8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 27, 2007

HORIZON LINES, INC.

(Exact name of registrant as specified in its Charter)

Delaware	001-32627	74-3123672
(State or Other Jurisdiction	(Commission File Number)	(I.R.S. Employer
of Organization)		Identification No.)

4064 Colony Road, Suite 200
Charlotte, North Carolina 28211
(Address of Principal Executive Offices, including Zip Code)

(704) 973-7000
(Registrant’s telephone number, including area code)

N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

On July 31, 2007, Horizon Lines, Inc. (the “Company”) announced that it had received the requisite consents (“Consents”) of the holders of approximately 95.82% of the 9.0% Senior Notes due 2012 of Horizon Lines, LLC and Horizon Lines Holding Corp. (the “Senior Notes”) and 98.75% of the 11.0% Senior Discount Notes due 2013 of H-Lines Finance Holding Corp. (the “Senior Discount Notes” together with the Senior Notes, the “Notes”), in connection with the previously disclosed tender offer and consent solicitation (the “Tender Offer”) by the Company. On July 31, 2007, Horizon Lines, LLC, Horizon Lines Holding Corp., the subsidiaries of the Company acting as guarantors (the “Guarantors”) and The Bank of New York Trust Company, N.A., as trustee (the “Trustee”) entered into a first supplemental indenture (the “Senior Notes First Supplemental Indenture”), which supplements the Indenture dated as of July 7, 2004, among Horizon Lines, LLC, Horizon Lines Holding Corp., the Guarantors referred to therein and the Trustee (the “Senior Notes Indenture”). In addition, H-Lines Finance Holding Corp. and the Trustee entered into a first supplemental indenture (the “Senior Notes Discount First Supplemental Indenture” together with the Senior Notes First supplemental Indenture, the “Supplemental Indentures”), which supplements the Indenture dated as of December 10, 2004 among H-Lines Finance Holding Corp. and the Trustee (the “Senior Discount Notes Indenture” together with the Senior Notes Indenture, the “Indentures”).

The First Supplemental Indentures effect certain amendments to the Indentures, proposed in connection with the Tender Offer, that will eliminate substantially all of the restrictive covenants in the Indentures. The Supplemental Indentures became effective upon signing by the parties thereto, but the amendments set forth therein will become operative only upon the acceptance for purchase by the Company of the Notes validly tendered and not validly withdrawn in the Tender Offer, which is expected to occur on or prior to August 13, 2007.

This summary of the Supplemental Indentures is qualified in its entirety by reference to the Supplemental Indentures attached as Exhibit 4.1 and Exhibit 4.2 hereto, which are incorporated herein by reference.

Item 2.02 Results of Operations and Financial Condition

On July 27, 2007, the Company (i) held a conference call to discuss financial results for the quarter ended June 24, 2007, and (ii) issued a press release and made available its Second Quarter 2007 Earnings Release. A copy of the transcript of the conference call is attached as Exhibit 99.1 hereto, a copy of the press release is attached as Exhibit 99.2 hereto, and a copy of the Second Quarter 2007 Earnings Release is attached as Exhibit 99.3 hereto, and each is incorporated herein by reference. The press release and the Second Quarter 2007 Earnings Release are available on the Company’s website, www.horizonlines.com until August 10, 2007.

NON-GAAP FINANCIAL MEASURES

Item 2.02 of this Current Report on Form 8-K includes the financial measures EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income and adjusted earnings per share which

are non-GAAP financial measures. EBITDA is defined as net income plus net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and certain other adjustments. Adjusted operating income is defined as operating income adjusted to exclude unusual items. Adjusted net income is defined as net income adjusted to exclude unusual items. Adjusted earnings per share is defined as adjusted net income divided by basic shares outstanding. We acknowledge that there are limitations when using EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income or adjusted earnings per share. These financial measures are not recognized terms under GAAP and do not purport to be alternatives to operating income as a measure of operating performance, to net income or net income per share as a measure of earnings or to cash flows from operating activities as a measure of liquidity. Additionally, these financial measures are not intended to be measures of free cash flow for management’s discretionary use, as they do not consider certain cash requirements such as tax payments and debt service requirements. Because all companies do not use identical calculations, these presentations of EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income, and adjusted earnings per share may not be comparable to other similarly titled measures of other companies.

Item 7.01 Regulation FD Disclosure

The disclosure contained in Item 2.02 is incorporated herein by reference.

Item 8.01 Other Events.

The disclosure contained in Item 1.01 is incorporated herein by reference.

On July 31, 2007, the Company issued a press release announcing receipt of the requisite consents in connection with its Tender Offer. A copy of this press release is attached hereto as Exhibit 99.4 and is incorporated herein by reference.

On July 31, 2007, the Company issued a press release announcing plans for an offering of approximately $300 million principal amount of 4.5% Convertible Senior Notes due 2012 (the “Convertible Senior Notes”). A copy of this press release is attached hereto as Exhibit 99.5 and is incorporated herein by reference.

On August 2, 2007, the Company issued a press release announcing the pricing terms of the Convertible Senior Notes. The transaction is expected to close August 8, 2007, subject to customary closing conditions. A copy of this press release is attached hereto as Exhibit 99.6 and is incorporated herein by reference.

SAFE HARBOR STATEMENT

The information contained in this Current Report on Form 8-K (including the exhibits hereto) should be read in conjunction with our filings made with the Securities and Exchange

Commission. This Current Report on Form 8-K (including the exhibits hereto) contains “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “projects,” “likely,” “will,” “would,” “could” and similar expressions or phrases identify forward-looking statements.

     All forward-looking statements involve risk and uncertainties. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results.

     Factors that may cause actual results to differ from expected results include: our substantial debt; uncertainty and volatility in the credit markets that could delay or prevent our tender offer for the 9% senior notes and 11% senior discount notes and any related refinancing of our existing debt; restrictive covenants under our debt agreements; decreases in shipping volumes; our failure to renew our commercial agreements with Maersk; rising fuel prices; labor interruptions or strikes; job related claims, liability under multi-employer pension plans; compliance with safety and environmental protection and other governmental requirements; new statutory and regulatory directives in the United States addressing homeland security concerns; the successful start-up of any Jones Act competitor; delayed delivery or non-delivery of one or more of our new vessels; increased inspection procedures and tighter import and export controls; restrictions on foreign ownership of our vessels; repeal or substantial amendment of the coastwise laws of the United States, also known as the Jones Act; escalation of insurance costs, catastrophic losses and other liabilities; the arrest of our vessels by maritime claimants; severe weather and natural disasters; our inability to exercise our purchase options for our chartered vessels; the aging of our vessels; unexpected substantial drydocking costs for our vessels; the loss of our key management personnel; actions by our stockholders; changes in tax laws or in their interpretation or application, adverse tax audits and other tax matters; and legal or other proceedings to which we are or may become subject.

     In light of these risks and uncertainties, expected results or other anticipated events or circumstances discussed in this Form 10-Q might not occur. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

     See the section entitled “Risk Factors” in our Form 10-K for the fiscal year ended December 24, 2006 as filed with the SEC for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. Those factors and the other risk factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on,

us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

4.1*	First Supplemental Indenture, dated as of July 31, 2007, to the Indenture dated as of July 7, 2004, by and among Horizon Lines Holding Corp., Horizon Lines, LLC, the guarantors party thereto and The Bank of New York Trust Company, N.A., as Trustee.
4.2*	First Supplemental Indenture, dated as of July 31, 2007, to the Indenture dated as of December 10, 2004 by H-Lines Finance Holding Corp. and The Bank of New York Trust Company, N.A., as Trustee.
99.1*	Transcript of conference call held on July 27, 2007.
99.2*	Press release, dated July 27, 2007.
99.3*	Second Quarter 2007 Earnings Release.
99.4*	Press release, dated July 31, 2007.
99.5*	Press Release, dated July 31, 2007.
99.6*	Press Release, dated August 2, 2007.

* Filed herewith

SIGNATURE

     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 hereunto duly authorized.

	HORIZON LINES, INC. (Registrant)
Date: August 2, 2007	By:	/s/ M. Mark Urbania
		M. Mark Urbania Senior Vice President, Chief Financial Officer and Assistant Secretary

EX-4.1

Exhibit 4.1

HORIZON LINES, LLC
HORIZON LINES HOLDING CORP.
as Issuers

the GUARANTORS party hereto,
as Guarantors

9% Senior Notes due 2012

FIRST SUPPLEMENTAL INDENTURE

Dated as of July 31, 2007

THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Trustee

Supplementing the Indenture dated as of July 7, 2004

FIRST SUPPLEMENTAL INDENTURE

     FIRST SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”) dated as of July 31, 2007, among HORIZON LINES, LLC, a Delaware limited liability company, as co-issuer, and HORIZON LINES HOLDING CORP., a Delaware corporation, as co-issuer (together with Horizon Lines, LLC, the “Issuers”), each of the guarantors named in the Indenture (the “Guarantors”) and The Bank of New York Trust Company, N.A., a national banking association, as Trustee (the “Trustee”).

RECITALS

     WHEREAS, the Issuers, the Guarantors and the Trustee have heretofore executed and delivered a certain Indenture, dated as of July 7, 2004 (the “Indenture”) with respect to the Issuers’ 9.0% Senior Notes due 2012 (the “Senior Notes”);

     WHEREAS, Section 9.02 of the Indenture provides that, with the written consent of the Holders of at least a majority in aggregate principal amount of the Senior Notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Senior Notes), the Issuers, the Guarantors and the Trustee may amend or supplement the Indenture;

     WHEREAS, Horizon Lines, Inc., a Delaware corporation (“Horizon Lines”) has offered to purchase for cash any and all outstanding Senior Notes, upon the terms and subject to the conditions set forth in its Offer to Purchase and Consent Solicitation Statement, dated July 17, 2007 (the “Offer to Purchase”), and in the related Consent and Letter of Transmittal (the “Letter of Transmittal” and together with the Offer to Purchase, the “Tender Offer”); in connection therewith, the Issuers have been soliciting written consents of the Holders to the amendments to the Indenture set forth herein (and to the execution of this First Supplemental Indenture), and the Issuers have now obtained such written consents from the Holders of a majority in aggregate principal amount of the outstanding Senior Notes; accordingly, the First Supplemental Indenture and the amendments set forth herein are authorized pursuant to Section 9.02 of the Indenture; and

     WHEREAS, the execution and delivery of this First Supplemental Indenture has been duly authorized by the parties hereto, and all other acts necessary to make this First Supplemental Indenture a valid and binding agreement to the Indenture effectively amending the Indenture as set forth herein have been duly taken;

     NOW, THEREFORE, in consideration of the above premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, it is mutually agreed, for the equal and proportionate benefit of all Holders, as follows:

ARTICLE I
DEFINITIONS AND EFFECT

     1.1 Incorporation of Previous Documents. Unless otherwise expressly provided, the provisions of the Indenture are incorporated herein by reference.

     1.2 Definitions. Capitalized terms which are used but not defined herein shall have the meanings ascribed to such terms in the Indenture.

     1.3 Effectiveness and Operativeness of this Supplemental Indenture.

          (a) Effectiveness. This Supplemental Indenture will become effective and binding upon the Company, the Trustee and the holders of the Senior Notes as of the date on which the Opinion of Counsel and Officers’ Certificate required by Section 9.06 of the Indenture is delivered to the Trustee.

