UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F/A

(Amendment No. 3)

_____________________

(Mark One)

[_]       Registration statement pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

[X]       Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2011

[_]       Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

[_]       Shell Company Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 001-34077

_____________________

SAFE BULKERS, INC.

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

Republic of The Marshall Islands

(Jurisdiction of incorporation or organization)

30-32 Avenue Karamanli
P.O. Box 70837
16605 Voula
Athens, Greece
(Address of principal executive offices)

Dr. Loukas Barmparis
President
30-32 Avenue Karamanli
P.O. Box 70837
16605 Voula
Athens, Greece
Telephone : +30 210 899 4980
Facsimile : +30 210 895 4159

(Name, Address, Telephone Number and Facsimile Number of Company contact person)

_____________________

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $0.001 par value per share Preferred stock purchase rights	New York Stock Exchange New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. As of December 31, 2011, there were 70,891,916 shares of the registrant’s common stock outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [_] No [X]

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes [_] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every

Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X]No [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [_] Accelerated filer [X] Non-accelerated filer [_]

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.

U.S. GAAP [X] International Financial Reporting Standards as issued by the International Accounting Standards Board [_] Other [_]

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 [_] Item 18 [_]

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X]

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [_] No [_]

Explanatory Note

This Amendment No. 3 to the Annual Report on Form 20-F for the fiscal year ended December 31, 2011, originally filed with the Securities and Exchange Commission on February 29, 2012 (“2011 Form 20-F”), as amended by Amendment No. 1 filed with the Securities and Exchange Commission on March 6, 2012, and by Amendment No. 2 filed with the Securities and Exchange Commission on March 12, 2012 (“Amendment No. 2”), is being filed to re-file Amendment No. 2 and the exhibits thereto in their entirety to add a new Paragraph 3 to the Section 302 certification included in Exhibit 12.2.

Other than as expressly set forth above, this Form 20-F/A does not, and does not purport to, amend, update or restate the information in the 2011 Form 20-F or any amendment thereto, or reflect any events that have occurred after the 2011 Form 20-F was originally filed.

Part I

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this annual report. This discussion includes forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report, our actual results may differ materially from those anticipated in these forward-looking statements. Please see the section “Forward-Looking Statements” at the beginning of this annual report.

Overview

Our business is to provide international marine drybulk transportation services by operating vessels in the drybulk sector of the shipping industry. As of February 25, 2012 our fleet consisted of 20 drybulk vessels, and we had newbuild contracts for an additional nine vessels with an aggregate capacity of 2,709,600 dwt. We deploy our vessels on a mix of period time and spot charters according to our assessment of market conditions, adjusting the mix of these charters to take advantage of the relatively stable cash flow and high utilization rates associated with period time charters, or to profit from attractive spot charter rates during periods of strong charter market conditions, or to maintain employment flexibility that the spot market offers during periods of weak time charter market conditions. As of February 25, 2012, 15 out of 20 vessels in our fleet were employed on period time charters. We believe our customers, some of which have been chartering our vessels or vessels of our predecessor for over 22 years, enter into period time and spot charters with us because of the quality of our young and modern vessels and our record of safe and efficient operations.

The average number of vessels in our fleet for the years ended December 31, 2009, 2010 and 2011 was 13.2, 14.6 and 16.4 respectively.

After delivery of our contracted newbuilds, our drybulk fleet will consist of 29 vessels and will have an aggregate carrying capacity of 2,709,600 dwt, assuming we do not acquire any additional vessels or dispose of any of our vessels.

Our Manager

Our operations are managed by our Manager, Safety Management Overseas S.A., under the supervision of our executive officers and our board of directors. Under our Management Agreement, our Manager provides us with technical, administrative and commercial services for an initial term that expired on May 28, 2010, with automatic one-year renewals for an additional eight years, at our option. Our Manager is controlled by Polys Hajioannou.

A.Operating Results

Our operating results are largely driven by the following factors:

· Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.

· Available days. We define available days (also referred to as voyage days) as the total number of days in a period during which each vessel in our fleet was in our possession net of off-hire days associated with scheduled maintenance, which includes major repairs, drydockings, vessel upgrades or special or intermediate surveys. Available days are used to measure the number of days in a period during which vessels should be capable of generating revenues.

· Operating days. We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, excluding scheduled maintenance. Operating days are used to measure the aggregate number of days in a period during which vessels actually generate revenues.

· Fleet utilization. We calculate fleet utilization by dividing the number of our operating days during a period by the number of our ownership days during that period. Fleet utilization is used to measure a company’s ability to efficiently find suitable employment for its vessels and minimize the number of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades, drydockings or special surveys. During the three years ended December 31, 2011, our average annual fleet utilization rate was approximately 99.22%. However, an increase in annual off-hire days could reduce our operating days, and therefore, our fleet utilization.

· Time charter equivalent rates. We define time charter equivalent rates, or “TCE rates,” as our charter revenues less commissions and voyage expenses during a period divided by the number of our available days during the period. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on period time charters and trip time charters with daily earnings generated by vessels on voyage charters, because charter rates for vessels on voyage charters are generally not expressed in per day amounts, while charter rates for vessels on period time charters and trip time charters generally are expressed in such amounts. We have only rarely employed our vessels on voyage charters and, as a result, generally our TCE rates approximate our time charter rates.

	Year Ended December 31,
	(In thousands of U.S. dollars except available days and time charter equivalent rate)
	2009		2010		2011
Time charter revenues	$	168,400	$	159,698	$	172,036
Less commissions		3,794		2,678		3,128
Less voyage expenses		577		610		1,987
Time charter equivalent revenue	$	164,029	$	156,410	$	166,921
Available days		4,795		5,296		5,976
Time charter equivalent rate	$	34,208	$	29,534	$	27,932

· Daily vessel operating expenses. We define daily vessel operating expenses to include the costs for crewing, insurance, lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermediate and special surveys and other miscellaneous items. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period. Our ability to control our fixed and variable expenses, including our daily vessel operating expenses, also affects our financial results. In addition, factors beyond our control, such as developments relating to market premiums for insurance and the value of the U.S. dollar compared to currencies in which certain of our expenses, including certain crew wages, are denominated can cause our vessel operating expenses to increase.

The following table reflects our ownership days, available days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the periods indicated:

	Year Ended December 31,
	2009			2010			2011
Ownership days		4,817			5,326			5,992
Available days		4,795			5,296			5,976
Operating days		4,778			5,269			5,962
Fleet utilization		99.19	%		98.93	%		99.50	%
TCE rates	$	34,208		$	29,534		$	27,932
Daily vessel operating expenses	$	4,075		$	4,342		$	4,350

Revenues

Our revenues are driven primarily by the number of vessels in our fleet, the number of days during which our vessels operate and the amount of daily charter rates that our vessels earn under our charters, which, in turn, are affected by a number of factors, including:

· levels of demand and supply in the drybulk shipping industry;

· the age, condition and specifications of our vessels;

· the duration of our charters;

· our decisions relating to vessel acquisitions and disposals;

· the amount of time that we spend positioning our vessels;

· the availability of our vessels, which is related to the amount of time that our vessels spend in drydock undergoing repairs and the amount of time required to perform necessary maintenance or upgrade work; and

· other factors affecting charter rates for drybulk vessels.

