Form 20-F
DIANA SHIPPING INC. - DSX
Filed: April 13, 2006 (period: December 31, 2005)
Registration of securities of foreign private issuers pursuant to section 12(b) or (g)
Table of Contents
PART I.
...... 4
Item 1. Identity of Directors, Senior Management and Advisers...... 4
PART I.
...... 4
Item 2. Offer Statistics and Expected Timetable...... 4
PART I.
...... 4
Item 3. Key Information...... 4
PART I.
...... 4
Item 4. Information on the Company...... 6
PART I.
...... 4
Item 5. Operating and Financial Review and Prospects...... 28
PART I.
...... 4
Item 6 Directors, Senior Management and Employees...... 40
PART I.
...... 4
Item 7 Major Shareholders and Related Party Transactions...... 44
PART I.
...... 4
Item 8. Financial information...... 46
PART I.
...... 4
Item 9. Listing Details...... 47
PART I.
...... 4
Item 10. Additional Information...... 48
PART I.
...... 4
Item 11. Quantitative and Qualitative Disclosures about Market Risk...... 51
PART I.
...... 4
Item 12. Description of Securities Other than Equity Securities...... 52
PART II.
...... 53
Item 13. Defaults, Dividend Arrearages and Delinquencies...... 53
PART II.
...... 53
Item 14. Material Modifications to the Rights of Security Holders
Item 15. Controls and Procedures...... 53
Item 16A. Audit Committee Financial Expert...... 53
Item 16B. Code of Ethics...... 53
Item 16C. Principal Accountant Fees and Services...... 53
Item 16D. Exemptions from the Listing Standards for Audit Committees...... 54
Item 16E. Purchases of Equity Securities by the Issuer and
PART III.
...... 55
Item 17. Financial Statements...... 55
PART III.
...... 55
Item 18. Financial Statements...... 55
PART III.
...... 55
Item 19. Exhibits...... 55
PART I
Item 1. Identity of Directors, Senior Management and Advisers
Item 2. Offer Statistics and Expected Timetable
Item 3. Key Information
Item 4. Information on the Company
Item 18 and in exhibit 8.1.
Item 4A. Unresolved Staff Comments
Item 5. Operating and Financial Review and Prospects
Item 6 Directors, Senior Management and Employees
Item 7 Major Shareholders and Related Party Transactions
Item 8. Financial information
Item 9. Listing Details
Item 10. Additional Information
Item 11. Quantitative and Qualitative Disclosures about Market Risk
Item 12. Description of Securities Other than Equity Securities
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
Item 14. Material Modifications to the Rights of Security Holders and Use of
Item 15. Controls and Procedures
Item 16A. Audit Committee Financial Expert
Item 16B. Code of Ethics
Item 16C. Principal Accountant Fees and Services.
Item 16D. Exemptions from the Listing Standards for Audit Committees.
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
PART III
Item 17. Financial Statements
Item 18. Financial Statements
Item 19. Exhibits
SIGNATURES
EX-8.1 SUBSIDIARIES
EX-12.CERTIFICATION
EX-12.CERTIFICATION
EX-13.CERTIFICATION
EX-13.CERTIFICATION

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

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FORM 20-F

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|_| REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES

EXCHANGE ACT OF 1934

OR

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

for the fiscal year ended December 31, 2005

OR

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

Commission file number ______-

OR

|_| SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of event requiring this shell company report ......

For the transition period from to

DIANA SHIPPING INC.

(Exact name of Registrant as specified in its charter)

Diana Shipping Inc.

(Translation of Registrant's name into English)

Marshall Islands

(Jurisdiction of incorporation or organization)

16, Pentelis Str., 175 64 P. Faliro, Athens, Greece

(Address of principal executive offices)

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

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Common share, $0.01 par value New York Stock Exchange

Securities registered or to be 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:

Title of each class Name of each exchange on which registered

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Common share, $0.01 par value New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as

defined in Rule 405 of the Securities Act.

|_| Yes |X| No

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 |X| No

Note-Checking the box above will not relieve any registrant required to file

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

from their obligations under those Sections.

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, 2005, there were 45,000,000 shares of the

registrant's Common Shares outstanding.