          (b) Operativeness. All of the provisions of this Supplemental Indenture other than Article II hereof will become operative on and simultaneously with the time that this Supplemental Indenture becomes effective; and Article II hereof will become operative upon and simultaneously with, and shall have no force or effect prior to, the time when the Company has accepted for purchase in accordance with the Tender Offer and the Offer to Purchase all Senior Notes validly tendered and not validly withdrawn prior to the Expiration Time (as defined in the Offer to Purchase), and given notice thereof to the Trustee (upon which notice the Trustee may rely).

     1.4 Effect on the Indenture. Upon effectiveness of this Supplemental Indenture as provided in Section 1.3(a) hereof, then automatically (without further act by any person) and with respect to all outstanding Senior Notes, the Indenture shall be deemed to be modified as herein provided, but except as modified hereby, the Indenture shall continue in full force and effect. The Indenture as modified hereby shall be read, taken and construed as one and the same instrument.

ARTICLE II
AMENDMENTS TO THE INDENTURE

     2.1 Amendments to Certain Covenants of the Indenture. Sections 4.03 to 4.23 and Section 5.01 of the Indenture are hereby amended to read as follows:

     SECTION 4.03. Corporate Existence.

[Intentionally deleted by Amendment.]

     SECTION 4.04. Payment of Taxes.

[Intentionally deleted by Amendment]

     SECTION 4.05. [RESERVED].

     SECTION 4.06. Compliance Certificate; Notice of Default.

[Intentionally deleted by Amendment]

     SECTION 4.07. Payments for Consent.

[Intentionally deleted by Amendment]

     SECTION 4.08. Waiver of Stay, Extension or Usury Laws.

[Intentionally deleted by Amendment]

     SECTION 4.09. Change of Control.

[Intentionally deleted by Amendment]

     SECTION 4.10. Incurrence of Indebtedness and Issuance of Preferred Stock.

[Intentionally deleted by Amendment]

     SECTION 4.11. Limitations on Restricted Payments.

[Intentionally deleted by Amendment]

     SECTION 4.12. Limitations on Liens.

[Intentionally deleted by Amendment]

     SECTION 4.13. Limitations on Asset Sales.

[Intentionally deleted by Amendment]

     SECTION 4.14. Limitations on Transactions with Affiliates.

[Intentionally deleted by Amendment]

     SECTION 4.15. Dividend and Other Payment Restrictions Affecting Subsidiaries

[Intentionally deleted by Amendment]

     SECTION 4.16. Subsidiary Guarantees.

[Intentionally deleted by Amendment]

     SECTION 4.17. Limitations on Layering Indebtedness.

[Intentionally deleted by Amendment]

     SECTION 4.18. Reports to Holders.

[Intentionally deleted by Amendment]

     SECTION 4.19. Limitations on Designation of Restricted and Unrestricted Subsidiaries.

[Intentionally deleted by Amendment]

     SECTION 4.20. Business Activities.

[Intentionally deleted by Amendment]

     SECTION 4.21. Limitation on Sale/Leaseback Transactions

[Intentionally deleted by Amendment]

     SECTION 4.22. Ownership of Issuers.

[Intentionally deleted by Amendment]

     SECTION 4.23. Special Interest Notice.

[Intentionally deleted by Amendment]

     SECTION 5.01. Mergers, Consolidations, Etc.

[Intentionally deleted by Amendment]

     2.2 Amendments to Certain Events of Default of the Indenture. Section 6.01 of the Indenture is hereby amended to read in its entirety as follows:

     SECTION 6.01. Events of Default.

     Each of the following is an “Event of Default”:

     (1) default by the Company or any Guarantor for 30 consecutive days in the payment when due and payable of interest on, or Special Interest, if any, with respect to, the Notes;

     (2) default by the Company or any Guarantor in the payment when due and payable of the principal of or premium, if any, on the Notes;

     (3) [Intentionally deleted by Amendment.]

     (4) failure by the Company or any of its Restricted Subsidiaries for 60 consecutive days after notice has been given to the Issuers by the Trustee or to the Issuers and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes then outstanding specifying the default and demanding compliance with any of the other covenants in this Indenture;

     (5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Issuers or any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, whether such Indebtedness now exists or is created after the date of this Indenture, if that default:

     (a) is caused by a failure to pay the principal amount of any such Indebtedness at its stated final maturity after giving effect to any applicable grace periods (a “Payment Default”); or

     (b) results in the acceleration of such Indebtedness prior to its stated final maturity; and

in the case of clauses (a) and (b) above, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more and such failure shall not have been cured or waived within 60 days thereof;

     (6) failure by the Issuers or any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $15.0 million in excess of amounts that are covered by insurance, which judgments are not paid, discharged or stayed for a period of 60 days after such judgment or judgments become final and non-appealable;

     (7) except as permitted by this Indenture, any Guarantee of a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor or any Person acting on behalf of any Guarantor shall deny or disaffirm in writing its obligations under its Guarantee;

     (8) either Issuer or any of the Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary as debtor in an involuntary case, pursuant to or within the meaning of any Bankruptcy Law:

     (a) commences a voluntary case or proceeding,

     (b) consents to the entry of an order for relief or decree against it in an involuntary case or proceeding,

     (c) consents to the appointment of a Custodian of it or for all or substantially all of its assets, or

     (d) makes a general assignment for the benefit of its creditors;

     (e) admits in writing its inability to pay its debts generally as they become due; or

     (f) files a petition or answer or consent seeking reorganization or relief; and

     (9) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

     (a) is for relief against either Issuer or any of the Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary as debtor in an involuntary case or proceeding;

     (b) appoints a Custodian of either Issuer or any of the Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, or a Custodian for all or substantially all of the assets of either Issuer or any of the Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary or adjudges any such entity or group a bankrupt or insolvent or approves as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of such entity or group; or

     (c) orders the winding up or liquidation of either Issuer or any of the Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days.

     2.3 Amendments to Certain Definitions. Article One of the Indenture is hereby amended by deleting those definitions which appear solely in the text deleted from the Indenture pursuant to the amendments contained herein.

     2.4 Failure to Comply with Certain Provisions of the Indenture. Any failure by the Issuers or Guarantors to comply with the terms of Sections 4.03-4.23, 5.01 or Clause (3) of Section 6.01 (whether before or after the execution of this First Supplemental Indenture) shall no longer constitute a default or an Event of Default under the Indenture and shall no longer have any other consequence under the Indenture.

ARTICLE III
THE TRUSTEE

     3.1 Acceptance by Trustee. The Trustee hereby accepts this First Supplemental Indenture. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this First Supplemental Indenture, for the due execution hereof by the Issuers or the Guarantors or for or in respect of the recitals contained herein, all of which recitals are made by the Issuers and Guarantors solely.

ARTICLE IV
MISCELLANEOUS PROVISIONS

     4.1 Further Assurances. The parties hereto will execute and deliver such further instruments and do such further acts and things as may be reasonably required to carry out the intent and purpose of this First Supplemental Indenture and the Indenture.

     4.2 Governing Law. This First Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York as to all matters, including, without limitation, matters of validity, construction, effect, performance and remedies.

     4.3 Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but such counterparts shall together constitute but one and the same instrument.

     4.4 Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

     4.5 Successors and Assigns. All covenants and agreements of the Issuers, the Guarantors and the Trustee in this First Supplemental Indenture shall bind each of the Issuer’s, the Guarantor’s and the Trustee’s respective successors and assigns, whether so expressed or not.

     4.6 Severability Clause. In case any provision of this First Supplemental Indenture should be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

     4.7 Conflict with Trust Indenture Act. If any provision of this First Supplemental Indenture limits, qualifies or conflicts with a provision of the Trust Indenture Act of 1939, as amended (the “TIA”) that is required under the TIA to be a part

of and govern this First Supplemental Indenture, the latter provision shall control. If any provision of this First Supplemental Indenture modifies or excludes any provisions of the TIA that may be so modified or excluded, the latter provision shall be deemed to apply to this First Supplemental Indenture as so modified or to be excluded, as the case may be.

     IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, all as of the day and year first written above.

	HORIZON LINES, LLC,
	as Issuer
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: VP & Secretary
	HORIZON LINES HOLDING CORP.
	as Issuer
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: VP & Secretary
	HORIZON LINES OF PUERTO RICO, INC.
	as a Guarantor
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: VP & Secretary
	HLH, LLC,
	as a Guarantor
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: VP & Secretary

	HORIZON SERVICES GROUP, LLC
	as a Guarantor
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: Secretary
	SEA-LOGIX, LLC, as a Guarantor
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: Secretary
	S-L DISTRIBUTION SERVICE, LLC,
	as a Guarantor
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: Secretary
	SL PAYROLL SERVICES, LLC,
	as a Guarantor
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: Secretary

	HORIZON LINES VENTURES, LLC
	as a Guarantor
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: VP & Secretary
	HORIZON LINES OF ALASKA, LLC,
	as a Guarantor
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: Secretary
	HORIZON LINES OF GUAM, LLC,
	as a Guarantor
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: Secretary
	HORIZON LINES VESSELS, LLC,
	as a Guarantor
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: Secretary
	BANK OF NEW YORK TRUST COMPANY, N.A.,
	as Trustee
By:	/s/ Tina D. Gonzalez
	Name: Tina D. Gonzalez
	Title: Assistant Treasurer

EX-4.2

Exhibit 4.2

H-LINES FINANCE HOLDING CORP.
as Issuer

11% Senior Discount Notes due 2013

FIRST SUPPLEMENTAL INDENTURE

Dated as of July 31, 2007

THE BANK OF NEW YORK TRUST COMPANY, N.A.

as Trustee

Supplementing the Indenture dated as of December 10, 2004

FIRST SUPPLEMENTAL INDENTURE

     FIRST SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”) dated as of July 31, 2007, among H-LINES FINANCE HOLDING CORP., a Delaware corporation, as Issuer (the “Issuer) and The Bank of New York Trust Company, N.A., a national banking association, as Trustee (the “Trustee”).

RECITALS

     WHEREAS, the Issuer and the Trustee have heretofore executed and delivered a certain Indenture, dated as of December 10, 2004 (the “Indenture”) with respect to the Issuer’s 11.0% Senior Discount Notes due 2013 (the “Senior Discount Notes”);

     WHEREAS, Section 9.02 of the Indenture provides that, with the written consent of the Holders of a majority in principal amount at maturity of the Senior Discount Notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Senior Discount Notes), the Issuer and the Trustee may amend or supplement the Indenture;

     WHEREAS, Horizon Lines, Inc., a Delaware corporation (“Horizon Lines”) has offered to purchase for cash any and all outstanding Senior Discount Notes, upon the terms and subject to the conditions set forth in its Offer to Purchase and Consent Solicitation Statement, dated July 17, 2007 (the “Offer to Purchase”), and in the related Consent and Letter of Transmittal (the “Letter of Transmittal” and together with the Offer to Purchase, the “Tender Offer”); in connection therewith, the Issuer has been soliciting written consents of the Holders to the amendments to the Indenture set forth herein (and to the execution of this First Supplemental Indenture), and the Issuer has now obtained such written consents from the Holders of a majority in principal amount at maturity of the outstanding Senior Discount Notes; accordingly, the First Supplemental Indenture and the amendments set forth herein are authorized pursuant to Section 9.02 of the Indenture; and

     WHEREAS, the execution and delivery of this First Supplemental Indenture has been duly authorized by the parties hereto, and all other acts necessary to make this First Supplemental Indenture a valid and binding agreement to the Indenture effectively amending the Indenture as set forth herein have been duly taken;

     NOW, THEREFORE, in consideration of the above premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, it is mutually agreed, for the equal and proportionate benefit of all Holders, as follows:

ARTICLE I
DEFINITIONS AND EFFECT

     1.1 Incorporation of Previous Documents. Unless otherwise expressly provided, the provisions of the Indenture are incorporated herein by reference.

