.

As at September 30, 2011, 884,450 RSUs had been issued since the inception of the 2004 program to directors, officers and seafarers employed by the Company and to staff of the commercial and technical managers (who are considered as non-employees), of which 725,800 had vested and 19,400 forfeited. Of the remaining outstanding RSUs, 54,750 will vest on December 31, 2011 and 84,500 on 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 the grant date of the RSUs. For non-employees, the amortization rate is based on the share price at the vesting date and thereafter the valuation is adjusted quarterly in line with movements in the share price until the vesting date.

8

Gain on sale of vessels

There were no sales of vessels in the third quarter of 2011. In the third quarter of 2010, the Company sold the panamax tanker Victory III for $7.2 million, realizing a capital loss of $0.5 million due to expenses on its sale. In the first nine months of 2011 the Company sold the aframax tanker Vergina II for $10.9 million, realizing a capital loss of $0.8 million due to expenses on its sale, and the aframax tanker Opal Queen for $34.0 million realizing a gain of $5.8 million. In the first nine months of 2010, the Company sold five vessels for total proceeds of $144.1 million, realizing a total net gain of $19.7 million.

Operating income (loss)

Loss from vessel operations was $9.1 million (with no gains or losses on the sale of vessels) during the third quarter of 2011, compared to $8.6 million income from vessel operations (including loss on the sale of a vessel amounting to $0.5 million) during the third quarter 2010. During the first nine months of 2011, income from vessel operations was $4.6 million (including gains on the sale of vessels amounting to $5.0 million) compared to $71.7 million (including gains on the sale of vessels amounting to $19.7 million) during the first nine months of 2010.

Interest and finance costs

	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
	$ million			$ million			$ million			$ million
Loan interest expense		6.5			6.4			19.2			17.8
Swap interest expense		8.1			8.3			25.2			25.9
Less: Interest capitalized		(0.4	)		(0.6	)		(2.2	)		(1.8	)
Interest expense, net		14.2			14.1			42.2			41.9
Bunkers swap cash settlements		(1.8	)		(0.6	)		(4.7	)		(2.0	)
Change in fair value of non-hedging bunker swaps		2.1			(0.7	)		1.0			2.5
Amortization of deferred loss on de-designated interest rate swap		0.4			0.4			1.1			0.9
Expense of portion of accumulated negative valuation of de-designated interest rate swap		—			0.4			0.5			0.8
Change in fair value of non-hedging interest rate swaps		0.3			0.7			(2.2	)		5.0
Amortization of loan fees		0.2			0.2			0.8			0.9
Bank charges		0.1			0.1			0.2			0.2
Net total		15.5			14.6			38.9			50.2

Interest and finance costs were $15.5 million for the third quarter of 2011 compared to $14.6 million for the quarter ended September 30, 2010, a 6.2% increase. Loan interest (excluding the impact of interest rate swaps) in the third quarter 2011 increased by 1.1% to $6.5 million from $6.4 million in the third quarter of 2010. The average balance of outstanding debt was approximately $1,548 million for the third quarter of 2011 compared to $1,501 million for the previous year’s third quarter and the average loan interest rate fell to 1.6%. However, the average all-in loan finance cost in the third quarter of 2011, taking account of net swap interest paid, was approximately 3.7% in the third quarter of 2011 compared to 3.8% in the third quarter of 2010. Interest paid on swaps amounted to $8.1 million in the third quarter of 2011 compared to $8.3 million in the third quarter of 2010.

9

For the nine months to September 30, 2011, interest and finance costs were $38.9 million compared to $50.2 million in the prior year period, a 22.5% decrease. Loan interest actually increased to $19.2 million from $17.8 million due to a modest increase in the average interest rates due to slightly higher margins on the new loans than the average margins on previously obtained loans and because overall loans outstanding were approximately $64 million higher than in the previous year’s nine month period. However, interest paid on swaps decreased to $25.2 million from $25.9 million in the prior year’s first nine months.

