UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F/A

(Amendment No. 3)

_____________________

(Mark One)

[_]Registration
statement pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

[X]Annual
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2011

[_]Transition
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

[_]Shell
Company Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 001-34077

_____________________

SAFE BULKERS, INC.

(Exact name of Registrant as specified in
its charter)

Not Applicable

(Translation of Registrant’s name into
English)

Republic of The Marshall Islands

(Jurisdiction of incorporation or organization)

30-32 Avenue Karamanli
P.O. Box 70837
16605 Voula
Athens, Greece(Address of principal executive offices)

Dr. Loukas Barmparis
President
30-32 Avenue Karamanli
P.O. Box 70837
16605 Voula
Athens, Greece
Telephone : +30 210 899 4980
Facsimile : +30 210 895 4159

(Name, Address, Telephone Number and Facsimile
Number of Company contact person)

_____________________

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
|------------------------------------------------------------------------- | -------------------------------------------------
|Common Stock, $0.001 par value per share  Preferred stock purchase rights | New York Stock Exchange  New York Stock Exchange 

Securities 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: None

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, 2011, there were
70,891,916 shares of the registrant’s common stock outstanding.

Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes[_]No[X]

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[_]No[X]

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. Yes[X]No [_]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every

Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes[X]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[X] | Non-accelerated filer[_]
|-------------------------- | -------------------- | ------------------------

Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing.

U.S. GAAP[X]International Financial Reporting Standards as issued by the International Accounting Standards Board[_]Other[_]

If “Other” has been
checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected
to follow. Item 17[_]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[_]No[X]

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST 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[_]No[_]



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Explanatory Note



This Amendment No. 3 to the Annual Report on Form 20-F for the fiscal
year ended December 31, 2011, originally filed with the Securities and Exchange Commission on February 29, 2012 (“2011 Form
20-F”), as amended by Amendment No. 1 filed with the Securities and Exchange Commission on March 6, 2012, and by Amendment
No. 2 filed with the Securities and Exchange Commission on March 12, 2012 (“Amendment No. 2”), is being filed to re-file
Amendment No. 2 and the exhibits thereto in their entirety to add a new Paragraph 3 to the Section 302 certification included in
Exhibit 12.2.



Other than as expressly set forth above, this Form 20-F/A does not,
and does not purport to, amend, update or restate the information in the 2011 Form 20-F or any amendment thereto, or reflect any
events that have occurred after the 2011 Form 20-F was originally filed.



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Part I



ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS



The following discussion of our financial condition and
results of operations should be read in conjunction with the financial statements and the notes to those statements included elsewhere
in this annual report. This discussion includes forward-looking statements that involve risks and uncertainties. As a result of
many factors, such as those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual
report, our actual results may differ materially from those anticipated in these forward-looking statements. Please see the section
“Forward-Looking Statements” at the beginning of this annual report.

Overview

Our business is to provide international marine drybulk transportation
services by operating vessels in the drybulk sector of the shipping industry. As of February 25, 2012 our fleet consisted of 20
drybulk vessels, and we had newbuild contracts for an additional nine vessels with an aggregate capacity of 2,709,600 dwt. We deploy
our vessels on a mix of period time and spot charters according to our assessment of market conditions, adjusting the mix of these
charters to take advantage of the relatively stable cash flow and high utilization rates associated with period time charters,
or to profit from attractive spot charter rates during periods of strong charter market conditions, or to maintain employment flexibility
that the spot market offers during periods of weak time charter market conditions. As of February 25, 2012, 15 out of 20 vessels
in our fleet were employed on period time charters. We believe our customers, some of which have been chartering our vessels or
vessels of our predecessor for over 22 years, enter into period time and spot charters with us because of the quality of our young
and modern vessels and our record of safe and efficient operations.

The average number of vessels in our fleet for the years
ended December 31, 2009, 2010 and 2011 was 13.2, 14.6 and 16.4 respectively.

After delivery of our contracted newbuilds, our drybulk fleet
will consist of 29 vessels and will have an aggregate carrying capacity of 2,709,600 dwt, assuming we do not acquire any additional
vessels or dispose of any of our vessels.

Our Manager

Our operations are managed by our Manager, Safety Management
Overseas S.A., under the supervision of our executive officers and our board of directors. Under our Management Agreement, our
Manager provides us with technical, administrative and commercial services for an initial term that expired on May 28, 2010, with
automatic one-year renewals for an additional eight years, at our option. Our Manager is controlled by Polys Hajioannou.

A.Operating Results

Our operating results are largely driven by the following
factors:

·

Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in
our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount
of revenues and the amount of expenses that we record during a period.

·

Available days. We define available days (also referred to as voyage days) as the total number of days in a period
during which each vessel in our fleet was in our possession net of off-hire days associated with scheduled maintenance, which includes
major repairs, drydockings, vessel upgrades or special or intermediate surveys. Available days are used to measure the number of
days in a period during which vessels should be capable of generating revenues.

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·
Operating days. We define operating days as the number of our available days in a period less the aggregate number
of days that our vessels are off-hire due to any reason, excluding scheduled maintenance. Operating days are used to measure the
aggregate number of days in a period during which vessels actually generate revenues.

·
Fleet utilization. We calculate fleet utilization by dividing the number of our operating days during a period by
the number of our ownership days during that period. Fleet utilization is used to measure a company’s ability to efficiently
find suitable employment for its vessels and minimize the number of days that its vessels are off-hire for reasons such as scheduled
repairs, vessel upgrades, drydockings or special surveys. During the three years ended December 31, 2011, our average annual fleet
utilization rate was approximately 99.22%. However, an increase in annual off-hire days could reduce our operating days, and therefore,
our fleet utilization.

·
Time charter equivalent rates. We define time charter equivalent rates, or “TCE rates,” as our charter
revenues less commissions and voyage expenses during a period divided by the number of our available days during the period. TCE
rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on period
time charters and trip time charters with daily earnings generated by vessels on voyage charters, because charter rates for vessels
on voyage charters are generally not expressed in per day amounts, while charter rates for vessels on period time charters and
trip time charters generally are expressed in such amounts. We have only rarely employed our vessels on voyage charters and, as
a result, generally our TCE rates approximate our time charter rates.

|                                | Year
        Ended December 31,                                                                      
|------------------------------- | -----------------------------------------------------------------------------------------------------
|                                | (In thousands
        of U.S. dollars except
        available days and time charter equivalent rate)
|                                | 2009                                                                                                 
|Time charter revenues           | $                                                                                                    
|Less commissions                |                                                                                                      
|Less voyage expenses            |                                                                                                      
|Time charter equivalent revenue | $                                                                                                    
|Available days                  |                                                                                                      
|Time charter equivalent rate    | $                                                                                                    
|                                |                                                                                                      

·
Daily vessel operating expenses. We define daily vessel operating expenses to include the costs for crewing, insurance,
lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermediate
and special surveys and other miscellaneous items. Daily vessel operating expenses are calculated by dividing vessel operating
expenses by ownership days for the relevant period. Our ability to control our fixed and variable expenses, including our daily
vessel operating expenses, also affects our financial results. In addition, factors beyond our control, such as developments relating
to market premiums for insurance and the value of the U.S. dollar compared to currencies in which certain of our expenses, including
certain crew wages, are denominated can cause our vessel operating expenses to increase.

