Greetings, and welcome to the Diana Shipping, Incorporated 2009 year-end conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Edward Nebb, IR Advisor for Diana Shipping. Thank you, Mr. Nebb, you may begin.

Thanks, Rob. Greetings, everyone. This is Ed Nebb. I want to welcome you to the Diana Shipping, Inc 2009 fourth quarter and year-end conference call. The members of the Diana Shipping management team who are with us today include Mr. Simeon Palios, Chairman and Chief Executive Officer; Mr. Anastassis Margaronis, President; Mr. Andreas Michalopoulos, Chief Financial Officer; Mr. Ioannis Zafirakis, Executive Vice President and Secretary; and, Ms. Maria Dede, Chief Accounting Officer. Before management begins their remarks, let me briefly summarize the Safe Harbor notice, which you can see in its entirety in the release we issued earlier today. Certain statements made during this conference call, which are not statements of historical fact are forward-looking statements and are made pursuant to the Safe Harbor Provisions of Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on assumptions, expectations, projections, intentions, and beliefs as to future events that may not prove to be accurate. For description of the risks, uncertainties, and other factors that may cause future events to differ materially for what is expressed or forecasted in our forward-looking statements, please refer to the company's filings with the Securities and Exchange Commission. And with that, let me turn the call over to Mr. Simeon Palios, Chairman and Chief Executive Officer of Diana Shipping, Inc.

Thank you. Good morning, and thank you for joining us today. It has now been nearly five years since the IPO of Diana Shipping, Inc in March 2005. Since that time and in spite of the recent challenging and uncertain economic environment, we have consistently delivered profitable results each and every quarter. I'm proud to report that this was again the case for the fourth quarter and year 2009. At the same time, we have maintained a staff focused on our strategy to create and enhance shareholder value. We have expanded our fleet, managed our time charter operations to produce the desired revenues, build relationships with high quality charterers, and to establish a strong balance sheet to support our growth and avoid the risk of excessive leverage. One of the most significant events of recent months was the delivery in January 2010 of the Melite, a 2004-built Panamax dry bulk carrier of 76,136 tons deadweight, purchased at the price of $35.1 million. This was the first vessel purchase under our previously announced investment program, whereby we will take advantage of the growth opportunities presented during the low phase of the shipping cycle. We're excited about the potential for this program, which is designed to create shareholders' value through purchases of attractive-priced vessels during the next 18 to 24 months in accordance with our technical and age profile standards. Now, I would like to point out some of the other highlights of our recent performance, then the members of our senior management team will review our market outlook and discuss the financial results in greater detail. Net income was $27.6 million for the fourth quarter of 2009, and there – $121.5 million for the full year. Voyage and time charter revenues totaled $58.6 million for the fourth quarter of 2009 and…

Thank you, Simeon, and a warm welcome to all who have honored us by participating in this morning's conference call. Last year will go down in shipping history as one of the most volatile years in recent times. The bulk dry rate started the year at 773 points, to end it 3,005, having gone up 4,661 on the 19th of November last year. The question that is keeping most international economists and shipping analysts busy nowadays is, "Where do we go from here?" The OECD increased its 2010 forecast for economic growth for the world's leading developed economies. The OECD 30 members are now predicted to grow 1.9% in 2010, compared to an anemic 0.7% growth forecast made back in June 2009. In 2011, the same organization expects growth to accelerate to 2.5% per annum. So with this relatively favorable climate in world economic activity, let us look at individual commodities and how they are expected to contribute to the absorption of an ever-increasing world bulk carrier fleet. Starting with steel production, during 2009, global steel production held by 110 million tons or 8.5%. Chinese steel production increased by 67 million tons or 13.5%, while Chinese iron ore imports rose by a massive 183 million tons or 41% to reach 627 million tons. As a result, despite unprecedented polls and imports by the European Union and Japan, global (inaudible) trade in iron ore actually increased by approximately 70 million tons or 8%. This pattern was followed in several other trades, most notably coal. We agree with Clarkson's and Howe Robinson that it is extremely difficult to judge just how robust and sustained the recovery in OECD production will be this year. The conservative estimates placed Japan and European Union to using steel at the levels seen during 2002. As regards…