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. |X| Yes |_| 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 |_| Non-Accelerated filer |_|

Indicate by check mark which financial statement item the registrant has elected

to follow. |_| Item 17 |X| 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 |X| No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE LAST

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 |X| No

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS...... 3

PART I...... 4

Item 1. Identity of Directors, Senior Management and Advisers...... 4

Item 2. Offer Statistics and Expected Timetable...... 4

Item 3. Key Information...... 4

Item 4. Information on the Company...... 6

Item 5. Operating and Financial Review and Prospects...... 28

Item 6 Directors, Senior Management and Employees...... 40

Item 7 Major Shareholders and Related Party Transactions...... 44

Item 8. Financial information...... 46

Item 9. Listing Details...... 47

Item 10. Additional Information...... 48

Item 11. Quantitative and Qualitative Disclosures about Market Risk...... 51

Item 12. Description of Securities Other than Equity Securities...... 52

PART II...... 53

Item 13. Defaults, Dividend Arrearages and Delinquencies...... 53

Item 14. Material Modifications to the Rights of Security Holders

and Use of Proceeds...... 53

Item 15. Controls and Procedures...... 53

Item 16A. Audit Committee Financial Expert...... 53

Item 16B. Code of Ethics...... 53

Item 16C. Principal Accountant Fees and Services...... 53

Item 16D. Exemptions from the Listing Standards for Audit Committees...... 54

Item 16E. Purchases of Equity Securities by the Issuer and

Affiliated Purchasers...... 54

PART III...... 55

Item 17. Financial Statements...... 55

Item 18. Financial Statements...... 55

Item 19. Exhibits...... 55

FORWARD-LOOKING STATEMENTS

Diana Shipping Inc., or the Company, desires to take advantage of the safe

harbor provisions of the Private Securities Litigation Reform Act of 1995 and is

including this cautionary statement in connection with this safe harbor

legislation. This document and any other written or oral statements made by us

or on our behalf may include forward-looking statements, which reflect our

current views with respect to future events and financial performance. The words

"believe", "except," "anticipate," "intends," "estimate," "forecast," "project,"

"plan," "potential," "will," "may," "should," "expect" and similar expressions

identify forward-looking statements.

Please note in this annual report, "we", "us", "our", "The Company", all refer

to Diana Shipping Inc. and its subsidiaries.

The forward-looking statements in this document are based upon various

assumptions, many of which are based, in turn, upon further assumptions,

including without limitation, management's examination of historical operating

trends, data contained in our records and other data available from third

parties. Although we believe that these assumptions were reasonable when made,

because these assumptions are inherently subject to significant uncertainties

and contingencies which are difficult or impossible to predict and are beyond

our control, we cannot assure you that we will achieve or accomplish these

expectations, beliefs or projections.

In addition to these important factors and matters discussed elsewhere herein,

important factors that, in our view, could cause actual results to differ

materially from those discussed in the forward-looking statements include the

strength of world economies, fluctuations in currencies and interest rates,

general market conditions, including fluctuations in charter hire rates and

vessel values, changes in demand in the dry-bulk shipping industry, changes in

the Company's operating expenses, including bunker prices, drydocking and

insurance costs, changes in governmental rules and regulations or actions taken

by regulatory authorities, potential liability from pending or future

litigation, general domestic and international political conditions, potential

disruption of shipping routes due to accidents or political events, and other

important factors described from time to time in the reports filed by the

Company with the Securities and Exchange Commission.

PART I

Item 1. Identity of Directors, Senior Management and Advisers

Not Applicable.

Item 2. Offer Statistics and Expected Timetable

Not Applicable.

Item 3. Key Information

A. Selected Financial Data

The following table sets forth our selected consolidated financial data and

other operating data. The selected consolidated financial data in the table as

of December 31, 2001, 2002, 2003, 2004 and 2005 and for the five year periods

ended December 31, 2005 are derived from our audited consolidated financial

statements and notes thereto which have been prepared in accordance with U.S.

generally accepted accounting principles ("US GAAP") and have been audited by

Ernst & Young (Hellas) Certified Auditors Accountants S.A. ("Ernst & Young"),

independent registered public accounting firm. The following data should be read

in conjunction with Item 5. "Operating and Financial Review and Prospects", the

consolidated financial statements, related notes and other financial information

included elsewhere in this annual report.