     1.2 Definitions. Capitalized terms which are used but not defined herein shall have the meanings ascribed to such terms in the Indenture.

     1.3 Effectiveness and Operativeness of this Supplemental Indenture.

          (a) Effectiveness. This Supplemental Indenture will become effective and binding upon the Company, the Trustee and the holders of the Senior Discount Notes as of the date on which the Opinion of Counsel and Officers’ Certificate required by Section 9.06 of the Indenture is delivered to the Trustee.

          (b) Operativeness. All of the provisions of this Supplemental Indenture other than Article II hereof will become operative on and simultaneously with the time that this Supplemental Indenture becomes effective; and Article II hereof will become operative upon and simultaneously with, and shall have no force or effect prior to, the time when the Company has accepted for purchase in accordance with the Tender Offer and the Offer to Purchase all Senior Discount Notes validly tendered and not validly withdrawn prior to the Expiration Time (as defined in the Offer to Purchase), and given notice thereof to the Trustee (upon which notice the Trustee may rely).

     1.4 Effect on the Indenture. Upon effectiveness of this Supplemental Indenture as provided in Section 1.3(a) hereof, then automatically (without further act by any person) and with respect to all outstanding Senior Discount Notes, the Indenture shall be deemed to be modified as herein provided, but except as modified hereby, the Indenture shall continue in full force and effect. The Indenture as modified hereby shall be read, taken and construed as one and the same instrument.

ARTICLE II
AMENDMENTS TO THE INDENTURE

     2.1 Amendments to Certain Covenants of the Indenture. Sections 4.03 to 4.23 and Section 5.01 of the Indenture are hereby amended to read as follows:

     SECTION 4.03. Corporate Existence.

          [Intentionally deleted by Amendment.]

     SECTION 4.04. Payment of Taxes.

          [Intentionally deleted by Amendment]

     SECTION 4.05. [RESERVED].

     SECTION 4.06. Compliance Certificate; Notice of Default.

          [Intentionally deleted by Amendment]

     SECTION 4.07. Payments for Consent.

          [Intentionally deleted by Amendment]

     SECTION 4.08. Waiver of Stay, Extension or Usury Laws.

          [Intentionally deleted by Amendment]

     SECTION 4.09. Change of Control.

          [Intentionally deleted by Amendment]

     SECTION 4.10. Incurrence of Indebtedness and Issuance of Preferred Stock.

          [Intentionally deleted by Amendment]

     SECTION 4.11. Limitations on Restricted Payments.

          [Intentionally deleted by Amendment]

     SECTION 4.12. Limitations on Liens.

          [Intentionally deleted by Amendment]

     SECTION 4.13. Limitations on Asset Sales.

          [Intentionally deleted by Amendment]

     SECTION 4.14. Limitations on Transactions with Affiliates.

          [Intentionally deleted by Amendment]

SECTION 4.15. Dividend and Other Payment Restrictions Affecting Subsidiaries

          [Intentionally deleted by Amendment]

     SECTION 4.16. [RESERVED]

     SECTION 4.17. Limitations on Layering Indebtedness.

          [Intentionally deleted by Amendment]

     SECTION 4.18. Reports to Holders.

          [Intentionally deleted by Amendment]

     SECTION 4.19. Limitations on Designation of Restricted and Unrestricted Subsidiaries.

          [Intentionally deleted by Amendment]

     SECTION 4.20. Business Activities.

          [Intentionally deleted by Amendment]

     SECTION 4.21. Limitation on Sale/Leaseback Transactions

          [Intentionally deleted by Amendment]

     SECTION 4.22. [RESERVED]

     SECTION 4.23. Special Interest Notice.

          [Intentionally deleted by Amendment]

     SECTION 5.01. Mergers, Consolidations, Etc.

          [Intentionally deleted by Amendment]

     2.2 Amendments to Certain Events of Default of the Indenture. Section 6.01 of the Indenture is hereby amended to read in its entirety as follows:

     SECTION 6.01. Events of Default.

     Each of the following is an “Event of Default":

     (1) default by the Issuer for 30 consecutive days in the payment when due and payable of interest on, or Special Interest, if any, with respect to, the Notes;

     (2) default by the Issuer in the payment when due and payable of the Accreted Value of or premium, if any, on the Notes;

     (3) [Intentionally deleted by Amendment];

     (4) failure by the Issuer or any of its Restricted Subsidiaries for 60 consecutive days after notice has been given to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in aggregate principal amount at maturity of the Notes then outstanding specifying the default and demanding compliance with any of the other covenants in this Indenture;

     (5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, whether such Indebtedness now exists or is created after the date of this Indenture, if that default:

     (a) is caused by a failure to pay the principal amount of any such Indebtedness at its stated final maturity after giving effect to any applicable grace periods (a “Payment Default"); or

     (b) results in the acceleration of such Indebtedness prior to its stated final maturity; and

in the case of clauses (a) and (b) above, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more and such failure shall not have been cured or waived within 60 days thereof;

     (6) failure by the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary to pay final judgments aggregating in

excess of $15.0 million in excess of amounts that are covered by insurance, which judgments are not paid, discharged or stayed for a period of 60 days after such judgment or judgments become final and non-appealable;

     (7) the Issuer or any of the Issuer’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary as debtor in an involuntary case, pursuant to or within the meaning of any Bankruptcy Law:

     (a) commences a voluntary case or proceeding,

     (b) consents to the entry of an order for relief or decree against it in an involuntary case or proceeding,

     (c) consents to the appointment of a Custodian of it or for all or substantially all of its assets, or

     (d) makes a general assignment for the benefit of its creditors;

     (e) admits in writing its inability to pay its debts generally as they become due; or

     (f) files a petition or answer or consent seeking reorganization or relief; and

     (8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

     (a) is for relief against the Issuer or any of the Issuer’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary as debtor in an involuntary case or proceeding;

     (b) appoints a Custodian of the Issuer or any of the Issuer’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, or a Custodian for all or substantially all of the assets of the Issuer or any of the Issuer’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary or adjudges any such entity or group a bankrupt or insolvent or approves as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of such entity or group; or

     (c) orders the winding up or liquidation of the Issuer or any of the Issuer’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary;

     and the order or decree remains unstayed and in effect for 60 consecutive days.

     2.3 Amendments to Certain Definitions. Article One of the Indenture is hereby amended by deleting those definitions which appear solely in the text deleted from the Indenture pursuant to the amendments contained herein.

     2.4 Failure to Comply with Certain Provisions of the Indenture. Any failure by the Issuer to comply with the terms of Sections 4.03-4.23, 5.01 or Clause (3) of Section 6.01 (whether before or after the execution of this First Supplemental Indenture) shall no longer constitute a default or an Event of Default under the Indenture and shall no longer have any other consequence under the Indenture.

ARTICLE III
THE TRUSTEE

     3.1 Acceptance by Trustee. The Trustee hereby accepts this First Supplemental Indenture. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this First Supplemental Indenture, for the due execution hereof by the Issuer or for or in respect of the recitals contained herein, all of which recitals are made by the Issuer solely.

ARTICLE IV
MISCELLANEOUS PROVISIONS

     4.1 Further Assurances. The parties hereto will execute and deliver such further instruments and do such further acts and things as may be reasonably required to carry out the intent and purpose of this First Supplemental Indenture and the Indenture.

     4.2 Governing Law. This First Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York as to all matters, including, without limitation, matters of validity, construction, effect, performance and remedies.

     4.3 Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but such counterparts shall together constitute but one and the same instrument.

     4.4 Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

     4.5 Successors and Assigns. All covenants and agreements of the Issuer and the Trustee in this First Supplemental Indenture shall bind each of the Issuer’s and the Trustee’s respective successors and assigns, whether so expressed or not.

     4.6 Severability Clause. In case any provision of this First Supplemental Indenture should be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

     4.7 Conflict with Trust Indenture Act. If any provision of this First Supplemental Indenture limits, qualifies or conflicts with a provision of the Trust Indenture Act of 1939, as amended (the “TIA”) that is required under the TIA to be a part of and govern this First Supplemental Indenture, the latter provision shall control. If any provision of this First Supplemental Indenture modifies or excludes any provisions of the TIA that may be so modified or excluded, the latter provision shall be deemed to apply to this First Supplemental Indenture as so modified or to be excluded, as the case may be.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

     IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, all as of the day and year first written above.

	H-LINES FINANCE HOLDING CORP., as Issuer
By:	/s/ Robert S. Zuckerman
	Name: Robert S. Zuckerman
	Title: VP & Secretary
	BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee
By:	/s/ Tina D. Gonzalez
	Name: Tina D. Gonzalez
	Title: Assistant Treasurer

EX-99.1

Exhibit 99.1

HORIZON LINES, #11093292
Second Quarter Earnings Results
July 27, 2007, 11:00 a.m. ET

Operator	Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Horizon Lines’ second quarter fiscal 2007 conference call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. If you have a question, please press the star followed by the one on your touchtone phone. This conference is being recorded Friday, July 27, 2007.
	I would now like to turn the conference over to Mike Avara, Vice President of Investor Relations and Treasurer. Please go ahead, sir.
M. Avara	Eric, thank you. Good morning, everyone, and welcome to Horizon Lines’ second quarter 2007 earnings release call. Thanks for joining us today.
	With me here in Charlotte are Chuck Raymond, our Chairman, President and CEO; John Handy, our Executive Vice President; Mark Urbania, our Senior Vice President and CFO; Brian Taylor, our Senior Vice President of Sales and Marketing; and joining from Dallas is John Keenan, our Senior Vice President and Chief Transportation Officer.
	We will be conducting the call in our usual manner with Chuck kicking off with an introduction and an overview, John reviewing the operations for the quarter, Mark taking you through the financials, and finally a Q&A session.
	Before we begin I must call your attention to the Safe Harbor Statement on Page 2. During this call we’ll be making certain forward-looking statements and although we believe them to be true at this point in time and reasonable and accurate, we can of course provide no assurance that they’ll actually come to fruition. Important risk factors that can cause actual results to differ materially are outlined in our filings with the SEC and I would refer you to those filings.
	With that I’d like to introduce Horizon Lines Chairman, President and CEO, Chuck Raymond. Chuck?
C. Raymond	Mike, thank you very much. Those of you on the call, thank you for joining us today. Interesting days here in the stock market.
	As you know, our core line of services is somewhat of a GDP growth business and in the latter part of 2006 when we were putting our plans together for this year we followed the lead of most economists who anticipated that 2007 would be a year in which we could expect growth in the range of the mid-3% level. At that time they were reflecting I think on a very

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strong third quarter we had back in 2006 where growth was 3.3% so we forecasted accordingly with the exception of Puerto Rico. Puerto Rico we were much more conservative for 2007, particularly because we had a 10% market contraction in 2006.

As we worked our way through the first quarter we saw several impacts on our business. They included a late thaw from the State of Alaska, a little softening in the Hawaii retail and housing sectors, and a continuing softness actually in the Puerto Rico economy. Nevertheless, we delivered earnings and earnings per share results for the first and second quarter that were in the range of our guidance although toward the low end of those ranges.

Unfortunately, the overall U.S. economy has struggled somewhat this year especially earlier in the year. You’ll recall that in the first quarter, GDP growth was less than 1%, 6/10ths of 1% to be exact.

We expect a better second half with full year GDP being slightly below 3%. Alaska today is strong and Hawaii and Guam are healthy. Puerto Rico is really where we’ve seen continuing softness and the result of that is really what’s causing our need to take a look at our guidance for the rest of the year.