Revenue is recognized as earned on a straight-line basis over the charter period in respect of charter agreements that provide for varying rates. The difference between the revenue recognized and the actual charter rate is recorded either as unearned revenue or accrued revenue (see “—Unearned Revenue” below). Commissions (address and brokerage), regardless of charter type, are always paid by us and are deferred and amortized over the related charter period and are presented as a separate line item in revenues to arrive at net revenues in the accompanying consolidated statements of income.

Revenues from our period time charters comprised 92.8%, 99.5% and 92.0% respectively, of our charter revenues for the years ended December 31, 2009, 2010 and 2011. The revenues from our spot charters comprised 7.2%, 0.5% and 8.0%, respectively, of our charter revenues for the years ended December 31, 2009, 2010 and 2011.

Vessels operating on period time charters provide more predictable cash flows, but can yield lower profit margins than vessels operating in the spot market during periods characterized by favorable market conditions. Vessels operating in the spot market generate revenues that are less predictable than those on period time charters, but may enable us to capture increased profit margins during periods of high drybulk charter rates, although we are exposed to the risk of low drybulk charter rates, which may have a materially adverse impact on our financial performance. During periods of volatility or weak market conditions, period time charters of past periods may provide relatively stable cash flows, while spot time charters can provide employment flexibility. If we fix vessels on period time charters, future spot market rates may be higher or lower than those rates at which we have time chartered our vessels. We are constantly evaluating potential opportunities to increase the number of our drybulk vessels

employed on period time charters, but only expect to enter into additional period time charters if we can obtain contract terms that satisfy our criteria.

Unearned Revenue

Unearned revenue as of December 31, 2011 includes: (i) cash received prior to the balance sheet date relating to services to be rendered after the balance sheet date amounting to $4.1 million as of December 31, 2011 and (ii) deferred revenue resulting from straight-line revenue recognition in respect of charter agreements that provide for varying charter rates amounting to $36.9 million, all of which will be recognized as revenue during the period from January 1, 2012 until March 1, 2015.

Unearned revenue as of December 31, 2010 includes: (i) cash received prior to the balance sheet date relating to services to be rendered after the balance sheet date amounting to $4.7 million as of December 31, 2010 and (ii) deferred revenue resulting from straight-line revenue recognition in respect of charter agreements that provide for varying charter rates amounting to $37.4 million, all of which would be recognized as revenue during the period from January 1, 2010 until March 1, 2015.

Commissions

We pay commissions currently ranging up to 5.5% on our period time and trip time charters, which are a type of spot charter, to unaffiliated ship brokers, other brokers associated with our charterers and to our charterers. These commissions are directly related to our revenues, from which they are deducted. We expect that the amount of our total commissions to unaffiliated ship brokers and other brokers associated with our charterers and our charterers will continue to grow as the size of our fleet grows and revenues increase following delivery of our nine remaining contracted newbuilds and as a result of additional vessel acquisitions. These commissions do not include fees we pay to our Manager, which are described under “Item 4. Information on the Company—B. Business Overview— Management of Our Fleet.”

Voyage Expenses

We charter our vessels primarily through period time charters and trip time charters under which the charterer is responsible for most voyage expenses, such as the cost of bunkers, port expenses, agents’ fees, canal dues, extra war risks insurance and any other expenses related to the cargo. We are responsible for the remaining voyage expenses such as draft surveys, hold cleaning, bunkers during ballast period, postage and other minor miscellaneous expenses related to the voyage. We generally do not employ our vessels on voyage charters under which we would be responsible for all voyage expenses. We also record within voyage expenses the 4% United States federal tax we pay in respect of our U.S. source shipping income (imposed on gross income without the allowance for any deductions). In many cases, we recover these taxes from the charterers, and we record such recovered amounts within revenues.

Vessel Operating Expenses

Vessel operating expenses include costs for crewing, insurance, lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermediate and special surveys and other minor miscellaneous items. We expect that crewing costs will continue to increase in the future due to the limited supply and increase in demand for well-qualified crew. In addition, we expect that insurance costs, drydocking and maintenance costs will increase as our vessels age. In addition, a portion of our vessel operating expenses, crew wages paid to our Greek crew members, are in currencies other than the U.S. dollar. These expenses may increase or decrease as a result of fluctuation of the U.S. dollar against these currencies.

Depreciation

We depreciate our drybulk vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25

years from the date of delivery from the shipyard. Furthermore, we estimate the residual value of our vessels to be $182 per light-weight ton.

Vessels, Net

Vessels are recorded at their historical cost, which consists of the contracted purchase price, any direct material expenses incurred upon acquisition (including improvements, on-site supervision expenses incurred during the construction period, commissions paid, delivery expenses and other expenditures to prepare the vessel for her initial voyage) and financing costs incurred during the construction of the vessel, less any potential discount or commission payable to us resulting in a contract price reduction. Subsequent expenditures for conversions and major improvements are also capitalized when it is determined that they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. If such factors are not met, such expenditures are not capitalized and, instead, are charged to expenses as incurred.

For the years ended December 31, 2010 and 2011, we capitalized interest amounting to $315,084 and $1,471,785, respectively.

Under our Management Agreement with our Manager, for purchases of vessels including with respect to each of our nine remaining contracted newbuilds, we will pay our Manager a commission of 1.0% on the contract price of the relevant vessel for our Manager’s services in connection with finalizing the contract and arranging for various regulatory approvals. In addition, as of May 29, 2011, according to an agreement between us and our Manager, the flat supervision fee we pay our Manager was set to $550,000 per newbuild, of which 50% is payable upon the signing of the relevant supervision agreement, and 50% upon successful completion of the sea trials of each newbuild, for the on-premises supervision of all newbuilds we have agreed to acquire pursuant to shipbuilding contracts, memoranda of agreement, or otherwise. These amounts payable to our Manager are included as part of the vessel cost.

General and Administrative Expenses

General and administrative expenses consist of management fees paid to our Manager, which is a related party, in relation to management services offered, and expenses paid to third parties associated with us being a public company, which include the preparation of disclosure documents, legal and accounting costs, including costs related to compliance with the Sarbanes-Oxley Act of 2002, director and officer liability insurance costs and director compensation.