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The following table reflects our ownership days, available
days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the periods indicated:

|                                | Year
        Ended December 31, |       
|------------------------------- | ------------------------------- | ------
|                                | 2009                            |       
|Ownership days                  |                                 | 4,817 
|Available days                  |                                 | 4,795 
|Operating days                  |                                 | 4,778 
|Fleet utilization               |                                 | 99.19 
|TCE rates                       | $                               | 34,208
|Daily vessel operating expenses | $                               | 4,075 
|                                |                                 |       



Revenues

Our revenues are driven primarily by the number of vessels
in our fleet, the number of days during which our vessels operate and the amount of daily charter rates that our vessels earn under
our charters, which, in turn, are affected by a number of factors, including:

·
levels of demand and supply in the drybulk shipping industry;

·
the age, condition and specifications of our vessels;

·
the duration of our charters;

·
our decisions relating to vessel acquisitions and disposals;

·
the amount of time that we spend positioning our vessels;

·
the availability of our vessels, which is related to the amount of time that our vessels spend in drydock undergoing repairs
and the amount of time required to perform necessary maintenance or upgrade work; and

·
other factors affecting charter rates for drybulk vessels.

Revenue is recognized as earned on a straight-line basis
over the charter period in respect of charter agreements that provide for varying rates. The difference between the revenue recognized
and the actual charter rate is recorded either as unearned revenue or accrued revenue (see “—Unearned Revenue”
below). Commissions (address and brokerage), regardless of charter type, are always paid by us and are deferred and amortized over
the related charter period and are presented as a separate line item in revenues to arrive at net revenues in the accompanying
consolidated statements of income.

Revenues from our period time charters comprised 92.8%, 99.5%
and 92.0% respectively, of our charter revenues for the years ended December 31, 2009, 2010 and 2011. The revenues from our spot
charters comprised 7.2%, 0.5% and 8.0%, respectively, of our charter revenues for the years ended December 31, 2009, 2010 and 2011.

Vessels operating on period time charters provide more predictable
cash flows, but can yield lower profit margins than vessels operating in the spot market during periods characterized by favorable
market conditions. Vessels operating in the spot market generate revenues that are less predictable than those on period time charters,
but may enable us to capture increased profit margins during periods of high drybulk charter rates, although we are exposed to
the risk of low drybulk charter rates, which may have a materially adverse impact on our financial performance. During periods
of volatility or weak market conditions, period time charters of past periods may provide relatively stable cash flows, while spot
time charters can provide employment flexibility. If we fix vessels on period time charters, future spot market rates may be higher
or lower than those rates at which we have time chartered our vessels. We are constantly evaluating potential opportunities to
increase the number of our drybulk vessels

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employed
  on period time charters, but only expect to enter into additional period time
  charters if we can obtain contract terms that satisfy our criteria.

Unearned Revenue

Unearned revenue as of December 31, 2011 includes: (i) cash
received prior to the balance sheet date relating to services to be rendered after the balance sheet date amounting to $4.1 million
as of December 31, 2011 and (ii) deferred revenue resulting from straight-line revenue recognition in respect of charter agreements
that provide for varying charter rates amounting to $36.9 million, all of which will be recognized as revenue during the period
from January 1, 2012 until March 1, 2015.

Unearned revenue as of December 31, 2010 includes: (i) cash
received prior to the balance sheet date relating to services to be rendered after the balance sheet date amounting to $4.7 million
as of December 31, 2010 and (ii) deferred revenue resulting from straight-line revenue recognition in respect of charter agreements
that provide for varying charter rates amounting to $37.4 million, all of which would be recognized as revenue during the period
from January 1, 2010 until March 1, 2015.

Commissions

We pay commissions currently ranging up to 5.5% on our period
time and trip time charters, which are a type of spot charter, to unaffiliated ship brokers, other brokers associated with our
charterers and to our charterers. These commissions are directly related to our revenues, from which they are deducted. We expect
that the amount of our total commissions to unaffiliated ship brokers and other brokers associated with our charterers and our
charterers will continue to grow as the size of our fleet grows and revenues increase following delivery of our nine remaining
contracted newbuilds and as a result of additional vessel acquisitions. These commissions do not include fees we pay to our Manager,
which are described under “Item 4. Information on the Company—B. Business Overview— Management of Our Fleet.”

Voyage Expenses

We charter our vessels primarily through period time charters
and trip time charters under which the charterer is responsible for most voyage expenses, such as the cost of bunkers, port expenses,
agents’ fees, canal dues, extra war risks insurance and any other expenses related to the cargo. We are responsible for the
remaining voyage expenses such as draft surveys, hold cleaning, bunkers during ballast period, postage and other minor miscellaneous
expenses related to the voyage. We generally do not employ our vessels on voyage charters under which we would be responsible for
all voyage expenses. We also record within voyage expenses the 4% United States federal tax we pay in respect of our U.S. source
shipping income (imposed on gross income without the allowance for any deductions). In many cases, we recover these taxes from
the charterers, and we record such recovered amounts within revenues.

Vessel Operating Expenses

Vessel operating expenses include costs for crewing, insurance,
lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermediate
and special surveys and other minor miscellaneous items. We expect that crewing costs will continue to increase in the future due
to the limited supply and increase in demand for well-qualified crew. In addition, we expect that insurance costs, drydocking and
maintenance costs will increase as our vessels age. In addition, a portion of our vessel operating expenses, crew wages paid to
our Greek crew members, are in currencies other than the U.S. dollar. These expenses may increase or decrease as a result of fluctuation
of the U.S. dollar against these currencies.

Depreciation

We depreciate our drybulk vessels on a straight-line basis
over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value.
We estimate the useful life of our vessels to be 25

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years from
  the date of delivery from the shipyard. Furthermore, we estimate the residual
  value of our vessels to be $182 per light-weight ton.

Vessels, Net

Vessels are recorded at their historical cost, which consists
of the contracted purchase price, any direct material expenses incurred upon acquisition (including improvements, on-site supervision
expenses incurred during the construction period, commissions paid, delivery expenses and other expenditures to prepare the vessel
for her initial voyage) and financing costs incurred during the construction of the vessel, less any potential discount or commission
payable to us resulting in a contract price reduction. Subsequent expenditures for conversions and major improvements are also
capitalized when it is determined that they appreciably extend the life, increase the earning capacity or improve the efficiency
or safety of the vessels. If such factors are not met, such expenditures are not capitalized and, instead, are charged to expenses
as incurred.

For the years ended December 31, 2010 and 2011, we capitalized
interest amounting to $315,084 and $1,471,785, respectively.

Under our Management Agreement with our Manager, for purchases
of vessels including with respect to each of our nine remaining contracted newbuilds, we will pay our Manager a commission of 1.0%
on the contract price of the relevant vessel for our Manager’s services in connection with finalizing the contract and arranging
for various regulatory approvals. In addition, as of May 29, 2011, according to an agreement between us and our Manager, the flat
supervision fee we pay our Manager was set to $550,000 per newbuild, of which 50% is payable upon the signing of the relevant supervision
agreement, and 50% upon successful completion of the sea trials of each newbuild, for the on-premises supervision of all newbuilds
we have agreed to acquire pursuant to shipbuilding contracts, memoranda of agreement, or otherwise. These amounts payable to our
Manager are included as part of the vessel cost.

General and Administrative Expenses

General and administrative expenses consist of management
fees paid to our Manager, which is a related party, in relation to management services offered, and expenses paid to third parties
associated with us being a public company, which include the preparation of disclosure documents, legal and accounting costs, including
costs related to compliance with the Sarbanes-Oxley Act of 2002, director and officer liability insurance costs and director compensation.

