Greetings, and welcome to the Diana Shipping Incorporated Fourth Quarter conference call. At this time, all participates 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, Mr. Edward Nebb, IR Advisor for Diana Shipping. Thank you Mr. Nebb. You may begin.

Thank you very much. Good morning, and welcome you to the Diana Shipping, Inc. fourth quarter and year-end 2010 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. Anastasios Margaronis, President; Mr. Andreas Michalopoulos, Chief Financial Officer; Mr. Ioannis Zafirakis, Executive Vice President and Secretary; and Ms. Maria Dede, Chief Accounting Officer. Before the management begins their remarks, let me briefly summarize the Safe Harbor notice, which you can see in today's news release. 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 the 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 a description of the risks, uncertainties, and other factors that may cause future results to differ materially from what is expressed or forecast in forward-looking statements, please refer to the company’s filings with the Securities and Exchange Commission. And now, 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. I am pleased to report that Diana Shipping emerged from 2010 and present 2011 in a position of financial strength. We have persistently followed a strategic course that combines prudent in growth and conservative capital management. That approach was a significant factor in determining our performance during a challenging year for our industry. I would like to review a number of key developments during the past year. We expanded our fleet during 2010, ending the year with 25 ships including two Newcastlemax vessels, now under construction. Our investment policy would have a favorable effect on our long-term ability to generate revenue. We have demonstrated the continued ability to maintain excellent relationships with our existing quality customers such as Cargill, BHP [inaudible], J. Aron, NYK, [inaudible] and [inaudible]. And we have established new relationships with other strong customers during the year including Minmetals Logistics Group, Sinochart, and the Resource Marine. As I mentioned on last quarters call, we created a major relationship with the Export-Import Bank of China. As a result on the acquisition financing that they provided for our New Castle Max [inaudible]. Given the role of China Eximbank, as a leading provider of funding for the shipping sector, our close working relationship represents an additional source of financial flexibility. In financial terms, 2010 was a year of profitable growth for Diana Shipping despite the difficult positions in the market. Notable achievements of the last year, net income increased to $32.3 million for the fourth quarter of 2010, and they reach $128.8 million U.S. for the full year. Voyage and Time Charter revenues totaled $73 million for the fourth quarter of 2010 and $275.4 million U.S. for the full year. We view conditions in the dry bulk market for the…

Thank you, Simeon, let’s just hope that our audience would be patient and understanding as regards what we present over the next few minutes, and will not draw the wrong long-term conclusions from an example of the fatality of the dry-bulk shipping industry. During the last quarter of 2010, some pretty dramatic developments took place in dry bulk shipping. The bulk is trying to stop the delay this quarter of 2010 at 2,462 and on January 4, 2011, stood at only 1,693. The Baltic Cape ziindex was at 3,419 on October 1, 2010 and ended at 2,285 on January 4, 2011. The equivalent figures for the Baltic Panamax Index were 2,412 and 1,789 respectfully. These are pretty dramatic moves even for a volatile industry such of shipping. Here we try in explain the reasons behind this volatility and offer some pointers as to what might be the future course of the dry-bulk market over the next few quarters. Of course, dry-bulk shipping is very volatile and no one can predict its future. Rebound from the economy crisis led the global investor production to grow around 10% in 2010. The higher-than-usual growth rates in regions like Japan, the United States and European Union would be attributed according to merchant brokers to the low levels to which investor production fell in 2009. Consequently and in line with the expected slower GDP growth, global industrial production growth is expected to slow down in 2011 to about 5%. At the same time, however, the international monitory fund has raised its target for global economy growth this year to 4.4% from 4.2% which was the estimate given out last October. This revision was the result of stronger-than-expect U.S. output based on tax cap extensions. The U.S. economy is now expected to grow 3% this year.…