There was a non-cash negative net movement of only $0.3 million in the fair value (mark-to-market) of the non-hedging interest rate swaps in the third quarter of 2011, compared to a negative movement of $0.7 million in the third quarter of 2010. In the nine months to September 30, 2011, there was a positive movement of $2.2 million compared to a negative movement of $5.0 million for the first nine months of 2010.

Amortization of the deferred loss on de-designation of an interest rate swap that became ineffective in 2010 amounted to $0.4 million in both third quarters. The previous third quarter also incurred an immediate expense of $0.4 million from the accumulated negative valuation relating to the same de-designated swap transferred from Other comprehensive loss, following the sale of one of the vessels part financed by the loan associated with the swap. The amortization of the deferred loss on de-designation of the swap amounted to $1.1 million in the first nine months of 2011, and $0.9 million in the prior year nine months. The immediate expense of portions of the accumulated negative valuation relating to the de-designated swap transferred from Other comprehensive loss amounted to $0.5 million in the 2011 nine month period and $0.8 million in the prior year nine months.

Also in the third quarter of 2011, there was a negative non-cash movement of $2.1 million on bunker swaps entered into since March 2009, which do not qualify as hedging instruments and an actual receipt of $1.8 million on these swaps. In the third quarter of 2010, there was a positive movement on these swaps of $0.7 million and cash was received amounted to $0.6 million. For the nine months to September 30, 2011, cash received amounted to $4.7 million ($2.0 million in the prior period) and valuation movements amounted to a negative $1.0 million compared to a negative $2.5 million in the prior nine months.

Capitalized interest is based on expenditure incurred to date on vessels under construction. In the third quarter of 2011, capitalized interest was $0.4 million compared to $0.6 million in the previous year’s third quarter, the decrease being due to the delivery of the two suezmaxes in 2011. For the first nine months of 2011 and 2010, capitalized interest was $2.2 million and $1.8 million respectively.

Amortization of loan expenses amounted to $0.3 million in the third quarter of 2011 and $0.3 million in the third quarter of 2010.

Interest income

Total income derived from bank deposits was $0.8 million during the third quarter of 2011 and $0.7 million during the quarter ended September 30, 2010. For both the nine month periods of 2011 and 2010, $2.0 million were earned, interest rates and average balances being at approximately the same levels for the equivalent periods of 2011 and 2010.

10

Net income attributable to the non-controlling interest

A third-party company has a non-controlling interest of 49% in our 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 non-controlling interest in the third quarter 2011 amounted to $0.1 million compared to $0.2 million in the third quarter 2010, the decrease being primarily due to increased repairs and maintenance and crew expenses, the revenue being the same for both periods as the vessels are on time charter with profit sharing and earned only the minimum for both periods. For the nine months to September 30, 2011, the income attributable to the non-controlling interest amounted to $0.4 million compared to $1.1 million in the first nine months of 2010, the decrease was primarily due to the settlement of a prior year claim in the second quarter of 2010.

Net income attributable to Tsakos Energy Navigation Limited

As a result of the foregoing, net loss attributable to Tsakos Energy Navigation Limited for the quarter ended September 30, 2011 was $24.1 million, or $0.52 per share diluted, versus net loss of $5.5 million, or $0.14 per share diluted, for the quarter ended September 30, 2010. Net loss attributable to Tsakos Energy Navigation Limited for the nine months ended September 30, 2011 was $32.9 million, or $0.71 per share diluted, versus net income of $22.4 million, or $0.59 per share diluted, for the nine months ended September 30, 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 and dry-docking schedule requires us to expend cash. 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.

Given our non-restricted cash holdings as at September 30, 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 are sufficient to meet our liquidity needs through January 1, 2013, taking into account both our existing capital commitments and the minimum debt service requirements.

Working capital (non-restricted net current assets) amounted to $81.3 million at September 30, 2011, compared to $95.8 million as at September 30, 2010. Non-restricted cash balances at September 30, 2011 were $231.0 million compared to $249.6 million at September 30, 2010.

Net cash provided by operating activities was $5.0 million in the quarter ended September 30, 2011, compared to $23.0 million in the previous year’s third quarter. For the nine month respective periods, net cash from operating activities was $40.6 million in 2011, compared to $67.5 million in the first nine months of 2010, mainly due to lower net income in the first nine months of 2011.