In connection with our initial public offering which was
completed in June 2008, we entered into a two year initial term Management Agreement with our Manager, with automatic one-year
renewals for an additional eight years. The fees were fixed for the initial two-year period at $575 per day and 1.0% on gross freight,
charter hire, ballast bonus and demurrage and were to be adjusted thereafter every year by agreement between us and our Manager.
The initial term of two years expired on May 28, 2010 and as of May 29, 2010, pursuant to an agreement between us and our Manager,
the fee on gross freight, charter hire, ballast bonus and demurrage was readjusted to 1.25%. As of May 29, 2011, pursuant to an
agreement between us and our Manager, the flat daily fee was readjusted to $700 per day per vessel from $575 per day.

In addition to the fees described above, we pay our Manager
the commissions and fees with respect to vessel purchases and newbuilds described above in “— Vessels, Net” and
the commissions with respect to vessel sales described below under “—Gain on Sale of Assets.” Such commissions
and fees remained unchanged.

Although we have not, within the past seven years, deployed
our vessels on bareboat charters and do not currently have any plans to deploy our vessels on bareboat charters, under our Management
Agreement, we will also provide our Manager with a fee of $250 per day per vessel deployed on bareboat charters for providing commercial,
technical and administrative services. We expect that the amount of our total management fees will increase following the delivery
of our nine contracted newbuilds and as a result of additional vessel acquisitions.

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Interest Expense and Other Finance Costs

We incur interest expense on outstanding indebtedness under
our existing credit facilities, which we include in interest expenses. We also incurred financing costs in connection with establishing
those facilities, which are capitalized and amortized over the period of the facility. The amortization of the finance costs is
included in amortization and write-off of deferred finance charges. We will incur additional interest expense in the future on
our outstanding borrowings and under future borrowings.

Inflation

Inflation has only a moderate effect on our expenses given
current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase
our operating, voyage, administrative and financing expenses.

Gain on Sale of Assets

In June 2009, we agreed to sell our oldest vessel, the Panamax
class Efrossini(which is hereinafter called“Old Efrossini”, as we currently own another vessel with
the same name), which was delivered to her new owners on January 7, 2010. The gain from the sale of this vessel amounted to $15.2
million, which was recorded as gain on sale of assets during the year ended December 31, 2010. In connection with the sale of Old
Efrossini, we paid our Manager a commission of 1.0% of the sale price of the vessel. Under our Management Agreement, we are
required to pay our Manager a commission of 1.0% of the sale price of a vessel for any future vessel sales.

No gain on sale of assets was recorded in the other periods
presented.

Early Redelivery Income, Net

Early redelivery cost reflects amounts payable to charterers
for early termination of a period time charter resulting from our request for early redelivery of a vessel. We generally request
such early redelivery when we would like to take advantage of a strong period time charter market environment and believe that
an opportunity to enter into a similarly priced period time charter is not likely to be available when the relevant vessel is scheduled
to be redelivered.

Early redelivery income reflects amounts payable to us for
early termination of a period time charter resulting from a charterer’s request for early redelivery of a vessel. We may
accept such requests from charterers when we believe that we are compensated by a substantial portion of the contracted revenue
and maintain the opportunity to re-employ the vessel either in the spot or in the period time charter market at adequate levels.

We have entered into such arrangements for early redelivery,
and incurred such costs or income in the past and we may continue to do so in the future, depending on market conditions.

On January 1, 2009, we took early redelivery of the Maritsa,
instead of on January 13, 2009. The respective charterer paid cash compensation of $0.6 million, net of commissions. No replacement
charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed
at a gross daily charter rate of $15,500 until February 2010.

On March 15, 2009, we took early redelivery of the Old
Efrossini, instead of on January 8, 2011. The respective charterer paid cash compensation of $25.5 million, net of commissions.
An amount of $3.6 million, representing the unearned revenue from the terminated period time charter contract, was recorded as
additional early redelivery income. No replacement charter contract had been secured at the time of conclusion of the early redelivery
agreement. The vessel was subsequently fixed in the spot market, at a gross daily charter rate of $13,750 until April 2009.

On June 26, 2009, we took early redelivery of the Katerina,
instead of on November 26, 2010. The respective charterer paid cash compensation of $21.5 million, net of commissions. An amount
of $0.9 million, representing the

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unearned
  revenue from the terminated period time charter contract, was recorded as additional
  early redelivery income. No replacement charter contract had been secured at
  the time of conclusion of the early redelivery agreement. The vessel was subsequently
  fixed at a gross daily charter rate of $15,500 until September 2011.

On June 28, 2009, we took early redelivery of the Maria,
instead of on January 2, 2011. The respective charterer paid cash compensation of $15.5 million, net of commissions. An amount
of $4.5 million, representing the unearned revenue from the terminated period time charter contract, was recorded as additional
early redelivery income. No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement.
The vessel was subsequently fixed at a gross daily charter rate of $18,000 until August 2010.

On July 19, 2009, we took early redelivery of the Pedhoulas
Leader, instead of on November 22, 2009. The respective charterer paid cash compensation of $2.7 million, net of commissions.
No replacement charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently
fixed at a gross daily charter rate of $18,500 until November.

On July 20, 2009, we took early redelivery of the Stalo,
instead of on July 29, 2009. The respective charterer paid cash compensation of $0.2 million, net of commissions. No replacement
charter contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed
in the spot market at a gross daily charter rate of $42,500 until October 2009.

On March 25, 2010, we agreed with the charterers of the Katerina
to terminate the $15,500 daily fixed rate time charter which had commenced on June 26, 2009, and was due to expire by September
15, 2011. As compensation for early redelivery, we paid the charterers $1.5 million. No replacement charter contract had been secured
at the time of conclusion of the early redelivery agreement. The vessel was subsequently fixed at a gross daily charter rate of
$20,000 for three years.

On April 13, 2010, we took early redelivery of the Pedhoulas
Merchant, instead of the contracted earliest redelivery date of November 5, 2010. In connection with this early redelivery,
we recognized early redelivery income of $3.6 million, comprising cash compensation paid by the relevant charterer of $4.8 million
net of commissions, less accrued revenue of $1.2 million. No replacement charter contract had been secured at the time of conclusion
of the early redelivery agreement. The vessel was subsequently fixed at a gross daily charter rate of $27,250 until April 2011.

On April 28, 2010, we agreed with the charterers of the Pedhoulas
Leader to terminate the $18,500 daily fixed rate time charter which had commenced on July 19, 2009, and was due to expire by
September 30, 2011. As compensation for early redelivery of the vessel, we paid the charterers $1.8 million. No replacement charter
contract had been secured at the time of conclusion of the early redelivery agreement. The vessel was redelivered on November 12,
2010, and was subsequently fixed in the spot market at a gross daily charter rate of $21,750.

On July 30, 2010, we agreed with the charterers of the Maria
to terminate the $18,000 daily fixed rate time charter which had commenced on June 28, 2009, and was due to expire by November
30, 2010. As compensation for early redelivery of the vessel, we paid the charterers $0.2 million. No replacement charter contract
had been secured at the time of conclusion of the early redelivery agreement. The vessel was redelivered on August 24, 2010, and
was subsequently fixed at a gross daily charter rate of $17,750 until April 2011.