As of and for the

Year Ended December 31,

2001 2002 2003 2004 2005

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(in thousand of US dollars,

except for share and per share data and average daily results)

Income Statement Data:

Voyage and time charter revenues ...... $ 11,359 $ 11,942 $ 25,277 $ 63,839 $ 103,104

Voyage expenses ...... 1,494 946 1,549 4,330 6,480

Vessel operating expenses ...... 3,432 3,811 6,267 9,514 14,955

Depreciation and amortization ...... 2,347 3,004 3,978 5,087 9,943

Management fees ...... 456 576 728 947 1,731

Executive management services and rent ... 1,363 1,404 1,470 1,528 455

General and administrative expenses ...... 70 140 123 300 2,871

Foreign currency losses (gains) ...... (17) 5 20 3 (30)

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Operating income ...... 2,214 2,056 11,142 42,130 66,699

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Interest and finance costs ...... (2,690) (2,001) (1,680) (2,165) (2,731)

Interest income ...... 84 21 27 136 1,022

Gain on vessel's sale ...... ------19,982 --

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Net income (loss) ...... $ (392) $ 76 $ 9,489 $ 60.083 $ 64,990

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Basic earnings (loss) per share ...... $ (0.11) $ 0.02 $ 0.37 $ 2.17 $ 1.72

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Weighted average basic shares outstanding 3,683,333 4,297,161 25,340,596 27,625,000 37,765,753

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Diluted earnings (loss) per share ...... $ (0.11) $ 0.00 $ 0.37 $ 2.17 $ 1.72

======

Weighted average diluted shares

outstanding ...... 3,683,333 18,416,667 25,340,596 27,625,000 37,765,753

======

Dividends declared per share ...... $ -- $ 0.06 $ -- $ 1.85 $ 1.60

======

Balance Sheet Data:

Cash and cash equivalents ...... $ 1,310 $ 1,867 $ 7,441 $ 1,758 $ 21,230

Total current assets ...... 3,229 3,347 9,072 3,549 26,597

Total assets ...... 83,498 79,947 134,494 155,636 341,949

Total current liabilities ...... 5,536 5,863 9,107 11,344 4,667

Long-term debt (including current portion) 57,646 53,810 82,628 92,246 12,859

Total stockholders' equity ...... 23,118 23,482 48,441 59,052 324,158

Cash Flow Data:

Net cash flow provided by operating

activities ...... $ 5,131 $ 5,451 $ 15,218 $ 47,379 $ 69,256

Net cash flow used in investing activities (53,011) -- (52,723) (11,778) (169,241)

Net cash flow provided by (used in)

financing activities ...... 47,993 (4,894) 43,079 (41,284) 119,457

Fleet Data: (1)

Average number of vessels (2) ...... 3.2 4.0 5.1 6.3 9.6

Number of vessels at end of period ...... 4.0 4.0 6.0 7.0 12.0

Weighted average age of fleet at end of

period (in years) ...... 0.8 1.8 2.9 3.4 3.8

Ownership days (3) ...... 1,155 1,460 1,852 2,319 3,510

Available days (4) ...... 1,139 1,460 1,852 2,319 3,471

Operating days (5) ...... 1,126 1,459 1,845 2,315 3,460

Fleet utilization (6) ...... 98.9% 99.9% 99.6% 99.8% 99.7%

Average Daily Results: (1)

Time charter equivalent (TCE) rate (7) ... $ 8,661 $ 7,532 $ 12,812 $ 25,661 $ 27,838

Daily vessel operating expenses (8) ...... 2,971 2,610 3,384 4,103 4,261

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(1) The fleet data and average daily results presented above do not give effect

to our sale of the Amfitrite. In October 2004, prior to the delivery of the

Amfitrite to us, we entered into a memorandum of agreement to sell the

vessel to Orthos Shipping Corporation, an unaffiliated third party, upon

its delivery to us for a total purchase price of $42.0 million. We elected

to sell the Amfitrite rather than include it in our operating fleet in

order to take advantage of strong market conditions and to sell the vessel

at a favorable price. In November 2004, we took delivery of the Amfitrite

from the shipyard and thereupon delivered the vessel to the buyer. Because