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Ultrapetrol Reports Financial Results For Second Quarter 2010

The use of the terms "EBITDA as defined in the Notes due 2014" and "Adjusted Consolidated EBITDA" in the current filing rather than EBITDA as has been used in previous filings, is responsive to the US Securities and Exchange Commission Release No. 34-47226 wherefrom if the measurement being used excludes "non-cash charges" or other similar concepts other than strictly interest, taxes, depreciation and amortization, or were otherwise to depart from the definition of EBITDA as included in the aforementioned release, it should be called "EBITDA as defined in the Notes due 2014" and "Adjusted Consolidated EBITDA" rather than EBITDA.

EBITDA as defined in the Notes due 2014 consists of net income (loss) prior to deductions for interest expense and other financial gains and losses related to the financing of the Company, income taxes, depreciation of vessels and equipment and amortization of drydock expense, intangible assets, financial gain (loss) on extinguishment of debt, premium paid for redemption of preferred shares and certain non-cash charges (including for instance losses on write-downs of vessels). The calculation of EBITDA as defined in the Notes due 2014 excludes from all items those amounts corresponding to unrestricted subsidiaries under the Indenture governing the Company's 9% First Preferred Ship Mortgage Notes due 2014 (the "Indenture") from the time of designation as such. We have provided EBITDA as defined in the Notes due 2014 in this report because we use it to, and believe it provides useful information to investors to evaluate our ability to incur and service indebtedness and it is a required disclosure to comply with a covenant contained in such Indenture. Adjusted Consolidated EBITDA in this filing represents EBITDA as defined in the Notes due 2014 plus EBITDA corresponding to unrestricted subsidiaries designated as such under the terms of the Indenture and other adjustments related to our FFAs. We do not intend for EBITDA as defined in the Notes due 2014 nor Adjusted Consolidated EBITDA to represent cash flows from operations, as defined by GAAP (on the date of calculation) and it should not be considered as an alternative to measure our liquidity. This definition of EBITDA as defined in the Notes due 2014 and Adjusted Consolidated EBITDA may not be comparable to similarly titled measures disclosed by other companies. Generally, funds represented by EBITDA as defined in the Notes due 2014 and Adjusted Consolidated EBITDA are available for management's discretionary use. Both EBITDA as defined in the Notes due 2014 and Adjusted Consolidated EBITDA have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported. These limitations include, among others, the following:

  • EBITDA as defined in the Notes due 2014 and Adjusted Consolidated EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments,
  • EBITDA as defined in the Notes due 2014 and Adjusted Consolidated EBITDA do not reflect changes in, or cash requirements for, our working capital needs,
  • EBITDA as defined in the Notes due 2014 and Adjusted Consolidated EBITDA do not include income taxes, which are a necessary and ongoing cost of our operations,
  • EBITDA as defined in the Notes due 2014 and Adjusted Consolidated EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts,
  • EBITDA as defined in the Notes due 2014 and Adjusted Consolidated EBITDA do not reflect the amortization of dry docking, or the cash requirements necessary to fund the required dry docks of our vessels,
  • Although depreciation is a non-cash charge, the assets being depreciated will often have to be replaced in the future, and EBITDA as defined in the Notes due 2014 and Adjusted Consolidated EBITDA do not, therefore, reflect any cash requirements for such replacements, and
  • EBITDA as defined in the Notes due 2014 and Adjusted Consolidated EBITDA can be affected by the lease rather than purchase of fixed assets.

The following tables reconcile the Company's Adjusted Consolidated EBITDA to its Operating profit for the three months ended June 30, 2010 and 2009, on a consolidated and a per segment basis:

  Second Quarter Ended June 30, 2010
($000's) River Offshore Supply Ocean TOTAL
         
Segment operating profit $6,457 $3,535 ($398) $9,594
Depreciation and amortization 4,251 1,699 2,271 8,221
Investment in affiliates / Net income attributable to non-controlling interest in subsidiaries (102) (125) (8) (235)
Gains on derivatives, net  --   --  266 266
Other net (235) -- (93) (328)
Realized net gain on FFAs  --   --  1,251 1,251
         
Segment Adjusted EBITDA $10,371 $5,109 $3,289 $18,769
         
Items not included in Segment Adjusted EBITDA        
Financial income       111
Other financial expenses       (1,269)
         
Adjusted Consolidated EBITDA from continuing operations       $17,611
Adjusted Consolidated EBITDA from discontinued operations       $4
         
Adjusted Consolidated EBITDA       $17,615
         
         
         
  Second Quarter Ended June 30, 2009
($000's) River Offshore Supply Ocean TOTAL
         
Segment operating (loss) profit ($2,784) $2,322 $5,952 $5,490
Depreciation and amortization 3,533 1,369 5,401 10,303
Investment in affiliates / Net loss attributable to non-controlling interest in subsidiaries 78 (95) 32 15
Gains on derivatives, net  --  40  --  40
Other net (239)  (11) 7 (243)
         
Segment Adjusted EBITDA $588 $3,625 $11,392 $15,605
         
Items not included in Segment Adjusted EBITDA        
         
Non-cash (gains) losses on derivatives, net       0
Financial income       123
Other financial expenses       2,653
         
Adjusted Consolidated EBITDA from continuing operations       $18,381
Adjusted Consolidated EBITDA from discontinued operations       ($309)
         
Adjusted Consolidated EBITDA       $18,072

The following tables reconcile the Company's Adjusted Consolidated EBITDA to its Operating profit for the six months ended June 30, 2010 and 2009, on a consolidated and a per segment basis:

  Period Ended June 30, 2010
($000's) River Offshore Supply Ocean TOTAL
         
Segment operating profit $8,432 $5,244 $2,241 $15,917
Depreciation and amortization 8,277 3,360 5,307 16,944
Investment in affiliates / Net income attributable to non-controlling interest in subsidiaries (132) (273) (23) (428)
Net Gains on derivatives, net  --   --  9,369 9,369
Other net (445) 3 (9) (451)
Unrealized non-cash gains on FFAs   --   --  (1,250) (1,250)
         
Segment Adjusted EBITDA $16,132 $8,334 $15,635 $40,101
         
Items not included in Segment Adjusted EBITDA        
Financial income       203
Other financial income       (2,550)
         
Adjusted Consolidated EBITDA from continuing operations       $37,754
Adjusted Consolidated EBITDA from discontinued operations       ($510)
         
Adjusted Consolidated EBITDA       $37,244
         
         
         
         
  Period Ended June 30, 2009
($000's) River Offshore Supply Ocean TOTAL
         
Segment operating (loss) profit ($3,186) $4,384 $13,748 $14,946
Depreciation and amortization 6,774 2,697 10,817 20,288
Investment in affiliates / Net loss attributable to non-controlling interest in subsidiaries (7) (225) 27 (205)
Gains on derivatives, net  --  115  --  115
Other net (418)  (11) 27 (402)
         
Segment Adjusted EBITDA $3,163 $6,960 $24,619 $34,742
         
Items not included in Segment Adjusted EBITDA        
Financial income       218
Other financial expenses       1,044
         
Adjusted Consolidated EBITDA from continuing operations       $36,004
Adjusted Consolidated EBITDA from discontinued operations       ($858)
         
Adjusted Consolidated EBITDA       $35,146
CONTACT:  The IGB Group
          Leon Berman
          212-477-8438
          lberman@igbir.com

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