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): October 23, 2008

HORIZON LINES, INC.

(Exact name of registrant as specified in its Charter)

Delaware	001-32627	74-3123672
(State or Other Jurisdiction of Organization)	(Commission File Number)	(I.R.S. Employer 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:

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

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

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

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

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition.
	Item 7.01. Regulation FD Disclosure.
	Item 8.01. Other Events.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURE
Exhibit Index
	Item 9.01 Financial Statements and Exhibits.
EX-99.1
EX-99.2
EX-99.3
EX-99.4

Item 2.02. Results of Operations and Financial Condition.

     On October 24, 2008, Horizon Lines, Inc. (the “Company”) issued a press release announcing its financial results for the third fiscal quarter and nine months ended September 21, 2008, and held a conference call to discuss its financial results. A copy of the press release is filed as Exhibit 99.1 hereto, a copy of the transcript of the conference call is filed as Exhibit 99.2 hereto and a copy of the Third Fiscal Quarter 2008 Earnings Release Presentation is attached as Exhibit 99.3 hereto. Each of these exhibits is incorporated herein by reference.

     The information under Items 2.02 and 7.01 in this Current Report, and Exhibits 99.1, 99.2 and 99.3 hereto, are being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall this information be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

     The disclosure under Item 2.02 of this Current Report on Form 8-K is incorporated herein by reference.

Item 8.01. Other Events.

     On October 23, 2008, the Company issued a press release announcing that its Board of Directors has voted to declare a cash dividend on its outstanding shares of common stock of $0.11 per share, payable on December 15, 2008 to all stockholders of record as of the close of business on December 1, 2008. A copy of this press release is attached as Exhibit 99.4 hereto and is incorporated 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: the Department of Justice antitrust investigation and related legal proceedings, our substantial 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; 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, including the Department of Justice antitrust investigation and related legal proceedings.

     In light of these risks and uncertainties, expected results or other anticipated events or circumstances

discussed in this Form 8-K 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 23, 2007 and in our Form 10-Q for the quarter ended September 21, 2008, as filed with the SEC for a more complete discussion of the above mentioned 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.

NON-GAAP FINANCIAL MEASURES

          Items 2.02 and 7.01, and Exhibits 99.1, 99.2 and 99.3 hereto, contain the following financial measures: adjusted net income, adjusted net income per diluted share, adjusted operating income, free cash flow, adjusted free cash flow, adjusted operating expense, adjusted other expense, adjusted income tax expense, adjusted pretax income, adjusted earnings per share, adjusted earnings per diluted share and adjusted operating ratio, as well as EBITDA and Adjusted EBITDA on a consolidated basis and for the Company’s shipping and logistics business segments, and, to supplement the Company’s guidance for fiscal 2008, projected EBITDA, adjusted EBITDA and adjusted Net Income on a consolidated basis and for the Company’s shipping and logistics business segments for fiscal 2008 and projected free cash flow for fiscal 2008. These are non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission.

     The Company uses adjusted net income, adjusted net income per diluted share, adjusted operating income, adjusted operating expense, adjusted other expense, adjusted income tax expense, adjusted pretax income and adjusted earnings per diluted share to exclude unusual items. The Company defines free cash flow as EBITDA adjusted to include certain unusual and certain non-cash items and net proceeds from sale of fixed assets and to exclude certain uses of cash flow, EBITDA as net income plus net interest expense, income taxes, depreciation and amortization and adjusted EBITDA as net income plus net interest expense, income taxes, depreciation and amortization adjusted to exclude unusual items.

     The Company believes that these non-GAAP financial measures provide information that is useful to the Company’s investors. The Company believes that this information is helpful in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportional positive or negative impact on the Company’s results of operations in any particular period. Additionally, the Company uses these non-GAAP measures to evaluate its past performance and prospects for future performance. The Company also utilizes certain of these measures to compensate certain management personnel of the Company.

     The Company believes that EBITDA is a meaningful measure for investors as (i) EBITDA is a component of the measure used by the Company’s board of directors and management team to evaluate the Company’s operating performance, (ii) the senior credit facility contains covenants that require the Company to maintain certain interest expense coverage and leverage ratios, which contain EBITDA, and (iii) EBITDA is a measure used by the Company’s management team to make day-to-day operating decisions. EBITDA for the Company’s business segments is used by the Company’s internal decision makers to evaluate segment operating performance. The Company believes free cash flow provides supplemental information about the Company’s ability to fund its working capital needs and capital expenditures, and to pay interest and service debt.

     The Company also uses a non-GAAP net income measure on a per diluted share basis. The Company believes that it is important to provide per share information, in addition to absolute dollar measures, when describing its business, including when presenting non-GAAP measures.

     The Company uses adjusted financial measures to exclude certain items in order to illustrate the affect of

those items on the financial performance of the Company. Adjusted financial measures are the measures used by management to compare operating results and to evaluate operating performance.

     The financial measures adjusted net income, adjusted net income per diluted share, adjusted operating income, free cash flow, adjusted free cash flow, adjusted operating expense, adjusted other expense, adjusted income tax expense, adjusted pretax income, adjusted earnings per share, adjusted earnings per diluted share, adjusted operating ratio, EBITDA and Adjusted EBITDA are not recognized terms under GAAP and do not purport to be alternatives to net income or earnings per share as a measure of earnings or free cash flow as a measure of cash flow for management’s discretionary use, as they do not consider certain cash requirements such as dividend payments and debt service requirements. Because all companies do not use identical calculations, these presentations of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies.

     Reconciliations of the non-GAAP measures to the most directly comparable GAAP measures are provided in the press release and the Earnings Release Presentation filed as Exhibits 99.1 and 99.3, respectively.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1	Press Release of Horizon Lines, Inc. dated October 24, 2008.
99.2	Transcript of conference call held on October 24, 2008.
99.3	Earnings Release Presentation for the Third Fiscal Quarter Ended September 21, 2008.
99.4	Press Release of Horizon Lines, Inc., dated October 23, 2008.

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: October 28, 2008	By:	/s/ Michael T. Avara
		Michael T. Avara, Senior Vice President and
		Chief Financial Officer

Exhibit Index

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1	Press Release of Horizon Lines, Inc. dated October 24, 2008.
99.2	Transcript of conference call held on October 24, 2008.
99.3	Earnings Release Presentation for the Third Fiscal Quarter Ended September 21, 2008.
99.4	Press Release of Horizon Lines, Inc., dated October 23, 2008.

EX-99.1

4064 Colony Road, Suite 200
Charlotte, NC 28211
704.973.7000
www.horizonlines.com

News Release

For information contact:

Jim Storey
Director of Investor Relations & Corporate Communications
704.973.7107
jstorey@horizonlines.com

HORIZON LINES REPORTS THIRD-QUARTER 2008 RESULTS
— Company Made $12.5 Million Voluntary Debt Payment In Quarter —

• Revenue rose 9.8% to $352.6 million; Revenue per container up 3.1%, net of fuel

• GAAP Diluted EPS of $0.42 vs. $0.05; Adjusted Diluted EPS of $0.53 vs. $0.61

CHARLOTTE, NC, October 24, 2008 — Horizon Lines, Inc. (NYSE: HRZ), today reported results for the third quarter ended September 21, 2008. On a GAAP basis, net income was $12.5 million, or $0.42 per diluted share, on revenue of $352.6, compared with net income of $1.6 million, or $0.05 per diluted share, on revenue of $321.1 million for third quarter of 2007.

Adjusted net income for the third quarter was $16.2 million, or $0.53 per diluted share, compared with adjusted net income of $20.7 million, or $0.61 per diluted share, in the 2007 third quarter. Adjusted 2008 results exclude anti-trust related legal expenses totaling $4.6 million, or $0.11 per diluted share. Adjusted 2007 results excluded a loss on extinguishment of debt of $38.0 million and a tonnage tax deferred revaluation benefit of $4.8 million, or $0.56 per diluted share.

Horizon Lines 3^rd Quarter 2008 Page 2 of 18

Comparison of GAAP and Adjusted Earnings (in millions, except per share data)

	Quarters Ended				Nine Months Ended
	9/21/08		9/23/07		9/21/08		9/23/07
GAAP:
Operating revenue	$	352.6	$	321.1	$	989.5	$	890.5
Net income	$	12.5	$	1.6	$	21.9	$	18.2
Net income per diluted share	$	0.42	$	0.05	$	0.72	$	0.53
EBITDA	$	37.6	$	12.8	$	97.6	$	86.0
Adjusted*:
Net income	$	16.2	$	20.7	$	28.1	$	35.2
Net income per diluted share	$	0.53	$	0.61	$	0.92	$	1.03
EBITDA	$	42.2	$	50.8	$	105.4	$	124.5

* See attached schedules for reconciliation of third-quarter and nine-month 2008 and 2007 reported results and EBITDA amounts to adjusted results.

“Our company performed well in the face of increased challenges during the third-quarter,” said Chuck Raymond, Chairman, President and Chief Executive Officer. “Volumes were negatively impacted by continued weakness in our Puerto Rico market, which was exacerbated by five tropical storms including three hurricanes, and by a sharper-than-anticipated slowdown in Hawaii, where a steep drop in tourism pressured the economy. Although fuel prices moderated somewhat during the period, they remained high; on average, 82% above their levels of a year ago.

“Despite these challenges, we grew revenue 3.1% during the quarter, excluding the impact of fuel recovery, through a combination of rate and mix.” Mr. Raymond said. “We contained costs through measures including strict fuel conservation while preserving our high standards of vessel on-time performance, and we continued to position our logistics business for long-term organic growth opportunities.

“Just as importantly, we repaid $12.5 million of outstanding debt under our revolving credit facility during the quarter,” Mr. Raymond continued. “We finished the quarter with strong corporate liquidity and comfortably in compliance with our credit facility financial covenants.”

Horizon Lines 3^rd Quarter 2008 Page 3 of 18

Third-Quarter 2008 Financial Highlights

• Operating Revenue — The 9.8% growth in operating revenue for the quarter to $352.6 million from $321.1 million for the third quarter of 2007 was driven by a combination of rate improvement, revenue from the Aero Logistics acquisition, and higher fuel surcharges, which more than offset a 4% volume decline and lower Hawaii Stevedores revenue resulting from the Hawaii slowdown. Revenue per container increased by $441, or 12%, from the same period a year ago.

• Operating Income — Operating income for the third quarter of 2008 was $21.8 million, compared with $35.3 million for the third quarter of 2007. The decline in operating income primarily reflects lower overall container volume, increased fuel costs, and legal fees related to the antitrust investigation. The decline was slightly offset by rate improvements. Adjusted operating income totaled $26.4 million for the 2008 third quarter.

• Adjusted EBITDA — Adjusted EBITDA for the 2008 third quarter was $42.2 million, compared with $50.8 million for the 2007 third quarter. Adjusted EBITDA was impacted by the same factors affecting operating income.

• Shares Outstanding — As a result of share repurchases completed in the first quarter of 2008, the company had a weighted daily average of 30.2 million diluted shares outstanding for the third quarter of 2008, compared with 33.8 million for the third quarter of 2007.

• Nine-Month Results — For the 2008 nine-month period, operating revenue increased 11.1% to $989.5 million from $890.5 million for the same period of 2007. EBITDA was $97.6 million compared with $86.0 million a year ago. Adjusted EBITDA, excluding the items previously mentioned as well as 2008 second-quarter severance cost related to early retirement for specific union employees, was $105.4 million versus $124.5 million. Nine-month net income totaled $21.9 million, or $0.72 per diluted share, compared with $18.2 million, or $0.53 per diluted share for the same period last year.

Horizon Lines 3^rd Quarter 2008 Page 4 of 18

Adjusted net income was $28.1 million, or $0.92 per diluted share, compared with $35.2 million, or $1.03 per diluted share, a year ago, which excludes the after-tax loss related to the extinguishment of debt mentioned above, as well as a $7.3 million deferred tax revaluation benefit.

(Please see attached schedules for reconciliation of third-quarter and nine-month 2008 and 2007 reported results and EBITDA amounts to adjusted results.)

Outlook

Mr. Raymond concluded: “In this increasingly uncertain economic environment, our company remains well positioned to continue serving our customers and operating from a foundation of financial strength. We are well capitalized, operating with strong liquidity, well within our financial covenants, and have no refinancing needs until mid-2012. That said, as we budget for 2009, we will do so with the intention of conserving cash and removing costs from our organization wherever possible.

