First Quarter 2007 Earnings Release

Forward-Looking Statements

Risks, Uncertainties, Other Factors with Respect to “Forward-Looking

Statements”:

Certain statements contained in this presentation constitute “forward-

looking statements”

within the meaning of the Private Securities

Litigation

Reform

Act

1995.

Such

statements

that

are

not

historical

fact

constitute

“forward-looking

statements”

and,

accordingly,

involve

estimates,

assumptions,

judgments

and

uncertainties.

There

are a number of factors that could cause actual results or outcomes to

differ materially from those addressed in the “forward-looking

statements”. Such factors are detailed in the Horizon Lines, Inc.’s

Form 10-K filed with the Securities and Exchange Commission on

March 2, 2007.

Earnings Call Agenda

Introduction and Overview

Chuck Raymond –

Chairman, President & Chief Executive Officer

Operations Review

John Handy –

Executive Vice President

Financial Review

Mark Urbania –

Senior Vice President & Chief Financial Officer

Questions and Answers

First Quarter 2007 –

Highlights

$15.9

$16.5

2006

2007

Operating Income

$274.9

$273.7

200

220

240

260

280

300

2006

2007

Operating Revenue

($ in Millions)

$0.11

$0.13

0.0

0.1

0.2

0.3

2006

2007

Adjusted EPS

($ in Millions)

Record first quarter earnings

consecutive quarter of adjusted

EBITDA growth

Cost controls, EDGE savings and rate

improvement more than offset volume

softness

TP1 fleet enhancement initiative on track

and nearing completion

Horizon EDGE meets all milestones and

delivers increasing benefits

Service excellence awards continue

($)

Operating Highlights

Continued soft market conditions in Puerto Rico and an extended

winter in Alaska adversely impacted revenue volumes

Higher margin cargo mix, general rate increases and fuel surcharge

recoveries mitigated volume shortfalls

Economic outlook improving and remains positive

Competitive landscape stable and overall market share maintained

Horizon EDGE captured first quarter benefits in line with targets and

achieved all milestones

TP1 fleet enhancement initiative on schedule and deployment of

new vessels nearing completion

Vessel operating metrics in line with 2006

Service excellence awards continue

Volume Update

Unusually cold winter in

Alaska delayed spring

shipments

Alaska seafood late starting,

but recovering with shipments

extending into second quarter

Hawaii volumes impacted by

adverse weather conditions

Guam continues to be a bright

spot with solid growth

Puerto Rico economy

recovering slower than

anticipated

71,601

66,921

2006

2007

Container Volume

Variance

(4,680)

Unit Revenue Update

$3,375

$3,587

2006

2007

Rate Per Container

Variance

$212

Unit rate improvements in all

three tradelanes

continue to

offset volume softness

Cargo mix focus continues to

provide positive impact on

overall rate improvements

Fluctuations in fuel related

expenses were appropriately

mitigated by fleet conservation

efforts and surcharges

2007 Economic Outlook

Alaska thawing out and market stabilizing and returning to normal

Deployment of new vessels and schedules to improve on time

performances

Hawaii market continues to grow and we are positioned to capitalize

2007 GNP growth of 1.2% projected by the Government

Development Bank of Puerto Rico has not been seen yet

Competitive Update

Overall market share in all trades remained stable

Puerto Rico carriers withheld extra seasonal tonnage due to slow

economic growth

Regaining our arrival advantage into Guam with deployment of

new, faster vessels

Horizon EDGE Update

All Q1 2007 milestones completed per plan

Offshore Ports

–

EDGE process implementation completed

Supply Chain

–

Vessel fuel consumption initiative implemented

–

Data integrity improvement process ongoing

–

Benchmarking performed with CGM-CMA and NYK

–

Cost per move over North America trucking network reduced

–

Automated dispatch planning implemented

Sales

–

Sales performance metrics implemented

–

System upgrades and pricing tool enhancements in progress

Domestic Ports

–

EDGE process implementation accelerated

2007 Net Benefits

Q1 2007 gross benefits of $3.0M and net benefits of $1.4M achieved

2007 net benefits target remains $13M or better

TP1 Fleet Enhancement Update

Execution of the new TP1 Service phase-in is on schedule

Performance of vessels continues to meet expectations

New TP1 Service commenced as planned on March 18

Jul

May

Dec

Jan

Feb

Mar

Nov

Apr

Jun

New TP1 Commences Ex Asia

PEX Service Commences

Large Jones Act Vessel to PR

Horizon Falcon

Horizon Hunter

Horizon Hawk

Horizon Eagle

Horizon Tiger

Container Fleet Investments

300

900

1200

300

200

700

1200

2003

2004

2005

2006

1Q '07

New Refrigerated Containers

1000

2800

200

700

1200

1700

2200

2700

2003

2004

2005

2006

New Dry Containers

$202

$74

100

150

200

250

1Q '06

1Q '07

Refrigerated Containers

Investment in our business continues with 300 new refrigerated

containers (“reefers”) added in the first quarter of 2007

Maintenance cost per load has improved significantly

$37

1Q '06

1Q '07

Dry Containers

Vessel Performance

99.3%

99.6%

20%

40%

60%

80%

100%

2006

2007

Vessel Availability

89.0%

84.0%

20%

40%

60%

80%

100%

2006

2007

Vessel Utilization

78.0%

20%

40%

60%

80%

100%

2006

2007

Vessel On-Time Arrival

Service Excellence Awards

Lowe’s 2006 “Platinum Carrier Award”

for

Outstanding Service for the sixth straight

year

Toyota 2006 “Logistics Excellence Award”

for Quality in Export Marine for the eighth

consecutive year

Financial Highlights

Adjusted EBITDA growth for the 21

consecutive quarter

Record first quarter earnings achieved above midpoint of guidance

Stringent cost controls, Horizon EDGE benefits, cargo mix upgrade,

rate increases and fuel recoveries combine to more than offset

volume softness

De-leveraging continues

Capital structure continues to improve

2122

118

145

163

100

120

140

160

180

Adjusted EBITDA Growth

Continuous Earnings Improvement

(1)