We expect that the market will recover. It typically does in the face of an election year, but the jury’s still out down there so we think it is appropriate today to guide investors to slightly lower earnings expectations for the remainder of the year.

Let me again emphasize that our business is characterized by stable markets with only a handful of competitors. Carriers in these trades do understand that cutting prices to gain revenue through volume is a zero sum game for the individual trades and fortunately we haven’t seen major market share ratings as a solution to earnings softness. We in particular can point to our market shares in the trades where we compete as being stable. Additionally, we continue to see cargo mix upgrades which improve our margins.

When well managed companies are faced with these circumstances they take a hard look at their cost structure and they do what makes good long term business sense to provide sustainable and necessary services at efficient levels and we at Horizon Lines have done just that. Over the last 14 months we’ve exercised the Horizon EDGE process and that business improvement initiative has been well executed with projected savings surpassed by our organization. EDGE is a part of our culture and we’re excited about the accelerating future benefits from this program.

Our TP1 strategy is complete. All 5 new ships are now phased in and over the last 2 months we’ve delivered a 98% on time record throughout our fleet. That’s our strongest ever and remember our departures and arrivals are timed to the minute, measured with zero tolerance for lateness. That’s truly an

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incredible achievement and a standard we will continue to stress and protect.

Our excellent service record continues to stand out and once again this past quarter we were selected by key customers and other industry groups to receive awards for service excellence.

Our acquisition of Hawaii Stevedores, Inc., was completed on June 25^th and we are seeing the benefits of that move already. All 3 of our planned strategic initiatives for this year are in excellent shape. We can check those off.

The one part of our TP1 plan that we have not yet executed is the repositioning of larger, more efficient ships from the Pacific into the Puerto Rico trade. We plan to deploy two vessels in Puerto Rico early in 2008.

With our significantly reduced leverage and strong outlook, we’ve worked with a half dozen banks to get their best advice on a financial restructuring that is appropriate for our business and for our company’s financial strength. We’re pleased to report to you today that in the first days of July, both Moody’s Investor Service and Standard & Poor’s elevated our corporate credit ratings. In the case of S&P by 2 notches, rather unprecedented. This was very positive of course.

Following that, on July 17^th we announced a tender offering for 100% of our 9% bonds and 11% discount notes. We intend to replace them with more appropriate borrowings through a combination of bank term loans and convertible securities. We’re moving very quickly toward completion of those offerings. You may understand that the SEC regulations prohibit us from discussing the expected impact of these active offerings so on this call today we won’t speculate about those benefits.

The impact of our revised financial structure will be known very soon and when we close those financings we’ll again revise our earnings guidance to reflect all the efficiencies of our new structure.

With the initiatives we have in place we’re well positioned for healthy business growth and for the strategic acquisitions we’ll be pursuing.

To summarize, all corporate plans are being executed flawlessly. The Alaska and Hawaii/Guam markets are healthy; Puerto Rico is where we’ve had some weakness. Although volumes in that trade are down versus last year, our actual business results we believe are better than 2006. That’s a credit particularly to our operating team on the island. While we’re working hard to lessen the earnings impact of that particular part of our portfolio, we do think it’s appropriate to use caution in forecasting our business results there for the next couple of quarters.

John Handy, will you take us through the operating highlights for the second

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	quarter, please?
J. Handy	Thank you, Chuck. I sure will. As you’ve just heard, Chuck gave an excellent summary of where we are to date in 2007 so I’ll just emphasize some main points.
	Obviously our TP1 is a huge success for the company. EDGE, as I’ll discuss in a minute, is ahead. Our port projects in Puerto Rico, Honolulu and Alaska are all on track and highly successful. And I’d emphasize that our market share is a steady 36% across the company.
	As you look at the rest of the agenda, I’ll be covering those things that are listed on chart 7, starting out with a volume update. Our volumes as you see are down 3.6% Q2 ‘07 versus the Q2 of ‘06. Year-to-date we’re down 5%. But as you look at each of the trade lanes, as Chuck pointed out, Alaska, a booming oil economy. The state permanent fund has in excess of $40 billion invested already.
	In Hawaii, volumes are flat compared to our expectations earlier in the year. However, as you look at the performance of the tourism trade and other aspects of the state economy, we do expect to see improvement through the next 2 quarters. Their economy has been dampened by increased energy and housing costs.
	Guam. Growth is certainly expected to increase in Guam as the military redeployment continues as we’ve discussed on previous calls. Our Micronesia service is doing quite well.
	As Chuck pointed out, in Puerto Rico consumer confidence is still down, predominantly attributable to the sales tax increases and energy costs which have affected the entire economy. As he pointed out as well, 2008 being an election year, we expect as in the past that the economy will see some increases.
	As you turn to slide 9, as I mentioned volume is down but rates are up. Contract renewals and our cargo mix improvement ideas have contributed to our higher revenues per container.
	On slide 10 you’ll see EDGE. We’ve put right across the slide that clearly it’s exceeding our expectations as we target process improvements, savings and cost reductions. Our customer focus and milestone achievements all are well ahead. The culture of the company is focused obviously and clearly on process improvement and cost control. We are very excited about what EDGE is doing for us.
	Equally exciting is our TP1. We’ve met all of our goals. We’ve improved service throughout the entire Pacific trade. We’ve added capacity. Our schedule integrity is very high and of course that’s contributed to the

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	increased speed in our Guam first arrival which our customers certainly are enjoying.
	To brag about our TP1, the next slide 12 shows you a picture of the Horizon Tiger, our latest arrival.
	Chart 13 talks about some of our equipment modernization. As we invest in new and divest old, you can see clearly by these charts that maintenance costs are reduced. Our investments in new equipment have been across the board. Chassis, dry containers, refrigerated containers of all types, flat racks for the increased over and outsized cargo and clip-on generator sets. Our maintenance and repair costs within our shops have reduced by 7% Q2 ‘07 versus Q2 ‘06.
	As you look at vessel performance that I briefly mentioned earlier, our availability is a staggering 99.9%. That means our ships are available virtually 100% of the time when we need them. Our utilization, we wanted to add capacity off the West Coast at reasonable cost. That’s done with the addition of the TP1 and the shifting of our other more capable ships. That all is without destabilizing the market.
	Our on-time arrival to the minute, as Chuck pointed out, not hours, days or weeks, but to the minute, is up 8.1%, reflecting clearly the impact of the TP1. The last 2 months as he said is an excellent 98%.
	As you look at slide 15 we’re certainly very proud of our associates and the awards and recognition that they’ve garnered. The latest 3 are in information technology, safety, which is critical to us, and logistics performance. The Army/Air Force Exchange Service has awarded us their Logistics Excellence Award for 2007 for processing over 4,000 bookings, over 6,800 containers with a staggering 99.6% on-time service performance. As I said, we’re certainly proud of the company and the associates that bring us to these peaks.
	I’d like to turn over to Mark Urbania as he covers our financials.
M. Urbania	Thank you, John. I’m on page 17 that has financial highlights here. To summarize for you, the company is in very good shape financially, performed very well in the second quarter. We do have some continued softness in the Puerto Rico trade, but the company is on strong financial footing and doing well.
	Our EPS for the second quarter was $0.29. Although it was at the low end of our range, still 2006 was a record, we matched that. We continue to grow our operating revenue despite some of that softness. We’re on track with our controls. Horizon EDGE is in place delivering benefits. We continue to see cargo mix upgrade rate increases in all of our markets including Puerto Rico.

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Our capital structure continues to improve. We elected to make a $25 million voluntary prepayment on our current debt during the quarter as we continue to deliver cash flow. Refinancing is underway. That Chuck talked about. We feel very positive about this and are excited to tell you about this in the near term. Our current guidance that I will be giving you at the end of our presentation does not include the positive effects of this refinancing.

On page 18, looking at operating revenue. Operating revenue increased by $5.9 million or 2% on a comparative basis. Again, reflective of continued rate and mix improvements offsetting some of the volume softness. Same holds true for the first 6 months of the year, up 0.8% of a percent to $569.4.

On the operating revenue side, it’s more of what we’ve told you in the past. Cargo mix improvement rate increases offset the volume shortfall. You can see for the second quarter and also for the 6 months that’s true with the rate in cargo mix a little bit on the non-transportation revenue that we generate offsetting that volume variance.

Adjusted operating income. Operating income was down slightly on a comparative basis primarily as a result of the increased vessel operating costs as we brought on line the new TP1 vessels and then transitioned some of the existing Jones Act vessels to replace them in that string. We planned on that. The second quarter was a major milestone for us as we transitioned those ships to other trade routes and bring those new ships on.

For the 6 month period on a comparative basis we were up $200,000 or 0.5%.

All that translated into EBITDA for the second quarter pretty close to being on par with the second quarter of prior year at $40 million and then for the 6 months up slightly, 1.7% to $73.7 million.

Adjusted net income, we were up $300,000 or 3.1% and then for the 6 months, $1.1 million on a comparative basis.

Adjusted EPS on page 23 as talked about, on par with the record of 2006, $0.29, and then for the first 6 months of the year, $0.42.

On page 24, looking at free cash flow for the moment. Our free cash flow for the first 6 months of the year were down comparatively, but we planned to be that way. We have used some working capital I should say through growth and accounts receivable and really timing of some accrued expenses.

The $33 million is the balloon payment that we had on the 3 vessels that we operate in the Alaska trade. We’d planned on that, communicated that previously. What was different than last year also is the cost related to implementing the TP1, the new vessels, $4.4 million that was not there in prior year.

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	Then I’ll draw your attention to the debt payment, voluntary debt payment. That’s why the $30.6 versus $2.6 last year was a discretionary use of cash flow to put that money to work. The second half of the year we expect cash flows to be strong and I’ll share that guidance with you in a moment.
	On page 25, turning to our guidance and I will say again this will be revised once our financing initiatives are complete.
	For the third quarter we expect revenue to be in the range of $314 to $322. EBITDA to be $49 to $52 range, translates into diluted earnings per share of $0.56 to $0.63.
	For the full year, slightly down due to continued difficulty in the Puerto Rico trade, $1.19 billion to $1.2 billion. EBITDA $168 to $173. The $173 was the low end of our previous guidance range, translates into earnings per share of $1.46 to $1.58 and then again free cash flow, $30 to $37, down slightly from what we previously reported because of slightly revising our earnings estimates.
	With that we will turn it over to the leader, Chuck Raymond.
C. Raymond	Thank you, Mark. Good job. I just want to reinforce a couple of things that we talked about here on the call so far.
	All of our corporate plans as you can see are being executed flawlessly. With the TP1 we’ve repositioned a number of ships from one market to another. When we do that the fuel costs are rather significant and as you know this year, fuel costs are up substantially from where they were last year. The assumptions we had made on what it was going to cost us to do that were a little low in terms of the fuel costs and that’s why some of our operating income kind of slipped away, but there’s nothing fundamentally wrong with the TP1. That’s working fine.
	The Hawaii and Alaska markets are in great shape. As I said, Puerto Rico is where we’ve seen some softness. We thought that we would see that coming back in the second half. We expect it will, but we really treasure our credibility and we think it is appropriate to use caution in forecasting the second half particularly in Puerto Rico. We believe the rest of the business is in great shape and as you can see, our company is operating well, continues to protect its market share, does very well in the operating matrix and we’re executing our strategic plans flawlessly.
	With that, I’ll turn this back to the conference manager and we’ll take any questions you may have.
Operator	Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. As a reminder if you have a question, please press the star