In connection with our initial public offering which was completed in June 2008, we entered into a two year initial term Management Agreement with our Manager, with automatic one-year renewals for an additional eight years. The fees were fixed for the initial two-year period at $575 per day and 1.0% on gross freight, charter hire, ballast bonus and demurrage and were to be adjusted thereafter every year by agreement between us and our Manager. The initial term of two years expired on May 28, 2010 and as of May 29, 2010, pursuant to an agreement between us and our Manager, the fee on gross freight, charter hire, ballast bonus and demurrage was readjusted to 1.25%. As of May 29, 2011, pursuant to an agreement between us and our Manager, the flat daily fee was readjusted to $700 per day per vessel from $575 per day.

In addition to the fees described above, we pay our Manager the commissions and fees with respect to vessel purchases and newbuilds described above in “— Vessels, Net” and the commissions with respect to vessel sales described below under “—Gain on Sale of Assets.” Such commissions and fees remained unchanged.

Although we have not, within the past seven years, deployed our vessels on bareboat charters and do not currently have any plans to deploy our vessels on bareboat charters, under our Management Agreement, we will also provide our Manager with a fee of $250 per day per vessel deployed on bareboat charters for providing commercial, technical and administrative services. We expect that the amount of our total management fees will increase following the delivery of our nine contracted newbuilds and as a result of additional vessel acquisitions.

Interest Expense and Other Finance Costs

We incur interest expense on outstanding indebtedness under our existing credit facilities, which we include in interest expenses. We also incurred financing costs in connection with establishing those facilities, which are capitalized and amortized over the period of the facility. The amortization of the finance costs is included in amortization and write-off of deferred finance charges. We will incur additional interest expense in the future on our outstanding borrowings and under future borrowings.

Inflation

Inflation has only a moderate effect on our expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase our operating, voyage, administrative and financing expenses.

Gain on Sale of Assets

In June 2009, we agreed to sell our oldest vessel, the Panamax class Efrossini (which is hereinafter called “Old Efrossini”, as we currently own another vessel with the same name), which was delivered to her new owners on January 7, 2010. The gain from the sale of this vessel amounted to $15.2 million, which was recorded as gain on sale of assets during the year ended December 31, 2010. In connection with the sale of Old Efrossini, we paid our Manager a commission of 1.0% of the sale price of the vessel. Under our Management Agreement, we are required to pay our Manager a commission of 1.0% of the sale price of a vessel for any future vessel sales.

No gain on sale of assets was recorded in the other periods presented.

Early Redelivery Income, Net

Early redelivery cost reflects amounts payable to charterers for early termination of a period time charter resulting from our request for early redelivery of a vessel. We generally request such early redelivery when we would like to take advantage of a strong period time charter market environment and believe that an opportunity to enter into a similarly priced period time charter is not likely to be available when the relevant vessel is scheduled to be redelivered.

Early redelivery income reflects amounts payable to us for early termination of a period time charter resulting from a charterer’s request for early redelivery of a vessel. We may accept such requests from charterers when we believe that we are compensated by a substantial portion of the contracted revenue and maintain the opportunity to re-employ the vessel either in the spot or in the period time charter market at adequate levels.

We have entered into such arrangements for early redelivery, and incurred such costs or income in the past and we may continue to do so in the future, depending on market conditions.

On January 1, 2009, we took early redelivery of the Maritsa, instead of on January 13, 2009. The respective charterer paid cash compensation of $0.6 million, net of commissions. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed at a gross daily charter rate of $15,500 until February 2010.

On March 15, 2009, we took early redelivery of the Old Efrossini, instead of on January 8, 2011. The respective charterer paid cash compensation of $25.5 million, net of commissions. An amount of $3.6 million, representing the unearned revenue from the terminated period time charter contract, was recorded as additional early redelivery income. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed in the spot market, at a gross daily charter rate of $13,750 until April 2009.

On June 26, 2009, we took early redelivery of the Katerina, instead of on November 26, 2010. The respective charterer paid cash compensation of $21.5 million, net of commissions. An amount of $0.9 million, representing the

unearned revenue from the terminated period time charter contract, was recorded as additional early redelivery income. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed at a gross daily charter rate of $15,500 until September 2011.

On June 28, 2009, we took early redelivery of the Maria, instead of on January 2, 2011. The respective charterer paid cash compensation of $15.5 million, net of commissions. An amount of $4.5 million, representing the unearned revenue from the terminated period time charter contract, was recorded as additional early redelivery income. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed at a gross daily charter rate of $18,000 until August 2010.

On July 19, 2009, we took early redelivery of the Pedhoulas Leader, instead of on November 22, 2009. The respective charterer paid cash compensation of $2.7 million, net of commissions. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed at a gross daily charter rate of $18,500 until November.

On July 20, 2009, we took early redelivery of the Stalo, instead of on July 29, 2009. The respective charterer paid cash compensation of $0.2 million, net of commissions. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed in the spot market at a gross daily charter rate of $42,500 until October 2009.

On March 25, 2010, we agreed with the charterers of the Katerina to terminate the $15,500 daily fixed rate time charter which had commenced on June 26, 2009, and was due to expire by September 15, 2011. As compensation for early redelivery, we paid the charterers $1.5 million. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed at a gross daily charter rate of $20,000 for three years.

On April 13, 2010, we took early redelivery of the Pedhoulas Merchant, instead of the contracted earliest redelivery date of November 5, 2010. In connection with this early redelivery, we recognized early redelivery income of $3.6 million, comprising cash compensation paid by the relevant charterer of $4.8 million net of commissions, less accrued revenue of $1.2 million. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed at a gross daily charter rate of $27,250 until April 2011.

On April 28, 2010, we agreed with the charterers of the Pedhoulas Leader to terminate the $18,500 daily fixed rate time charter which had commenced on July 19, 2009, and was due to expire by September 30, 2011. As compensation for early redelivery of the vessel, we paid the charterers $1.8 million. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was redelivered on November 12, 2010, and was subsequently fixed in the spot market at a gross daily charter rate of $21,750.

On July 30, 2010, we agreed with the charterers of the Maria to terminate the $18,000 daily fixed rate time charter which had commenced on June 28, 2009, and was due to expire by November 30, 2010. As compensation for early redelivery of the vessel, we paid the charterers $0.2 million. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was redelivered on August 24, 2010, and was subsequently fixed at a gross daily charter rate of $17,750 until April 2011.

Critical Accounting Policies

We prepared our consolidated financial statements in accordance with U.S. GAAP, which requires us to make estimates in the application of our accounting policies based on our best assumptions, judgments and opinions. We base these estimates on the information currently available to us and on various other assumptions we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Following is a discussion of the accounting policies that involve a high degree of judgment and the methods of their application. For a further description of our material accounting policies, please read Note 2 to our financial statements at the end of this annual report.

Vessels’ Depreciation

Depreciation is computed using the straight-line method over the estimated useful life of a vessel, after considering the estimated residual value. We estimate the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard. An increase in the useful life of a drybulk vessel or in its residual value would have the effect of decreasing the annual depreciation and extending it into later periods. A decrease in the useful life of a drybulk vessel or in its residual value would have the effect of increasing the annual depreciation.