Thank you, Anastasios, and good morning. I am pleased to be discussing today with you, Diana’s operational results for the fourth quarter and year ended December 31, 2010. Fourth quarter of 2010, net income for Diana Shipping Inc. for the fourth quarter of 2010 amounted to $32.3 million and the earnings per share of Diana Shipping amounted to $0.40. Voyage and Time Charter revenues increase to $73 million from that of $58.6 million in 2009. The increase is attributable to increased revenue due to the addition in our fleet of the vessels Melite in January, New York, in March and [inaudible] 2010 and the company’s participation in Diana Containerships, Inc. Ownership days were 2,251 for the fourth quarter of 2010, compared to 1,813 in the same period of 2009. Fleet utilization was 99.5% in the fourth quarter of 2010, and 98.9% in 2009. The daily time charter equivalent rate for the fourth quarter of 2010 was $31,602 compared to $31,003 for 2009. Voyage expenses were $3.5 million for the quarter. Operating expenses amounted to $14.9 million, an increase by 32%. The increase attributable to the 24% increase in ownership days resulting from the delivery of vessels in Melite and New York, [inaudible] and the container vessel [inaudible]. Operating expenses also increased due to increased repairs and maintenance cost of the vessels. This increase was partly set off by decreased fuel costs and insurance costs. Daily operating expenses were $6,631 for the fourth quarter of 2010 compared to $6,238 in 2009 representing an increase of 6%. Depreciation and amortization of deferred charges amounted to $14.3 million for the fourth quarter of 2010. General and administrative expenses increased by $2.3 million or 48% for the fourth quarter of 2010 to $7.1 million compared to $4.8 million in 2009. The increase was mainly…

(Operator instructions). Thank you, our first question is coming from Urs Dur of Lazard Capital Market. Urs Dur – Lazard Capital Markets, LLC: Good morning, guys, or good afternoon.

Hi. Good morning. Hi. Urs Dur – Lazard Capital Markets, LLC: The presentation was extremely detailed, so that is great. I was interested if Stacy, maybe can give a little bit of color on the reduction in congestion of late. It looks like things are getting loaded, and you mentioned this, in Australia. Do you expect this moment to increase, and then with being able to exit Australia of late, demand for ships to get in line for loadings to improve and see some improvement in the spot rates in the nearer term from these very low levels?

There are too many unknowns, here. First of all, we are not entirely certain how many ships have been redirected to load the cargos that they couldn’t get from Australia to places like the Unites States and Canada. So there we have one question mark because these ships are going to be tied up for at least another 40 to 60 days, carrying the cargo that they were supposed to be carrying from Australia to the far East. So, that’s one unknown. But there is no doubt that as far as that is concerned, given time, the ships will return to load from ports in Queensland in Australia, and logically, congestions should gradually increase after dropping a little further for the next few weeks. So, we expect as far as that part of the world is concerned to see a further drop in congestion, and then a gradual increase. Now, we have to look to China for the iron-ore discharging ports. The situation there is that the Chinese usually deal with congestion more efficiently than anybody else, and even though we expect increased shipments between now and the middle of the year, we think that there would be no significant change in congestion for the Chinese iron-ore discharging ports, which leaves us basically with the iron-ore loading ports in South America. Now there, if everything goes smoothly, which it very rarely does in South America, this would be no significant increase in congestion, especially after the work in [inaudible] was completed as I mentioned during the small presentation. So, in total, if you gather South America, Australia and China, we don’t really expect congestion to increase at all the lack of tonnage as regards the basic commodities, leading to a significant support in freight rates. Urs Dur – Lazard Capital Markets, LLC: So, you expect it to say relatively weak throughout the remainder of the year in your view?

No, as we mentioned earlier, we agree with the analyist’s view that the then you have a gradual maybe improvement between now and middle of the year. Then, if you’ll be expecting it to spiral to weak the freight market, except of course, accepting the effects of major political events in the Middle East or elsewhere in the world, which might of course distort this picture; usually in favor of the freight market though on the bulk side. Urs Dur – Lazard Capital Markets, LLC: I hear that, very good, and I generally agree with that. You have a very nice war chest of cash, guys. I expect $4-plus per share, and it does look like you’re trading probably below your net asset value despite weak or asset values as of late. What is your view of asset values and what can we do with this cash? Buy back shares, or buy more ships? I mean, I guess it’s a rhetorical question, but more to highlight what you think maybe you might be able to do with it.

Hi, this is Andreas. I’ll go back to what you said about the net asset value, you know that we never comment on that, but the cash that we have on the side is for buying new vessels and think wait, and you will see Diana Shipping buying vessels for the next year or so. Urs Dur – Lazard Capital Markets, LLC: You would think it’s better to be buying assets now with this cash than say buying back stock or giving a dividend.