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	followed by the one on your touchtone phone. If you’d like to withdraw your question, press star followed by the two. If you are using a speakerphone, you will need to lift the handset before making your selection.
	Our first question is from Jonathan Chappell with JP Morgan. Please go ahead.
J. Chappell	Thank you. Good morning, guys.
Management	Good morning, Jon.
J. Chappell	Chuck, I just want to get a sense. You’ve kind of addressed in your wrap up there too just how conservative you are being for the second half of the year. You’ve mentioned a couple times that you thought that Puerto Rico would bounce back in the second half, but you said that you, for your reputation and whatnot have taken the guidance down.
	Are you putting in a worst case scenario for Puerto Rico in the second half guidance? And also if we can talk about Hawaii briefly too. You said Hawaii’s kind of recovered as well. Are you being conservative with your outlook for Hawaii when it comes to the second half guidance?
C. Raymond	Jonathan, thank you. I would say on Hawaii we’re right in there. We’re forecasting Hawaii and Guam the way we normally do so we will be able to make our business plans out there.
	In Puerto Rico let’s say it’s probably not worst case, but it’s awful close to it. I don’t want to have this call next quarter and start making excuses for Puerto Rico. We are seeing some strengthening here. During July we’ve had a pretty good month and we’re in the back to school season right now.
	Like I mentioned, Jonathan, we went back and tracked the last 20 years of the Puerto Rico market and typically as you ramp up toward the election year, you see the economy start to strengthen down there, government spending picks up. I think they have the wherewithal to do that now that they’ve gotten past their credit crunch and the indications we’re getting from our major customers is they’re expecting a better second half than the first half of the year. Let’s say it’s not worst case, but it’s probably pretty close to it.
J. Chappell	Okay. I know the Horizon EDGE has been working and is exceeding expectations as far as efficiencies are concerned. Is there anything else you can do, whether it be maybe temporary or even longer term, in the Puerto Rican market help let’s call it the bottom line performance there given the volume softness?
C. Raymond	That’s a very good question. The local operating team, as I mentioned, has done one heck of a job managing their business down there. They’re actually handling freight at an all time record rate down there, cost-wise and productivity-wise, and I give them a lot of credit for that. We’re not going to

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	do a slash and burn. We think what we have in Puerto Rico is an anomaly and it derives from the switch from the excise tax to consumption tax on the island so we’re not going to do something that’s going to hurt our long term business.
	On the other hand, we are looking at our deployments. We’re talking about these larger vessels coming in from the Pacific and seeing if we can operate that trade perhaps with one less vessel. I’m not sure that that’s going to be the case because we do have very, very good service right now. I think and know from our customers that we’re the preferred carrier.
	We’re going to take a long hard look at that and rest assured we’ll do what we can to have the right cost structure in place that’s appropriate for that trade today.
J. Chappell	Okay, that’s great. And then the final one. Is there any update as to deployment of all the excess tonnage after the full deployment of TP1, either potential for coastal trade or used for some of the older tonnage?
C. Raymond	Nothing that we can give you to mark down as a benefit going forward at this stage. We have a lot of activity underway. We’re meeting with international carriers with regard to a shuttle service we would operate on the coast. We have also been very active in the Congress.
	You may know that the House Transportation and Infrastructure Committee reported out into this budget a guarantee program which provides for U.S. government backing of vessels that would be used in these services so that’s important for us to protect that.
	We believe the Harbor Maintenance Tax will be addressed by the House Ways and Means Committee so things are falling in place for that and we’re kind of excited about the opportunities going forward. But I would hesitate to put any numbers on the table at this time.
J. Chappell	Okay. Thanks very much, Chuck.
Operator	Our next question comes from Kevin Sterling with Stephens. Please go ahead.
K. Sterling	Good morning, all.
Management	Hi, Kevin. Good morning.
K. Sterling	Chuck, let me just start. I just want to clarify that your revised ‘07 guidance does not include any accretion from interest cost savings. Is that correct?
C. Raymond	That is correct, Kevin. That’s right. We’re prohibited from sharing the details of the economic accounting impact of this potentially new financing that

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	we’re working on so the guidance that we have given you does not include any of that.
K. Sterling	Okay, thanks. And just kind of doing a little back of envelope math, is it safe to say that from interest cost savings potentially that this could offset any of the softness in Puerto Rico for the back half of this year and could be meaningfully accretive for ‘08?
M. Urbania	Kevin, I would love to be able to answer that question, but I can neither confirm nor deny any math that you’re doing.
K. Sterling	Okay. Mark, as you guys look at the debt markets today, is there any concern that your refinancing does not get done given some of the concerns?
M. Urbania	Well, it’s always a concern. You know it’s tough times in the debt markets right now. We meet with our advisors and bankers daily. Everything seems to be on track at this point. It is day to day. If you had to take my temperature right now and Chuck’s temperature I think we feel pretty good about it. But it’s never done until it’s done and we’ll be working on it diligently over the next week.
K. Sterling	Okay, thanks. And you guys have talked in the past, it looks like your EDGE cost savings are exceeding expectations and you guys right now I think have targeted maybe $13 million for ‘07. Where do you stand with those cost savings in ‘07 now because you sound very upbeat. It looks like things are really progressing ahead of schedule.
M. Urbania	Certainly some of the stuff that John Handy presented is very exciting stuff. We are working on some targets here that are exceeding operationally what we want to accomplish. From a financial perspective when you break down that $13 million, more of that is in the second half of the year than the first half of the year. But that being said I think on average, on a net basis there’s probably a couple of million in each of the first 2 quarters of the year and we’re on track with that. We have every expectation that we’ll be on track for the $13, possibly slightly above that maybe.
K. Sterling	Okay. It looks like you guys continue to add refrigerated containers. Can you maybe talk a little bit about this business and why you like the refrigerated container business and are focusing on it?
B. Taylor	Kevin, this is Brian. The refrigerated container market is one of the higher margin segments that we can carry in the business because of the perishability of the cargo. Obviously over the years we have continued to grow our market share in this segment in all of the trades. Our customers were looking to us to make some capacity additions and also some additions in new specialized refrigerated equipment to help handle the special needs that they have in Hawaii, Guam and also Puerto Rico. We have done that in the last 3 years and we have every intention of continuing to make those

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	investments to refresh the rest of the fleet throughout the balance of the next couple of years.
K. Sterling	Thanks, Brian. One last question, guys, and I’ll get off and let someone else hop on. Just a follow up to Jonathan’s question, but it sounds like we’re hearing a lot of good things here with the cost savings and refinancing, refinancing your balance sheet and debt structure. Except for softness in the Puerto Rico market, it sounds like everything else is kind of progressing according to plan, if not better. Is that a safe assessment?
C. Raymond	That’s correct, Kevin. We feel very good about our business up in Alaska, lifting good loads at good rates, the fish is strong. All indications are that economy of course, as John Handy pointed out, it’s an oil driven economy and we’re bullish, very, very bullish on Alaska.
	Hawaii, again we saw a little softness in the first quarter. Second quarter kind of turned around a little bit. Our business volumes are flat versus last year. We expect that’ll pick up a little bit in the second half.
	And of course we have this huge project underway out in Guam related to the various services that’s going to build our volumes in that market. Our strategic initiatives in terms of the cost of the TP1, this refinancing that we’re doing, the phase-in of HSI, all that stuff you can kind of check those off and say look we’ve accomplished those and they’re moving very, very well.
	The one area in our portfolio as I pointed out that we’re a little disappointed about is that Puerto Rico didn’t turn around a little bit here in the first half. It hasn’t and we would love to say we wish it would happen in the second half and we’ll forecast that, but we can’t run this business on wishes. We’re going to be realistic with you, maintain our credibility, work on the other parts of our business to deliver earnings per share that are impressive.
	And the financing, again we can’t talk about what that is, but we are very active with that right now. We should be closing that out shortly so we’ll have that new guidance to you pretty quickly.
K. Sterling	Gentlemen, thanks for your time. I really appreciate it and thanks for all the clarification.
Operator	Our next question comes from Chad Jones with Morgan Keegan. Please go ahead.
C. Jones	Good morning, all.
C. Raymond	Good morning, Chad.
C. Jones	I got on the call a little late so I apologize if you covered this, but in looking at the second half of the year and the revised guidance, I’m assuming from

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	some of the remarks that I did hear that most of that is volume driven. Did you guys say at all in terms of your expectations on the volume side in the second half, are you looking for volumes to be flat in the second half of the year, year-over-year?
M. Urbania	When you look at the first half or the second half of the year, we were flat in most of the markets, down in Puerto Rico. We still expect that to be the case in the second half of the year, although not to the degree that we’ve seen. Although we’ve reduced our forecasted profitability for that business, although we don’t break that down, we had been expecting for the full year Puerto Rico to show some volume improvement. A percent and a half is I think pretty close to what we had and we’re not seeing it so we’ve had to take that out.
	But, yes, to summarize for you it is Puerto Rico and it is volume related and when we adjusted that, we revised our EBITDA and earnings down slightly as a result.
C. Jones	Okay. Are there any changes ... from all the remarks you’ve made, it certainly seems like it’s all demand driven. Have there been any changes not necessarily from Horizon’s standpoint, but have there been any changes on the supply side in the Puerto Rican market?
C. Raymond	No, there have not.
C. Jones	Okay, I didn’t think so, I just wanted to double check. And then looking at the refrigerated fleet, that’s been an ongoing theme in the business. Could you maybe quantify what percentage of your business is refrigerated and how maybe that’s changed over the last several years? Do you have any sort of long term growth targets of where you’d like that to be as a percentage of the business?
B. Taylor	Chad, this is Brian. I’ll answer that question for you. Refrigerated cargo today represents roughly 24% of the freight that we carry within the company. I would say that that is up several percentage points over what we have seen in the last couple of years. We have refreshed roughly 50% of our refrigerated container fleet. We intend to continue refreshing that fleet over the next couple of years and certainly we have every intention of continuing to focus on the growth of this segment for Horizon Lines.
C. Jones	Would it be a stretch to say that potentially 3 to 4 years out you could see that be closer to 30% of your freight?
B. Taylor	Given some of the capacity additions that we put into our trade, certainly giving us more capacity on the ships to handle refrigerated freight, we do obviously have some targets to grow in those segments. I would say it’s certainly reasonable to expect that, yes.

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C. Jones	Okay, great. Well I appreciate it, guys, and best of luck on getting the refinancing completed here in the next couple weeks.
C. Raymond	Thank you, Chad.
Operator	Our next question comes from Peter Wahlstrom with Goldman Sachs. Please go ahead.
P. Wahlstrom	Good morning.
C. Raymond	Good morning, Pete.
P. Wahlstrom	I was trying to get a little bit more color. What product segments or categories have seen the largest drop off this year given your exposure to both the consumer and industrial end markets?
B. Taylor	Peter, if you’re talking about specifically Puerto Rico I’d say really the food and beverage segment as well as the retail segment down in Puerto Rico have been certainly the key reductions that we’ve seen so far this year.
P.Wahlstrom	Okay and then Chuck mentioned in Hawaii it was still the building materials as well as retail, correct?
B. Taylor	Building materials, what we have seen is obviously a little bit of a slowdown in the construction market, that would be the residential construction market out in Hawaii. On the other hand, we’ve actually seen an increase in the building materials that we are handling there as a result of the implementation of the TP1 and the new Peck service and the additional 238 flat racks that we’ve added to our fleet. We had targeted that segment as a growth segment for us as a result of the implementation of the deployments and we are seeing that.
P. Wahlstrom	Okay. And if we again split up those 2 categories between the consumer and the industrial and markets for the back half of the year do you have a particular view on the consumer based on the type of products that you are carrying from a Wal*Mart, or a Lowe’s, or Safeway, etc.?
B. Taylor	Again, looking specifically at Puerto Rico, I think it’s very difficult for us to predict what’s going to happen in the consumer segment down there. From an industrial perspective we see many of the customers that support Horizon Lines, the pharmaceutical companies and the manufacturers, they are continuing to invest in infrastructure. We see those segments of the business remaining strong and robust, but it is very difficult for us to predict what is going to happen on the consumer front down in that market.
P. Wahlstrom	Fair enough. And just so I heard this correctly, with continued softness in the Puerto Rican market, there would be an opportunity to temporarily dry dock some tonnage and that is being considered. Is that correct?