Impairment of Long-lived Assets

The Company reviews for impairment its long-lived assets held and used whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, we are required to evaluate the asset for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset.

The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuilds. Historically, both charter rates and vessel values tend to be cyclical. Declines in the fair market value of vessels, prevailing market charter rates, vessel sale and purchase considerations, and regulatory changes in dry bulk shipping industry, changes in business plans or changes in overall market conditions that may adversely affect cash flows are considered as potential impairment indicators. In the event the independent market value of a vessel is lower than its carrying value, we determine undiscounted projected net operating cash flow for such vessel and compare it to the vessel carrying value.

The undiscounted projected net operating cash flows for each vessel are determined by considering the charter revenues from existing time charters for the fixed vessel days and an estimated daily time charter equivalent for the unfixed days (based on our company budgeted charter rate for the first 12 months and the most recent ten year historical average of similar size vessels for the period thereafter) over the remaining estimated life of the vessel, net of brokerage commissions, expected outflows for vessels’ maintenance, vessel operating expenses, assuming an average annual inflation rate and management fees. The undiscounted cash flows incorporate various factors such as estimated future charter rates, future drydocking costs, estimated vessel operating costs assuming an average annual inflation rate of 3%, estimated vessel utilization rates, estimated remaining lives of the vessels, assumed to be 25 years from the delivery of the vessel from the shipyard and estimated salvage value of the vessels at $182 per light weight ton. These assumptions are based on historical trends as well as future expectations. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective.

Our analysis of the impairment test performed for the year ended December 31, 2010, indicated a variance of plus 6% for the first twelve months, between actual net receipts during 2011 and net receipts forecasted by the company for the same period. Our analysis of the impairment test performed for the year ended December 31, 2011, which also involved sensitivity tests on the future time charter rates (which is the input that is most sensitive to variations), allowing for variances of up to 37% depending on vessel type on time charter rates from the Company’s base scenario, indicated no impairment on any of our vessels.

No impairment loss was recorded for any of the periods presented.

Recent Accounting Pronouncements

Refer to Note 2 of the consolidated financial statements attached to this report.

Results of Operations

Year ended December 31, 2011 compared to year ended December 31, 2010

During the year ended December 31, 2011, we had an average of 16.4 drybulk vessels in our fleet. During the year ended December 31, 2010, we had an average of 14.6 drybulk vessels in our fleet.

During the year ended December 31, 2011, we acquired the vessels Venus History, a Post-Panamax class vessel and Pelopidas, a Capesize class vessel.

During the year ended December 31, 2010, we acquired the vessels Kanaris, a Capesize class vessel, Panayiota K, a Post-Panamax class vessel, and Venus Heritage, a Post-Panamax class vessel and sold Old Efrossini, a Panamax class vessel.

Revenues

Revenues increased by 7.7%, or $12.3 million, to $172.0 million during the year ended December 31, 2011 from $159.7 million during the year ended December 31, 2010, as result of the net effect of the following factors: (i) a decrease in the TCE rate for 2011 by 5.4% to $27,932, compared to $29,534 for 2010 due to the decrease in prevailing charter rates and (ii) an increase in operating days for the year ended December 31, 2011 by 13.2% to 5,962 days, compared to 5,269 days for the year ended December 31, 2010, due to an increase in the weighted number of vessels during 2010 of 14.6 compared to 16.4 during 2011, due to the deliveries of the vessels Venus History in September 2011, and Pelopidas in November 2011.

Commissions

Commissions to unaffiliated ship brokers, other brokers associated with our charterers and our charterers during the year ended December 31, 2011 amounted to $3.1 million, an increase of $0.4 million, or 14.8%, compared to $2.7 million during the year ended December 31, 2010, primarily due to the increase in our revenues and to a lesser extent to higher average contracted commissions, which increased in 2011 to 1.81% from 1.68% in 2010.

Vessel operating expenses

Vessel operating expenses increased by 12.6% to $26.0 million during the year ended December 31, 2011 from $23.1 million during the year ended December 31, 2010. This increase of $2.9 million reflects mainly: (i) crewing cost of $13.2 million, compared to $11.4 million primarily attributable to increased salaries paid to our crews and increased number of ownership days from 5,326 in 2010 to 5,992 in 2011, (ii) insurance cost of $2.3 million, compared to $1.9 million primarily attributable to the increase number of vessels in 2011 and to increased insurances paid to our insurers, (iii) the cost for repairs, maintenance and drydocking of $2.1 million, compared to $1.8 million, and (iv) cost for lubricants of $3.1 million, compared to $2.8 million mainly due to increased number of operating days from 5,269 in 2010 to 5,962 in 2011 and increased lubricants prices.

Consequently, daily operating expenses, which represent the operating expenses per vessel per ownership day, increased marginally by 0.2% to $4,350 during the year ended December 31, 2011 from $4,342 during the year ended December 31, 2010.

Depreciation

Depreciation expenses increased by 19.8% to $23.6 million during the year ended December 31, 2011, compared to $19.7 million during the year ended December 31, 2010, due to the increase in the average number of vessels from 14.6 during the year ended December 31, 2010 to 16.4 during the year ended December 31, 2011.

General and administrative expenses

General and administrative expenses increased by 21.4% to $8.5 million during the year ended December 31, 2011 from $7.0 million during the year ended December 31, 2010, due to an increase in the number of ownership days by 12.5% from 5,326 in 2010 to 5,992 in 2011, as well as due to an increase, as of May 29, 2011, in the flat daily fee per vessel to $700 from $575.

Interest expense

Interest expenses decreased by 18.8% to $5.2 million during the year ended December 31, 2011 from $6.4 million during the year ended December 31, 2010. The $1.2 million decrease in interest expense was mainly attributable to the increase in the capitalized interest during the year ended December 31, 2011 of $1.5 million from $0.3 million during the year ended December 31, 2010, and the decrease in the average loans outstanding during the year ended December 31, 2011 of $460.4 million from $476.9 million during the year ended December 31, 2010, partly offset by the increase of the weighted average interest rate of our outstanding indebtedness to 1.439% per annum (“p.a.”) for the year ended December 31, 2011 from 1.394% p.a. for the year ended December 31, 2010.

Loss on derivatives

Loss on derivatives increased by $4.3 million to $12.5 million during the year ended December 31, 2011 from $8.2 million during the year ended December 31, 2010. The increase of $4.3 million mainly reflects an increase in losses of $4.4 million from interest rate derivatives as a result of the realized loss and the markto-market valuation of interest rate swap transactions to $12.4 million for the year ended December 31, 2011 compared to $8.0 million for the year ended December 31, 2010.