“Looking at our liner markets, we expect Puerto Rico’s economy to remain weak and Hawaii’s to soften further in the fourth quarter, as visitor volumes from the U.S. and Japan continue to contract sharply. Our Alaska tradelane remains stable, with the economy there buoyed by still relatively high oil prices. As a Jones Act carrier, Horizon Lines plays a crucial role delivering basic food, clothing and shelter to customers and consumers in these three tradelanes, regardless of economic cycles. As we move forward, we will remain focused on serving our customers well and operating our company so that it remains financially strong through this difficult environment. We also expect our business supplying the U.S. military in Guam, and to a lesser extent Hawaii and Alaska, to continue providing stability to earnings and cash flow.

“Regarding logistics, we plan to continue to grow this business without acquisitions for the foreseeable future. Organic expansion of our logistics business offers long-term growth opportunity with minimal capital investment requirements beyond those that we are making in people.”

Horizon Lines 3^rd Quarter 2008 Page 5 of 18

Based on management’s expectations for a continued recession in Puerto Rico, further weakening in the Hawaii economy, and continuing volatility in fuel prices, guidance for the full year 2008 has been adjusted as follows:

	Current Guidance	Previous Guidance
Revenue:	$1.270-$1.290 billion	$1.335-$1.365 billion
Adjusted EBITDA(1):	$120-$130 million	$135-$150 million
Adjusted Diluted EPS (1):	$0.68-$0.96	$1.03-$1.43
Adjusted Free Cash Flow (2):	$29-$36 million	$40-$59 million

(1)	Adjusted 2008 results exclude the anticipated $10 million (increased from our July 2008 estimate of $6.5 million) in anti-trust related legal expenses and $0.8 million in severance expense related to early retirement for specific union employees, totaling $10.8 million, or $0.30 per share after tax.
	(Please see attached schedules for reconciliation of full-year projections.)
(2)	Adjusted 2008 results exclude the anticipated $8.0 million in anti-trust related legal payments and $0.4 million in severance payments related to early retirement for specific union employees.
	(Please see attached schedules for reconciliation of full-year projections.)

Webcast & Conference Call Information

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 1-800-218-0713 and asking for the Horizon Lines Earnings Call. A hardcopy of the presentation materials may be printed from the Horizon Lines website, http://www.horizonlines.com, shortly before the start of the call. Alternatively, a live audio webcast of the call may be accessed at http://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.

Use of Non-GAAP Measures

Horizon Lines reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). The company also believes that the presentation of certain

Horizon Lines 3^rd Quarter 2008 Page 6 of 18

non-GAAP measures, i.e., results excluding certain costs and expenses, provides useful information for the understanding of its ongoing operations and enables investors to focus on period-over-period operating performance without the impact of significant special items, and thereby enhances the user’s overall understanding of the company’s current financial performance relative to past performance and provides a better baseline for modeling future earnings expectations. Non-GAAP measures are reconciled in the financial tables accompanying this news release. The company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the company’s reported GAAP results.

About Horizon Lines

Horizon Lines, Inc. is the nation’s leading domestic ocean shipping and integrated logistics company comprised of two primary operating subsidiaries. Horizon Lines, LLC owns or leases a fleet of 21 U.S.-flag containerships and 5 port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. Horizon Logistics, LLC offers customized logistics solutions to shippers from a suite of transportation and distribution management services designed by Aero Logistics, information technology developed by Horizon Services Group and intermodal trucking and warehousing services provided by Sea-Logix. Horizon Lines, Inc. is based in Charlotte, NC, and trades on the New York Stock Exchange under the ticker symbol HRZ.

Forward Looking Statements

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,”

Horizon Lines 3^rd Quarter 2008 Page 7 of 18

“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 February 6, 2008, and in subsequent Form 10-Qs, 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.

(Tables Follow)

Horizon Lines 3^rd Quarter 2008 Page 8 of 18

Horizon Lines, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)

	September 21,
	2008			December 23,
	(unaudited)			2007
Assets
Current assets
Cash	$	4,194		$	6,276
Accounts receivable, net of allowance of $8,325 and $6,191 at September 21, 2008 and December 23, 2007, respectively		169,674			140,820
Deferred tax asset		5,655			13,792
Prepaid vessel rent		4,749			4,361
Materials and supplies		33,232			31,576
Other current assets		11,039			10,446
Total current assets		228,543			207,271
Property and equipment, net		202,020			194,679
Goodwill		334,717			334,671
Intangible assets, net		134,418			152,031
Deferred tax asset		10,520			4,060
Other long-term assets		30,119			33,729
Total assets	$	940,337		$	926,441
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	27,269		$	40,225
Current portion of long-term debt		6,543			6,537
Accrued vessel rent		—			6,503
Other accrued liabilities		110,718			95,027
Total current liabilities		144,530			148,292
Long-term debt, net of current		603,062			572,469
Deferred rent		28,176			31,531
Other long-term liabilities		21,458			19,571
Total liabilities		797,226			771,863
Stockholders’ equity
Common stock, $.01 par value, 100,000 shares authorized, 33,774 shares issued and 29,974 shares outstanding as of September 21,2008 and 50,000 shares authorized, 33,674 shares issued and 31,502 shares outstanding as of December 23, 2007		338			337
Treasury stock, 3,800 and 2,172 shares at cost as of September 21, 2008 and December 23, 2007, respectively		(78,538	)		(49,208	)
Additional paid in capital		168,423			163,760
Retained earnings		51,863			39,994
Accumulated other comprehensive income (loss)		1,025			(305	)
Total stockholders’ equity		143,111			154,578
Total liabilities and stockholders’ equity	$	940,337		$	926,441

Horizon Lines 3^rd Quarter 2008 Page 9 of 18

Horizon Lines, Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)

	Quarters Ended						Nine Months Ended
	September 21,			September 23,			September 21,			September 23,
	2008			2007			2008			2007
Operating revenue	$	352,638		$	321,145		$	989,544		$	890,509
Operating expense:
Cost of services (excluding depreciation expense)		287,400			246,402			809,069			698,530
Depreciation and amortization		11,449			10,714			34,325			36,765
Amortization of vessel dry-docking		4,393			4,820			13,168			13,139
Selling, general and administrative		26,513			23,481			80,517			66,885
Miscellaneous expense, net		1,095			445			2,392			525
Total operating expense		330,850			285,862			939,471			815,844
Operating income		21,788			35,283			50,073			74,665
Other expense:
Interest expense, net		7,772			10,077			24,927			32,953
Loss on early extinguishment of debt		—			37,958			—			38,522
Other (income) expense, net		(4	)		25			(2	)		45
Income (loss) before income tax expense (benefit)		14,020			(12,777	)		25,148			3,145
Income tax expense (benefit)		1,492			(14,347	)		3,294			(15,038	)
Net income	$	12,528		$	1,570		$	21,854		$	18,183
Net income per share:
Basic	$	0.42		$	0.05		$	0.73		$	0.54
Diluted	$	0.42		$	0.05		$	0.72		$	0.53
Number of shares used in calculation:
Basic		29,970			33,131			30,060			33,460
Diluted		30,187			33,770			30,527			34,066
Dividends declared per common share	$	0.11		$	0.11		$	0.33		$	0.33

Horizon Lines 3^rd Quarter 2008 Page 10 of 18

Horizon Lines, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands, except per share data)

	Nine Months Ended
	September 21,			September 23,
	2008			2007
Cash flows from operating activities:
Net income	$	21,854		$	18,183
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		18,339			21,826
Amortization of other intangible assets		15,986			14,939
Amortization of vessel dry-docking		13,168			13,139
Amortization of deferred financing costs		2,022			2,296
Deferred income taxes		1,677			(20,023	)
Gain on equipment disposals		(7	)		(281	)
Stock-based compensation		3,532			2,401
Loss on early extinguishment of debt		—			38,522
Accretion of interest on 11% senior discount notes		—			6,062
Changes in operating assets and liabilities:
Accounts receivable		(28,521	)		(37,142	)
Materials and supplies		(1,655	)		(5,761	)
Other current assets		(593	)		(1,537	)
Accounts payable		(13,054	)		(6,727	)
Accrued liabilities		17,590			(8,650	)
Vessel rent		(9,657	)		(30,790	)
Vessel dry-docking payments		(9,291	)		(15,516	)
Other assets/liabilities		1,613			3,545
Net cash provided by (used in) operating activities		33,003			(5,514	)
Cash flows from investing activities:
Purchases of property and equipment		(26,351	)		(16,714	)
Purchase of business		(198	)		(32,082	)
Proceeds from the sale of property and equipment		350			3,078
Net cash used in investing activities		(26,199	)		(45,718	)
Cash flows from financing activities:
Payments on long-term debt		(4,902	)		(517,074	)
Borrowing under revolving credit facility		73,000			161,500
Payments on revolving credit facility		(37,500	)		(15,000	)
Issuance of convertible notes		—			330,000
Borrowing of term loan		—			125,000
Purchase of call spread options		—			(52,541	)
Sale of common stock warrants		—			11,958
Redemption premiums		—			(25,568	)
Dividends to stockholders		(9,985	)		(11,011	)
Purchase of treasury stock		(29,330	)		(28,560	)
Payments of financing costs		(139	)		(11,929	)
Payments on capital lease obligation		(81	)		(152	)
Common stock issued under employee stock purchase plan		38			8
Proceeds from exercise of stock options		13			84
Net cash used in financing activities		(8,886	)		(33,285	)
Net decrease in cash		(2,082	)		(84,517	)
Cash at beginning of period		6,276			93,949
Cash at end of period	$	4,194		$	9,432

Horizon Lines 3^rd Quarter 2008 Page 11 of 18

Horizon Lines, Inc.
Adjusted Operating Income
($ in Millions)

	Quarter Ended		Quarter Ended		Nine Months Ended		Nine Months Ended
	September 21, 2008		September 23, 2007		September 21, 2008		September 23, 2007
Operating Income	$	21.8	$	35.3	$	50.1	$	74.7
Adjustments:
Anti-Trust Legal Fees		4.6		—		7.0		—
Severance		—		—		0.8		—
Total Adjustments		4.6		—		7.8		—
Adjusted Operating Income	$	26.4	$	35.3	$	57.9	$	74.7

Horizon Lines 3^rd Quarter 2008 Page 12 of 18

Horizon Lines, Inc.
Adjusted Net Income
($ in Millions)

	Quarter Ended			Quarter Ended			Nine Months Ended			Nine Months Ended
	September 21, 2008			September 23, 2007			September 21, 2008			September 23, 2007
Net Income	$	12.5		$	1.6		$	21.9		$	18.2
Adjustments:
Anti-Trust Legal Fees		4.6			—			7.0			—
Severance		—			—			0.8			—
Loss on Extinguishment of Debt		—			38.0			—			38.5
Tax Impact of Adjustments		(0.9	)		(14.1	)		(1.6	)		(14.2	)
2007 Tonnage Tax Deferred Tax Revaluation Benefit		—			(4.8	)		—			(7.3	)
Total Adjustments		3.7			19.1			6.2			17.0
Adjusted Net Income	$	16.2		$	20.7		$	28.1		$	35.2

Horizon Lines 3^rd Quarter 2008 Page 13 of 18

Horizon Lines, Inc.
Adjusted Net Income Per Diluted Share

	Quarter Ended			Quarter Ended			Nine Months Ended			Nine Months Ended
	September 21, 2008			September 23, 2007			September 21, 2008			September 23, 2007
Net Income, Per Diluted Share	$	0.42		$	0.05		$	0.72		$	0.53
Adjustments Per Share:
Anti-Trust Legal Fees		0.14			—			0.23			—
Severance		—			—			0.02			—
Loss on Extinguishment of Debt		—			1.12			—			1.13
Tax Impact of Adjustments		(0.03	)		(0.42	)		(0.05	)		(0.42	)
2007 Tonnage Tax Deferred Tax Revaluation Benefit		—			(0.14	)		—			(0.21	)
Total Adjustments Per Share		0.11			0.56			0.20			0.50
Adjusted Net Income Per Diluted Share	$	0.53		$	0.61		$	0.92		$	1.03

Horizon Lines 3^rd Quarter 2008 Page 14 of 18

Horizon Lines, Inc.
Net Income / EBITDA / Adjusted EBITDA Reconciliation
($ in Millions)

	Quarter Ended		Quarter Ended			Nine Months Ended		Nine Months Ended
	September 21, 2008		September 23, 2007			September 21, 2008		September 23, 2007
Net Income	$	12.5	$	1.6		$	21.9	$	18.2
Interest Expense, Net		7.8		10.1			24.9		32.9
Tax Expense (Benefit)		1.5		(14.4	)		3.3		(15.0	)
Depreciation and Amortization		15.8		15.5			47.5		49.9
EBITDA		37.6		12.8			97.6		86.0
Anti-Trust Legal Fees		4.6		—			7.0		—
Severance		—		—			0.8		—
Loss on Extinguishment of Debt		—		38.0			—		38.5
Adjusted EBITDA	$	42.2	$	50.8		$	105.4	$	124.5

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 the Company 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.