Adjusted EBITDA equal to EBITDA plus non-recurring items, management fees, and restricted stock

compensation charges

($ in Millions)

Operating Revenue

(15.8)

Volume Variance

Revenue Change

($ in Millions)

(1.2)

Total Revenue Decrease

0.4

Other / Non-Transportation Revenue

1.0

Fuel Recovery

13.2

Rate and Cargo Mix Improvement

First Quarter

2007

Cargo mix improvement and rate increases offset volume softness,

after accounting for one delayed sailing that fell into the second

quarter

Free Cash Flow

(3.7)

Dividends

Quarter Ended

March 26, 2006

Quarter Ended

March 25, 2007

(49.8)

(5.1)

(41.0)

(3.5)

(0.4)

(2.4)

(2.9)

(3.3)

(36.0)

(26.2)

33.7

(1.0)

Transaction Costs

(8.8)

Net Cash Flow

(0.6)

Debt Payment

(4.5)

Free Cash Flow

(4.1)

Interest

(0.1)

Income Taxes

(4.2)

Dry-Dock Expenditures

(2.0)

Capital Expenditures, Net

TP1 Related Costs

(11.0)

Vessel Payments in Excess of Accrual

(13.9)

Working Capital

31.8

EBITDA

Free Cash Flow

($ in Millions)

Improving Capital Structure

(a)

Fully accreted balances were $160 million at September 25, 2005 and $102.5 million on March 25, 2007

(b)

Includes proforma

adjustment for lease expense buyouts in September 25, 2005 EBITDA

(c)

Excludes amortization of financing fees

62.2

Series A preferred stock

3.7x

2.9x

LTM adjusted EBITDA (b) / LTM interest expense (c)

71%

88%

Debt/capitalization

3.1x

4.3x

Debt/LTM adjusted EBITDA (b)

Credit statistics:

$716.9

$709.6

Total capitalization

208.8

22.7

Equity

508.1

624.7

Total debt

92.0

122.2

11% notes (a)

197.0

250.0

9% notes

219.1

252.5

Senior secured debt

0.3

0.5

Capital leases

4.5

Vessel mortgages

218.8

247.5

Term loan

$--

Revolver

March 25,

2007

September 25,

2005

($ in Millions)

2007 Financial Guidance

Financial Guidance

($ in Millions except EPS)

Second Quarter

Year

Revenue

$ 295 -

$ 300

$1,200 -

$1,210

EBITDA

$ 40 -

$ 43

$ 173 -

$ 180

Diluted EPS

$ .29 -

$ .34

$ 1.62 -

$ 1.73

Free Cash Flow

$ 42 -

$ 49

Income Statement Summary

33,596,230

34,135,084

33,596,230

34,135,084

Shares Outstanding –

Diluted

.11

.13

.07

.21

Earnings Per Share -

Diluted

33,544,170

33,612,667

33,544,170

33,612,667

Shares Outstanding –

Basic

94.2%

94.0%

94.2%

94.0%

Operating Ratio

31.8

33.7

31.8

33.7

EBITDA

.11

.13

.07

.21

Earnings Per Share –

Basic

3.6

4.5

2.4

7.1

Net Income

0.5

0.8

1.7

(1.8)

Income Tax (Benefit) Expense

4.1

5.3

4.1

5.3

Pretax Income

11.8

11.2

11.8

11.2

Other Expense

15.9

16.5

15.9

16.5

Operating Income

259.0

257.2

259.0

257.2

Operating Expense

274.9

273.7

274.9

273.7

Operating Revenue

Quarter

Ended

Mar. 26, 2006

Quarter

Ended

Mar. 25, 2007

Quarter

Ended

Mar. 26, 2006

Quarter

Ended

Mar. 25, 2007

Adjusted

(1)

Actual

(1)

Adjusted to exclude non-recurring IPO, other transaction and non-cash expenses, and to retroactively

apply tonnage tax.

($ in Millions, Except per Share Amounts)

Adjusted Net Income Results

1.2

•

2006

Proforma

Impact

(2.6)

•

2007 Deferred Tax Revaluation Benefit

Tonnage Tax Adjustments:

Adjusted Net Income

($ in Millions)

3.6

4.5

Adjusted Net Income

Adjustments

(a)

2.4

7.1

Net Income

Quarter

Ended

Mar 26, 2006

Quarter

Ended

Mar. 25, 2007

(a)

These

charges

are

not

anticipated

recur

regularly

the

ordinary

course

business.

Net Income/EBITDA Reconciliation

11.7

11.2

Interest Expense, Net

Note: EBITDA is defined as net income plus net interest expense, income taxes, depreciation and amortization. We believe that EBITDA is

a meaningful measure for investors as (i) EBITDA is a component of the measure used by our board of directors and management team to

evaluate our operating performance, (ii) the senior credit facility contains covenants that require Horizon Lines Holding 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.

Net Income/EBITDA Reconciliation

($ in Millions)

31.8

33.7

EBITDA

16.0

17.2

Depreciation and Amortization

1.7

(1.8)

Tax (Benefit) Expense

2.4

7.1

Net Income

Quarter

Ended

Mar. 26, 2006

Quarter

Ended

Mar. 25, 2007