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C. Raymond	Pete, you know we’re looking at the deployments. It’s a difficult analysis because we have cargo coming from many, many, many intermodal points in North America to and from Puerto Rico. As we look at trying to continue to serve all 3 coasts, New York, the Gulf. We’re the only carrier that goes up to New York with a vessel, the same thing in the Gulf. We want to make sure we don’t stub our toe. I mean we could pull tonnage out and end up spending a lot of money on the intermodal piece.
	That tradeoff is something we’re studying very carefully right now. I can’t predict what the result will be. I just wanted to answer the question honestly that was asked, is there anything else you can do, and the answer is we’re studying it very carefully.
P. Wahlstrom	Okay. What was your organic container volume shipped during the quarter if we exclude the impact of the TP1 vessels that are now coming on line?
C. Raymond	I’m sorry, Pete, I didn’t understand the question.
P. Wahlstrom	Last year you didn’t have the TP1 vessels in operation during the second quarter. What type of container volume did they contribute during the quarter?
J. Keenan	Peter, as you may recall, we actually deployed these ships and did not have them fully deployed until almost the end of March, sorry the end of May. We had a very small, small planned incremental volume that we had built into our plan this year so I would say really we haven’t seen ... really our volumes have been flat because we really didn’t project any significant TP1 volume growth in the second quarter as a result of the deployment.
P. Wahlstrom	Okay, thanks. Last question. Am I thinking about the free cash flow outlook correctly. The decrease is solely reflective of the lowered full year EBITDA guidance and then the resulting tax impact, correct, and there’s not another component to the difference?
M. Urbania	There was one other small component, Pete, and that was some cash that we spent to acquire Hawaii Stevedore’s, Inc., that Chuck mentioned earlier. That was $5 million. But other than those one time things that we went over, we did plan to use working capital in the first half of the year. We did. It was for the balloon payments on the vessels. Our accounts receivable grew on the working capital side. On the right side of the balance sheet, on the accruals and payables, it’s some timing issues there. Nothing to worry about.
	But we’re on plan for what we thought internally we would do with working capital in the first half of the year and we’re very comfortable that we’ll generate the working capital or free cash flow I should say in the second half of the year as we represented it.

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P. Wahlstrom	Great. Thank you very much.
Operator	Our next question is from Marcelo Choi with Deutsche Bank. Please go ahead.
M. Choi	Hi, guys, I was wondering if you can give us a quick update on the financial implications of TP1 for 2007 and 2008. I believe that your previous guidance was a drain of about $15 million for 2007, about breakeven for 2008.
M. Urbania	That’s still the case, Marcelo. We haven’t changed that.
M. Choi	Okay, great. In terms of the tax rate, it seems like it was a little bit lower this quarter. How do we see that in the back half of ‘07?
M. Urbania	I think the last time we were together and talked about tax rates we said listen, because of the tonnage tax and not paying federal income taxes in Puerto Rico and the other 2 trades would, it’s a balancing act. We gave guidance of 12% to 17% and that’s still the case depending on profitability of those 3 trades. For the guidance that we gave you, we decided to use a blended rate. It’s 13.5% so you didn’t have to guess on what we were using and you knew exactly what it was so that’s how we’re viewing the taxes right now.
M. Choi	Great. Thank you very much.
Operator	This does conclude our question and answer session. I’d like to turn the call back over to management for their concluding remarks.
C. Raymond	Just one quick thing. We’re going through obviously a year here where there’s quite a bit of change, bringing in these new ships and redeploying our tonnage throughout all 3 of these trades. We’re trying to do that and we are doing that without impacting the financial record we’ve had. We’re not talking about a big dip in earnings here. We’re actually going to do better than we did last year and substantially better than last year. That’s a tribute to the organization. We’re going to get through this fine.
	The one thing we had not anticipated was the Puerto Rico economy continuing to lag. That will right itself, it always has and this company’s on a good, solid foundation for the future. We appreciate your interest and your questions.
Operator	Ladies and gentlemen, this does conclude the Horizon Lines second quarter fiscal 2007 earnings results conference call. You may now disconnect and thank you for using ACT Teleconferencing.

HORIZON LINES Page 15

EX-99.2

Exhibit 99.2

HORIZON LINES REPORTS SOLID SECOND QUARTER 2007 EARNINGS

CHARLOTTE, North Carolina, July 27, 2007 — Horizon Lines, Inc. (NYSE:HRZ) reported solid earnings for the second quarter of 2007.

Net income for the second quarter of 2007 was $9.6 million or $.28 per diluted share compared to net income of $6.4 million or $.19 per diluted share for the second quarter of 2006. After adjustment to exclude the non-recurring loss on extinguishment of debt in 2007 and secondary offering expenses in 2006, and to retroactively apply tonnage tax to 2006, adjusted net income was $10.0 million or $.29 per diluted share in 2007’s second quarter, versus $9.7 million or $.29 per diluted share in the second quarter of 2006.

Operating revenue grew by $5.9 million or 2.0% in the second quarter of 2007 to $295.7 million, compared to $289.8 million for the second quarter of 2006.

Operating income in the second quarter of 2007 was $22.9 million versus $22.4 million in 2006’s second quarter. Absent non-recurring secondary offering expenses, adjusted operating income in the second quarter of 2006 would have been $23.3 million.

Earnings before net interest expense, taxes, depreciation and amortization (EBITDA) was $39.5 million for the second quarter of 2007 compared to $39.8 million for the 2006 second quarter. Excluding the non-recurring loss on extinguishment of debt in 2007 and secondary offering expenses in 2006, adjusted EBITDA would have been $40.0 million in the second quarter of 2007 in contrast to $40.7 million for the second quarter of 2006.

“Despite some lingering volume softness, we once again overcame challenges and delivered solid earnings in the second quarter of 2007”, said Chuck Raymond, Chairman, President and Chief Executive Officer. “Benefits generated by our Horizon EDGE process re-engineering and customer service program, stringent cost controls and unit revenue and cargo mix improvements, all combined to more than offset the volume shortfall. We completed our Transpacific (TP1) fleet enhancement initiative and all five new vessels are now deployed and are operating in the new TP1 service. Investment in our business continued with the addition of 707 new refrigerated containers and 238 new flat racks. Finally, we initiated a process to refinance our capital structure that we expect will result in reduced interest expense going forward when completed in the third quarter of 2007.”

The Company also updated its earnings guidance for the full year 2007, with projections of operating revenue at $1,190 — $1,200 million, EBITDA at $168 — $173 million, diluted earnings per share (EPS) at $1.46 — $1.58 and free cash flow at $30 — $37 million. Earnings guidance for the third quarter of 2007 was also provided, with forecasts of operating revenue of $314 — $322 million, EBITDA of $49 — $52 million and diluted EPS of $0.56 — $0.63. The earnings guidance for the third quarter and full year does not reflect any impact from the Company’s recently announced planned refinancing.

Company executives will provide additional perspective on the Company’s earnings during a conference call beginning at 11:00 a.m. Eastern Time today. Those interested in participating in the call may do so by dialing 1-800-240-6709 and asking for the Horizon Lines Second Quarter 2007 Earnings Call. A hardcopy of the presentation materials may be printed from the Horizon Lines website, www.horizonlines.com, shortly before the start of the call. Alternatively, a live audio webcast of the call may be accessed at www.horizonlines.com. In order to access the live audio webcast please allow at least 15 minutes before the start of the call to visit Horizon Lines’ website and download and install any necessary audio/video software for the webcast.

About Horizon Lines

Horizon Lines, Inc. is the nation’s leading Jones Act container shipping and integrated logistics company with a fleet of 21 U.S.—flag vessels and service routes linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. A fully integrated service provider of ocean transportation, trucking, terminal and warehousing operations, Horizon Lines also owns Horizon Services Group, an organization with a diversified offering of transportation management systems and customized software solutions being marketed to shippers, carriers, and other supply chain participants. Horizon Lines, Inc. trades on the New York Stock Exchange under the ticker symbol HRZ.

Forward Looking Statement:

The information contained in this press release should be read in conjunction with our filings made with the Securities and Exchange Commission. This press release contains “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “target,” “projects,” “likely,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements.

All forward-looking statements involve risk and uncertainties. In light of these risks and uncertainties, expected results or other anticipated events or circumstances discussed in this press release might not occur. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. See the section entitled “Risk Factors” in our Form 10-K filed with the SEC on March 2, 2007 for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. Those factors and the other risk factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable

factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences.

Media Contact:

Michael Avara of Horizon Lines, Inc.

1-704-973-7000

mavara@horizonlines.com

EX-99.3

Exhibit 99.3

Second Quarter 2007 Earnings Release July 27, 2007

Earnings Call Agenda Introduction and Overview Chuck Raymond - Chairman, President & Chief Executive Officer Operations Review John Handy - Executive Vice President Financial Review Mark Urbania - Senior Vice President & Chief Financial Officer Questions and Answers

Forward-Looking Statements Risks, Uncertainties, Other Factors with Respect to "Forward- Looking Statements": Certain statements contained in this presentation constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements that are not of historical fact constitute "forward-looking statements" and, accordingly, involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the "forward-looking statements". Such factors are detailed in the Horizon Lines, Inc.'s Form 10-K filed with the Securities and Exchange Commission on March 2, 2007.

Second Quarter 2007 Earnings Release Chuck Raymond Chairman, President & Chief Executive Officer Introduction and Overview

Second Quarter 2007 - Highlights 2006 2007 Operating Income 23.3 22.9 2006 2007 Fourth Quarter 289.8 295.7 ($ in Millions) 2006 2007 Fourth Quarter 0.29 0.29 ($ in Millions) Adjusted EPS matches record 2006 second quarter Adjusted EPS Cost controls, EDGE savings and rate improvement nearly offset volume softness TP1 fleet enhancement initiative completed Refinancing launched IT, vessel safety and military logistics excellence awards received H.S.I. acquisition completed ($) 2.0% 1.7%

Second Quarter 2007 Earnings Release John Handy Executive Vice President Operations Review

Agenda Volume Revenue Horizon EDGE TP-1 Equipment Performance Metrics Awards / Recognition

2006 2007 East 75604 72894 Second Quarter - Volume Update Alaska Cargo mix improved with higher 45' container lift as we reduce automobile shipments Market share improved slightly Southbound seafood increased slightly from Q206 Hawaii volume impacted by softened economic growth with some rebound towards the end of the quarter Guam volume remains strong with growth in military and vehicle segments Puerto Rico remains slow to recover from reduced consumer spending 3.6%

2006 2007 East 3426 3610 Second Quarter - Revenue Rates continue to improve across the company Cargo mix: positive impact Contract renewals: very solid, with moderate rate increases 5.4%

Horizon EDGE Update Sales and Marketing Order Fulfillment Domestic Ports Offshore Ports Note: Not to scale Supply Chain May -Dec 2006 2007 2008 Customer segmentation study, design, and implementation Effective price setting, execution and monitoring Sales management process: policies, procedures, organization Reducing billing errors, compression of cycle time Reducing accounts receivables DSO cycle Stevedoring costs/lift productivity Schedule integrity, vessel stowage Equipment utilization, rationalization, and tracking Network and route optimization: trucking costs and contracts Stevedoring costs/lift productivity Schedule integrity, yard and maintenance cost management EXCEEDING EXPECTATIONS