Critical Accounting Policies

We prepared our consolidated financial statements in accordance
with U.S. GAAP, which requires us to make estimates in the application of our accounting policies based on our best assumptions,
judgments and opinions. We base these estimates on the information currently available to us and on various other assumptions we
believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
Following is a discussion of the accounting policies that involve a high degree of judgment and the methods of their application.
For a further description of our material accounting policies, please read Note 2 to our financial statements at the end of this
annual report.

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Vessels’ Depreciation

Depreciation is computed using the straight-line method over
the estimated useful life of a vessel, after considering the estimated residual value. We estimate the useful life of our vessels
to be 25 years from the date of initial delivery from the shipyard. An increase in the useful life of a drybulk vessel or in its
residual value would have the effect of decreasing the annual depreciation and extending it into later periods. A decrease in the
useful life of a drybulk vessel or in its residual value would have the effect of increasing the annual depreciation.

Impairment of Long-lived Assets

The Company reviews for impairment its long-lived assets
held and used whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less
than its carrying amount, we are required to evaluate the asset for an impairment loss. Measurement of the impairment loss is based
on the fair value of the asset.

The carrying values of our vessels may not represent their
fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter
rates and the cost of newbuilds. Historically, both charter rates and vessel values tend to be cyclical. Declines in the fair market
value of vessels, prevailing market charter rates, vessel sale and purchase considerations, and regulatory changes in dry bulk
shipping industry, changes in business plans or changes in overall market conditions that may adversely affect cash flows are considered
as potential impairment indicators. In the event the independent market value of a vessel is lower than its carrying value, we
determine undiscounted projected net operating cash flow for such vessel and compare it to the vessel carrying value.

The undiscounted projected net operating cash flows for each
vessel are determined by considering the charter revenues from existing time charters for the fixed vessel days and an estimated
daily time charter equivalent for the unfixed days (based on our company budgeted charter rate for the first 12 months and the
most recent ten year historical average of similar size vessels for the period thereafter) over the remaining estimated life of
the vessel, net of brokerage commissions, expected outflows for vessels’ maintenance, vessel operating expenses, assuming
an average annual inflation rate and management fees. The undiscounted cash flows incorporate various factors such as estimated
future charter rates, future drydocking costs, estimated vessel operating costs assuming an average annual inflation rate of 3%,
estimated vessel utilization rates, estimated remaining lives of the vessels, assumed to be 25 years from the delivery of the vessel
from the shipyard and estimated salvage value of the vessels at $182 per light weight ton. These assumptions are based on historical
trends as well as future expectations. Although management believes that the assumptions used to evaluate potential impairment
are reasonable and appropriate, such assumptions are highly subjective.

Our analysis of the impairment test performed for the year
ended December 31, 2010, indicated a variance of plus 6% for the first twelve months, between actual net receipts during 2011 and
net receipts forecasted by the company for the same period. Our analysis of the impairment test performed for the year ended December
31, 2011, which also involved sensitivity tests on the future time charter rates (which is the input that is most sensitive to
variations), allowing for variances of up to 37% depending on vessel type on time charter rates from the Company’s base scenario,
indicated no impairment on any of our vessels.

No impairment loss was recorded for any of the periods presented.

Recent Accounting Pronouncements

Refer to Note 2 of the consolidated financial statements
attached to this report.

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Results of Operations

Year ended December 31, 2011 compared to year
ended December 31, 2010

During the year ended December 31, 2011, we had an average
of 16.4 drybulk vessels in our fleet. During the year ended December 31, 2010, we had an average of 14.6 drybulk vessels in our
fleet.

During the year ended December 31, 2011, we acquired the
vessels Venus History, a Post-Panamax class vessel and Pelopidas, a Capesize class vessel.

During the year ended December 31, 2010, we acquired the
vessels Kanaris, a Capesize class vessel, Panayiota K, a Post-Panamax class vessel, and Venus Heritage, a
Post-Panamax class vessel and sold Old Efrossini, a Panamax class vessel.

Revenues

Revenues increased by 7.7%, or $12.3 million, to $172.0 million
during the year ended December 31, 2011 from $159.7 million during the year ended December 31, 2010, as result of the net effect
of the following factors: (i) a decrease in the TCE rate for 2011 by 5.4% to $27,932, compared to $29,534 for 2010 due to the decrease
in prevailing charter rates and (ii) an increase in operating days for the year ended December 31, 2011 by 13.2% to 5,962 days,
compared to 5,269 days for the year ended December 31, 2010, due to an increase in the weighted number of vessels during 2010 of
14.6 compared to 16.4 during 2011, due to the deliveries of the vessels Venus Historyin September 2011, and Pelopidas
in November 2011.

Commissions

Commissions to unaffiliated ship brokers, other brokers associated
with our charterers and our charterers during the year ended December 31, 2011 amounted to $3.1 million, an increase of $0.4 million,
or 14.8%, compared to $2.7 million during the year ended December 31, 2010, primarily due to the increase in our revenues and to
a lesser extent to higher average contracted commissions, which increased in 2011 to 1.81% from 1.68% in 2010.

Vessel operating expenses

Vessel operating expenses increased by 12.6% to $26.0 million
during the year ended December 31, 2011 from $23.1 million during the year ended December 31, 2010. This increase of $2.9 million
reflects mainly: (i) crewing cost of $13.2 million, compared to $11.4 million primarily attributable to increased salaries paid
to our crews and increased number of ownership days from 5,326 in 2010 to 5,992 in 2011, (ii) insurance cost of $2.3 million, compared
to $1.9 million primarily attributable to the increase number of vessels in 2011 and to increased insurances paid to our insurers,
(iii) the cost for repairs, maintenance and drydocking of $2.1 million, compared to $1.8 million, and (iv) cost for lubricants
of $3.1 million, compared to $2.8 million mainly due to increased number of operating days from 5,269 in 2010 to 5,962 in 2011
and increased lubricants prices.

Consequently, daily operating expenses, which represent the
operating expenses per vessel per ownership day, increased marginally by 0.2% to $4,350 during the year ended December 31, 2011
from $4,342 during the year ended December 31, 2010.

Depreciation

Depreciation expenses increased by 19.8% to $23.6 million
during the year ended December 31, 2011, compared to $19.7 million during the year ended December 31, 2010, due to the increase
in the average number of vessels from 14.6 during the year ended December 31, 2010 to 16.4 during the year ended December 31, 2011.

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General and administrative expenses

General and administrative expenses increased by 21.4% to
$8.5 million during the year ended December 31, 2011 from $7.0 million during the year ended December 31, 2010, due to an increase
in the number of ownership days by 12.5% from 5,326 in 2010 to 5,992 in 2011, as well as due to an increase, as of May 29, 2011,
in the flat daily fee per vessel to $700 from $575.

Interest expense

Interest expenses decreased by 18.8% to $5.2 million during
the year ended December 31, 2011 from $6.4 million during the year ended December 31, 2010. The $1.2 million decrease in interest
expense was mainly attributable to the increase in the capitalized interest during the year ended December 31, 2011 of $1.5 million
from $0.3 million during the year ended December 31, 2010, and the decrease in the average loans outstanding during the year ended
December 31, 2011 of $460.4 million from $476.9 million during the year ended December 31, 2010, partly offset by the increase
of the weighted average interest rate of our outstanding indebtedness to 1.439% per annum (“p.a.”) for the year ended
December 31, 2011 from 1.394% p.a. for the year ended December 31, 2010.