Horizon Lines 3^rd Quarter 2008 Page 15 of 18

Horizon Lines, Inc.
Operating Income to Adjusted EBITDA Segment Reconciliation
($ in Millions)

Third Quarter 2008

	Liner		Logistics			Consolidated
Operating Income (Loss)	$	23.1	$	(1.3	)	$	21.8
Depreciation and Amortization		10.6		0.8			11.4
Amortization of Vessel Dry-docking		4.4		—			4.4
EBITDA		38.1		(0.5	)		37.6
Anti-Trust Legal Fees		4.6		—			4.6
Severance		—		—			—
Adjusted EBITDA	$	42.7	$	(0.5	)	$	42.2

Nine Months 2008

	Liner		Logistics			Consolidated
Operating Income (Loss)	$	54.0	$	(3.9	)	$	50.1
Depreciation and Amortization		32.1		2.2			34.3
Amortization of Vessel Dry-docking		13.2		—			13.2
EBITDA		99.3		(1.7	)		97.6
Anti-Trust Legal Fees		7.0		—			7.0
Severance		0.8		—			0.8
Adjusted EBITDA	$	107.1	$	(1.7	)	$	105.4

Horizon Lines 3^rd Quarter 2008 Page 16 of 18

Horizon Lines, Inc.
2008 Operating Income to Adjusted EBITDA Projection Segment Reconciliation
($ in Millions)

2008 Segment Financial Guidance ⁽¹⁾

	Liner		Logistics			Consolidated
Operating Income (Loss)	$	56.6	$	(5.5	)	$	51.1
Adjustments:
Anti-Trust Legal Fees		10.0		—			10.0
Severance		0.8		—			0.8
Total Adjustments		10.8		—			10.8
Adjusted Operating Income (Loss)		67.4		(5.5	)		61.9
Depreciation and Amortization		43.0		3.1			46.1
Amortization of Vessel Dry-docking		17.0		—			17.0
Adjusted EBITDA	$	127.4	$	(2.4	)	$	125.0

(1) At midpoint of Guidance

Horizon Lines 3^rd Quarter 2008 Page 17 of 18

Horizon Lines, Inc.
2008 Net Income to Adjusted EBITDA Projection Reconciliation
($ in Millions)

	Year Ended
	December 21, 2008
Net Income	$	11.4 - $20.0
Adjustments:
Anti-Trust Legal Fees		10.0
Severance		0.8
Tax Impact of Adjustments		(1.5	)
Total Adjustments		9.3
Adjusted Net Income	$	20.7 - $29.3
Interest Expense, Net		32.9
Tax Expense		3.3 - 4.7
Depreciation and Amortization		63.1
Adjusted EBITDA	$	120.0 - $130.0

Horizon Lines 3^rd Quarter 2008 Page 18 of 18

Horizon Lines, Inc.
2008 Free Cash Flow Projection
($ in Millions)

Adjusted EBITDA	$	120.0 - $130.0
Stock Compensation		4.8
Annual Performance Incentive Plan		2.0
Working Capital		(10.0) - (12.8	)
Vessel Payments in Excess of Accrual		(4.9	)
TP1 Related Costs		(0.1	)
Capital Expenditures		(39.0	)
Net Proceeds from Sale of Fixed Assets		0.4
Dry-dock Expenditures		(14.6	)
Purchase of Business		(0.2	)
Income Taxes		(0.4	)
Interest, Net		(29.2	)
Adjusted Free Cash Flow	$	28.8 - $36.0
Severance		(0.4	)
Anti-Trust Legal Fees		(8.0	)
Free Cash Flow	$	20.4 - $27.6

# # #

EX-99.2

Exhibit 99.2

On October 24, 2008, Horizon Lines, Inc. hosted a conference call to discuss financial results for the third quarter ended September 21, 2008. The following transcript is an interpretation of the statements made on the call. The actual conference call may have differed slightly.

Operator	Good morning ladies and gentlemen. Thank you for standing by. Welcome to the Horizon Lines, Inc. third quarter 2008 earnings results conference call. During today’s presentation all parties will be in the listen only mode. Following the presentation the conference will be open for questions. If you have a question, please press the “*” followed by the “1” on your touch tone phone. If you’d like to withdraw your questions, please press the “*” star followed by the “2”. If you’re using speaker equipment, please lift the hand set before making you’re selection. This conference is being recorded today, Friday October 24, 2008.
	I would now like to turn the conference over to Jim Storey, Director of Investor Relations and Corporate Communications please go ahead, sir.
Jim Storey	Thank you, operator, and good morning everyone. Welcome to Horizon Lines, Inc. third quarter 2008 conference call.
	With us this morning are Chuck Raymond, our Chairman, President and CEO; John Keenan, president of our liner company; Brian Taylor, president of our logistics company; and Mike Avara, our Chief Financial Officer. Also on hand with us in the room are John Handy, our Executive Vice President and Catherine Walsh, our Vice President and Controller.
	Our call today will be conducted in the normal manner. Chuck will provide an overview of the quarter, John will then review our shipping operations, followed by Brian, who will discuss our logistics business. Mike will then walk you through the financials and Chuck will provide some further commentary before opening the call to questions.
	Before we get started I would like to draw your attention to our safe harbor statement and remind everyone that on today’s call, management will make certain forward-looking statements that it believes to be reasonable at this point in time. Actual results could differ materially from those projected today, due to known and unknown risks and uncertainties. A discussion of factors that might affect future results is provided in our filings with the SEC and we encourage you to review them. Now let me turn the call over to Chuck Raymond. Chuck?
Chuck Raymond	Thank you Jim, and welcome everyone to our third quarter earnings conference call. I’ll start out by providing a brief overview of the quarter, our accomplishments, our challenges and the environment that we faced.
	By now I hope everybody’s had a chance to review our third quarter press release and the attachments that detail our third quarter performance. Despite a few challenges, Horizon Lines’ associates continued to perform in both our liner and logistics businesses. We served our customers well, preserving and growing key relationships. We posted third quarter earnings of $0.53 per share on an adjusted basis. We grew our revenue 3.1% during the quarter, net of fuel, and we generated solid cash flows, which we used in part to pay down debt, and to continue to make selective investments in our Puerto Rico and our Honolulu marine terminals, and made an advance payment on the freight that we have purchased for the future. We ended the quarter on solid financial ground, with strong liquidity, well within the financial covenants of our revolver, and solidly positioned to continue to execute our business in what increasingly looks to us to be an extended period of economic uncertainty.

	As you know, tourism is a major driver of the Hawaiin economy and while we expected tourism to weaken in-line with the second half slowdown here and in Japan, I don’t think we could have projected the softening that Hawaii saw in the past quarter, and it continues now. As a result, we reduced our volume expectations in that particular trade lane, certainly for the rest of the year, and probably through much of 2009 as well. And it’s a key reason that we’ve turned a little more cautious on our outlook for the full year.
	I want to make two key points about the operating environment which we find ourselves in today. First, I fully expect that our country’s financial dilemmas will continue to send economic shock waves not only across the United States, but throughout the globe, well into 2009, and even possibly beyond. Second, one point on fuel costs. While crude prices moderated somewhat during the quarter, the average price for fuel that we use was still about 82% above what he had paid a year ago. Our per ton purchase costs of fuel are just now starting to fall.
	Looking back at the third quarter, our financial results were negatively impacted by volume declines in Puerto Rico and in Hawaii. Puerto Rico’s weak economy continued in the quarter and the trade lane was also impacted by five major hurricanes and several tropical storms. Alaska held steady, as did Guam. Our performance was helped by rate improvements, mix improvement, cost controls, and exceptional schedule reliability despite the weather issues that plagued others.
	Briefly, on the DOJ investigation of the carriers in the Puerto Rico trade. As you know, I can’t comment specifically on this situation, other than to tell you that our company will continue to cooperate as the investigation moves forward. Today we have a strong team in place in our Puerto Rico business unit and we’re continuing to serve our customers with the high level of service that they have come to expect from Horizon Lines throughout the 50 years that we’ve served that market.
	Today our company is well positioned to continue serving our customers in all of our trade lanes, for the following very solid reasons. First, we’ve aligned ourselves with successful leading brands like Wal-Mart, Costco, Walgreens and Safeway in the retail sector, like Lowes and Home Depot in the home improvement area and like Johnson and Johnson and Amgen in the biotech and pharmaceutical space. We provide all of our customers with a high level of service and on-time performance, which is ever so important to them in these tough economic times. This, of course, translates into strong customer relationships and a fortified enduring brand preference for Horizon Lines. Second, we’re largely in the business of providing the basics within our trade lanes. Food, clothing and shelter, and I said it before, I’ll say it again: delivering these goods in three different geographies makes Horizon Lines, Inc. not recession proof by any means, but certainly less exposed than others might be in a recessionary environment. Consumers in our trade lanes depend on us for the necessities that sustain and improve the quality of their lives. Third, we are financially sound. I can’t stress this enough. Our business generates strong cash flows. We’re using these funds primarily to pay down debt and although leveraged; the cost of our debt is low, and the majority is fixed. We also remain highly liquid and we have no recapitalization needs here at Horizon Lines until at least mid 2012.
	Just one last point before I turn the call over to John. We manage our business for the long-term. As I said earlier, I don’t believe that this unstable economic environment will blow us off course. Our logistics business is a key component of our long-term growth strategy, and as Brian will share with you in a few minutes, our logistics business is serving more and diverse customers. We’re seeing the business develop organically from within, which is the way we intend to grow it going forward. Acquisitions at this particular time are not on the table and probably won’t be for the foreseeable future. Now, I’ll turn the call over to John Keenan who will take you through our liner business. John.
John Keenan	Thank you Chuck, and good morning everyone. I will be walking you through our third quarter liner operations, starting with a review of our trade lanes a look at volume, unit revenue and vessel performance trends. I will conclude with updates on the labor and legislative areas affecting our business, as well as a quick review of our cost efficiency and coast wide shipping initiatives.

As a company, I feel we operated very well in an increasingly difficult environment during the third quarter which was impacted by the weakening overall economy. Even with this, we continued to align ourselves with successful growing customers. We maintained strong on-time arrivals and we continued to identify and implement cost savings initiatives across our organization.

I’m starting the review of our trade lanes on page 7 with a look at Alaska.

Alaska was definitely the strongest of our trade lanes. The economy continued to be buoyed by high oil prices and a recent boost in the oil production tax. This has resulted in a record budget surplus on the order of $2.6 billion this year. Every year, Alaska pays each resident a special dividend based on oil revenues, and this year it was a record payout of more than $3,200 [per resident] pumping an estimated $2 billion into the hands of Alaska consumers who in turn have been spending it on everything from basic goods, to furniture, to cars and HD TVs.

Another 33,000 Alaskans are expected to receive a total of $350 million from the Exxon Valdez settlement possibly later this year. The economy has received a boost and that has helped. The third quarter southbound fish volume is strong, which is expected at this time of year. As we look out on the horizon we continue to focus on expanding relationships with leading brand name retail customers that are expanding in the state. Retail sales per square foot are very high in Alaska, about double the average in the mainland US. It’s a very attractive market for retailers. We also focused on on-time service and vessel utilization both to ensure timely delivery of the needed goods and staples to our Alaska consumers, and to make sure we’re serving these market as cost effectively as possible. We purchased three new cranes for the Port of Anchorage, which is going under a major expansion effort. Those cranes are due to arrive in 2010 when the port is completed. We expect to be able to handle more cargo more efficiently.