TP1 Fleet Enhancement Update Execution of the new TP1 Service phase-in completed Performance of vessels meets expectations Nov Dec Jan Feb Mar Apr May Jun Jul New TP1 Commences Ex Asia PEX Service Commences Horizon Falcon Horizon Hunter Horizon Hawk Horizon Eagle Horizon Tiger FULLY IMPLEMENTED

Horizon Tiger

Equipment Modernization 2003 2004 2005 2006 1Q '07 2Q '07 Refrigerated 300 900 1200 0 300 707 2003 2004 2005 2006 2007-2H Dry 0 0 1000 2800 2200 2Q '06 2Q '07 Old 145 142 New 61 62 Investment in our business continues with 707 new refrigerated containers ("reefers") and 238 new flat racks added during the second quarter of 2007 Maintenance costs per load have improved significantly 2Q '06 2Q '07 old 41 37 new 9 10 Old Old New New Old New Old New

2006 2007 Utilization 0.89 0.78 Second Quarter - Vessel Performance 2006 2007 Vessl Avail 0.996 0.999 2006 2007 On-Time 0.87 0.94 (1) New TP1 provided 12.6% more capacity than 2006; based on Q206 capacity, Q207 utilization would be 87.9% 0.3% 12.4% 8.1% (1)

Awards / Recognition CIO magazine's 2007 CIO 100 award Chamber of Shipping of America John Devlin Safety Achievement Award Army Air Force Exchange Service (AAFES) Logistics Excellence Award 2007

Second Quarter 2007 Earnings Release M. Mark Urbania Senior Vice President & Chief Financial Officer Financial Review

Financial Highlights Adjusted EPS of $.29 matches record 2006 second quarter Operating revenue grows by 2.0% despite volume softness Stringent cost controls, Horizon EDGE benefits, cargo mix upgrade and rate increases combine to more than offset volume softness Capital structure continues to improve Refinancing underway that will yield significant interest savings

Operating Revenue 2006 2007 Fourth Quarter 289.8 295.7 2006 2007 East 564.8 569.4 ($ in Millions) 2.0% 0.8%

Operating Revenue Revenue Change ($ in Millions) Revenue Change ($ in Millions) Revenue Change ($ in Millions) Revenue Change ($ in Millions) Second Quarter 2007 Six Months 2007 Rate and Cargo Mix Improvement $ 14.4 $ 27.7 Other / Non-Transportation Revenue 1.7 2.0 Volume Variance (9.2) (25.1) Fuel Recovery (1.0) -- Total Revenue Increase $ 5.9 $ 4.6 Cargo mix improvement and rate increases more than offset volume shortfall

Adjusted Operating Income(1) 2006 2007 Fourth Quarter 23.3 22.9 2006 2007 East 39.2 39.4 ($ in Millions) 1.7% 0.5% (1) See reconciliation of Operating Income to Adjusted Operating Income on page 29.

2006 2007 East 40.7 40 Adjusted EBITDA(1) (1)See reconciliation of Net Income to EBITDA on page 31. 2006 2007 East 72.5 73.7 ($ in Millions) 1.7% 1.7%

Adjusted Net Income(1) 2006 2007 East 9.7 10 (1)See reconciliation of Net Income to Adjusted Net Income on page 30. 2006 2007 East 13.3 14.4 ($ in Millions) 3.1% 8.3%

Adjusted EPS(1) 2006 2007 First Qtr 0.29 0.29 (1) See reconciliations on pages 27 and 28. 2006 2007 East 0.4 0.42 ($) 5.0%

Free Cash Flow Free Cash Flow ($ in Millions) Free Cash Flow ($ in Millions) Free Cash Flow ($ in Millions) Free Cash Flow ($ in Millions) Free Cash Flow ($ in Millions) Six Months June 24, 2007 Six Months June 25, 2006 Adjusted EBITDA $ 73.7 $ 72.5 Stock Compensation 1.2 0.4 Working Capital (40.0) (14.3) Vessel Payments in Excess of Accrual (33.2) (6.4) TP1 Related Costs (4.4) -- Capital Expenditures (10.4) (7.2) Net Proceeds from Sale of Fixed Assets 2.3 1.1 Dry-Dock Expenditures (9.1) (12.1) Income Taxes (0.4) -- Interest (16.5) (19.5) Free Cash Flow (36.8) 14.5 Dividends (7.4) (7.4) Debt Payment (30.6) (2.6) Financing Transaction Costs -- (1.8) Net Cash Flow $ (74.8) $ 2.7

2007 Financial Guidance Financial Guidance ($ in Millions except EPS) Third Quarter Year Revenue $314 - $322 $1,190 - $1,200 EBITDA(1) $49 - $52 $168 - $173 Diluted EPS(1) $0.56 - $0.63 $1.46 - $1.58 Free Cash Flow N/A $30 - $37 Guidance excludes loss on extinguishment of debt on the $25 million debt prepayment, and the impact of the refinancing.

Financial Appendix

Income Statement Summary - Second Quarter Actual Actual Actual Adjusted(1) Adjusted(1) Adjusted(1) Quarter Ended June 24, 2007 Quarter Ended June 25, 2006 Quarter Ended June 24, 2007 Quarter Ended June 25, 2006 Operating Revenue $ 295.7 $ 289.8 $ 295.7 $ 289.8 Operating Expense 272.8 267.4 272.8 266.5 Operating Income 22.9 22.4 22.9 23.3 Other Expense 12.2 12.1 11.7 12.1 Pretax Income 10.7 10.3 11.2 11.2 Income Tax Expense 1.1 3.9 1.2 1.5 Net Income $ 9.6 $ 6.4 $ 10.0 $ 9.7 Earnings Per Share - Basic $ .28 $ .19 $ .30 $ .29 Earnings Per Share - Diluted $ .28 $ .19 $ .29 $ .29 Shares Outstanding - Basic 33,635,168 33,544,170 33,635,168 33,544,170 Shares Outstanding - Diluted 34,312,038 33,621,120 34,312,038 33,621,120 EBITDA $ 39.5 $ 39.8 $ 40.0 $ 40.7 Operating Ratio 92.3% 92.3% 92.3% 92.0% (1) Adjusted to exclude non-recurring loss on extinguishment of debt, secondary offering expenses, and to retroactively apply tonnage tax. ($ in Millions, Except per Share Amounts)

Income Statement Summary - Six Months Actual Actual Actual Adjusted(1) Adjusted(1) Adjusted(1) Six Months Ended June 24, 2007 Six Months Ended June 25, 2006 Six Months Ended June 24, 2007 Six Months Ended June 25, 2006 Operating Revenue $ 569.4 $ 564.8 $ 569.4 $ 564.8 Operating Expense 530.0 526.5 530.0 525.6 Operating Income 39.4 38.3 39.4 39.2 Other Expense 23.5 23.8 22.9 23.8 Pretax Income 15.9 14.5 16.5 15.4 Income Tax (Benefit) Expense (0.7) 5.7 2.1 2.1 Net Income $ 16.6 $ 8.8 $ 14.4 $ 13.3 Earnings Per Share - Basic $ .49 $ .26 $ .43 $ .40 Earnings Per Share - Diluted $ .49 $ .26 $ .42 $ .40 Shares Outstanding - Basic 33,623,917 33,544,170 33,623,917 33,544,170 Shares Outstanding - Diluted 34,252,637 33,586,992 34,252,637 33,586,992 EBITDA $ 73.2 $ 71.6 $ 73.7 $ 72.5 Operating Ratio 93.1% 93.2% 93.1% 93.1% (1) Adjusted to exclude non-recurring loss on extinguishment of debt, secondary offering expenses, and to retroactively apply tonnage tax. ($ in Millions, Except per Share Amounts)

Adjusted Operating Income Results Quarter Ended June 24, 2007 Quarter Ended June 25, 2006 Six Months Ended June 24, 2007 Six Months Ended June 25, 2006 Operating Income $ 22.9 $ 22.4 $ 39.4 $ 38.3 Adjustments: Transaction Related Expense -- 0.9 -- 0.9 Total Adjustments -- 0.9 -- 0.9 Adjusted Operating Income $ 22.9 $ 23.3 $ 39.4 $ 39.2 (1) Adjusted to exclude non-recurring secondary offering expenses. ($ in Millions)

Adjusted Net Income Results Quarter Ended June 24, 2007 Quarter Ended June 25, 2006 Six Months Ended June 24, 2007 Six Months Ended June 25, 2006 Net Income $ 9.6 $ 6.4 $ 16.6 $ 8.8 Adjustments: Loss on Extinguishment of Debt 0.5 -- 0.5 -- Transaction Related Expense -- 0.9 -- 0.9 Tax Impact of Adjustments (0.1) -- (0.1) -- Tonnage Tax Adjustments: 2007 Deferred Tax Revaluation Benefit -- -- (2.6) -- 2006 Proforma Impact -- 2.4 -- 3.6 Total Adjustments 0.4 3.3 (2.2) 4.5 Adjusted Net Income $ 10.0 $ 9.7 $ 14.4 $ 13.3 (1) Adjusted to exclude non-recurring loss on extinguishment of debt, secondary offering expenses, and to retroactively apply tonnage tax. ($ in Millions)

Net Income / EBITDA Reconciliation Quarter Ended June 24, 2007 Quarter Ended June 25, 2006 Six Months Ended June 24, 2007 Six Months Ended June 25, 2006 Net Income $ 9.6 $ 6.4 $ 16.6 $ 8.8 Interest Expense, Net 11.7 12.3 22.9 24.0 Tax Expense (Benefit) 1.1 3.9 (0.6) 5.7 Depreciation and Amortization 17.1 17.2 34.3 33.1 EBITDA 39.5 39.8 73.2 71.6 Loss on Extinguishment of Debt 0.5 -- 0.5 -- Transaction Related Expense -- 0.9 -- 0.9 Adjusted EBITDA $ 40.0 $ 40.7 $ 73.7 $ 72.5 ($ in Millions) Note: EBITDA is defined as net income plus net interest expense, income taxes, depreciation and amortization. We believe that EBITDA is a meaningful measure for investors as (i) EBITDA is a component of the measure used by our board of directors and management team to evaluate our operating performance, (ii) the senior credit facility contains covenants that require Horizon Lines Holding Corp. to maintain certain interest expense coverage and leverage ratios, which contain EBITDA and (iii) EBITDA is a measure used by our management team to make day-to-day operating decisions.

Second Quarter 2007 Earnings Release Questions & Answers

EX-99.4

Exhibit 99.4

HORIZON LINES, INC. ANNOUNCES PRICING AND SATISFACTION OF THE CONSENT CONDITION FOR ITS TENDER OFFER

Charlotte, North Carolina, July 31, 2007 — Horizon Lines, Inc. (the “Company”) (NYSE: HRZ) announced today the pricing terms for its previously announced debt tender offer. The Company has offered to purchase any and all of the 9.00% Senior Notes due 2012 (CUSIP No. 44043YAB8) of its subsidiaries Horizon Lines, LLC and Horizon Lines Holding Corp. (the “Senior Notes) and 11.00% Senior Discount Notes due 2013 (CUSIP No. 40422RAB2) of its subsidiary H-Lines Finance Holding Corp. (the “Senior Discount Notes” and together with the Senior Notes, the “Notes”). The terms and conditions of the tender offer are described in detail in the Offer to Purchase and Consent Solicitation Statement (“Offer to Purchase”) dated July 17, 2007, and the related Letter of Transmittal, which were mailed to the holders of the Notes.