Loss on derivatives

Loss on derivatives increased by $4.3 million to $12.5 million
during the year ended December 31, 2011 from $8.2 million during the year ended December 31, 2010. The increase of $4.3 million
mainly reflects an increase in losses of $4.4 million from interest rate derivatives as a result of the realized loss and the markto-market
valuation of interest rate swap transactions to $12.4 million for the year ended December 31, 2011 compared to $8.0 million for
the year ended December 31, 2010.

As of December 31, 2011, the aggregate notional amount of
interest rate swap transactions outstanding was $547.1 million, compared to $638.0 million at December 31, 2010. The aggregate
notional amount of interest rate swap transactions outstanding at December 31, 2011 is higher than the aggregate loans outstanding
at December 31, 2011, of $484.3 million, as two of the interest rate swap transactions outstanding at December 31, 2011 will become
effective upon the expiration of the existing interest rate swap transactions relating to such loans. These swaps economically
hedged the interest rate exposure of 95% of the Company’s aggregate loans outstanding as of December 31, 2011. The mark-to-market
valuation of these interest rate swap transactions at the end of each period is affected by the prevailing comparable interest
rates at that time.

Foreign currency gain/(loss)

Foreign currency loss was $0.8 million during the year ended
December 31, 2011, compared to gain of $0.3 million during the year ended December 31, 2010. Foreign currency exchange gains or
losses resulted primarily from currency translation or currency conversion of advances for vessel acquisitions and vessels under
construction denominated in foreign currencies. None of our loans were denominated in foreign currency as of December 31, 2011.

Early redelivery income, net

During the year ended December 31, 2011, we recorded early
redelivery income, relating to the early termination of period time charters of our vessels, of $0.2 million compared to $0.1 million
early redelivery income during the year ended December 31, 2010.

Year ended December 31, 2010 compared to year
ended December 31, 2009

During the year ended December 31, 2010, we had an average
of 14.6 drybulk vessels in our fleet. During the year ended December 31, 2009, we had an average of 13.2 drybulk vessels in our
fleet.

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During the year ended December 31, 2010, we acquired the
vessels Kanaris, a Capesize class vessel, Panayiota K, a Post-Panamax class vessel, and Venus Heritage, a
Post-Panamax class vessel and sold Old Efrossini, a Panamax class vessel.

During the year ended December 31, 2009, we acquired the
vessels Martine, a Post-Panamax class vessel, and Andreas K, a Post-Panamax class vessel.

Revenues

Revenues decreased by 5.2%, or $8.7 million, to $159.7 million
during the year ended December 31, 2010 from $168.4 million during the year ended December 31, 2009, as result of the net effect
of the following factors: (i) a decrease in the TCE rate for 2010 by 13.7% to $29,534, compared to $34,208 for 2009 due to the
decrease in prevailing charter rates at which a number of our vessels were chartered and (ii) an increase in operating days for
the year ended December 31, 2010 by 10.3% to 5,269 days, compared to 4,778 days for the year ended December 31, 2009 due to deliveries
of the vessels Kanaris in March 2010, Panayiota K in April 2010 and Venus Heritage in December 2010 and the
sale of Old Efrossiniin January 2010.

Commissions

Commissions to unaffiliated ship brokers, other brokers associated
with our charterers and our charterers during the year ended December 31, 2010 amounted to $2.7 million, a decrease of $1.1 million,
or 28.9%, compared to $3.8 million during the year ended December 31, 2009, primarily due to the decrease in our revenues and to
lower average contracted commissions, which were reduced to 1.68% from 2.25% for the years ended December 31, 2010 and 2009, respectively.

Vessel operating expenses

Vessel operating expenses increased by 17.9% to $23.1 million
during the year ended December 31, 2010 from $19.6 million during the year ended December 31, 2009. This increase of $3.5 million
reflects mainly: (i) the cost for repairs, maintenance and drydocking of $1.8 million, compared to $1.0 million, including three
drydockings completed during 2010, of our vessels Marina, Pedhoulas Trader and Pedhoulas Merchant, compared to two
drydockings completed during 2009, of our vessels Stalo, and Maritsa, (ii) crewing cost of $11.4 million, compared
to $10.1 million primarily attributable to increased salaries paid to our crews and increased number of ownership days from 4,817
in 2009 to 5,326 in 2010, (iii) cost for lubricants of $2.8 million, compared to $2.5 million mainly due to increased number of
operating days from 4,778 in 2009 to 5,269 in 2010 and increased lubricants prices and (iv) cost for spares, stores and provisions
of $3.9 million, compared to $2.8 million due to increased use of spares for repairs, including one additional dry-docking and
one additional vessel delivery, increased prices for stores and provisions and increased number of ownership days during the year
ended December 31, 2010 and December 31, 2009, respectively.

Consequently, daily operating expenses, which represent the
operating expenses per vessel per ownership day, increased by 6.6% to $4,342 during the year ended December 31, 2010 from $4,075
during the year ended December 31, 2009, as a result of the increase of vessel operating expenses by 17.9% partially offset by
the 10.6% increase of ownership days, as described above.

Depreciation

Depreciation expense increased by 41.7% to $19.7 million
during the year ended December 31, 2010, compared to $13.9 million during the year ended December 31, 2009, due to the increase
in the average number of vessels from 13.2 during the year ended December 31, 2009 to 14.6 during the year ended December 31, 2010.

General and administrative expenses

General and administrative expenses remained stable at $7.0
million for the years ended December 31, 2010, and December 31, 2009.

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Interest expense

Interest expense decreased by 37.9% to $6.4 million during
the year ended December 31, 2010 from $10.3 million during the year ended December 31, 2009. The $3.9 million decrease in interest
expense was mainly attributable to the decrease in the weighted average interest rate of our outstanding indebtedness to 1.39%
p.a. for the year ended December 31, 2010 from 2.14% p.a. for the year ended December 31, 2009 due to lower prevailing LIBOR rates.
The total loans outstanding as of December 31, 2010 amounted to $494.74 million compared to $471.2 million as of December 31, 2009.

Loss on derivatives

Loss on derivatives increased by $3.8 million to $8.2 million
during the year ended December 31, 2010 from $4.4 million during the year ended December 31, 2009. The increase of $3.8 million
reflects: (i) an increase in losses of $4.5 million from interest rate derivatives as a result of the realized loss and the mark-tomarket
valuation of interest rate swap transactions to $8.0 million for the year ended December 31, 2010 compared to $3.5 million for
the year ended December 31, 2009, and (ii) a decrease in losses of $0.7 million from foreign exchange derivatives, as a result
of the decrease in the nominal value of the foreign exchange derivatives and movements of the rates of the currencies in which
the derivatives contracts were denominated, to $0.2 million for the year ended December 31, 2010, compared to $0.9 million for
the year ended December 31, 2009.

As of December 31, 2010, the aggregate notional amount of
interest rate swap transactions outstanding was $638.0 million, compared to $452.5 million at December 31, 2009. The aggregate
notional amount of interest rate swap transactions outstanding at December 31, 2010 is higher than the aggregate loans outstanding
at December 31, 2010, of $494.7 million, as during the year ended December 31, 2010, we entered into four interest rate swap transactions
relating to four outstanding loans, whereby the new interest rate swap transactions will become effective upon the expiration of
the existing interest rate swap transactions relating to such loans. These swaps economically hedged the interest rate exposure
of 98% of the Company’s aggregate loans outstanding as of December 31, 2010. The mark-to-market valuation of these interest
rate swap transactions at the end of each period is affected by the prevailing comparable interest rates at that time.