Thank you, Stacey, and good morning. I'm pleased to be discussing today to you Diana's operation results for the fourth quarter and year ended December 31st, 2009. Fourth quarter 2009, net income for the fourth quarter of 2009 amounted to $27.6 million, and the earnings per share of Diana Shipping amounted to $0.34. Volumes in time charter revenues decreased to $58.6 million, compared to $84.3 million in 2008. The decrease is attributable to decreased average hire rates. The decrease in voyage and time charter revenues was partly offset by the revenue earned by motor vessel Houston, which was delivered in October 2009. Ownership days were 1,813 for the fourth quarter of 2009, compared to 1,748 for 2008. This utilization was 98.9% in the fourth quarter of '09 and 98.6% in 2008. The daily time charter equivalent rate for the fourth quarter of 2009 was $31,003, compared to $45,824 for 2008. Voyage expenses were 2.9 million for the quarter. Operating expenses amounted to $11.3 million and increased by 14%. The increase is attributable to the addition of motor vessel Houston in the fleet in October 2009, and to increases in old cost factories about the effect of decreased insurance costs. Daily operating expenses were $6,238 for the fourth quarter of 2009, compared to $5,675 in 2008. Depreciation and amortization of deferred charges amounted to $11.7 million for the fourth quarter of 2009. General and administrative expenses increased by $1.7 million or 55% for the fourth quarter 2009 to $4.8 million, compared to $3.1 million in 2008. The increase is mainly attributable to increased gas (inaudible) and competition costs from the this liquid stock. Interest and finance costs decreased to $0.9 million for the quarter, compared $1.5 million in 2008 due to lower average interest rates. For the year ended December 31st,…

Thank you. We’ll now be conducting the question and answer session. (Operator Instructions) One moment please while we poll for questions. Thank you. Our fist question is from the line of Jon Chappell with J.P. Morgan Chase. Please go ahead with your question. Jon Chappell – J.P. Morgan Chase: Thank you. Good afternoon, guys.

Hi.

Hi, Jon. Jon Chappell – J.P. Morgan Chase: My first question has to do with the thought process behind the investment in the containership business. I know that wasn’t addressed in the prepared remarks and this probably isn’t the time to talk about the supply and demand of containers. But can you just talk about the returns that you foresee at this point of the cycle, and if these asset prices in container's relative to what you’re seeing in your core dry bulk fleet?

Thank for your question. We are in the process of closing it. We cannot go into details because it is a private transaction. Jon Chappell – J.P. Morgan Chase: Okay. I’m not sure if you can answer this then, but can you explain this a little bit, the management role in this new venture from the current management team in Diana?

Well at this point, we cannot disclose anything further than that. Jon Chappell – J.P. Morgan Chase: Okay. If I can move on then to the dry bulk side, after Stacey’s uplifting view on the market, how much further do you think asset prices can go down if the environment plays out that you’re expecting? Do you think that we’ve passed the bottom or can asset prices go below the trough that we saw about 12 months ago?

Well, I think that the save and purchase market is directly governed by the freight market. So if the freight market has to be depressed, then the values have to be depressed also. Jon Chappell – J.P. Morgan Chase: And when you think about the freight market, would you think about the next six quarters? Do you think that the first half of this year might be a little bit stronger than this pressure that you foresee with the over capacity will really be a second half of 2010 story, and maybe the first half of 2011?