The total consideration for each series of Notes is based on the applicable reference U.S. Treasury security yield, which was determined at 2:00 p.m., New York City time, on July 27, 2007, by the dealer manager, plus a fixed spread as set forth in the Offer to Purchase. Holders of Notes subject to the tender offer who validly tendered, and did not validly withdraw their tender, on or before 5:00 p.m., New York City time, on July 30, 2007 (the “Consent Expiration”), are eligible to receive the total consideration if such tendered notes are accepted for purchase. Holders of Notes subject to the tender offer who validly tender their Notes after the Consent Expiration and on or before 12:00 midnight, New York City time, on Monday, August 13, 2007, and do not validly withdraw their tender, and whose Notes are accepted for purchase will receive the applicable tender offer consideration.

The Company also announced that, for both the Senior Notes and the Senior Discount Notes, it has received consents from holders representing in excess of a majority in aggregate principal amount of the outstanding Notes in such series and that, in each case, the consent condition related to the tender offer has been satisfied. Following receipt of the consents described above, the Company, Horizon Lines, LLC and Horizon Lines Holding Corp. and certain of the Company’s subsidiaries and The Bank of New York Trust Company, N.A., as trustee, executed a supplemental indenture to each of the indentures governing the Senior Notes and the Senior Discount Notes, providing for the amendments to the indentures described in the Offer to Purchase. These amendments will become operative on the date that the Company accepts for purchase the Senior Notes and the Senior Discount Notes that are validly tendered and not validly withdrawn in the tender offer, which is expected to be on or prior to August 13, 2007.

Subject to market conditions and other factors, the Company intends to finance the tender offer with a portion of the proceeds from the sale of up to $300 million of its convertible debt securities and the replacement of the Company’s existing credit facility with a new credit facility consisting of a $125 million term loan and a $200 million revolver (collectively, the “New Financing”). The Company’s obligation to accept for purchase and to pay the consideration for the Notes validly tendered in the tender offer is subject to, and conditioned upon, the completion and close of the New Financing on terms and

conditions satisfactory to the Company, and receipt by the Company of net proceeds from the New Financing sufficient to repay the Company’s indebtedness under the existing credit facility and to purchase all Notes pursuant to the Offer and certain other customary conditions.

As of 5:00 p.m., New York City time, on July 30, 2007, approximately 95.82% of the outstanding principal amount of the Senior Notes have been validly tendered and approximately 98.75% of the outstanding principal amount of the Senior Discount Notes have been validly tendered. The tender offer will expire at 12:00 midnight, New York City time, on August 13, 2007.

The tender offer is being made only pursuant to the Offer to Purchase and related Letter of Transmittal and Consent dated July 17, 2007. The Company has retained Goldman, Sachs & Co. to serve as the exclusive Dealer Manager and Solicitation Agent for the tender offer and D.F. King & Co., Inc. to serve as the Information Agent. Requests for documents may be directed to D.F. King & Co., Inc. by telephone at 800-714-3313 (toll-free). Questions regarding the tender offer and consent solicitation may be directed to Goldman, Sachs & Co. at 800-828-3182 (toll-free) or 212-357-0775.

The Offer to Purchase and this notice does not constitute an offer to sell or a solicitation of an offer to buy any securities. The convertible debt securities with which the Company intends to finance the tender offer have not been and will not be registered under the Securities Act of 1933, and as a result, such securities may not be offered or sold absent registration or an applicable exemption from registration.

Some of the statements contained in this press release are forward-looking statements, as such term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s beliefs and assumptions and on information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statement as a result of factors, risks and uncertainties, including uncertainties and volatility in the credit markets that could delay or prevent any new financing; the Company’s substantial indebtedness and ability to meet payment obligations; covenants contained in existing indebtedness that restrict the Company’s business operations; downgrade in the Company’s credit ratings; the Company’s inability to repurchase outstanding notes; decreases in shipping volumes; the Company’s failure to renew its commercial agreements with Maersk; rising fuel prices; labor interruptions or strikes; job related claims, liability under multi-employer pension plans; compliance with safety and environmental protection and other governmental requirements; new statutory and regulatory directives in the United States addressing homeland security concerns; the successful start-up of any Jones-Act competitor; increased inspection procedures and tighter import and export controls; restrictions on foreign ownership of the Company’s vessels; repeal or substantial amendment of the coastwise laws of the United States, also known as the Jones Act; escalation of insurance costs, catastrophic losses and other liabilities; the arrest of the Company’s vessels by maritime claimants; severe weather and natural disasters; the Company’s inability to exercise its purchase options for its chartered vessels; the aging of the Company’s

vessels; unexpected substantial drydocking costs for the Company’s vessels; the loss of the Company’s key management personnel; and changes in tax laws or in their interpretation or application, adverse tax audits and other tax matters. For a discussion of these risks and other factors that could cause actual results to differ materially from results referred to in the forward-looking statements, see the risk factors that are discussed in the Company’s Annual Report on Form 10-K for the year ended December 24, 2006 filed with the Commission. The Company does not have any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Media Contact:

Michael Avara of Horizon Lines, Inc.

1-704-973-7000

mavara@horizonlines.com

EX-99.5

Exhibit 99.5

HORIZON LINES TO OFFER $300 MILLION OF CONVERTIBLE SENIOR NOTES

Charlotte, North Carolina, July 31, 2007 — Horizon Lines, Inc. (NYSE: HRZ) today announced its intention to offer, subject to market and other conditions, approximately $300 million principal amount of Convertible Senior Notes due 2012 through offerings to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The notes will be convertible under certain circumstances, into cash up to the principal amount of the notes, and shares of Horizon Lines common stock or cash (at the option of Horizon Lines) for any conversion value in excess of the principal amount. Horizon Lines also expects to grant the initial purchasers an option to purchase up to $30 million of additional notes. The interest rate, conversion price and other terms of the notes will be determined by negotiations between Horizon Lines and the initial purchasers of the notes.

Horizon Lines expects to use a portion of the net proceeds of the offering to repurchase up to approximately 1 million shares of its common stock in privately negotiated transactions concurrently with this offering. The company also intends to enter into convertible note hedge transactions with one or more of the initial purchasers and/or their affiliates and, separately, to sell warrants to one or more of the initial purchasers and/or their affiliates. It plans to use a portion of the net proceeds of the offering, and of the warrants that it expects to sell, to pay the cost of the hedge transactions. If the initial purchasers exercise their option to purchase additional notes, the company intends to sell additional warrants and to use a portion of the net proceeds from the sale of the additional notes and from the sale of the additional warrants to increase the size of the convertible note hedge transactions. Horizon Lines intends to use the balance of the proceeds, together with cash on hand or borrowings from our existing facility or borrowings under a new senior secured credit facility that it expects to enter into to replace its existing facility, to fund its obligations to holders of its 9.00% Senior Notes due 2012 and its 11.00% Senior Notes due 2013 under the previously-announced offer to purchase any and all of such senior notes and to make certain consent payments to the holders of those notes.

The convertible note hedge transactions are intended to offset the potential dilution to Horizon Lines common stock upon potential future conversion of the notes. Horizon Lines has been advised that, in connection with establishing their initial hedge of the convertible note and the warrant transactions previously referenced, the counterparties to those transactions or their affiliates expect to enter into various derivative transactions with respect to Horizon Lines common stock concurrently with or shortly after the pricing of the notes. These activities could have the effect of increasing or preventing a decline in the price of Horizon Lines’ common stock concurrently with or following the pricing of the notes. The counterparties or their affiliates may also enter into or unwind various transactions with respect to Horizon Lines’ common stock and purchase or sell Horizon Lines common stock in secondary market transactions following the pricing of the note (and are likely to do so during any observation period relating to the conversion of notes), which may adversely affect the value of Horizon Lines’ common stock.

This notice does not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers of the securities will be made only by means of a private offering circular. The securities and the shares of Horizon Lines common stock that would be issued upon conversion or exercise of the securities have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Media Contact:

Michael Avara of Horizon Lines, Inc.

1-704-973-7000

mavara@horizonlines.com

EX-99.6

Exhibit 99.6

HORIZON LINES, INC. ANNOUNCES PRICING OF CONVERTIBLE SENIOR NOTES

Charlotte, North Carolina, August 2, 2007 — Horizon Lines, Inc. (the “Company”) (NYSE: HRZ) announced today the pricing of a private placement of $300 million aggregate principal amount of 4.25% convertible senior notes due 2012. The Company has also granted the initial purchasers of the notes an option to purchase up to an additional $30 million in aggregate principal amount of the convertible senior notes. The offering was made pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”). The private placement is expected to close on August 8, 2007, subject to customary closing conditions.

The notes will pay interest semiannually at a rate of 4.25% per annum. The notes will be convertible under certain circumstances into cash up to the principal amount of the notes, and shares of the Company’s common stock or cash (at the option of the Company) for any conversion value in excess of the principal amount at an initial conversion rate of 26.9339 shares of the Company’s common stock per $1,000 principal amount of notes. This represents an initial conversion price of approximately $37.13 per share, a 30% premium over the last reported sale price of the Company’s common stock on August 1, 2007.

The Company estimates that the net proceeds from this offering will be approximately $291.3 million after deducting initial purchasers’ discounts and estimated expenses. As previously announced, the Company intends to use approximately $36.9 million of the net proceeds of the offering to fund convertible note hedge transactions that the Company has entered into with one or more of the initial purchasers of the notes, their affiliates or other financial institutions. These convertible note hedge transactions are intended to offset the dilution to the Company’s common stock resulting from potential future conversions of the notes. The Company also entered into separate transactions with one or more of the initial purchasers, their affiliates and other financial institutions to sell warrants to purchase shares of its common stock. The convertible note hedge and warrant transactions increase the effective conversion price of the notes to $51.41 per common share, reflecting a premium of approximately 80% to the closing price per share of $28.56 on August 1, 2007.

If the initial purchasers exercise their option to purchase the additional $30 million in aggregate principal amount of notes, the Company intends to sell additional warrants and to use a portion of the net proceeds from the sale of the additional notes and from the sale of the additional warrants to increase the size of the convertible note hedge transactions.

The Company expects to use approximately $28.6 million of the net proceeds of the offering to repurchase 1,000,000 shares of its common stock in privately negotiated transactions concurrently with this offering. The Company intends to use the remaining proceeds, together with cash on hand or borrowings from its existing facility or borrowings under a new senior secured credit facility that it expects to enter into to replace its existing facility, to fund its obligations to holders of its 9.00% Senior Notes

due 2012 and its 11.00% Senior Notes due 2013 under the previously-announced offer to purchase any and all of such senior notes and to make certain consent payments to the holders of those notes.

The Company has been advised that, in connection with establishing their initial hedge of the convertible notes and entering into the warrant transactions previously referenced, the counterparties to those transactions or their affiliates have entered into or expect to enter into various derivative transactions with respect to the Company’s common stock. These activities could have the effect of increasing or preventing a decline in the price of the Company’s common stock. The counterparties or their affiliates may also enter into or unwind various transactions with respect to the Company’s common stock and purchase or sell the Company’s common stock in secondary market transactions (and are likely to do so during any observation period relating to the conversion of notes), which may adversely affect the value of the Company’s common stock.

This notice does not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers of the securities will be made only by means of a private offering circular. The securities and the shares of the Company’s common stock that would be issued upon conversion or exercise of the securities have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Media Contact:

Michael Avara of Horizon Lines, Inc.

1-704-973-7000

mavara@horizonlines.com