Foreign currency gain/(loss)

Foreign currency gain was $0.3 million during the year ended
December 31, 2010, compared to gain of $0.8 million during the year ended December 31, 2009. Foreign currency exchange gains resulted
primarily from currency translation or currency conversion of loans denominated in foreign currencies. Following conversions during
2008 and the first quarter of 2009, none of our loans were denominated in foreign currency as of December 31, 2010.

Early redelivery income, net

During the year ended December 31, 2010, we recorded early
redelivery income, relating to the early termination of period time charters of our vessels, of $0.1 million compared to $75.0
million early redelivery income during the year ended December 31, 2009. Early redelivery income during the year ended December
31, 2010 is analyzed as follows: (i) Maria was redelivered on August 24, 2010 instead of November 30, 2010, for which we
paid compensation of $0.2 million, net of commissions, (ii) Katerina was agreed to be redelivered on January 15, 2011 instead
of September 15, 2011, for which we recognized a cost of $1.5 million, consisting of cash compensation paid to charterer on April
7, 2010, net of commissions, (iii) Pedhoulas Merchant was redelivered on April 13, 2010 instead of November 5, 2010, for
which we recognized income of $3.6 million, consisting of cash compensation paid by the relevant charterer on May 6, 2010 of $4.8
million, net of commissions, less $1.2 million representing the accrued revenue from the terminated period time charter contract,
(iv) Pedhoulas Leaderwas redelivered on November 12, 2010 instead of September 30, 2011, for which we recognized a cost
of $1.8 million, consisting all of cash compensation paid to the relevant charterer on May 6, 2010, net of commissions. Early redelivery
income during the year ended December 31, 2009 is analyzed as follows: (i) Maritsa was redelivered on January 1, 2009 instead
of January 13, 2009, for which we received compensation of $0.6 million, net of commissions, (ii) Old Efrossiniwas redelivered
on March 15, 2009 instead of January 8, 2011, for which we recognized income of $29.1 million consisting of cash compensation received
of $25.5 million, net of commissions, and $3.6 million representing the unearned revenue from the terminated period time charter
contract, (iii) Katerina was redelivered

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on June
  26, 2009 instead of November 26, 2010, for which we recognized income of $22.3
  million consisting of cash compensation paid by the relevant charterer on July
  1, 2009 of $21.5 million, net of commissions, and $0.9 million representing
  the unearned revenue from the terminated period time charter contract, (iv) Maria was
  redelivered on June 28, 2009 instead of January 2, 2011, for which we recognized
  income of $20.0 million consisting of cash compensation paid by the relevant
  charterer on July 1, 2009 of $15.5 million, net of commissions, and $4.5 million
  representing the unearned revenue from the terminated period time charter contract,
  (v) Pedhoulas Leader was redelivered on July 19, 2009 instead of November
  22, 2009, for which we received cash compensation of $2.7 million, net of commissions
  and (vi) Stalowas redelivered on
  July 20, 2009 instead of July 29, 2009, for which we received cash compensation
  of $0.2 million, net of commissions.

B.Liquidity and Capital Resources

As of December 31, 2011, we had $33.5 million in cash and
restricted cash, of which $28.1 million consisted of cash and cash equivalents, and $5.4 million was long-term restricted cash.
In addition, as of December 31, 2011, we had $50.0 million in a long-term floating rate note investment (for more information,
please see Note 8 to our financial statements included at the end of this annual report). Against this investment we may borrow,
under certain conditions, up to $40.0 million in cash.

As of December 31, 2011, we had aggregate debt outstanding
of $484.3 million, of which $18.5 million was payable within the next 12 months. As of December 31, 2011, we had aggregate additional
borrowing capacity of $178.9 million, consisting of $135.2 million available in undrawn or committed loan facilities and $43.7
million available under existing revolving credit facilities. The undrawn loan facilities consist of $24.0 million under a new
credit facility for Panayiota K signed in 2010, $52.8 million under a new credit facility for Pelopidas signed in
2011 and $38.4 million under a new credit facility for Venus Horizon signed in 2011. In addition, in 2011 we accepted a
commitment letter for a new credit facility for Hull No. 616 scheduled to be delivered in 2012, in the amount of $20 million,
the documentation for which was concluded in February 2012. In February 2012, we accepted an offer letter from a bank for a new
revolving credit facility of up to $18 million which will be utilized to finance the acquisition of one of the remaining newbuild
vessels (see Note 23 to our financial statements included at the end of this annual report).

Our primary liquidity needs are to fund capital expenditures
in relation to newbuild contracts, financing expenses, debt repayment, vessel operating expenses, general and administrative expenses
and dividend payments to our stockholders. We anticipate that our primary sources of funds will be the existing cash and cash equivalents
as of December 31, 2011 of $28.1 million, borrowings of $40 million against our long term floating rate note investment, additional
undrawn or committed borrowing capacity of $178.9 million, cash from operations and possibly, additional indebtedness to be raised
against seven unencumbered newbuild vessels upon their delivery and equity financing.

Our commitments for newbuilds of $259.7 million as of December
31, 2011 consisted of $150.9 million, payable in 2012, $38.2 million, payable in 2013 and $70.6 million, payable in 2014. These
commitments represent the remaining installment payments for the delivery of ten newbuild vessels, six of which are scheduled to
be delivered in 2012, one in 2013 and three in 2014.

We currently estimate that the contracted cash flow from
operations, existing cash and cash equivalents, additional borrowing against our floating rate note investment, existing undrawn
loan and revolving credit facilities and commitments and additional indebtedness secured by seven newbuild vessels which are currently
unencumbered, will be sufficient to fund the operations of our fleet, including our working capital requirements, and the capital
expenditure requirements through the end of 2012. However, during 2012 or 2013, we may seek additional indebtedness to partially
fund our capital expenditure requirements in order to maintain a strong cash position. We may incur additional indebtedness secured
by our other seven newbuild vessels upon their delivery which are currently unencumbered. To the extent that market conditions
deteriorate, charterers may default or seek to renegotiate charter contracts, and vessel valuations may decrease, resulting in
a breach of our debt covenants. In such case our contracted revenues may decrease and we may be required to make additional prepayments
under existing loan facilities, resulting in additional financing needs. If we acquire additional vessels, our capital expenditure
requirements will increase and we will need to rely on existing cash and time deposits, operating cash surplus and existing undrawn
loan commitments. If we are unable to obtain additional indebtedness, or to find

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alternative
  financing, we will not be capable of funding our commitments for capital expenditures
  relating to our contracted newbuilds. A failure to fulfill our commitment would
  generally result in a forfeiture of the advance we paid to the shipyard with
  respect to the contracted newbuild. In addition, we may also be liable for
  other damages for breach of contract. Examples of such liabilities could include
  payments to the shipyard for the difference between the forfeited advance and
  the amount that remains to be paid by us if the shipyard cannot locate a third-party
  buyer that is willing to pay an amount equal to the difference or compensatory
  payments by us to charter parties with whom we have entered into charters with
  respect to the contracted newbuilds. Such events could adversely impact the
  dividends we intend to pay, and could have a material adverse effect on our
  business, financial condition and results of operation.