Turning to slide 8 on Hawaii.

Hawaii certainly challenged us in the third quarter but we think it proved challenging for everyone as a result of the sharp drop off in tourism that caught everybody off guard. Tourism accounts for about 1/3 of Hawaii’s economy and 1/3 of its jobs so it’s a major economic driver. The University of Hawaii Economic Research Organization is now projecting the number of visitors to Hawaii will drop 9% from a year ago. That’s nearly double the decline projected just over three months ago. As recently as April, the number of visitors was projected to increase this year so that’s quite a turn about. Newspaper headlines coming out of Hawaii are saying that Honolulu is in a recession and the state is teetering close to one. Residential and commercial construction is softening as well, partially offset by construction related to privatized military housing. We also need to take into account that this latest downward revision of visitor expectations was made in mid September, just before the global financial crisis erupted and because the great majority of Hawaii visitors are from the US mainland and Japan, we believe it possibly can get worse before it gets better. We’re staying as close to our customers as we can in this environment, focusing on securing high margin business with major brand name retailers. As I just mentioned, one bright spot in Hawaii is construction related to the privatized military housing and we are participating in that.

Guam remained fairly steady in the third quarter. The big jump projected in military spending forthe relocation of US troops from Okinawa to Guam is expected to occur in 2011. Meantime, other military projects are stable and volume in this trade lane has been steady.

Looking at Puerto Rico on slide 9, the economy continues to stagnate. Unemployment and inflation are both in double digits. Economic growth has declined in the past two years, and is expected to decline through mid 2009. The recent turmoil in the financial markets also is impacting the Puerto Rico government, which lost hundreds of millions of dollars in the market value of its investment funds during the Wall Street meltdown in the past weeks. The polls for the November elections still show the pro-business reform candidate, Luis Fortuno leading by a wide margin. He’s running on a platform to drive economic growth with strong support from the private sector. Despite the outlook for ongoing economic weakness in Puerto Rico, we continue to operate with strong mutual loyalty between our company and our customers. In the third quarter we celebrated 50 years of service to the island. Our new team in Puerto Rico is focused on providing reliable, on-time service while at the same time finding ways to serve the market and our customers in the most cost efficient manner. While the economic environment is challenging, we’re seeing some good business wins including an uptick in our recent export loads that have previously been moved by air.

Now I would like to review our volume starting on slide 10. Our volume declined by 3,000 containers in the third quarter from last year. That’s a 4% decrease year over year. This was primarily due to the continuing recession in Puerto Rico and sharp slowdown in Hawaii. The Puerto Rico trade lane was also hit by two tropical storms and three hurricanes during the quarter, which additionally impacted volumes there and our Trans-Pacific service was impacted by two typhoons. One piece of positive news out of Puerto Rico, however, is we just completed bidding on our critical annual reefer contracts. We won 19 out of 20 contracts we were seeking with one still pending. That’s very encouraging news for us.

Alaska southbound Volumes in 2008 were hurt by a 2008 quota reduction in pollock. We’re expecting 2009 quota to be released in early December. Despite the third quarter volume decline, our overall market share held relatively steady, as noted on slide 11. We were able to achieve the 3.1% revenue increase when you exclude fuel. This 3.1% revenue increase was primarily due to a combination of rate improvement and commodity mix. Reefer volume was flat during the quarter relative to a year ago, but our strategy on focusing on higher margin product in both reefer and dry goods continued to payoff, evidenced in the rate improvement.

Turning to slide 12, we were able to maintain 92% on time even with seven storms during this quarter. At the same time, we were able to maintain a strict discipline of fuel consumption, on our vessels. As you recall, when we talk about on-time, we measure our ships to the minute. In terms of maintenance and vessel availability, I will compare our ships to any in the industry. Unlike many operators, we own our ships, which means we take really good care of them, so our vessels are available and ready to sail at a rate of the 99.9% which is consistent with our past performance. Capacity utilization was 66% in the quarter down from 75% a year ago. The difference reflects both increased capacity, resulting from our addition of TP-1 vessels last year, the redeployment of our fleet related to TP-1 vessels, and the slowing in some markets mostly related to the economy. In terms of capacity, we’re very well positioned for future growth. We’re also looking at every way possible in this economic environment to increase utilization and reduce costs.

Now let me review our EDGE initiative on page 13. The best way to describe EDGE is that it’s a culture of continuous improvement that we’ve engrained into our entire organization through process and system efficiency. We launched EDGE in spring of 2006 and it contributed to both financial and intangible benefits across key business functions at Horizon Lines, Inc.. We’re glad we implemented EDGE when we did. Using EDGE we have clearly placed ourselves in a better position to both manage cost through this economic slowdown and to accelerate opportunities when economic conditions improve.

Turning to slide 14, our Coastwise initiative continues in the planning stages. We have a team in place that is forging the strategic alliances with labor, port authorities and MARAD, and building the customer pipeline necessary to operate this coastal shipping program. Launching Coastwise shipping will depend on a confluence of factors which will be heavily impacted we believe by the evolving economic conditions in 2009.

	On slide 15, one very positive factor regarding our Coastwise shipping is that we expect passage of a Harbor Maintenance Tax exemption in 2009 that has good bipartisan support on Capitol Hill partly due to high fuel cost, highway congestion and environmental concerns. Regarding Title XI funding. The Federal ship construction loan guarantee program is continuing at the $5 million level through next March. We are encouraged by language in the continuing resolution that directs $48 million more for the program. That’s an impressive funding level which would support $750 to $1 billion in new ship construction.
	Let me give you a quick update on unionized labor as noted on slide 16. The agreement with ILWU on the west coast was completed and ratified in the third quarter with little or no freight flow disruptions. We don’t have any contracts expiring until 2010 but negotiations are expected to begin in mid-December with the ILA international longshoreman associations covering workers on the east coast and gulf.
	Before turning the call over to Brian I’d like to leave you with these closing thoughts. The challenges in our trade lanes intensified during the quarter but we operated well, achieving a 3.1% revenue gain net of fuel on a combination of commodity mix and rate improvement. Our vessel on-time performance remained very high despite very challenging weather conditions. We continued to work hard to control costs, to operate our vessels efficiently, and to serve our customers well regardless of the economic challenges facing us.
	With that, let me turn the call over to Brian.
Brian Taylor	Thank you John. Good morning everyone. I’d like to begin by reviewing the progress we’ve made in developing our logistics brand by focusing specifically on some of our business wins, our infrastructure development and our future growth plans. I’ll conclude with a brief review of our financial results for the division before I hand this over to Mike.
	I’m now on slide 18. I’m very excited about the progress of our business. I now have a strong leadership team in place and we’ve created a solid infrastructure foundation. We are seeing some nice wins with our customers. The logistics investments that we’ve made in people and technology over the past year have positioned us for growth, without any immediate need for future acquisitions or significant capital spending going forward.
	When we started Horizon Logistics in 2007, we really weren’t anticipating the stiff economic headwinds we have faced as this year has progressed. Throughout this challenging business climate, we’ve focused on growing our business. We are now beginning to see success in terms of an increasing, and more diversified, customer base. We have continued to enhance our sales platform and fine-tune our infrastructure, and we have further articulated our strategic growth plan which I’ll share with you shortly.
	Looking at our third quarter progress on slide 19, we continue building a diversified pipeline of customers in our chosen market segments. The photograph accompanying this slide is a major solar power project at the Nellis Air Force Base just outside Las Vegas. Earlier this year Horizon Logistics moved 200 truck loads of solar panels and infrastructure to this job site. We played an instrumental role in the evolution of this one project and now have two additional solar power projects we are handling for the same customer. From the installation of wind turbines in Times Square to the movement of a large piece of mining equipment to an open pit mine in New Mexico, our company is serving a growing diversified number of customers who depend on us to get their merchandise on site, on-time and intact. We recently finalized the transition to a single integrated technology platform for logistics. This change allows us to more effectively operate our business, giving supply chain visibility to our customers, and it also provides system wide cost visibility for each shipment creating a more coordinated approach to the way we price and the margin we generate in our overall business.

	Organizationally we’ve continued to strengthen the sales force. We recently re-located our west coast operation to a new facility in Los Angeles and have the ability to take on larger assignments from our customers. Slide 20 provides an overview of our strategic focus over the next three years. Much of this past year has been laying the foundation for future growth, and this plan demonstrates where we are heading. What we’ve created are four lines of business that support our vision to become a premier logistics provider, leveraging our sea freight expertise and developing a North American integrated logistics offering. Our service offerings are designed around four customer segments and the real beauty of this plan is it’s purely an organic growth strategy that leverages our existing liner relationships and competencies and requires predominantly human capital investments going forward.
	As you’ll see on slide 21, entering the international NVOCC business has become a key part of this strategy. First, it allows us to feed our logistics infrastructure with little investment in additional physical assets. Second, it allows us to leverage our core competencies, including our existing customer relationships and our sales expertise. And third, it expands our growth opportunities to a global trade environment that is driving demand for multi-modal international service providers. Through our existing infrastructure, much of the back office support and technology is already in place. I think it’s important that I stress the asset-light nature of this venture. It really requires no investment in ships, containers, chassis or other equipment. We are a third party international freight holder, which means we can participate in this space while avoiding many of the pricing battles initiated by asset-base international carriers trying to fill their capacity. In late September, we received our FMC license as an international NVOCC. Since then, we’ve recruited some new leadership talent, established a relationship with a significant offshore agent, and we’re targeting a December ‘08 launch for the service.
	Look at our logistics results on slide 22. You can see we generated $61 million in revenue. We were EBITDA negative for the quarter. We saw softening demand due largely to the economy but we are also growing a more diversified base of customers and expect to continue seeing nice wins in our chosen customer segments going forward.
	In summary, we’re upbeat about the future prospect for our logistics business. We see the potential inherent in our truck brokerage operation and the developing international NVOCC business. While we know we must continue to contend with the softening economy, we remain confident that we have a strategic platform in place to move forward with our organic growth plans. With that, I’ll turn this over to Mike.
Michael Avara	Thank you Brian and good morning everyone. I’ll start with page 24. Revenue for the third quarter grew nicely, up $31.5 million or 9.8% over 2007. Operating revenue for the first nine months jumped by $99 million, or 11.1% versus last year.
	Page 25 provides more information on the factors that drove the increase in revenue. In the third quarter, revenue per container grew by $441 or 12% and that is reflected in higher fuel cost recovery and rate mix improvement totaling $31.5 million. Aero Logistics and Hawaii Stevedores contributed net $5.9 million of increased revenue from these two acquisitions back in 2007. These positive factors, more than offset the $11.1 million adverse impact of a decline in volume of about 3,000 loads or 4%, primarily in Hawaii, Guam and Puerto Rico. For the nine months, rate per box increased by $371 or 10.2%. And it’s again reflected in both improved fuel surcharges and higher rates, totaling $71.8 million. Acquisitions accounted for $26.5 million of the $99 million revenue increase. A $19.8 million volume decline of about 5,500 loads, or 2.5%, in Puerto Rico, Hawaii Guam, partially offset these revenue gains.

Operating results on page 26 are adjusted to exclude antitrust related legal fees of $4.6 million in the quarter, and $7 million through nine months. The first nine months numbers also exclude severance expense of $800,000 that you may recall from the second quarter. Adjusted operating income declined by $8 million in the third quarter largely due to total volume decline that we have spoken about. A $10 million impact from that and a higher shortfall on fuel recoveries of $6.35 million negative. These two factors were partially offset by the rate net of fuel increase that we referenced which added $7.4 million to operating income. The first nine months adjusted operating income fell by $16.8 million, or 22.5%, primarily as a result of the volume decline. We saw About a $12.2 million impact from that. That’s the lease expense from our five new ships for full year, $8.2 million higher, mitigated somewhat by the rate net of fuel improving for nine months, also totaling $3.5 million.

Adjusted EBITDA on page 27 declined $8.6 million for the third quarter and $19.1 million for the first nine months. The same factors that impacted adjusted operating income also impacted adjusted EBITDA.