As of December 31, 2011, the aggregate notional amount of interest rate swap transactions outstanding was $547.1 million, compared to $638.0 million at December 31, 2010. The aggregate notional amount of interest rate swap transactions outstanding at December 31, 2011 is higher than the aggregate loans outstanding at December 31, 2011, of $484.3 million, as two of the interest rate swap transactions outstanding at December 31, 2011 will become effective upon the expiration of the existing interest rate swap transactions relating to such loans. These swaps economically hedged the interest rate exposure of 95% of the Company’s aggregate loans outstanding as of December 31, 2011. The mark-to-market valuation of these interest rate swap transactions at the end of each period is affected by the prevailing comparable interest rates at that time.

Foreign currency gain/(loss)

Foreign currency loss was $0.8 million during the year ended December 31, 2011, compared to gain of $0.3 million during the year ended December 31, 2010. Foreign currency exchange gains or losses resulted primarily from currency translation or currency conversion of advances for vessel acquisitions and vessels under construction denominated in foreign currencies. None of our loans were denominated in foreign currency as of December 31, 2011.

Early redelivery income, net

During the year ended December 31, 2011, we recorded early redelivery income, relating to the early termination of period time charters of our vessels, of $0.2 million compared to $0.1 million early redelivery income during the year ended December 31, 2010.

Year ended December 31, 2010 compared to year ended December 31, 2009

During the year ended December 31, 2010, we had an average of 14.6 drybulk vessels in our fleet. During the year ended December 31, 2009, we had an average of 13.2 drybulk vessels in our fleet.

During the year ended December 31, 2010, we acquired the vessels Kanaris, a Capesize class vessel, Panayiota K, a Post-Panamax class vessel, and Venus Heritage, a Post-Panamax class vessel and sold Old Efrossini, a Panamax class vessel.

During the year ended December 31, 2009, we acquired the vessels Martine, a Post-Panamax class vessel, and Andreas K, a Post-Panamax class vessel.

Revenues

Revenues decreased by 5.2%, or $8.7 million, to $159.7 million during the year ended December 31, 2010 from $168.4 million during the year ended December 31, 2009, as result of the net effect of the following factors: (i) a decrease in the TCE rate for 2010 by 13.7% to $29,534, compared to $34,208 for 2009 due to the decrease in prevailing charter rates at which a number of our vessels were chartered and (ii) an increase in operating days for the year ended December 31, 2010 by 10.3% to 5,269 days, compared to 4,778 days for the year ended December 31, 2009 due to deliveries of the vessels Kanaris in March 2010, Panayiota K in April 2010 and Venus Heritage in December 2010 and the sale of Old Efrossini in January 2010.

Commissions

Commissions to unaffiliated ship brokers, other brokers associated with our charterers and our charterers during the year ended December 31, 2010 amounted to $2.7 million, a decrease of $1.1 million, or 28.9%, compared to $3.8 million during the year ended December 31, 2009, primarily due to the decrease in our revenues and to lower average contracted commissions, which were reduced to 1.68% from 2.25% for the years ended December 31, 2010 and 2009, respectively.

Vessel operating expenses

Vessel operating expenses increased by 17.9% to $23.1 million during the year ended December 31, 2010 from $19.6 million during the year ended December 31, 2009. This increase of $3.5 million reflects mainly: (i) the cost for repairs, maintenance and drydocking of $1.8 million, compared to $1.0 million, including three drydockings completed during 2010, of our vessels Marina, Pedhoulas Trader and Pedhoulas Merchant, compared to two drydockings completed during 2009, of our vessels Stalo, and Maritsa, (ii) crewing cost of $11.4 million, compared to $10.1 million primarily attributable to increased salaries paid to our crews and increased number of ownership days from 4,817 in 2009 to 5,326 in 2010, (iii) cost for lubricants of $2.8 million, compared to $2.5 million mainly due to increased number of operating days from 4,778 in 2009 to 5,269 in 2010 and increased lubricants prices and (iv) cost for spares, stores and provisions of $3.9 million, compared to $2.8 million due to increased use of spares for repairs, including one additional dry-docking and one additional vessel delivery, increased prices for stores and provisions and increased number of ownership days during the year ended December 31, 2010 and December 31, 2009, respectively.

Consequently, daily operating expenses, which represent the operating expenses per vessel per ownership day, increased by 6.6% to $4,342 during the year ended December 31, 2010 from $4,075 during the year ended December 31, 2009, as a result of the increase of vessel operating expenses by 17.9% partially offset by the 10.6% increase of ownership days, as described above.

Depreciation

Depreciation expense increased by 41.7% to $19.7 million during the year ended December 31, 2010, compared to $13.9 million during the year ended December 31, 2009, due to the increase in the average number of vessels from 13.2 during the year ended December 31, 2009 to 14.6 during the year ended December 31, 2010.

General and administrative expenses

General and administrative expenses remained stable at $7.0 million for the years ended December 31, 2010, and December 31, 2009.

Interest expense

Interest expense decreased by 37.9% to $6.4 million during the year ended December 31, 2010 from $10.3 million during the year ended December 31, 2009. The $3.9 million decrease in interest expense was mainly attributable to the decrease in the weighted average interest rate of our outstanding indebtedness to 1.39% p.a. for the year ended December 31, 2010 from 2.14% p.a. for the year ended December 31, 2009 due to lower prevailing LIBOR rates. The total loans outstanding as of December 31, 2010 amounted to $494.74 million compared to $471.2 million as of December 31, 2009.

Loss on derivatives

Loss on derivatives increased by $3.8 million to $8.2 million during the year ended December 31, 2010 from $4.4 million during the year ended December 31, 2009. The increase of $3.8 million reflects: (i) an increase in losses of $4.5 million from interest rate derivatives as a result of the realized loss and the mark-tomarket valuation of interest rate swap transactions to $8.0 million for the year ended December 31, 2010 compared to $3.5 million for the year ended December 31, 2009, and (ii) a decrease in losses of $0.7 million from foreign exchange derivatives, as a result of the decrease in the nominal value of the foreign exchange derivatives and movements of the rates of the currencies in which the derivatives contracts were denominated, to $0.2 million for the year ended December 31, 2010, compared to $0.9 million for the year ended December 31, 2009.

As of December 31, 2010, the aggregate notional amount of interest rate swap transactions outstanding was $638.0 million, compared to $452.5 million at December 31, 2009. The aggregate notional amount of interest rate swap transactions outstanding at December 31, 2010 is higher than the aggregate loans outstanding at December 31, 2010, of $494.7 million, as during the year ended December 31, 2010, we entered into four interest rate swap transactions relating to four outstanding loans, whereby the new interest rate swap transactions will become effective upon the expiration of the existing interest rate swap transactions relating to such loans. These swaps economically hedged the interest rate exposure of 98% of the Company’s aggregate loans outstanding as of December 31, 2010. The mark-to-market valuation of these interest rate swap transactions at the end of each period is affected by the prevailing comparable interest rates at that time.

Foreign currency gain/(loss)

Foreign currency gain was $0.3 million during the year ended December 31, 2010, compared to gain of $0.8 million during the year ended December 31, 2009. Foreign currency exchange gains resulted primarily from currency translation or currency conversion of loans denominated in foreign currencies. Following conversions during 2008 and the first quarter of 2009, none of our loans were denominated in foreign currency as of December 31, 2010.