We have paid dividends to our stockholders each quarter since
our initial public offering in June 2008, including an aggregate amount of $41.8 million over four consecutive quarterly dividends,
each in the amount of $0.15 per share, payable during 2011. We also declared a dividend of $0.15 per share, payable on February
29, 2012, to our shareholders of record on February 24, 2012. Our future liquidity needs will impact our dividend policy. We currently
intend to use a portion of our free cash to pay dividends to our stockholders. The declaration and payment of dividends, if any,
will always be subject to the discretion of our board of directors. The timing and amount of any dividends declared will depend
on, among other things: (i) our earnings, financial condition and cash requirements and available sources of liquidity, (ii) decisions
in relation to our growth strategies, (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends,
(iv) restrictive covenants in our existing and future debt instruments and (v) global financial conditions. Dividends might not
be paid in the future.

Cash Flows

Cash and cash equivalents decreased to $28.1 million as of
December 31, 2011, compared to $65.3 million as of December 31, 2010. We consider highly liquid investments such as time deposits
and certificates of deposit with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents
are primarily held in U.S. dollars.

Net Cash Provided by Operating Activities

Net cash provided by operating activities amounted to $107.2
million in 2011, consisting of net income after non-cash items of $114.4 million plus an increase in working capital of $7.2 million.
Net cash provided by operating activities amounted to $118.1 million in 2010, consisting of net income after non-cash items of
$109.6 million plus a decrease in working capital of $8.5 million. Net cash provided by operating activities amounted to $211.3
million in 2009, consisting of net income after non-cash items of $195.1 million plus a decrease in working capital of $16.2 million.

Net Cash Used in Investing Activities

Net cash flows used in investing activities were $125.9 million
for the year ended December 31, 2011 compared to net cash flows used in investing activities of $131.7 million for the year ended
December 31, 2010. The decrease in cash flows used in investing activities of $5.8 million from 2010 is mainly attributable to
the net effect of the following factors: (i) a decrease in our net bank time deposits by $35.0 million during the year ended December
31, 2011, compared to a decrease of $22.8 million during the same period in 2010 and (ii) a decrease of $31.5 million in payments
for vessel acquisitions and advances for vessels under construction during the year ended December 31, 2011 due to our acquisition
of two new vessels, Venus History in September, and Pelopidas in November, while during the year ended December 31,
2010, we acquired three new vessels, Kanaris in March, Panayiota K in April and Venus Heritage in December,
2010 and (iii) proceeds from sale of vessels, amounting to $32.2 million in 2010 due to the sale of the Old Efrossini; no
vessels were sold in 2011.

Net cash flows used in investing activities were $131.7 million
for the year ended December 31, 2010 compared to net cash flows used in investing activities of $191.9 million for the year ended
December 31, 2009. The decrease in cash flows used in investing activities of $60.2 million from 2010 is mainly attributable from
the following factors: (i) investment in a 5 year floating rate note of $50 million in 2009, compared to no new long term investments
in 2010, (ii) a decrease in our net bank time deposits by $22.8 million during the year ended December 31, 2010, compared to an
increase of $36.6 million during the same period in 2009 and (iii) proceeds of $32.2 million during

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the year
  ended December 31, 2010 from the sale of Old Efrossinion January 7,
  2010, compared to no sales of assets during the year ended December 31, 2009
  and (iv) a partial offset caused by an increase of $60.9 million to $192.4
  million from $131.5 million in vessel acquisitions and advances for vessels
  payments during the year ended December 31, 2010 due to our acquisition of
  three new vessels, Kanaris in March, Panayiota K in April and Venus Heritage in
  December, while during the year ended December 31, 2009, we acquired two new
  vessels, Martinein February and Andreas K in September.

Net Cash (Used in)/Provided by Financing Activities

Net cash flows used in financing activities were $18.5 million
for the year ended December 31, 2011, compared to net cash flows provided by financing activities of $60.1 million for the year
ended December 31, 2010. This increase of $78.6 million compared to 2010 is largely attributable to a decrease of $35.4 million
in proceeds from the issuance of common stock, an increase in long-term debt principal payments of $43.5 million, an increase in
long-term debt proceeds of $9.5 million an increase in payments of deferred financing costs of $5.4 million and an increase in
dividends paid of $4 million.

Net cash flows provided by financing activities were $60.1
million for the year ended December 31, 2010, compared to net cash flows used in financing activities of $28.7 million for the
year ended December 31, 2009. This increase of $88.8 million, compared to 2010 is largely attributable to an increase of $75.0
million in proceeds from the issuance of common stock, an increase in long-term debt principal payments of $13.0 million, an increase
in long-term debt proceeds of $32.5 million and an increase in dividends paid of $5.1 million.

Credit Facilities

We operate in a capital intensive industry which requires
significant amounts of investment, and we fund a portion of this investment through long-term bank debt. Our subsidiaries have
generally entered into individual credit facilities in order to finance the acquisition of the vessels owned by these subsidiaries
and for general corporate purposes. The durations until maturity of our 16 credit facilities outstanding on December 31, 2011,
ranged from four to 12 years, and they are generally repaid by semiannual principal installments and a balloon payment for 13 out
of 15 of them, due on maturity except for the Maxdeka and Shikoku loan facilities, which are repayable in semi-annual installments.
We generally pay interest on these facilities which bear interest at LIBOR plus a margin, except for the Maxdeka and Shikoku loan
facilities, under which a portion of the principal amounts bear interest at the Commercial Interest Reference Rate published by
the Organization for Economic Co-operation and Development (“OECD”) applicable on the date of signing of the relevant
loan agreements. The obligations under our credit facilities are secured by, among other types of security, first priority mortgages
over the vessels owned by the respective borrower subsidiaries, first priority assignments of all insurances and earnings of the
mortgaged vessels and guarantees by Safe Bulkers, Inc.

During 2011, we drew down loans totaling $84.0 million and
we repaid $94.5 million of our indebtedness. As of December 31, 2011, we had 16 outstanding credit facilities with a combined outstanding
balance of $484.3 million. These debt facilities have maturity dates between 2015 and 2023. For a description of our debt facilities
as of December 31, 2011, please see Note 7 to our financial statements included at the end of this annual report. During 2012,
we plan to repay approximately $18.5 million of our long-term debt outstanding as of December 31, 2011. During 2011, we entered
into a new credit facility in the amount of $52.8 million for Pelopidasand we entered into a new credit facility in the
amount of $38.4 million for Venus Horizon. Additionally, during 2011, we accepted a commitment letter from a bank for a
credit facility for up to $20.0 million, which will be used for the financing of the acquisition of Hull No. 616, the documentation
for which was concluded in February 2012. This credit facility will be made available after delivery from the shipyard of Hull
No.616. Additionally, during February 2012, we accepted a commitment letter from a bank for a credit facility for up
to $18.0 million, which will be used for the financing of the acquisition of Hull No. 631. For more information regarding
these credit facilities, please refer to Notes 10(b) and 23(b) of the financial statements included at the end of this annual report.

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Covenants under Credit Facilities

The credit facilities impose operating and financial restrictions
on us. These restrictions in our existing credit facilities generally limit our subsidiaries’ ability to, among other things,
and subject to exceptions set forth in such credit facilities:

·pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends;

·enter into certain long-term charters;

·incur additional indebtedness, including through the issuance of guarantees;

·change the flag, class or management of the vessel mortgaged under such facility or terminate or materially amend the management
agreement relating to such vessel;

·create liens on their assets;

·make loans;

·make investments;

·make capital expenditures;

·undergo a change in ownership or control or permit a change in ownership and control of our Manager;

·sell the vessel mortgaged under such facility; and

·permit our chief executive officer to change.