For certain it is much better than paying a dividend at this part of the cycle, and not only that, for buying back stock, you need a big sound of the net asset value to do so. Urs Dur – Lazard Capital Markets, LLC: Yeah, I suppose. Okay, thank you for your time, gentlemen. I appreciate it.

You’re welcome.

Thank you. Our next question is coming from Gregory Lewis of Credit Suisse. Gregory Lewis – Credit Suisse Group: Thank you, and good afternoon.

Hi, Greg. Gregory Lewis – Credit Suisse Group: Stacy, first, could you touch on the comments you made about the older cape size vessels being less efficient, and you made that comment about using bulker. Roughly speaking, how much less efficient are those older capes?

I think that it depends what year you are talking about, and from which building you are talking about? Now, the capes we built in Japan are lighter in weight, thus they have a better consumption than the rest of the suites built in China or wherever. Now, the older type I would say is approximately 4-5 times today, the young ships are more efficient than the old ones at about 4-5 times, which of course is a big differential price wise, because the price of oil is very high toady, so you are talking about 2,000-$3,000 daily. Gregory Lewis – Credit Suisse Group: Okay, great,. And then I guess thinking about you were successful in spinning out the Diana Containership, Inc., at this point, given many potential opportunities in containership space, is there any thought or discussion about Diana Shipping, Inc. making further investments in Diana Containership, Inc.?

Greg, this is something that the board of directors of Diana Shipping would decide in the future. The fact that we have still another 11% in Diana containers we’ve seen, it shows that we still have an interest in containers that Diana Shipping, Inc., and it remains to be seen based on the situation of Diana Containership, Inc. and the project that we represent. Gregory Lewis – Credit Suisse Group: Okay, great, and then just really quick, one last question. Clearly, you’re in the markets every day looking at ships to acquire on the dry bulk side, when you think about where new building prices are and you sort of match that up with where modern second-hand vessels are, do you think the opportunities are relatively even at this point, or do you think there is more opportunity in either the new building or the second hand market?

I think it is good to be evenly spread. We are looking for re-saves, we are looking for older ships, two or three years old, and we are looking for new buildings also, but not as much as the resaves. We are focusing more on the resaves.

Okay, great, thank you very much for the time.

You’re welcome, thank you.

Thank you, our next question is coming from Natasha Boyden of Cantor Fitzgerald.

Thank you, operator. Good morning, gentlemen.

I wanted to ask you what you are seeing in terms of longer-term charges in this market. Are you seeing charters willing or interested to put ships away for longer than a year, and if so what kind of discounts are you seeing to go beyond two or three years?

Well, there is quite a range today for the capes. This is about $6,000. For the year, you are talking today between 17 and $19,000 for a good cape, so there is a difference.

Okay, but I mean are you seeing interest charters put ships away longer or are they still looking at just sort of shorter-term charters?

There are some charters who would be looking for ten-year periods, which does not attract us. I think the most we will be going is about five years.

Okay. All right, great. Thank you. Just about rates coming down, asset volumes coming down, there’s also been concern that some companies could be in violation of the loan covenants. Given that banks appear to be healthier than a few years ago, what do you anticipate that banks are going to do in terms of potentially foreclosing your vessels? Do you think we’ll see more of that or do you think that banks will still be willing to negotiate with companies?

Well, we had a loan on the containers for approximately two years, and there we have seen no for sales. Now, I think it would be different for the dry cargo and maybe we’re going to have for sales.

What do you think the difference is, then?

Well, the difference is that the containers are in the hands of very few people, and the banks have supported them. Plus the fact that the interest rates are very low, so the banks are happy provided that you are paying the interest rate But it’s not the same thing with the dry cargo, so we maybe be having for sales in the dry cargo.

Okay, great. Then just lastly I have a question; can you provide us some guidance on your anticipated dry -docking in 2011 and ’12, and did you have any dry docking in the fourth quarter?

Yes, we had actually three vessels that went in to dry docking the fourth quarter, that’s when we bought the vessel Titan in November with the vessel of Coronis in November and bought a vessel 19th of November as well. In 2011, we have scheduled dry docks for quite a few vessels, actually, for motor vessel, actually Alcyon, Naias and Thetis, Protefs and that’s all. So, that’s what is in 2011.