Early redelivery income, net

During the year ended December 31, 2010, we recorded early redelivery income, relating to the early termination of period time charters of our vessels, of $0.1 million compared to $75.0 million early redelivery income during the year ended December 31, 2009. Early redelivery income during the year ended December 31, 2010 is analyzed as follows: (i) Maria was redelivered on August 24, 2010 instead of November 30, 2010, for which we paid compensation of $0.2 million, net of commissions, (ii) Katerina was agreed to be redelivered on January 15, 2011 instead of September 15, 2011, for which we recognized a cost of $1.5 million, consisting of cash compensation paid to charterer on April 7, 2010, net of commissions, (iii) Pedhoulas Merchant was redelivered on April 13, 2010 instead of November 5, 2010, for which we recognized income of $3.6 million, consisting of cash compensation paid by the relevant charterer on May 6, 2010 of $4.8 million, net of commissions, less $1.2 million representing the accrued revenue from the terminated period time charter contract, (iv) Pedhoulas Leader was redelivered on November 12, 2010 instead of September 30, 2011, for which we recognized a cost of $1.8 million, consisting all of cash compensation paid to the relevant charterer on May 6, 2010, net of commissions. Early redelivery income during the year ended December 31, 2009 is analyzed as follows: (i) Maritsa was redelivered on January 1, 2009 instead of January 13, 2009, for which we received compensation of $0.6 million, net of commissions, (ii) Old Efrossini was redelivered on March 15, 2009 instead of January 8, 2011, for which we recognized income of $29.1 million consisting of cash compensation received of $25.5 million, net of commissions, and $3.6 million representing the unearned revenue from the terminated period time charter contract, (iii) Katerina was redelivered

on June 26, 2009 instead of November 26, 2010, for which we recognized income of $22.3 million consisting of cash compensation paid by the relevant charterer on July 1, 2009 of $21.5 million, net of commissions, and $0.9 million representing the unearned revenue from the terminated period time charter contract, (iv) Maria was redelivered on June 28, 2009 instead of January 2, 2011, for which we recognized income of $20.0 million consisting of cash compensation paid by the relevant charterer on July 1, 2009 of $15.5 million, net of commissions, and $4.5 million representing the unearned revenue from the terminated period time charter contract, (v) Pedhoulas Leader was redelivered on July 19, 2009 instead of November 22, 2009, for which we received cash compensation of $2.7 million, net of commissions and (vi) Stalo was redelivered on July 20, 2009 instead of July 29, 2009, for which we received cash compensation of $0.2 million, net of commissions.

B.Liquidity and Capital Resources

As of December 31, 2011, we had $33.5 million in cash and restricted cash, of which $28.1 million consisted of cash and cash equivalents, and $5.4 million was long-term restricted cash. In addition, as of December 31, 2011, we had $50.0 million in a long-term floating rate note investment (for more information, please see Note 8 to our financial statements included at the end of this annual report). Against this investment we may borrow, under certain conditions, up to $40.0 million in cash.

As of December 31, 2011, we had aggregate debt outstanding of $484.3 million, of which $18.5 million was payable within the next 12 months. As of December 31, 2011, we had aggregate additional borrowing capacity of $178.9 million, consisting of $135.2 million available in undrawn or committed loan facilities and $43.7 million available under existing revolving credit facilities. The undrawn loan facilities consist of $24.0 million under a new credit facility for Panayiota K signed in 2010, $52.8 million under a new credit facility for Pelopidas signed in 2011 and $38.4 million under a new credit facility for Venus Horizon signed in 2011. In addition, in 2011 we accepted a commitment letter for a new credit facility for Hull No. 616 scheduled to be delivered in 2012, in the amount of $20 million, the documentation for which was concluded in February 2012. In February 2012, we accepted an offer letter from a bank for a new revolving credit facility of up to $18 million which will be utilized to finance the acquisition of one of the remaining newbuild vessels (see Note 23 to our financial statements included at the end of this annual report).

Our primary liquidity needs are to fund capital expenditures in relation to newbuild contracts, financing expenses, debt repayment, vessel operating expenses, general and administrative expenses and dividend payments to our stockholders. We anticipate that our primary sources of funds will be the existing cash and cash equivalents as of December 31, 2011 of $28.1 million, borrowings of $40 million against our long term floating rate note investment, additional undrawn or committed borrowing capacity of $178.9 million, cash from operations and possibly, additional indebtedness to be raised against seven unencumbered newbuild vessels upon their delivery and equity financing.

Our commitments for newbuilds of $259.7 million as of December 31, 2011 consisted of $150.9 million, payable in 2012, $38.2 million, payable in 2013 and $70.6 million, payable in 2014. These commitments represent the remaining installment payments for the delivery of ten newbuild vessels, six of which are scheduled to be delivered in 2012, one in 2013 and three in 2014.

We currently estimate that the contracted cash flow from operations, existing cash and cash equivalents, additional borrowing against our floating rate note investment, existing undrawn loan and revolving credit facilities and commitments and additional indebtedness secured by seven newbuild vessels which are currently unencumbered, will be sufficient to fund the operations of our fleet, including our working capital requirements, and the capital expenditure requirements through the end of 2012. However, during 2012 or 2013, we may seek additional indebtedness to partially fund our capital expenditure requirements in order to maintain a strong cash position. We may incur additional indebtedness secured by our other seven newbuild vessels upon their delivery which are currently unencumbered. To the extent that market conditions deteriorate, charterers may default or seek to renegotiate charter contracts, and vessel valuations may decrease, resulting in a breach of our debt covenants. In such case our contracted revenues may decrease and we may be required to make additional prepayments under existing loan facilities, resulting in additional financing needs. If we acquire additional vessels, our capital expenditure requirements will increase and we will need to rely on existing cash and time deposits, operating cash surplus and existing undrawn loan commitments. If we are unable to obtain additional indebtedness, or to find

alternative financing, we will not be capable of funding our commitments for capital expenditures relating to our contracted newbuilds. A failure to fulfill our commitment would generally result in a forfeiture of the advance we paid to the shipyard with respect to the contracted newbuild. In addition, we may also be liable for other damages for breach of contract. Examples of such liabilities could include payments to the shipyard for the difference between the forfeited advance and the amount that remains to be paid by us if the shipyard cannot locate a third-party buyer that is willing to pay an amount equal to the difference or compensatory payments by us to charter parties with whom we have entered into charters with respect to the contracted newbuilds. Such events could adversely impact the dividends we intend to pay, and could have a material adverse effect on our business, financial condition and results of operation.