Well, I think that Stacey was very explicit to give you a number of assumptions, which we are making. It depends entirely to whether the assumptions or the analysts, and everybody concerned have the right assumptions or the wrong assumptions. So it’s almost impossible to predict. Jon Chappell – J.P. Morgan Chase: Okay. And then finally, I know that you want to pursue a growth strategy, but if you have – if the prices were to fall significantly and if you compare where you think that they may go relative to where you purchased assets over the last few years, would it make sense to sell at current prices, which may be far more robust than what you can buyback at in the future?

Not really because we have so much cash available to do our scheme that we don't need to sell vessels to buy ships. So we will be waiting when the market really moves up to try and sell the older units. Not now. Jon Chappell – J.P. Morgan Chase: Okay. Thanks very much, Simeon.

Thank you.

Thank you. Our next question is from the line of Gregory Lewis with Credit Suisse. Please go ahead with your question. Gregory Lewis – Credit Suisse:

Greg, this is Ioannis. How are you doing? Gregory Lewis – Credit Suisse: Good. Good.

Greg, as we have said in the past, we have to keep consistent to be consistent with our portfolio abroad. Every time we have to fix a vessel, we have to see where this vessel is about to be – to re-open for re-chartering based on the total fixer of fleet. So you understand that we cannot say that today we’re going to go spot or we‘re going to go for two or three years. It depends on the time we are going to fix a vessel each time. We will place it accordingly in the portfolio of the total number of vessels that we have. If we do what you say, and spot the three of them, then it’s like taking a position that the market is going to get better after these charters are going to finish. It’s something that we don't want to do. We are in a fortunate position to be able to have a certain strategy in our chartering policy [ph], and this is what we do. Gregory Lewis – Credit Suisse: Okay. Great. So then when you think about the portfolio, do you have a target or duration for the portfolio, or is that something that you don't really think about?

Basically, we want to have a vessel to charter as often as possible in order to get the average of the market at least. Gregory Lewis – Credit Suisse: Okay. Great. And then my last question would be related to the SG&A expense. It looks like it spiked up a few hundred thousand dollars in Q4 versus Q3. Was that related to the containership – work around the containership joint venture?

No. Actually, not really. It’s a mix of things for the SG&A. The bulk of it is the compensation committee decision to have some consultation talks awarded to the company staff. And that’s the major bulk of this SG&A spike in the fourth quarter. Gregory Lewis – Credit Suisse: Okay, Andreas. And related to that, and I don't know if you can talk about that either, but when you think about SG&A related to the containership joint venture, should we anticipate that being maybe a few hundred thousand dollars in Q1?

This will be basically, according to the percentage that Diana Shipping Inc will have in this new company. So you should budget accordingly. Of course, we will pay with the SG&A that are according to the percentage that we have. Yes, you should budget that. Gregory Lewis – Credit Suisse: Okay.

We can't go further into more details, but this – well be aware of that soon as this thing materializes. Gregory Lewis – Credit Suisse: Okay. Great. Thank you very much.

You’re welcome.

Our next question is from the line of Scott Burk with Oppenheimer & Company. Please go ahead with your question, sir. Scott Burk – Oppenheimer & Company: Hi. Good afternoon, guys.

Hi, Scott. Scott Burk – Oppenheimer & Company: I wanted to ask you a question about your total capacity for acquisitions. Obviously, we know about the cash in your balance sheet. But when you look at the cash we expected to generate and the debt availability that you have, what’s your total capacity for acquisition?

Well, actually at the moment, at the end of the year as you can see, we have an excess of $280 million on our balance sheet in cash. Now, we have financed the new motor vessel Melite that we have bought at the beginning at the year. That was delivered at the beginning of the year, 100% with our revolving credit facility from RBS. Remaining from this revolving credit facility is therefore, after this finance, $50 million. Taking into account the fact that the mortgaged vessels are only 11 out of the fleet on this facility. Now, having said that, we have two loans, one with Bremer Landesbank, for motor vessel Houston that was drawn down $40 million, and another one with Deutsche Bank that we intend to draw down from motor vessel New York of another $40 million. So what we foresee as a capacity is from $500 million to $700 million in acquisition capacity. Scott Burk – Oppenheimer & Company: Okay that’s a – yes, that’s from what’s where I’m coming in. Then you have cash on top of that. So do you think that – you talked about doing (inaudible) nine, acquiring nine vessels. It seems like there may be more – potential to buy even more than that, that's what I’m getting at?