Turning to net income in order to present results on a comparable basis. Net income has also been adjusted on page 28 to exclude the antitrust legal fees and severance expense in 2008 that I referred to, as well as a 2007 loss on extinguishment of debt of $38 million in the quarter, and $38.5 million for nine months. A deferred tax revaluation benefit of $4.8 million in the third quarter and $7.3 million through September 2007, is also excluded to present the results on a comparable apples-to-apples basis.

Adjusted net income of $16.2 million in the third quarter was $4.5 million lower than 2007. A $2.3 million interest expense savings partially offset the $8.9 million decline in adjusted operating income. Our refinancing last August combined with falling interest rates and debt repayments have enabled us to reduce the cost of debt from 8.8% last year before the refinancing, to 4.3% over the last year. Nine months adjusted net income of $28.1 million leaves us $7.1 million behind that of last year. An adjusted operating income shortfall of $16.8 million more than offset the savings from a lower interest expense, which totaled about $8 million

Adjusted diluted EPS on page 29 declined $0.08 or 13.2%. As a result of the 3.8 million shares re-purchased between August of 2007 and January of this year, our average diluted shares outstanding, have declined to 30.2 million shares from 33.8 million shares in the third quarter of 2007. Adjusted diluted EPS fell by 11 cents or 10.7% for the first nine months, as the lower net income more than offset the reduced shares outstanding. Free cash flow presented on page 30 of $6.8 million, for the nine months was $58.1 million improved over the first 9 months of 2007, and let me walk you there some of those primary factors. First of all, last year we did two acquisitions, HSI and Aero Logistics, which added $32.1 million. We also have lowered our vessel lease payments this year by about $21 million. You might recall that we had a $40 million mid-term balloon payment on our three Alaska vessel on January 2007 is which was about double the normal payment we made on January 1st of each year. Working capital consumption was improved by $15.6 million, primarily as a result of a focus on accounts receivable, with a majority of this savings in 2008, In January we paid a bonus payment on bonuses earned in 2006, and that is not in the numbers this time, so that added a positive $10.5 million. Now all these positive factors were mitigated somewhat by the EBITDA shortfall of $19.2 million.

Turning to liquidity, credit agreement compliance and capital structure on page 31. We are in the fortunate position of having ample liquidity. We are very comfortably in compliance with our credit facility financial covenants, have a low interest rate on our debt, and no recapitalization needs until August of 2012. We had nearly $90 million liquidity at the end of the third quarter. A voluntary additional revolver payment of $12.5 million was made during the third quarter, and you might recall that we made a similar payment of $10 million in second quarter. We’ve made an additional voluntary payment of $5 million on our revolver, so we continue to pay down debt. In terms of credit facility compliance, our interest coverage ratio of 4.47 times was significantly higher than the required 3.5 times minimum at the end of the third quarter. Our senior secured leverage ratio at 1.99 times was well under the 3.78 times maximum.

Continuing to capital structure. Our opportunistic financing last August and timely interest rate swap on our term loan this April has resulted in excellent capital structure. 74% of our debt is fixed through maturity in 2012 and a small piece in 2013, and again our average interest rate is below 4.4%.

Our 2008 financial guidance is reflected on page 32. We’re reducing our guidance due to the historic financial crisis and resulting increasingly difficult economic environment, which has adversely impacted volumes in both Puerto Rico and especially Hawaii. We’ve decided to retain a larger than typical $10 million EBITDA range for this time of year. We feel that this is prudent in light of the extremely difficult and rapidly changing economy, just in case thing are even worse than currently expected, and we do have the current expectations reflected in these numbers. We are hopeful that we can come in at or near the high end of the range but we thought it was appropriate to build in some downside protection because of the historic, and uncertain times we’re going through.

I would remind you that guidance is adjusted to exclude an estimated $10 million in antitrust legal fees in 2008. Just quickly on page 33, you see the liner EBITDA of $127.4 million was a big contributor. Regarding, logistics, Brian touched on a negative $2.4 million projection for 2008. I want to walk you through some of the major assumptions that we utilized in our guidance and as Chuck spoke to many of you these have changed it drastically in just a couple months since we last spoke to you. You will note that we have tempered our volume assumption in light of the deteriorating US economy. A significant downturn in Hawaii due to a sharp contraction in visitors and a lack of recovery in Puerto Rico is approaching three years. Total volume is now projected to slip to 3.1% versus 0.4% that we had expected back in July. However, unit revenue, net of fuel is a good news story, it improved by .6% to 2.2% for the year. As we secure some higher paying freight in the fourth quarter, we’ve also included projections on a trade lane drivers that we evaluate, Alaska GSP remains very healthy at a 5% increase. Hawaii visitors have declined sharply and GDP has slipped further. Bunker fuel prices were estimated at $515 per ton in the fourth quarter and you should remember that we actually expense fuel that we purchased in the previous months so we’re not enjoying in the fourth quarter in terms of expense, all the reduction in bunker prices that have occurred at this point in time.

I just want to quickly remind you on page 35 of some new accounting with convertible notes. Basically the new accounting rules require that the interest rate existing on other non-convertible debts — this would be other than our convertible notes at the time the issuance of the convertible notes — be reflected in the income statement. Now this of course, is higher or was higher back in August of 2007, somewhere in the neighborhood of about 8%. So convertible debt is recorded on the balance sheet under this new accounting at a discount, reflecting the lower coupon rate that is accretive up to par value using the higher non-convertible part, almost like your home mortgage amortization. The announcement is effective for fiscal year 2009 and must be retrospectively applied to prior periods. Page 36 provides the retrospective and prospective impact of required new accounting for convertible notes. Again I would remind you that the additional interest expense is non-cash and does not at all impact the true economic that convertible notes nor are very successful refinancing last August.

To wrap up, we delivered good results in the face of a growing financial crisis of really historic proportions. We haven’t seen such a tough time probably since the ‘30s and the resulting difficult economic environment. To compound matters, fuel prices were highly volatile during the quarter with oil prices first rising to historical rates and retreating sharply. However, bunker prices were slow to react to the falling oil prices from the peak. When bunker did fall, we did reduce our fuels surcharges in response. We are searching for opportunities to selectively grow revenue, by conserving cash and paying down debt. Although the severity and duration of the financial crisis and economic turmoil cannot be predicted. Horizon Lines, Inc. stands well positioned to weather the storm. Going into 2009, we’re expecting a deep and protracted U shape recession and preparing, while of course, hoping for a shallower and quicker V shaped recession, so with that I’ll turn the call back to Chuck Raymond to wrap up. Chuck.

Chuck Raymond	Thanks Mike, for building on some of the points that John made and that Brian made here, on the economy and on our business. First of all, our company is in the midst of a very challenging economic environment, and it’s impacting everyone. As I think about it, and what’s very clear from this discussion is that we’re very well positioned both financially and operationally to continue to make progress despite this environment., while at the same time positioning our company for the long-term value creation that we have been able to provide in the past. Second, our plan in this environment is to intensely focus on what we do best, and that’s to provide excellent service to our customers, preserve our brand reputation, and to build our business for the long-term and generate solid cash flows. Again, so that we are positioned to capitalize on growth opportunities when economic conditions do improve. And then last, the fundamental investment considerations for our company really haven’t changed. We remain a leading domestic ocean shipping company, serving as a economic lifeline, linking Puerto Rico, Alaska, Hawaii and Guam to the continental US. We continue to cultivate durable lasting partnership with the nation’s leading brands, protecting strong market share, and the related cash flows that are derived from that. Our logistics platform as Brian mentioned, offers us a very sound platform for organic expansion and long-term growth of our company. And with that, we’re ready to take questions.
Operator	Thank you, sir. We’ll now begin the question and answer session. As a reminder if you have a question, please press the star followed by the one on your touch tone phone. If you would like to withdraw your question, please press the star followed by the two. If you’re using speaker equipment, you will need to lift the handset before making you’re selection. And our first question comes from the line of Peter Wahlstrom with Goldman Sachs. Please go ahead, sir.
Peter Wahlstrom	Good morning. Given kind of your outlook for slowing US economy, have you considered adjusting your ships’ schedules and temporarily taking vessels out of service to better align capacity with near term demand.
John Keenan	Yes. Peter good morning this is John Keenan. Yes, we have. As you know, we constantly look at our markets and our vessel utilization. We’ve evaluated specifically Puerto Rico. We’ve looked at our service, our vessel and our GAX service and at this time we still think it’s the right time to keep that vessel in. However, we put in place triggers and areas where if we see that the volume’s fall below a certain level, we’ll implement a change in that service. We’ve also evaluated our Hawaii service, and have looked at the two major strings that we operate. The PEX string and the CHX. And we’ve changed departure schedules to have better fuel conservation and reduce our cost as well as our cost in our terminals. We are looking at putting in place some triggers if the volumes continue to deteriorate.
Peter Wahlstrom	Okay. And following up on that, can you give us a broad sense of what sort of magnitude volumes might have to drop before you consider taking a vessel out?
John Keenan	I think, if you look at Puerto Rico, Peter, the gulf is our smaller market there, so in that market, I would say the volumes have to drop at least probably 15% before we pull a vessel out, and in Hawaii we’re still evaluating that.
Peter Wahlstrom	Okay. Fair enough. I realize that you’re facing near term challenges in the Hawaii market. And taking a step back and maybe looking at prior cycles, does Hawaii lag the U.S. economy? Or does history or your experience in that region show otherwise?
Brian Taylor	You know, I’ll be happy to take that one, this is Brian Taylor speaking. Peter, I believe that the Hawaii economy tends to lag the US economy, and historically as we looked at what happened back in the ‘90s and in 2001, the impact to the Hawaiian economy tend to follow what happened on the US mainland. We’ll probably see this continue a little bit beyond the recovery we might see in the US main land.

Peter Wahlstrom	Okay. Thanks. And then quickly, you provided a fairly bleak realistic outlook for the 2008 fourth quarter where operating margins could, you know, come close to, if not back to zero. How much of this cost should we really attribute to seasonality in the quarter versus general weakness in the markets? As we kind of think ahead to 2009 and tack this on to your fourth quarter guidance range, from an EBITDA standpoint, what’s implied in terms of volume on the low end and also the high end for the quarter, thanks.
Mike Avara	This is Mike, good morning, I’ll take that for you. As you recall, our fourth quarter is, one of our weaker quarters, our first quarter is our weakest. You know we had good volumes going into, say the first half, until right around Thanksgiving time, then they drop off pretty rapidly as thing obviously get difficult in Alaska. So we do have a lot of seasonal costs and reduced volumes that hit us in the second half of the year. Second half of the quarter, I’m sorry but really the reason for the reduction in the guidance and the broad range is just the uncertainty out there. We’re in historic times. We really thought it was prudent to give a broader range and more downside protection. In terms of the volumes assumptions, we had on the low end 7% down and on the high end probably about a 5% down on an overall combined basis from the our current projections.
Peter Wahlstrom	Okay. Thank you very much.
Management	Thank you.
Operator	Our next question comes from the line of Kevin Sterling with Stevens Incorporated. Please go ahead.
Kevin Sterling	Good morning.
Management	Good morning Kevin
Kevin Sterling	Good morning Kevin. Just probably a question for Chuck, Chuck, and the rest of you guys, it seems like you’re committed to using your free cash flow to pay down debt, which is a good thing. But would you consider buying back your stock at current levels?
Chuck Raymond	Well, that’s a good question. And as you know we had done some stock buy backs in the past. At this point we think it’s more prudent to pay down debt, and continue to pay down debt. And that will be our focus for the next, let’s say 90 days to 120 days as we kind of see our way through this current economic dilemma that we have, Kevin.
Mike Avara	Kevin, I would just add to that, as a reminder, the way we pay down debt. We’re paying our revolver, so if things turn around, and improve significantly; we always have the ability to borrow and to potentially do other things.
Kevin Sterling	Okay. Thanks a lot. And just kind of following up about 2009, and, and I know you guys probably can’t give specifics, but I was wondering if you can talk a little bit about how you’re thinking about next year. I realize you may not be able to go into much detail, but if you could offer any color that would be helpful for sure.