Okay, thank you very much, that’s very helpful.

You’re welcome.

Thank you, our next question is coming from Fotis Giannakoulis of Morgan Stanley.

Yes, hello there. The only thing I want to ask is about the big spread that we see right now in the co-prices between the domestic Chinese co-prices and the regional prices. Do you think that this is going to have an impact on the Chinese imports for coal and consequently for the Panamax vessels?

Logically, it should, but the picture becomes slightly more complex due to what I mentioned earlier regarding coke and coal exports; that they would find profitable to make to other countries in the Far East. And because of this Australian replacement move that we’re going to be seeing. So generally, we believe that coal is going to be actively traded in China, one way or another regardless of practice credential. Under the coastal trade moving coal, increasingly so as we have seen in 2010 and they are going to be both imports and exports of different types of coal. So we are very confident that coal over all, coke and coal, is going to be the highlight as far as the growth is concerned in volumes of commodity going in and out of China.

Is it something that you are you’re talking about for 2011, or also for the next couple of months?

Well, we can’t pinpoint exactly when. Possibly, the next couple of months all the way through the year. But the next couple of months we’ll see basically the coke and coal moving through Taiwan, Japan and other Far Eastern countries, definitely because the contracts are there for that to happen. And also later on during the year we are going to have movements of coke and coal in and out of China and along the Chinese coast in larger and larger quantities.

Thank you very much, thank you.

Thank you, our next question is coming from Scott Malat of Golden Sachs.

Thanks. My question on vessel operating expenses, can you just help us think through the puts and the takes here of the next year? I guess I was thinking more of a higher insurance cost, you guys highlighted that insurance cost might have been down year over year, help us think through that, thanks.

Actually, our operating expenses if you compare them to last year in the quarter they were up 6% and during the entire year they were up 7%. The main reason here was definitely not insurance cost, those are actually pretty steady. We don’t have big variations on those. What is making the variations, and especially quarter to quarter is mainly the different works that we do when a vessel goes in to dry docks. To give you a very simple example, the main increase in the operating expenses in the fourth quarter are due to two things. The first is that the three vessels that went in to dry docks, Triton, Coronis, and Danae, we take the opportunity when a vessel goes in to dry docks to do some extra work in terms of repairs on deck. And the other example here, which made the operating expenses spike was the fact that we had initial supplies for two containership vessels that were for the fourth quarter pretty fully consolidated with Diana Shipping, Inc. results. Now, going forward, we foresee an average operating expense per day for 2011 at $6,450, that’s what we put in to our models and this is the budget we have made for 2011.

Thanks, that’s very helpful. Within that number, is there a way, just qualitatively to think about insurance cost and crew cost, do they come up from here? You’ve already given us the dry docking schedule but what is the breakup there?

Basically, we give you real figures for the entire year, of 2010, and the breakup of the operating expenses was 54% came from crew costs. So 54% of the operating expense are crew costs, 8 % are insurances, 24.1 % were stores and fares, 11.9 % were repairs and maintenance, 1.4 % were some miscellaneous, and 0.6% were various taxes, and that is 100 % of the OpEx for 2010. So more or less, you have this break down. The major part of the possible breaking expenses are crew costs and yes, insurance. Insurances come out of the operating expenses.

All right, that’s helpful, thanks. Just lastly, you had mentioned a little bit about the Middle East, can you expand on any of that? Have there been any disruptions that you’ve seen in the Middle East? And then what kind of things we should be looking out for and impacts, or risks and essential benefits that you can kind of get from that? Thanks.

As long as the Suez Canal remains open, the deductions have been mainly encouraged with the containership vessels calling in Egypt where we have had some delays and cancelations of port calls. And I assume now in Lybia we are going to have similar phenomena’s developing. We haven’t seen anything else, which is more dramatic in terms of affecting the schedule of bulk carriers call in that part of the world. So, the key question here is the Suez Canal, which it does not look as if we are going to have any serious distraction in transit through the canal up and down. So with that secure, let’s call it, we don’t see any significant effect because the rest of the countries have relatively low volumes of trade in bulk commodities compared to the world figures as a total.

Thanks.