Of course, of course. There are most probably – not most probably as surely more than nine vessels. We don't give a figure. We prefer not to give a figure because you understand that will be according to the good average that we will have around the bottom of that market acquiring vessels over the next 24 months as we’ve said in a steady and diligent way around what we feel is going to be the lowest end of the market. So for sure, putting a number would be wrong because it depends on many things, size, type of vessels, price – second key prices at that time, chartering market, et cetera, et cetera. Scott Burk – Oppenheimer & Company: Okay, okay. And then, I want to shift gears and ask you about – a lot of headlines recently about the problems with the – the government debt problems in Greece, the government debt, whatever. I just wanted to ask you, is there any impact on Diana’s operations either in terms of revenue, costs or loan availability? And what kind of impact might that have on Diana?

No. The operation here has very little to do with the Greek government and its finances. We do not rely on any financing change locally for any appreciable expense, nor do we foresee the tax situation to change imminently affecting our operations from Greece. So all in all, well the only effect that we see the Greek government debt situation having on shipping is essentially what we mentioned earlier, the general approach and view of investors towards the government debt. If that generally deteriorates, obviously, it’s going to affect growth, and true growth will affect the demands for the transportation of commodities of all kinds, including raw materials. So that is the indirect effect that we can see the Greek government debt problems having on our operations and nothing more for the time being. Scott Burk – Oppenheimer & Company: Okay. And Stacey, I guess one more for you, just say – you talked about a lot of the broker outlook and what nots for the supply and demand? I was just wondering in the last month or two, it seems there have been a shift towards sentiments that Chinese – with Chinese government tightening financing that there may be a slowdown in demand in China. I was just wondering if you guys are seeing anything specifically with your ships where there’s been a decreased level of shipments to China or near term impact from that tightening.

For the time being, we haven't seen anything, which is at least capable of being ascribed to such tightening. Our feeling is that any effects on tightening will initially hit the domestic market. And the spillover effects on international shipping trade will be – will take a bit longer to develop if the tightening prevails or increases for the next few quarters. So for the time being, we haven't seen many effects. Scott Burk – Oppenheimer & Company: Okay. Thank you very much.

You’re welcome.

(Operator Instructions) The next question is from Michael Weber with Deutsche Bank. Please go ahead with your question. Michael Weber – Deutsche Bank: Hi. Good morning, guys. How are you?

Hi. How are you? Michael Weber – Deutsche Bank: Good. Just a handful of questions I have on your acquisition strategy, obviously, you guys are looking to average down to over about two years. How exactly do you think current asset values? And is there one specific asset value that you might see better value over the near term?

Well I do want to speak to what we know, namely the Panamax, the Capes, and perhaps we could go to the (inaudible) and the Capes, to the 210,000 tons. Michael Weber – Deutsche Bank: Interesting. With regards to the Panamax, everything near term, would you consider buying one that was a little bit more expensive than the Melite or are you looking to average down from there?

Yes. Yes, because it fits our requirement and the strategy, which we have in mind, yes. Michael Weber – Deutsche Bank: Okay. So you would buy one potentially that made more sense?

We would if we have to. Michael Weber – Deutsche Bank: Okay. Looking at the potential to lever up, and you guys mentioned that you guys have nine vessels that are unencumbered right now. When you've had conversations around potential financing, would you look to mortgage all of those vessels? Would you look to leave some of them, send them off for this facility? And I guess, what kind of financing is available for you right now?