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. Actual payments to ship-yards where dry-dockings are performed are made in installments, starting usually with a payment in advance and with final settlement usually at or after completion of the dry-docking. In the third quarter of 2011, an amount of $1.1 million was paid primarily for the dry-dockings of the vessels Proteas and Amphitrite, compared to payments of $1.7 million in the third quarter of 2010. For the nine months periods, $4.0 million was paid in 2011 compared to $4.7 million in the previous year’s first nine months.

11

Net cash used in investing activities was $17.4 million for the quarter ended September 30, 2011, and $114.9 million for the quarter ended September 30, 2010. In the third quarter of 2011, net funds for acquisitions and improvements on existing vessels amounted to $16.1 million, relating to the acquisition of newbuilding Dimitris P while $109.8 million was paid in the prior third quarter for the acquisition of World Harmony and Chantal. In the third quarter of 2011, there were no vessel sales, while in the third quarter of 2010, the vessel Victory III was sold generating sales proceeds of $6.4 million. For the nine month period, vessel sales proceeds in 2011 generated $42.5 million. In the first nine months of 2010, vessel sales proceeds amounted to $140.5 million.

In the third quarter of 2011, expenditure for vessels under construction amounted to $0.3 million compared to advances and expenses totalling $11.5 million in the third quarter of 2010. For the nine month period, advances amounted to $19.1 million in 2011 and $55.3 million in 2010. There were two vessels on order as at September 30, 2011 and two on order as at September 30, 2010. The suezmax Dimitris P was delivered in August 2011. The two vessels under construction at September 30, 2011 are suezmaxes DP2 shuttle tankers, at a contract price of $92.0 million each, the first to be delivered in the first quarter of 2013 and the second in the second quarter of 2013. In total, $165.6 million was remaining to be paid at September 30, 2011 relating to these two shuttle tankers, of which $18.4 million was paid in October 2011, $55.2 million is payable in 2012 and $92.0 million is payable in 2013. We are in discussion with banks as to the partial financing of these two suezmaxes.

Net cash provided by financing activities was $16.0 million in the quarter ended September 30, 2011, compared to $35.9 million during the quarter ended September 30, 2010. Net cash used in financing activities was $36.7 million in the nine months ended September 30, 2011, compared to $4.3 million provided by financing activities during the nine months ended September 30, 2010. In the third quarter of 2011, $48.7 million of new debt was drawn down for the acquisition of the suezmax Dimitris P. In the third quarter of 2010, $70.0 million of new debt was drawn down for the acquisition of two panamax tankers, World Harmony and Chantal. In the third quarter of 2011 there were scheduled loan repayments of $28.0 million compared to total repayments and prepayments of $29.2 million in the third quarter of 2010.

Total debt outstanding increased from $1,527 million at the beginning of the third quarter 2011 to $1,548 million by the quarter end. The debt to capital (equity plus debt) ratio was 61.3% at September 30, 2011 (or 57.3% on a net of cash basis). One new interest rate swap to cover a notional amount of $41.6 million was arranged during the third quarter with a start date of May 2013. Interest rate swap coverage on outstanding loans was approximately 55%.

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%. Non-compliance with any of these covenants could result in a default under our credit agreements, requiring the Company to prepay the amount required to redress the default. There were no such defaults as at September 30, 2011. The most significant risk in the current economic environment has been the decline in vessel values. If values were to further decline to lower levels than witnessed in recent months, it could eventually lead to non-compliance in respect of the minimum hull value to loan requirement and the leverage ratio on one or more of our loans.

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No new shares were issued in the third quarters of 2011 and 2010.

Quarterly dividends of $0.15 per share each were paid on February 2, April 28 and August 10, 2011 and amounted to $6.9 million for each distribution. 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. A fourth dividend of $0.15 was declared in October, 2011 and was paid on November 30, 2011 amounting to $6.9 million in total. In the third quarter of 2010, following a decision to amend distributions to a quarterly basis, a first quarterly dividend of $0.15 was paid on July 15, 2010.

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