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Horizon Lines' Jones Act Ships for Asian Drydocking

May 10, 2012

Horizon Lines reports Q! 2012 financial results with revenue container volume up, plans to dry-dock three Puerto Rico vessels in Asia

The financial report includes the following summary statement:

"Horizon Lines generated slightly improved revenue container volume and higher EBITDA and adjusted EBITDA in the first quarter relative to a year ago, despite challenges that included severe winter weather in Alaska, higher fuel prices and increased expenses," said Stephen H. Fraser, interim President and Chief Executive Officer.

"Hawaii's performance improved significantly on solid customer support and an improving economy.  Alaska's results were also better despite record cold and snowfall, which had a significant, adverse impact on customer demand and operations. Alaska was buoyed in part by domestic southbound volume that was driven by a strong seafood market.  Earnings declined in Puerto Rico from the same period a year ago, due to continued slow business conditions and vessel service disruptions."

"In 2012, we are making significant investments in our Jones Act fleet with the dry-docking of three of our Puerto Rico vessels in Asia," Mr. Fraser said.  "Although dry-docking our vessels in Asia will add considerable transit expense in 2012, it will also facilitate extensive maintenance and high-quality enhancements that are instrumental in helping maintain service integrity in the Puerto Rico market."

The company continues to project that 2012 container volumes will increase modestly, in the 1% to 2% range, and that container rates, net of fuel surcharges, will rise slightly from 2011 levels.  Fuel prices for 2012 are currently projected in the $725-$730 per-ton range, excluding additional costs for low sulfur fuel that will be required in the Alaska tradelane, effective August 1, 2012.



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