This will be done in a steady manner to mortgage the vessels, you understand that? As we’ve said in the past, if banks are there to lend to somebody, they're there to lend to Diana Shipping because of the strategy that we have followed because of our balance sheet and because of our basically operational reputation. So yes, banks are here to lend. The best example is actually the m/v Houston that was – that we took a brand new facility for that project with a German bank named Bremer Landesbank. The other example is the motor vessel New York that we are about to get delivery of, whereby we also have a brand new facility in place, which we're going to activate as soon as we get delivery. So yes, banks are there. And yes, our intent is to use, as we've said in Scott Burk’s question, our fire power to basically have our strategy be implemented that these are the acquisitions along the next 24 months.

For the time being, we feel that the most efficient way to finance our positions is on a singular vessel basis because revolving credit facilities, as you probably are aware, are not offered either at all or by no means at competitive terms. We are not looking for anything as large as that for the time being, but we’ll take advantage of a debt as it is offered on the most competitive terms. For the time being, this is the source of debt that we have tapped, and we feel there is more there to be offered to our company on a ship-by-ship basis. Michael Weber – Deutsche Bank: Okay. Now, that’s helpful. With regards to New York, I think within our lease and (inaudible) it can be delivered as late as second quarter. Do you have any more specific color on when you would anticipate that being delivered in maybe a month or around the back end of the quarter?

Yes. The vessels had successful trials about a week ago. There was no problem whatsoever on the ship. And at the moment, she is getting ready to be delivered the first week of March, which is next month. And of course, simultaneously, she will be delivered with the charterer in waiting. Michael Weber – Deutsche Bank: Okay. That’s really helpful. And finally, I know you guys take the portfolio approach and might have diversified the charters you got on your fleet. When you look at the longer periods charters, how liquid is that market right now, specifically within the three to maybe in five years? And then when you look at to your case, is there business being done in this markets right now? At what kind of discount would you (inaudible)?

Well, today you can charter a vessel like a Cape of approximately $180,000 for three months – for three years. The rate, which you can achieve, provided, of course, it’s fairly early delivery, you can get approximately $30,000 daily, which is not a bad rate. Michael Webber – Deutsche Bank: You think there’s any activity longer than three years, anything in the four to five years?

Yes, you can go longer than that, but maybe you have to reduce slightly the rate. Michael Webber – Deutsche Bank: That is all I have. Thanks for (inaudible).

Thank you.

Thank you. Our next question is coming from the line of Rob MacKenzie with FBR Capital Markets. Please go ahead with your question, sir. Rob MacKenzie – FBR Capital Markets: Good afternoon.

Good afternoon.

Hi. Rob MacKenzie – FBR Capital Markets: I guess the last question I have last – one or two is you guys have historically gone with a ship-to-ship strategy among your – particularly among your Panas and I guess also among most of your Capes trying to standardize and keep down costs. How do you think about managing that approach to cost management through an acquisition strategy, which necessarily seems to entail buying runoff ships as they present themselves with attractive values?

Well, bear in mind that most of the machinery of the Panamax, whether they are built in Jiangnan or in Hyundai, or in any other major ship builder, are the same. So we have no engines, main engines have apart from (inaudible), all of them are the same. Maybe the size is bigger, but that’s all. The auxiliary engines and the generators are the same, and the main engines are the same. So it’s not very much difference even if they are not called sister ships. Rob MacKenzie – FBR Capital Markets: Okay, that’s helpful. And as a follow up to that, you guys have stated you desire to consistently buy over a multi-quarter period here, do you see the possibility of seeing a handful of ships come in at one or more opportunities as opposed to runoff acquisitions here and there?

Yes, there is a possibility that they will see a large number of ships similar or dissimilar offering themselves for sale and for us to purchase. We will try and avoid the temptation to buy too many ships at once so as not to ruin the averaging process that we have set that they need to follow until the end of 2011 to the early 2012. So the answer is – to your question is that, yes, we might be buying more than one ship. It’s unlikely we will be buying, let’s say, more than five ships in one time, so very unlikely. Rob MacKenzie – FBR Capital Markets: Okay. Thanks. And I’d like to go back I guess to Stacey's introduction in terms of the macro environment according to different broker estimates, I wonder, Stacey, if you could give us a color – a little more color, which side of the spectrum you lean on and what would – what events do you think might cause your expectations to vary from what you currently think?