Chuck Raymond	Why don’t you let me take that. You know, Kevin, we’re going to be cautious about 2009. We don’t like the fact that we have missed our guidance here a couple of times in the past year or so. And I believe we’re going to be very comfortably within our guidance for the fourth quarter. So you’re probably going to see us be a little more cautious with regard to our forecast going forward, but this is the way we’re looking at it. Number one, we’re going to have an intense focus on cost in our company. We’re using the EDGE tools to examine everything we do and we’re doing that today. Second, we’re going to continue to have a very strong focus on our vessel assets. The question was asked by Pete Wahlstrom, would we take capacity out of one or more of our trades, and that’s clearly an opportunity that we have. We have not removed capacity in our Puerto Rico trade, as an example, in the last six years. And, in fact, we’ve added a little capacity with new vessels in that trade. That being said, we have about a 66% utilization there, so should that market come back, and when it comes back, and it will, we’ve got the operating leverage to improve. But in the short run, we’ve got the ability to pull tonnage out should we need to do so. I think also that in terms of, of customer service, you’re going to see us intensely focus on servicing our customers. Here’s the reason why — in this economic environment, they demand that. We have to help them get their materials from the distribution centers in the US to the shelves of the stores in the markets that they’re serving. And they want reliable, on time service, so they can reduce the cost of their inventory in transit. That ties up their working capital and as we know right now, working capital is something very hard to borrow, and if you do you have to borrow, it’s at very, very high expense. So our approach in summary is going to be excellent service to our customers, watch our costs, and preserve our free cash to make sure we have a good cushion so we don’t run into any economic extremities.
Kevin Sterling	Thanks Chuck, that was some good color. You talked about utilization on your ships at 66% in Puerto Rico. Is there a threshold where it has to tip below where you would pull out one of your vessels?
John Keenan	Well, Kevin as you know, that 66% number, we put two ships in the Puerto Rico service which we knew had excess capacity when we did our TP1 implementation. We put in the two C eights and we also put some 48-foot capability on those ships so those two ships are the backbone of the service. It’s more the gulf service that we would look at, and perhaps the northeast. But right now, the utilization on the services are where we expect them to be and they are contributing to our profitability.
Kevin Sterling	Good. Thanks John. When looking at your military business particularly out of Guam, is this, is it still fairly steady for you guys?
John Keenan	Kevin, yes, it is. As I indicated on the call earlier, the Guam volumes are steady, as the building materials move and a lot of the material in support of the build up, as part of the marines coming from Japan a in 2011,. So Guam has been steady.
Chuck Raymond	Kevin I’d just like to build on that and say that we’ll probably see a little slowing in the tourism in Guam, same as we’re seeing in Hawaii. Overall that market is going to be down a little bit. The military construction, and the construction associated with the military build-up, is going to help tremendously to offset that weakness.
Kevin Sterling	Okay. Thanks. And on one last question, do you guys expect any antitrust legal fees in 2009?
Mike Avara	You know, Kevin, we do. The most current estimate that we have from our attorneys is somewhere in the neighborhood of what we have projected for 2008 of $10 million. And we’ll obviously manage those prudently to make sure that all the, the work is being done and manage those costs closely.
Kevin Sterling	Okay. Thanks Mike. Gentlemen, thanks so much for your time today.
Management	Thank you Kevin.

Operator	Thank you. Our next question comes from the line of Chaz Jones with Morgan Keegan, please go ahead.
Chaz Jones	Hey, good morning everyone.
Management	Morning Chaz.
Chaz Jones	I wanted to ask about pricing just in terms of, it seems like, you know, given you’re guidance that, that volumes are, are falling, you know, pretty rapidly here. Could you maybe give us some kind of sense for what type of volume fall off we would need to see for pricing to turn negative? I mean, considering that it’s still positive at this point?
Chuck Raymond	Well, let me take that one for a minute, if you would. This business has been in the past one where there have been a couple of companies that have struggled and have gone out of business. The most recent one of course, was back in 2002, Navieras in Puerto Rico. I think the carriers in the trades today realize that going out in a defined market, and slashing rates to try to earn more volume is really a zero-sum game, so I don’t think that people would do the irresponsible things there. That being said, there could be a little decline in rates as costs come down. I mean, we know that fuel right now is turning down. This morning you know, crude oil was down at $63 or $64 a barrel. It’s about half of what it was four months ago. And of course, surcharges are going to come down, and, and vessels will be more efficient as a result but there could be some tempering of rates as a result of that. We are however seeing rates holdup. John mentioned the Puerto Rico trade and our reefer contracts that we’ve negotiated for 2009. I believe John, if I’m not mistaken, we’ve got rate increases in every one of those contracts, so we haven’t seen that phenomenon and we don’t expect to see it. However, should that happen, we do have the ability to pull tonnage out, and as John mentioned, you know just the cost of one vessel in the Puerto Rico trade is in the range of 22 to $24 million a year to operate, so we have an ability to respond to that. On the other hand, if we had to get into a battle to fight the market share, we’ve got plenty of time to fight that battle, so on balance I think we’re in pretty good shape there. I don’t see any indication that we’re going to end up in a rate war here.
Chaz Jones	No, that’s helpful, Chuck. Thanks and then lastly, I just, you know, when I get back into the guidance, and I know you guys don’t give specific fourth quarter guidance, but obviously we can do the math with, with the full year guidance, you know, just kind of the back of the envelope calling for a $0.25 loss to roughly $0.03 in EPS. Obviously I understand, you know, we’re in a very challenging environment. Seasonally, it’s, you know a weaker type quarter, but also the fact is, my sense is the first quarter, you’re probably not going to get much of a change in terms of seasonality or that type of outlook, so I guess my question is, I recognize on slide 31 you guys put a lot of effort into explaining the liquidity situation. I mean, if we were to over the next several quarters get into a type of environment where you come in at the low end of that guidance, you know, are you going to be able to continue since those matrixes on 31 are on a, you know trailing 12-month basis to maintain the liquidity in those debt covenants if we kind of hit this worse case scenario?
Mike Avara	Hey Chaz, it’s Mike I’ll take that one. As you might imagine, we have done a lot of contingency planning as we looked at the situation. And we’re obviously hoping for the best here, but have prepared for the worst so we have a series of actions that we would undertake if necessary to maintain liquidity and conserve cash. I mentioned before, for the third quarter in a row now, and already in the fourth quarter we have paid down $5 million of revolver debt, and that helps us a couple ways. It helps us on the amount of debt outstanding on the leverage ratio and also reduces interest expense so it helps us on a coverage ratio. We hope to be able to pay down some more debt in the fourth quarter. So you know, we’re keenly aware of these measures, we track them almost every day. We still have plenty of room at this point in time, and we’ll take all steps necessary if things turn even further south to protect them.

Chaz Jones	Okay. No, that’s helpful. And I, you know, I figured that’s where you guys are making that kind of commentary that you are, about, you know, holding onto cash. I guess is there a scenario, if it plays out like I had just mentioned over the next couple quarters, kind of a worst case scenario, you know, it would seem to me that, it would be difficult for you guys to, to remain free cash flow positive in that environment. Am I looking at that wrong or could you help me out on that at all?
Mike Avara	Well, free cash flow in the first quarter is usually low as you know. But we start to build cash very quickly starting around April, and that continues through November. When we do our 2009 budget, and we are in the midst of that season, we’ll carefully look at all of our measures at each of the quarter reflection points and have, like I said, plans ready to take off the shelf if we need to protect liquidity and those ratios.
Chaz Jones	Okay. Great. I appreciate all the commentary guys. And nice performance there in the third quarter.
Chuck Raymond	I just had a couple comments on that. Chaz, as color, and of course, we do have a rather aggressive cap ex program that we’ve been pursuing over the last few years, so we have the discretionary ability to cut back on that in almost all the areas where we’re investing right now, Second, of course, we are paying a dividend and we intend to continue to pay a dividend and that’s an out lay of $3.3 million per quarter if I’ve got that right. And also, if we have a sustained economic dilemma here, I think you can expect a couple of things that will happen. Number one, is I believe that you’ll see a further stimulus program come out of the House and the Senate. As you know, the last time it included Puerto Rico so that might help one of our markets. I believe that if we have continued economic problems, that fuel will continue to moderate down in price, and of course, that’s a very large portion of our variable expense. And we’ve done a very good job of managing that, but because of high fuel costs, of managing all the other costs in our company. So I think we’re pretty well positioned in the event that the economy does come down, our costs come down along with it. We talked a little bit about the Exxon Valdez settlement up in Alaska is a help. The dividend payment that John Keenan mentioned is calculated on the basis of a five-year running average so we have the year 2008 in that formula. Now going forward for the next four years, the out lays from that fund will continue to be fairly extraordinary. And last, as we mentioned we can pull ships out. We can pull them out of service we also have five idle vessels right now, which in worse of cases we can turn around and scrap if we had to. So there are a lot of alternatives that we have. We have done the contingency planning. We feel very comfortable with that. In fact, that’s why we feel comfortable showing you a little lower guidance, even though it might cause you a little concerns you know we want you to know we can deal with that, and honestly you know we’re not going to fall out side of our guidance, so let me just wrap it up by telling you that.
Management	Thanks Chaz.
Operator	Thank you our next question is a follow-up question from the line of Peter Wahlstrom from Goldman Sachs.
Peter Wahlstrom	Thanks very much. Could you actually share a little bit more about maybe your container mix and which areas continue to holdup well, such as maybe reefers and others that remain under pressure?
John Keenan	Yes. As earlier in the presentation I described our overall rate improvement about 3.1%.. We said our reefer volumes had remained flat year over year, and that reefer volumes maintained flat despite declining volume in two of our trades, predominantly in Hawaii and Puerto Rico, where our reefer mix is good. We continue to focus on higher margin cargo but the volume fall off of 3,000 containers that we discussed a earlier is predominantly made up of Hawaii and Puerto Rico, with Puerto Rico being the lion’s share of that.

John Keenan	Well, if you look at the housing segment that’s softening in all three markets, so you see predominantly housing and consolidated are two major segments that fell off.
Peter Wahlstrom	Okay. And lastly what sort of visibility do you have into your freight forwarding and third party business segments? Is there meaningful margin difference for your freight forwarding business?
John Keenan	Well, Peter we have fair visibility. It’s not perfect, but I don’t think anybody has perfect visibility right now in this economic environment. We have a sales team that is actively engaged with our customers and out on the street and working through their forecasts with us. And obviously our forecasts are only as good as our consolidators are telling us, but we continue to try to work on ways to improve that visibility. That being said, with the consolidators, we feel we have very good visibility from our retailers, the big box guys
Peter Wahlstrom	Okay.
John Keenan	And the other thing to recall, Peter is we don’t move automobiles. We move very few autos. Everyone else in the market is seeing that segment down significantly. We’re isolated from that automotive sector.
Peter Wahlstrom	Okay. Thanks.
Operator	Thank you. I do not show any further questions at this time. Please continue.
Chuck Raymond	Okay. Gentlemen. Well thank you very much. And we will look forward to visiting with you again on January 30th, which is the date we intend to have our fourth quarter earnings release at this time. I wish you a good day and let’s hope that the market returns to some reasonableness shortly.
Operator	Ladies and gentlemen, this conclude the Horizon Lines, Inc. third quarter 2008 earnings result conference call. You may now disconnect. Thank you for using AT&T conferencing.

EX-99.3

October 24, 2008 Horizon Lines, Inc. Third Quarter 2008 Earnings Release

- -2- Earnings Call Agenda Third Quarter 2008 Earnings Release Introduction Jim Storey Director, Investor Relations&Corporate Communications, Horizon Lines, Inc. Overview Chuck Raymond Chairman, President&Chief Executive Officer, Horizon Lines, Inc. Liner Review John Keenan President&Chief Operating Officer, Horizon Lines, LLC Logistics Review Brian Taylor President&Chief Operating Officer, Horizon Logistics, LLC Financial Review Mike Avara Senior Vice President&Chief Financial Officer, Horizon Lines, Inc. Questions and Answers

- -3- Forward Forward-Looking Statements Risks, Uncertainties, Other Factors with Respect to“Forward- Looking Statements”: Certain statements contained in this presentation constitute“forwardlooking 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 February 6, 2008 and Form 10-Q to be filed on October 24, 2008.