We have paid dividends to our stockholders each quarter since our initial public offering in June 2008, including an aggregate amount of $41.8 million over four consecutive quarterly dividends, each in the amount of $0.15 per share, payable during 2011. We also declared a dividend of $0.15 per share, payable on February 29, 2012, to our shareholders of record on February 24, 2012. Our future liquidity needs will impact our dividend policy. We currently intend to use a portion of our free cash to pay dividends to our stockholders. The declaration and payment of dividends, if any, will always be subject to the discretion of our board of directors. The timing and amount of any dividends declared will depend on, among other things: (i) our earnings, financial condition and cash requirements and available sources of liquidity, (ii) decisions in relation to our growth strategies, (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends, (iv) restrictive covenants in our existing and future debt instruments and (v) global financial conditions. Dividends might not be paid in the future.

Cash Flows

Cash and cash equivalents decreased to $28.1 million as of December 31, 2011, compared to $65.3 million as of December 31, 2010. We consider highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are primarily held in U.S. dollars.

Net Cash Provided by Operating Activities

Net cash provided by operating activities amounted to $107.2 million in 2011, consisting of net income after non-cash items of $114.4 million plus an increase in working capital of $7.2 million. Net cash provided by operating activities amounted to $118.1 million in 2010, consisting of net income after non-cash items of $109.6 million plus a decrease in working capital of $8.5 million. Net cash provided by operating activities amounted to $211.3 million in 2009, consisting of net income after non-cash items of $195.1 million plus a decrease in working capital of $16.2 million.

Net Cash Used in Investing Activities

Net cash flows used in investing activities were $125.9 million for the year ended December 31, 2011 compared to net cash flows used in investing activities of $131.7 million for the year ended December 31, 2010. The decrease in cash flows used in investing activities of $5.8 million from 2010 is mainly attributable to the net effect of the following factors: (i) a decrease in our net bank time deposits by $35.0 million during the year ended December 31, 2011, compared to a decrease of $22.8 million during the same period in 2010 and (ii) a decrease of $31.5 million in payments for vessel acquisitions and advances for vessels under construction during the year ended December 31, 2011 due to our acquisition of two new vessels, Venus History in September, and Pelopidas in November, while during the year ended December 31, 2010, we acquired three new vessels, Kanaris in March, Panayiota K in April and Venus Heritage in December, 2010 and (iii) proceeds from sale of vessels, amounting to $32.2 million in 2010 due to the sale of the Old Efrossini; no vessels were sold in 2011.

Net cash flows used in investing activities were $131.7 million for the year ended December 31, 2010 compared to net cash flows used in investing activities of $191.9 million for the year ended December 31, 2009. The decrease in cash flows used in investing activities of $60.2 million from 2010 is mainly attributable from the following factors: (i) investment in a 5 year floating rate note of $50 million in 2009, compared to no new long term investments in 2010, (ii) a decrease in our net bank time deposits by $22.8 million during the year ended December 31, 2010, compared to an increase of $36.6 million during the same period in 2009 and (iii) proceeds of $32.2 million during

the year ended December 31, 2010 from the sale of Old Efrossini on January 7, 2010, compared to no sales of assets during the year ended December 31, 2009 and (iv) a partial offset caused by an increase of $60.9 million to $192.4 million from $131.5 million in vessel acquisitions and advances for vessels payments during the year ended December 31, 2010 due to our acquisition of three new vessels, Kanaris in March, Panayiota K in April and Venus Heritage in December, while during the year ended December 31, 2009, we acquired two new vessels, Martine in February and Andreas K in September.

Net Cash (Used in)/Provided by Financing Activities

Net cash flows used in financing activities were $18.5 million for the year ended December 31, 2011, compared to net cash flows provided by financing activities of $60.1 million for the year ended December 31, 2010. This increase of $78.6 million compared to 2010 is largely attributable to a decrease of $35.4 million in proceeds from the issuance of common stock, an increase in long-term debt principal payments of $43.5 million, an increase in long-term debt proceeds of $9.5 million an increase in payments of deferred financing costs of $5.4 million and an increase in dividends paid of $4 million.

Net cash flows provided by financing activities were $60.1 million for the year ended December 31, 2010, compared to net cash flows used in financing activities of $28.7 million for the year ended December 31, 2009. This increase of $88.8 million, compared to 2010 is largely attributable to an increase of $75.0 million in proceeds from the issuance of common stock, an increase in long-term debt principal payments of $13.0 million, an increase in long-term debt proceeds of $32.5 million and an increase in dividends paid of $5.1 million.

Credit Facilities

We operate in a capital intensive industry which requires significant amounts of investment, and we fund a portion of this investment through long-term bank debt. Our subsidiaries have generally entered into individual credit facilities in order to finance the acquisition of the vessels owned by these subsidiaries and for general corporate purposes. The durations until maturity of our 16 credit facilities outstanding on December 31, 2011, ranged from four to 12 years, and they are generally repaid by semiannual principal installments and a balloon payment for 13 out of 15 of them, due on maturity except for the Maxdeka and Shikoku loan facilities, which are repayable in semi-annual installments. We generally pay interest on these facilities which bear interest at LIBOR plus a margin, except for the Maxdeka and Shikoku loan facilities, under which a portion of the principal amounts bear interest at the Commercial Interest Reference Rate published by the Organization for Economic Co-operation and Development (“OECD”) applicable on the date of signing of the relevant loan agreements. The obligations under our credit facilities are secured by, among other types of security, first priority mortgages over the vessels owned by the respective borrower subsidiaries, first priority assignments of all insurances and earnings of the mortgaged vessels and guarantees by Safe Bulkers, Inc.

During 2011, we drew down loans totaling $84.0 million and we repaid $94.5 million of our indebtedness. As of December 31, 2011, we had 16 outstanding credit facilities with a combined outstanding balance of $484.3 million. These debt facilities have maturity dates between 2015 and 2023. For a description of our debt facilities as of December 31, 2011, please see Note 7 to our financial statements included at the end of this annual report. During 2012, we plan to repay approximately $18.5 million of our long-term debt outstanding as of December 31, 2011. During 2011, we entered into a new credit facility in the amount of $52.8 million for Pelopidas and we entered into a new credit facility in the amount of $38.4 million for Venus Horizon. Additionally, during 2011, we accepted a commitment letter from a bank for a credit facility for up to $20.0 million, which will be used for the financing of the acquisition of Hull No. 616, the documentation for which was concluded in February 2012. This credit facility will be made available after delivery from the shipyard of Hull No. 616. Additionally, during February 2012, we accepted a commitment letter from a bank for a credit facility for up to $18.0 million, which will be used for the financing of the acquisition of Hull No. 631. For more information regarding these credit facilities, please refer to Notes 10(b) and 23(b) of the financial statements included at the end of this annual report.