You’re welcome.

Thank you, our next question is coming from Doug Garber of FBR Capital Markets.

Good afternoon, guys.

Hi, Doug.

My first question is, in terms of your due diligence for vessel acquisitions, how many vessels are you currently looking at on the dry bulk, and if you would, the container side too? How many have you visited, and where do you stand on that process?

Well, on the dry side, we are looking at approximately 25 ships. We are expecting some of them, we have already inspected some of them, but because most of them are resaves, we know exactly where we are because we have the specification of each one. So some of them we are inspecting physically, and some of them we have them on paper.

Okay, that’s helpful. In terms of the amount of – you have a lot of liquidity, how much further do asset prices need to fall, before you would get very aggressive and start to purchase those 25 ships that you are doing due diligence on?

Well, it is not how much the prices fall, as much as the freight rates fall. And we strongly believe that the freight rates are low when they’re exactly the same as the running expenses of the ship. Then of course, the freight rate is at these levels and it will proportionally affect the price of the ships. Now, at the moment, the freight rates, or the bulk carriers are approximately three times or 2 ½ times more difficult to realize the expenses. So they have a lot of room to go.

Okay, that’s helpful. In terms of the amount of liquidity you have, would you guys consider putting leverage on your unencumbered vessels currently to maximize the amount of cash available per acquisition?

In theory, the net up should see it with 50 % literally. That’s in theory. So we have plenty of money aside to grow, of course.

All right, I think that’s all my questions. I’ll turn it back. Thank you.

You’re welcome.

Thank you, our next question is coming from Sal Vitale of Sterne, Agee. . Salvatore Vitale – Sterne, Agee & Leach, Inc. : Good morning, gentlemen. I just have a quick first question on the expense side. Looking at G&A expense, came in about 7.1 million this quarter, can you just tell me whether there is any impact of the Diana Containerships there, or how do we think about that going forward? Is that a decent run rate to use in our model going forward?

Yes, Sal, actually, there was an impact of Diana Containerships, and the impact for the year was about $3.5 million. And so I would, going forward, think that after the spinoff, Diana Containerships, Inc. would not be consolidated anymore with Diana Shipping, Inc. therefore as for the first quarter, 2011, I would use as a run rate for your G&A around the $21.6 million for the year. So, that is what I would use, and therefore taking out the DCI chunk of it. Salvatore Vitale – Sterne, Agee & Leach, Inc. : Okay, that’s helpful. And then I think it was Ioannis, your comments earlier regarding where you would need to see freight rates be before you dive in and make a significant acquisition of second hand vessels, and you said about where the running expenses are. So it seems that you still have a pretty cautious hand on the market, and given that, what should we expect? What are your plans in terms of fixed order coverage for 2011, and for 2012, because I think at 2011, currently you are at about 85 % of your days are fixed?

Ninety. Salvatore Vitale – Sterne, Agee & Leach, Inc. : Ninety, right, closer to 90. And for 2012 I have you at about 50 % more or less? Should we think of any significant increase in that 50%?

No, you shouldn’t expect anything different other than [inaudible]. What we will do is start with the vessels they are operating, and try to place them in such a manner that we feed the portfolio the entire portfolio we have will be [inaudible] of the company. We have a very strong feeling about what is going to happen in 2011, however we do not know what is going to happen in 2012. And this is exactly the reason why we are not entitled to commit all of our vessels for a longer period. We will continue our scheduling strategy the way we have said. As our chairman said earlier, the lowest point is where the freights are close to the operating expenses, but never the less, we have to keep buying vessels in the manor, and not wait for that to happen, although we believe that we may see that. Salvatore Vitale – Sterne, Agee & Leach, Inc. : Right, so is it your view, and I know it’s really hard to say-there’s no crystal ball-but is it your view that the decline in rate in the BBI that occurs sooner rather than later in the first half, is a 2011 event?

As our president, Mr. Margaronis said, this is more probably the second half of 2011 event to happen. Salvatore Vitale – Sterne, Agee & Leach, Inc. : Okay, thanks, that’s really helpful.

Thank you, at this time I’d like to hand the floor back over to management for any closing comments.

Thank you, again for your interest in and support for Diana Shipping. We look forward to speaking with you in the months ahead. Thanks.

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