- -4- Third Quarter 2008 Earnings Release Third Quarter 2008 Earnings Release Chuck Raymond Chuck Raymond Chairman, President&Chief Executive Officer Chairman, President&Chief Executive Officer Horizon Lines, Inc. Horizon Lines, Inc. Overview Overview

- -5- Third Quarter 2008 - Highlights Solid performance in unsettled environment Earned adjusted EPS of $0.53 Grew revenue 3.1% net of fuel Paid down debt Challenges included Continued weakness in Puerto Rico New challenges in Hawaii Unprecedented fuel prices Intense Focus on: Reliable customer service Cash flow and debt reduction Strong financial foundation Cost efficiencies Logistics platform organic growth

- -6- third Quarter 2008 Earnings Release third Quarter 2008 Earnings Release John Keenan John Keenan President And Chief Operating Officer President And Chief Operating Officer Horizon Lines, LLC Horizon Lines, LLC Liner Review Liner Review

- -7- Alaska Economic Outlook Economy buoyed by high oil prices; Record $2.6 billion state budget surplus and $29.6 billion Permanent Fund balance Combined annual distributions of $3,269 paid to every resident in Q3/Q4, injecting $2 billion into economy Exxon Valdez settlement expected to add $350+ million to economy Natural gas pipeline seed funding provided for initial studies 2009 pollock quota due in December. 2008 Quota was reduced by 28% Focus on: Expanding customer relationships On-time service, vessel utilization

- -8- Hawaii/Guam Economic Outlook Hawaii Significant economic slowdown Sharp drop in tourism - - '08 visitor forecast cut to -9.1% from -4.6% in June(1) - - July hotel occupancy rate at 10-yr low (74.2%) Softening residential/commercial construction '08 employment projected to decline 0.5% (1) Privatized military housing construction partially offsetting softening in residential/commercial Guam Construction and DoD expenditures at normal pace Focus on: Continue targeting higher-margin mix&major retail expansion on the islands Participate fully in construction activity in Guam 1. University of Hawaii Economic Research Organization Quarterly Update, Sept. 19, 2008

- -9- Puerto Rico Economic Outlook Recession continues: Double-digit unemployment July inflation up 11.7% over 2007 Election polls show pro-business candidate leading by 13-16 percentage points Consumers exempted from 7% sales tax for 5 days in response to storms Consumer goods outlets drained of inventories Focus on: Strong ties to Puerto Rico customers -- celebrated 50 years in Q3 Provide reliable on-time service Continue to seek cost efficiencies

- -10- 74,759 71,748 2007 2008 Container Volume Volume Update - Third Quarter Market share held fairly steady in all three tradelanes Reefer volumes flat, with strength in Alaska offset by continued softness in Puerto Rico & slowdown in Hawaii Hawaii volume impacted by tourism fall-off, softening construction Shipments to Guam stable, DoD spending is active, with big jump expected to start in 2011 Five Caribbean storms (Edouard, Fay, Gustav, Hanna, Ike) negatively impacted Q3 Puerto Rico volumes, but Puerto Rico recently won 19 out of 20 critical reefer contracts 4.0%

$3,685 $4,126 2007 2008 Unit Revenue Per Container Unit Revenue Update - Third Quarter 12% Unit revenue improved across all tradelanes Revenue per container up 12% based on rate/mix&fuel Revenue per container, net of fuel, rose 3.1% Focus on: Higher margin opportunities, mitigate fuel costs - -11-

- -12- Vessel Performance 99.9% 99.9% 0% 20% 40% 60% 80% 100% 2007 2008 Vessel Availability 93.0% 92.0% 0% 20% 40% 60% 80% 100% 2007 2008 Vessel On-Time Arrival 1% 75.0% 66.0% 0% 20% 40% 60% 80% 100% 2007 2008 Vessel Utilization(1) 9% (1) Redeployment of two C8 vessels in the Hawaii service and the redeployment of two C8 vessels into the Puerto Rico trade provided 20.8% increase in yearover- year capacity; based on comparable Q307 capacity, Q308 utilization would have been 71%. Vessel availability and on-time arrivals remained high, despite five storms in Puerto Rico tradelane and two in Pacific Vessel utilization reflects increased capacity and slowing Hawaii market

- -13- Horizon EDGE Update EDGE initiatives ingrained as part of company culture On track with cost savings Vessel fuel savings Terminal efficiencies Revenue enhancement initiatives working Business intelligence system yields on high-margin opportunities Sales force optimization targets new and expanded customer relationships

- -14- A Coastwise Shipping Solution Update Vice President of Coastwise Shipping named and team in place Strategic alliances being forged with labor, port authorities, MARAD Pipeline of customers being developed Business plan being developed Harbor Maintenance Tax legislation has bipartisan support - action expected in 2009 Value Proposition Vessel network savings Inland savings Market penetration Equipment positioning options Environment

- -15- Legislative Update Harbor Maintenance Tax Exemption HMT repeal is critical for short-sea shippers to compete with truckers or rail Bipartisan Congressional support for repeal makes passage likely in 2009 Title XI Funding Continuing Resolution providing ongoing $5M Title XI funding through March 2009 also contains language directing $48M more for program in 2009 Continuing to work with maritime trade unions and Congress to increase Title XI funding

- -16- Labor Relations Update International Longshore and Warehouse Union (ILWU) West Coast main contract completed, ratified by locals, and in effect through June 30, 2014 Negotiations succeeded with little to no work stoppage or freight flow disruptions No collective bargaining agreements expire until June 2010; ILA contract negotiations expected to commence in December 2008

- -17- Third Quarter 2008 Earnings Release Third Quarter 2008 Earnings Release Brian Taylor Brian Taylor President And Chief Operating Officer President And Chief Operating Officer Horizon Logistics, LLC Horizon Logistics, LLC Logistics Review Logistics Review

- -18- Sowing The Seeds Of Future Growth Building Logistics Foundation Economic headwinds slow revenue growth&profitability Third-Quarter Progress Growing and diversifying customer base Solidifying and unifying infrastructure Future Growth Strategic plan Launching NVOCC* business Financial Results *Non-Vessel Operating Common Carrier

3rd rd Quarter Progress Growing, diversified sales funnel taking shape Alternative energy, medical&high technology, brokerage ramp up HanesBrands, Puma, Michelin, SunPower, Pacwind, Varian Medical, Costex, PaperSource, Blue Heron, Copan Systems Solidifying infrastructure Moving to single IT platform Organization staffing and alignment - -19-

Strategic Plan Summary - -20-

NVOCC is a Key Strategic Choice FMC licensing as NVOCC secured Key leadership in place Established relationship with off-shore agent Sales training beginning Go live in December - -21-

- -22- Logistics Results Inter-company Third Party Total Revenue $ 50.3 $ 10.7 $ 61.0 Operating Expense(1) 50.3 11.2 61.5 EBITDA $ -- $ (0.5) $ (0.5) 3rd Quarter 2008 ($ in Millions) Inter-company Third Party Total Revenue $ 142.2 $ 27.5 $ 169.7 Operating Expense(1) 142.2 29.2 171.4 EBITDA $ -- $ (1.7) $ (1.7) Nine Months 2008 (1) Excluding depreciation and amortization expense

- -23- Third Quarter 2008 Earnings Release Third Quarter 2008 Earnings Release Mike Avara Mike Avara Senior Vice President&Chief Financial Officer Senior Vice President&Chief Financial Officer Horizon Lines, Inc. Horizon Lines, Inc. Financial Review Financial Review

- -24- Operating Revenue $321.1 $352.6 0 100 200 300 400 2007 2008 Third Quarter $890.5 $989.5 0 200 400 600 800 1000 1200 2007 2008 Nine Months ($ in Millions) 9.8% 11.1%

- -25- Operating Revenue Change Third Quarter 2008 Nine Months 2008 Fuel Surcharges $ 23.1 $ 56.0 Rate/Mix Improvement 8.3 22.1 Aero Logistics Revenue 6.5 18.5 Hawaii Stevedores Revenue (0.6) 8.0 Other / Non-Transportation Revenue 4.9 12.0 Other Horizon Logistics 0.4 2.2 Volume Reduction (11.1) (19.8) Total Revenue Increase from 2007 $ 31.5 $ 99.0 ($ in Millions)

- -26- Adjusted Operating Income Income(1) ($35.3 $26.4 0 10 20 30 40 2007 2008 Third Quarter $74.7 $57.9 0 20 40 60 80 100 2007 2008 Nine Months ($ in Millions) 25.2% 22.5% (1) See reconciliation of Operating Income to Adjusted Operating Income on page 41.

- -27- $50.8 $42.2 0 10 20 30 40 50 60 2007 2008 Third Quarter Adjusted EBITDA (1) (1)See reconciliation of Net Income to EBITDA on page 44. $124.5 $105.4 0 20 40 60 80 100 120 140 2007 2008 Nine Months ($ in Millions) 16.9% 15.3%

- -28- Adjusted Net Income (1) $20.7 $16.2 0 5 10 15 20 25 2007 2008 Third Quarter (1)See reconciliation of Net Income to Adjusted Net Income on page 42. $35.2 $28.1 0 5 10 15 20 25 30 35 40 2007 2008 Nine Months ($ in Millions) 21.8% 20.2%

- -29- Adjusted Diluted EPS (1) $0.61 $0.53 0.0 0.2 0.4 0.6 0.8 2007 2008 Third Quarter (1) See reconciliations on page 43. $1.03 $0.92 0.0 0.5 1.0 1.5 2007 2008 Nine Months 10.7% 13.2%

- -30- Free Cash Flow - nine months ($ in Millions) Nine Months September 21, 2008 Nine Months September 23, 2007 Adjusted EBITDA $ 105.3 $ 124.5 Stock Compensation 3.5 2.4 Working Capital (27.8) (43.4) Vessel Payments in Excess of Accrual (9.7) (30.8) Bonus Accrual (Payments) in Excess of Payments/Accrual 1.5 (10.5) TP1 Related Costs (0.1) (4.9) Capital Expenditures (26.3) (16.7) Acquisitions (0.2) (32.1) Net Proceeds from Sale of Fixed Assets 0.3 2.8 Dry-Dock Expenditures (9.2) (15.5) Income Taxes (0.3) (0.4) OPEIU Severance (0.2) - DoJ Investigation-Related Expenses (4.7) - Interest, Net (25.3) (26.7) Free Cash Flow 6.8 (51.3) Debt Borrowings 73.0 616.5 Debt Payments (42.5) (532.1) Premiums on Debt Extinguishment - (25.6) Financing Fees (0.1) (11.9) Dividends (10.0) (11.0) Bond Hedge - (40.6) Share Repurchase (29.3) (28.5) Net Cash Flow $ (2.1) $ (84.5)

Liquidity, Credit Facility Compliance and Capital Structure ($ in Millions) Corporate Liquidity Cash Balance $ 4.2 Revolver Availability 85.6 Total Liquidity $ 89.8 Credit Facility Compliance Q3 LTM 2008 Covenant Interest Coverage Ratio 4.52 3.50 Senior Secured Leverage Ratio 1.99 3.00 *4.36% 4.25% 5.26% 4.52% *4.46% Interest Rate Capital Structure Amount Rate Formula Maturity Revolver $ 157.5 LIBOR+1.50% 08/08/12 Term Loan 120.3 3.02%+1.50% 08/08/12 Note Payable 1.8 12/14/13 Total Senior Debt 279.6 Convertible Notes 330.0 08/15/12 Total Long-Term Debt 609.6 Total Shareholder Equity 143.1 Total Capitalization $ 752.7 - -31- *weighted average

- -32- 2008 Financial Guidance Financial Guidance Revenue $1,270 - $1,290 Adjusted EBITDA(1) $ 120 - $ 130 Adjusted Diluted EPS(1) $ 0.68 - $ 0.96 Adjusted Free Cash Flow(1) $ 29 - $ 36 ($ in Millions, Except EPS) (1) Adjusted to exclude anti-trust legal fees

- -33- 2008 Earnings Segment Guidance Segment Breakdown(1) Liner Logistics Eliminations / Other Consolidated Revenue $ 1,242.5 $ 227.5 $ (190.0) $ 1,280.0 Adjusted EBITDA $ 127.4 $ (2.4) $ -- $ 125.0 ($ in Millions) (1) Based on midpoint of guidance.