Covenants under Credit Facilities

The credit facilities impose operating and financial restrictions on us. These restrictions in our existing credit facilities generally limit our subsidiaries’ ability to, among other things, and subject to exceptions set forth in such credit facilities:

·pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends;

·enter into certain long-term charters;

·incur additional indebtedness, including through the issuance of guarantees;

·change the flag, class or management of the vessel mortgaged under such facility or terminate or materially amend the management agreement relating to such vessel;

·create liens on their assets;

·make loans;

·make investments;

·make capital expenditures;

·undergo a change in ownership or control or permit a change in ownership and control of our Manager;

·sell the vessel mortgaged under such facility; and

·permit our chief executive officer to change.

Our existing credit facilities also require certain of our subsidiaries to maintain financial ratios and satisfy financial covenants. Depending on the credit facility, certain of our subsidiaries are subject to financial ratios and covenants requiring that these subsidiaries:

·ensure that the market value of the vessel mortgaged under the applicable credit facility, determined in accordance with the terms of that facility, does not fall below 110% to 120%, as applicable, of the outstanding amount of the loan (the “Minimum Value Covenant”);

·ensure that outstanding amounts in currencies other than the U.S. dollar do not exceed 100% or 110%, as applicable, of the U.S. dollar equivalent amount specified in the relevant credit agreement for the applicable period by, if necessary, providing cash collateral security in an amount necessary for the outstanding amounts to meet this threshold; and

·ensure that we comply with certain financial covenants under the guarantees described below.

In addition, under guarantees we have entered into with respect to certain of our subsidiaries’ existing credit facilities, we are subject to financial covenants. Depending on the guarantee, these financial covenants include the following:

·our total consolidated liabilities with the relevant bank divided by our total consolidated assets must not exceed 70% or 80% as the case may be (“Consolidated Leverage Covenant”). The total consolidated assets are based on the market value of our vessels and the book values of all other assets, on an adjusted basis as set out in the relevant guarantee;

·the ratio of our aggregate debt to EBITDA must not at any time exceed 5.5:1 on a trailing 12 months’ basis (“EBITDA Covenant”);

·our net consolidated worth (total consolidated assets less total consolidated liabilities) (“Consolidated Net Worth Covenant”) must not at any time be less than $150.0 million, $175.0 million or $200.0 million, as the case may be, with the relevant bank;

·payment of dividends is subject to no event of default having occurred;

·maintenance of minimum free liquidity of $500,000 is required on deposit on a per vessel basis for five vessels; and

·a minimum of 51% of the Company’s shares shall remain directly or indirectly beneficially owned by the Hajioannou family for the duration of the relevant credit facilities.

As of December 31, 2011, the Company was in compliance with all debt covenants with respect to its credit facilities.

Interest Rate Swaps

We have entered into interest rate swap agreements converting floating interest rate exposure into fixed interest rates in order to economically hedge our exposure to fluctuations in prevailing market interest rates. For more information on our interest rate swap agreements, refer to Note 13 to our financial statements included at the end of this annual report.

C.Research and Development, Patents and Licenses

We incur from time to time expenditures relating to inspections for acquiring new vessels that meet our standards. Such expenditures are insignificant and they are expensed as they are incurred.

D.Trend Information

Our results of operations depend primarily on the charter hire rates that we are able to realize, and the demand for drybulk vessel services. After reaching historical highs in mid-2008, charter hire rates for Panamax and Capesize drybulk vessels reached near historically low levels. For example, the Baltic Drybulk Index, or “BDI,” declined from a high of 11,793 in May 2008 to a low of 663 in December 2008, which represents a decline of 94% within a single calendar year. During 2011, the BDI remained volatile, reaching a low of 1,043 on February 4, 2011 and a high of 2,173 on October 14, 2011. On February 3, 2012, the BDI reached a 26 year low of 647, due to a combination of weak demand and further growth in vessel supply. As of February 24, 2012, the BDI was 718.

The decline and volatility in charter rates in the drybulk market reflects in part the fact that the supply of drybulk vessels in the market has been increasing, and the number of newbuild drybulk vessels on order is near historic highs. Demand for drybulk vessel services is influenced by global financial conditions. The recovery in China and India positively influenced the charter rates; however, global financial conditions remain volatile and demand for drybulk services may decrease in the future. The combination of increasing drybulk capacity (both current and expected) and decreasing demand or demand which is not offset by the increase in drybulk capacity is likely to result in reductions in charter hire rates and, as a consequence, adversely affect our operating results.

In response to the volatile market conditions, we seek to strengthen our charter coverage. Currently, 15 of our 20 vessels are employed or scheduled to be employed in period time charters of more than three months. Additionally, we believe we have structured our capital expenditure requirements, debt commitments and liquidity resources is a way that will provide us with financial flexibility (see “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources” for more information).

E.Off-Balance Sheet Arrangements

As of December 31, 2011, we did not have any off-balance sheet arrangements.

F.Contractual Obligations

Our contractual obligations as of December 31, 2011 were:

	Total		Less than 1 year (2012)		1-3 years (2013-2014)		3-5 years (2015-2016)		More than 5 years (After January 1, 2017)
	(Dollars in thousands)
Long-term debt obligations	$	484,291	$	18,486	$	55,321	$	101,032		$	309,452
Interest payments (1)	$	69,962	$	16,834	$	23,877	$	15,328			13,923
Payments to our Manager (2)	$	16,794	$	10,661	$	6,133		—			—
Newbuild contracts	$	251,837	$	146,515	$	105,322		—			—
Total	$	822,884	$	192,496	$	190,653	$	116,360		$	323,375

(1) Amounts shown reflect estimated interest payments we expect to make with respect to our long-term debt obligations and interest rate swaps. The interest payments reflect an assumed LIBOR-based applicable interest rate of 0.8080% (the six-month LIBOR rate as of December 31, 2011), plus the relevant margin of the applicable credit facility and the estimated net settlement of our interest rate swaps. See “—B. Liquidity and Capital Resources—Interest Rate Swaps.”

(2) Represents a fee of $700 per vessel per day and 1.25% of estimated charter hire based on charter agreements in place as of December 31, 2011, based on the management fees effective as of May 29, 2011. In addition, it includes amounts payable to our Manager in respect of the commission of 1.0% of the contract price of our newbuilds and $550,000 per newbuild for the on-premises supervision of newbuilds, of which 50% is payable upon the signing of the relevant supervision agreement, and 50% upon successful completion of the sea trials of each newbuild, we have agreed to acquire pursuant to shipbuilding contracts, memoranda of agreement or otherwise. The levels of the above mentioned fees are subject to adjustment every year and will be agreed upon between us and our Manager. The fees shown in the table above do not take into account any potential future changes to the fees.

Part III

ITEM 19. EXHIBITS

Exhibit Number	Description
12.1	Certification of principal executive officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended
12.2	Certification of principal financial officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended

SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Amendment No. 3 to its Annual Report for the fiscal year ended December 31, 2011 on its behalf.

July 6, 2012

By /s/ KONSTANTINOS ADAMOPOULOS

Name: Konstantinos Adamopoulos
Title: Chief Financial Officer and Director

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