Our existing credit facilities also require certain of our
subsidiaries to maintain financial ratios and satisfy financial covenants. Depending on the credit facility, certain of our subsidiaries
are subject to financial ratios and covenants requiring that these subsidiaries:

·ensure that the market value of the vessel mortgaged under the applicable credit facility, determined in accordance with
the terms of that facility, does not fall below 110% to 120%, as applicable, of the outstanding amount of the loan (the “Minimum
Value Covenant”);

·ensure that outstanding amounts in currencies other than the U.S. dollar do not exceed 100% or 110%, as applicable, of the
U.S. dollar equivalent amount specified in the relevant credit agreement for the applicable period by, if necessary, providing
cash collateral security in an amount necessary for the outstanding amounts to meet this threshold; and

·ensure that we comply with certain financial covenants under the guarantees described below.

In addition, under guarantees we have entered into with respect
to certain of our subsidiaries’ existing credit facilities, we are subject to financial covenants. Depending on the guarantee,
these financial covenants include the following:

·our total consolidated liabilities with the relevant bank divided by our total consolidated assets must not exceed 70% or
80% as the case may be (“Consolidated Leverage Covenant”). The total consolidated assets are based on the market value
of our vessels and the book values of all other assets, on an adjusted basis as set out in the relevant guarantee;



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·the ratio of our aggregate debt to EBITDA must not at any time exceed 5.5:1 on a trailing 12 months’ basis (“EBITDA
Covenant”);

·our net consolidated worth (total consolidated assets less total consolidated liabilities) (“Consolidated Net Worth
Covenant”) must not at any time be less than $150.0 million, $175.0 million or $200.0 million, as the case may be, with the
relevant bank;

·payment of dividends is subject to no event of default having occurred;

·maintenance of minimum free liquidity of $500,000 is required on deposit on a per vessel basis for five vessels; and

·a minimum of 51% of the Company’s shares shall remain directly or indirectly beneficially owned by the Hajioannou
family for the duration of the relevant credit facilities.

As of December 31, 2011, the Company was in compliance with
all debt covenants with respect to its credit facilities.

Interest Rate Swaps

We have entered into interest rate swap agreements converting
floating interest rate exposure into fixed interest rates in order to economically hedge our exposure to fluctuations in prevailing
market interest rates. For more information on our interest rate swap agreements, refer to Note 13 to our financial statements
included at the end of this annual report.

C.Research and Development, Patents and Licenses

We incur from time to time expenditures relating to inspections
for acquiring new vessels that meet our standards. Such expenditures are insignificant and they are expensed as they are incurred.

D.Trend Information

Our results of operations depend primarily on the charter
hire rates that we are able to realize, and the demand for drybulk vessel services. After reaching historical highs in mid-2008,
charter hire rates for Panamax and Capesize drybulk vessels reached near historically low levels. For example, the Baltic Drybulk
Index, or “BDI,” declined from a high of 11,793 in May 2008 to a low of 663 in December 2008, which represents a decline
of 94% within a single calendar year. During 2011, the BDI remained volatile, reaching a low of 1,043 on February 4, 2011 and a
high of 2,173 on October 14, 2011. On February 3, 2012, the BDI reached a 26 year low of 647, due to a combination of weak demand
and further growth in vessel supply. As of February 24, 2012, the BDI was 718.

The decline and volatility in charter rates in the drybulk
market reflects in part the fact that the supply of drybulk vessels in the market has been increasing, and the number of newbuild
drybulk vessels on order is near historic highs. Demand for drybulk vessel services is influenced by global financial conditions.
The recovery in China and India positively influenced the charter rates; however, global financial conditions remain volatile and
demand for drybulk services may decrease in the future. The combination of increasing drybulk capacity (both current and expected)
and decreasing demand or demand which is not offset by the increase in drybulk capacity is likely to result in reductions in charter
hire rates and, as a consequence, adversely affect our operating results.

In response to the volatile market conditions, we seek to
strengthen our charter coverage. Currently, 15 of our 20 vessels are employed or scheduled to be employed in period time charters
of more than three months. Additionally, we believe we have structured our capital expenditure requirements, debt commitments and
liquidity resources is a way that will provide us with financial flexibility (see “Item 5. Operating and Financial Review
and Prospects — B. Liquidity and Capital Resources” for more information).

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E.Off-Balance Sheet Arrangements

As of December 31, 2011, we did not have any off-balance
sheet arrangements.

F.Contractual Obligations

Our contractual obligations as of December 31, 2011 were:

|                            |  | Total                  |         | Less
        than
    1 year (2012) |   | 1-3 years
    (2013-2014) |  | 3-5 years
    (2015-2016) |         | More
        than 5
        years (After
        January 1, 2017)
|--------------------------- |  | ---------------------- | ------- | ----------------------------------- | - | ------------------------- |  | ------------------------- | ------- | -----------------------------------------------------------------
|                            |  | (Dollars in thousands) |        
|                            |  |                        |         |                                     |   |                           |  |                           |         |                                                                  
|Long-term debt obligations  |  | $                      | 484,291 |                                     | $ | 18,486                    |  | $                         | 55,321  |                                                                  
|Interest payments (1)       |  | $                      | 69,962  |                                     | $ | 16,834                    |  | $                         | 23,877  |                                                                  
|Payments to our Manager (2) |  | $                      | 16,794  |                                     | $ | 10,661                    |  | $                         | 6,133   |                                                                  
|Newbuild contracts          |  | $                      | 251,837 |                                     | $ | 146,515                   |  | $                         | 105,322 |                                                                  
|Total                       |  | $                      | 822,884 |                                     | $ | 192,496                   |  | $                         | 190,653 |                                                                  
|                            |  |                        |         |                                     |   |                           |  |                           |         |                                                                  



| | (1) | Amounts shown reflect estimated interest payments we expect to make with respect to our long-term debt obligations and interest
rate swaps. The interest payments reflect an assumed LIBOR-based applicable interest rate of 0.8080% (the six-month LIBOR rate
as of December 31, 2011), plus the relevant margin of the applicable credit facility and the estimated net settlement of our interest
rate swaps. See “—B. Liquidity and Capital Resources—Interest Rate Swaps.”
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Represents a fee of $700 per vessel per day and 1.25% of estimated charter hire based on charter agreements in place as of
December 31, 2011, based on the management fees effective as of May 29, 2011. In addition, it includes amounts payable to our Manager
in respect of the commission of 1.0% of the contract price of our newbuilds and $550,000 per newbuild for the on-premises supervision
of newbuilds, of which 50% is payable upon the signing of the relevant supervision agreement, and 50% upon successful completion
of the sea trials of each newbuild, we have agreed to acquire pursuant to shipbuilding contracts, memoranda of agreement or otherwise.
The levels of the above mentioned fees are subject to adjustment every year and will be agreed upon between us and our Manager.
The fees shown in the table above do not take into account any potential future changes to the fees.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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Part III

ITEM 19. EXHIBITS

|              |  |                                                                                                                                         
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                             
|             
|12.1          |  | Certification of principal executive officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended
|             
|12.2          |  | Certification of principal financial officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended

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SIGNATURES

The Registrant hereby certifies that
it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this
Amendment No. 3 to its Annual Report for the fiscal year ended December 31, 2011 on its behalf.

July 6, 2012

By /s/ KONSTANTINOS ADAMOPOULOS

Name:	Konstantinos Adamopoulos
Title:	Chief Financial Officer and Director





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