For the main events, first of all, we lean towards the predictions offered by Howe Robinson on their assumptions, which I think needs a bit more time maybe in presenting, which in other words, shows an over challenging effect towards the end of this year, early next in the Capesize sector, and not so bad in the Panamax. And we believe that puts great pressure on rates, unless we have demands increasing by more than anticipated. In other words, more than 120 million or so extra million tons of cargo. Now, what could go wrong, as mentioned again, the double deep scenario as far as world economic growth is concerned would certainly ruin the predictions and make them even worse, and even anemic growth worldwide is going to be harmful to the freight market. So those are our main concerns on the demand side. Rob MacKenzie – FBR Capital Markets: Okay. Thanks, I’ll turn it back.

Thank you. Our last question is coming from the line of Anders Rosenlund with ABG SC. Please go ahead with your question. Anders Rosenlund – ABG SC: Thank for taking my question. My first question is regarding the operating expenses, which are (inaudible) earnings about $8,000 a day. Could you give us some guidance or indication where you think that operating expense be going forward, preferably on the Capes and Panamax?

Yes, hi, this is Andreas. The daily operating expenses for the year was – were as you mentioned, $5,110. And they were split evenly between Capes and Panamax. That is the same number basically that came out between Capes and Panamax. Next year, we would foresee the usual increase of about 3% to 4% evenly against for Capes and Panamax. That’s what I would budget if I were you. You must take into account the tax that – though between the quarters you have differences in the daily operating expenses mainly due to the crew, that gets – it increases either the – typically during the third quarter, but sometimes during the fourth quarter, and this is retroactively for the year. So you must take yearly figures when you make – when you put them in your models, and check when the increases come more or less. Anders Rosenlund – ABG SC: Excellent. I have a follow up as well. What do you think about the Cape and Panamax spread going forward?

I would foresee that it will remain evenly spread for the simple reason that Panamax are typically slightly older vessels for the moment at least. And therefore, that’s why they are – the costs are evenly spread between Panamax and Capes mainly because Panamax are basically slightly older. Anders Rosenlund – ABG SC: But in terms of these equivalent spot rates development, the market spread one–?

Are you talking about charter rates? Anders Rosenlund – ABG SC: Yes, sorry.

Well, the fall easy routes to date for the Capes are standing at $32,500 a day, the Panamax are standing at $25,800 a day. It was this huge. Andres, would you like to – when we have the market that's going down, the spread is getting smaller and smaller. And if we reach the level where we have depressed charter rates, then there may not even be any kind of spread there.

Especially, if you take into account the rates of the new building deliveries during 2010 on Panamax and Capes. Anders Rosenlund – ABG SC: Yes. I see. I totally agree with you. But your comment about the investing potentially in even larger vessels, how does that compare with–?

You see, Anders, that has nothing to do with the revenue of those vessels about flat. This is going to be through marketplace. It’s going to do with the revenues of the vessel in the future and the values of our vessel. The bigger the vessel, the more volatile it is in the price and the charter rate, so you are aiming for the future of that. It has nothing to do with the revenues. We are in the fortunate position to have revenues from the other vessels. Anders Rosenlund – ABG SC: Okay. That answered my question. Excellent. Thank you very much.

Thank you.

Welcome.

Thank you. At this time, I would like to turn the floor back over to Mr. Palios for closing comments.

So thank you again for your interest in and support of Diana Shipping. We are committed to actively pursuing opportunities to enhance shareholder value through our strategies in the coming year. And we look forward to speaking with you in the months ahead. Thank you.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.