- -34- 2008 Guidance Major Assumptions (2.9%) (9.1%) 5.0% $515 2.2% (3.1%) (5.2%) (3.6%) 0.7% October 2008 July 2008 April 2008 _ Volume Change Alaska 1.3% 2.0% Hawaii / Guam 1.0% 1.5% Puerto Rico (2.9%) (2.0%) Total (0.4%) 0.4% _ Unit Revenue Increase, Net 1.6% 1.7% _ Bunker Fuel Price per Ton* $710 $515 _ Tradelane Drivers Alaska - GSP Growth Expectation 5.0% 4.5% Hawaii - Visitor Arrivals Forecast (4.6%) 1.0% Puerto Rico - GDP Forecast (1.2%) (0.8%) (1) (2) (3) (4) (1) Government&company projections (2) University of Hawaii Economic Research Organization (3) Estudios Tecnicos Inc.&government forecasts FY09-July '08-June '09 (4) Government forecasts FY08-July '07-June '08 * Projected average price for remainder of 2008

- -35- Change In Convertible Debt Accounting FSP APB 14-1 requires that the liability and equity components of convertible debt that may be settled in cash upon conversion be accounted for separately The issuer's nonconvertible debt borrowing rate must be reflected: Liability component is recorded at a discount reflecting below market coupon rate and accreted to its par value Interest rate reflects the higher straight debt market rate at issuance Effective for fiscal years beginning after 12/15/08, and retrospective application is required

- -36- Change In Convertible Debt Accounting Estimated additional non-cash interest expense upon adoption $ 0.06 $ 3.2 2007 $ 0.10 $ 4.8 2012 $ 0.24 $ 11.8 2011 $ 0.23 $ 11.1 2010 $ 0.21 $ 10.0 2009 $ 0.18 $ 8.9 2008 EPS Reduction Additional Interest Year ($ in Millions, Except EPS)

- -37- Third Quarter 2008 Third Quarter 2008 Earnings Release Earnings Release Questions&Answers Questions&Answers

- -38- Financial Appendix Financial Appendix

- -39- Income Statement Summary - Third Quarter Actual Adjusted(1) Quarter Ended Sept 21, 2008 Quarter Ended Sept 23, 2007 Quarter Ended Sept 21, 2008 Quarter Ended Sept 23, 2007 Operating Revenue $ 352.6 $ 321.1 $ 352.6 $ 321.1 Operating Expense 330.8 285.8 326.2 285.8 Operating Income 21.8 35.3 26.4 35.3 Other Expense 7.8 48.1 7.8 10.1 Pretax Income 14.0 (12.8) 18.6 25.2 Income Tax Expense (Benefit) 1.5 (14.4) 2.4 4.5 Net Income $ 12.5 $ 1.6 $ 16.2 $ 20.7 Earnings Per Share - Basic $ .42 $ .05 $ .54 $ .62 Earnings Per Share - Diluted $ .42 $ .05 $ .53 $ .61 Shares Outstanding - Basic 29,969,568 33,130,373 29,969,568 33,130,373 Shares Outstanding - Diluted 30,186,831 33,769,518 30,186,831 33,769,518 EBITDA $ 37.6 $ 12.8 $ 42.2 $ 50.8 Operating Ratio 93.8% 89.0% 92.5% 89.0% (1) Adjusted to exclude anti-trust related legal expenses and severance in 2008, and to exclude loss on extinguishment of debt in 2007. ($ in Millions, Except per Share Amounts)

- -40- Income Statement Summary - Nine Months Actual Adjusted(1) Nine Months Ended Sept 21, 2008 Nine Months Ended Sept 23, 2007 Nine Months Ended Sept 21, 2008 Nine Months Ended Sept 23, 2007 Operating Revenue $ 989.5 $ 890.5 $ 989.5 $ 890.5 Operating Expense 939.4 815.8 931.6 815.8 Operating Income 50.1 74.7 57.9 74.7 Other Expense 24.9 71.5 24.9 33.0 Pretax Income 25.2 3.2 33.0 41.7 Income Tax Expense (Benefit) 3.3 (15.0) 4.9 6.5 Net Income $ 21.9 $ 18.2 $ 28.1 $ 35.2 Earnings Per Share - Basic $ .73 $ .54 $ .94 $ 1.05 Earnings Per Share - Diluted $ .72 $ .53 $ .92 $ 1.03 Shares Outstanding - Basic 30,059,789 33,459,403 30,059,789 33,459,403 Shares Outstanding - Diluted 30,526,782 34,065,534 30,526,782 34,065,534 EBITDA $ 97.6 $ 86.0 $ 105.4 $ 124.5 Operating Ratio 94.9% 91.6% 94.1% 91.6% (1) Adjusted to exclude anti-trust related legal expenses and severance in 2008, and to exclude loss on extinguishment of debt and the tax benefit related to revaluation of deferred taxes in 2007. ($ in Millions, Except per Share Amounts)

- -41- Adjusted Operating Income Results Quarter Ended Sept 21, 2008 Quarter Ended Sept 23, 2007 Nine Months Ended Sept 21, 2008 Nine Months Ended Sept 23, 2007 Operating Income $ 21.8 $ 35.3 $ 50.1 $ 74.7 Adjustments: Anti-Trust Legal Fees 4.6 -- 7.0 -- Severance -- -- 0.8 -- Total Adjustments 4.6 -- 7.8 -- Adjusted Operating Income $ 26.4 $ 35.3 $ 57.9 $ 74.7 ($ in Millions)

- -42- Adjusted Net Income Results Quarter Ended Sept 21, 2008 Quarter Ended Sept 23, 2007 Nine Months Ended Sept 21, 2008 Nine Months Ended Sept 23, 2007 Net Income $ 12.5 $ 1.6 $ 21.9 $ 18.2 Adjustments: Anti-Trust Legal Fees 4.6 -- 7.0 -- Severance -- -- 0.8 -- Loss on Extinguishment of Debt -- 38.0 -- 38.5 Tax Impact of Adjustments (0.9) (14.1) (1.6) (14.2) 2007 Tonnage Tax Deferred Tax Revaluation Benefit -- (4.8) -- (7.3) Total Adjustments 3.7 19.1 6.2 17.0 Adjusted Net Income $ 16.2 $ 20.7 $ 28.1 $ 35.2 ($ in Millions)

- -43- Adjusted Net Income Per Diluted Share Quarter Ended Sept 21, 2008 Quarter Ended Sept 23, 2007 Nine Months Ended Sept 21, 2008 Nine Months Ended Sept 23, 2007 Net Income, Per Diluted Share $ 0.42 $ 0.05 $ 0.72 $ 0.53 Adjustments Per Share: Anti-Trust Legal Fees 0.14 -- 0.23 -- Severance -- -- 0.02 -- Loss on Extinguishment of Debt -- 1.12 -- 1.13 Tax Impact of Adjustments (0.03) (0.42) (0.05) (0.42) 2007 Tonnage Tax Deferred Tax Revaluation Benefit -- (0.14) -- (0.21) Total Adjustments Per Share 0.11 0.56 0.20 0.50 Adjusted Net Income, Per Diluted Share $ 0.53 $ 0.61 $ 0.92 $ 1.03

- -44- Net Income / Adjusted EBITDA Reconciliation Quarter Ended Sept 21, 2008 Quarter Ended Sept 23, 2007 Nine Months Ended Sept 21, 2008 Nine Months Ended Sept 23, 2007 Net Income $ 12.5 $ 1.6 $ 21.9 $ 18.2 Interest Expense, Net 7.8 10.1 24.9 32.9 Tax Expense (Benefit) 1.5 (14.4) 3.3 (15.0) Depreciation and Amortization 15.8 15.5 47.5 49.9 EBITDA 37.6 12.8 97.6 86.0 Anti-Trust Legal Fees 4.6 -- 7.0 -- Severance -- -- 0.8 -- Loss on Extinguishment of Debt -- 38.0 -- 38.5 Adjusted EBITDA $ 42.2 $ 50.8 $ 105.4 $ 124.5 ($ 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, Inc. 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.

- -45- Operating Income to Adjusted EBITDA Segment Reconciliation Third Quarter 2008 Liner Logistics Consolidated Operating Income (Loss) $ 23.1 $ (1.3) $ 21.8 Depreciation and Amortization 10.6 0.8 11.4 Amortization of Vessel Dry-docking 4.4 -- 4.4 EBITDA 38.1 (0.5) 37.6 Anti-Trust Related Legal Fees 4.6 -- 4.6 Severance -- -- -- Adjusted EBITDA $ 42.7 $ (0.5) $ 42.2 Nine Months 2008 Liner Logistics Consolidated Operating Income (Loss) $ 54.0 $ (3.9) $ 50.1 Depreciation and Amortization 32.1 2.2 34.3 Amortization of Vessel Dry-docking 13.2 -- 13.2 EBITDA 99.3 (1.7) 97.6 Anti-Trust Legal Fees 7.0 -- 7.0 Severance 0.8 -- 0.8 Adjusted EBITDA $ 107.1 $ (1.7) $ 105.4 ($ in Millions)

- -46- 2008 Net Income to Adjusted EBITDA Projection Reconciliation Year Ended December 21, 2008 Net Income $ 11.4 - $ 20.0 Adjustments: Anti-Trust Legal Fees 10.0 Severance 0.8 Tax Impact of Adjustments (1.5) Total Adjustments 9.3 Adjusted Net Income 20.7 - 29.3 Interest Expense, Net 32.9 Tax Expense 3.3 - 4.7 Depreciation and Amortization 63.1 Adjusted EBITDA $ 120.0 - $ 130.0 ($ in Millions) 2008 Financial Guidance

- -47- 2008 Operating Income to Adjusted EBITDA Projection Segment Reconciliation 2008 Segment Financial Guidance (1) Liner Logistics Consolidated Operating Income (Loss) $ 56.6 $ (5.5) $ 51.1 Adjustments: Anti-Trust Legal Fees 10.0 -- 10.0 Severance 0.8 -- 0.8 Total Adjustments 10.8 -- 10.8 Adjusted Operating Income (Loss) 67.4 (5.5) 61.9 Depreciation and Amortization 43.0 3.1 46.1 Amortization of Vessel Dry-docking 17.0 -- 17.0 Adjusted EBITDA $ 127.4 $ (2.4) $ 125.0 (1) At midpoint of Guidance ($ in Millions)

- -48- 2008 Free Cash Flow Projection Adjusted EBITDA $120.0 - $130.0 Stock Compensation 4.8 Annual Cash Incentive Plan 2.0 Working Capital (10.0) - (12.8) Vessel Payments in Excess of Accrual (4.9) TP1 Related Costs (0.1) Capital Expenditures (39.0) Net Proceeds from Sale of Fixed Assets 0.4 Dry-dock Expenditures (14.6) Purchase of Business (0.2) Income Taxes (0.4) Interest, Net (29.2) Adjusted Free Cash Flow 28.8 - 36.0 Severance (0.4) Anti-Trust Legal Fees (8.0) Free Cash Flow $20.4 - $27.6 ($ in Millions)

EX-99.4

4064 Colony Road, Suite 200
Charlotte, NC 28211
704.973.7000
www.horizonlines.com

News Release

For information contact:

Jim Storey
Director of Investor Relations & Corporate Communications
704.973.7107
jstorey@horizonlines.com

HORIZON LINES, INC. DECLARES DIVIDEND

CHARLOTTE, NC, October 23, 2008 — Horizon Lines, Inc. (NYSE: HRZ), today announced that its Board of Directors has voted to declare a regular quarterly cash dividend of $0.11 per share, payable on December 15, 2008, to stockholders of record at the close of business on December 1, 2008. The dividend was approved during the regularly scheduled quarterly meeting of the Board of Directors, which was held today.

About Horizon Lines

Horizon Lines, Inc. is the nation’s leading domestic ocean shipping and integrated logistics company comprised of two primary operating subsidiaries. Horizon Lines, LLC owns or leases a fleet of 21 U.S.-flag containerships and 5 port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. Horizon Logistics, LLC offers customized logistics solutions to shippers from a suite of transportation and distribution management services designed by Aero Logistics, information technology developed by Horizon Services Group and intermodal trucking and warehousing services provided by Sea-Logix. Horizon Lines, Inc. is based in Charlotte, NC, and trades on the New York Stock Exchange under the ticker symbol HRZ.

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