Summary of EAGLE BULK SHIPPING INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following is a discussion of the Company's financial condition and results of operation for the three-month and nine-month periods ended September 30, 2008 and 2007. This section should be read in conjunction with the consolidated financial statements included elsewhere in this report and the notes to those financial statements.
This discussion contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbor provided for under these sections. These statements may include words such as "believe," "estimate," "project," "intend," "expect," "plan," "anticipate," and similar expressions in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward looking statements reflect management's current expectations and observations with respect to future events and financial performance. Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by those forward-looking statements. The principal factors that affect our financial position, results of operations and cash flows include, charter market rates, which have recently declined significantly from historic highs, periods of charter hire, vessel operating expenses and voyage costs, which are incurred primarily in U.S. dollars, depreciation expenses, which are a function of the cost of our vessels, significant vessel improvement costs and our vessels' estimated useful lives, and financing costs related to our indebtedness. Our actual results may differ materially from those anticipated in these forward looking statements as a result of certain factors which could include the following: (i) changes in demand in the dry bulk market, including, without limitation, changes in production of, or demand for, commodities and bulk cargoes, generally or in particular regions; (ii) greater than anticipated levels of dry bulk vessel new building orders or lower than anticipated rates of dry bulk vessel scrapping;
(iii) changes in rules and regulations applicable to the dry bulk industry, including, without limitation, legislation adopted by international bodies or organizations such as the International Maritime Organization and the European Union or by individual countries; (iv) actions taken by regulatory authorities;
(v) changes in trading patterns significantly impacting overall dry bulk tonnage requirements; (vi) changes in the typical seasonal variations in dry bulk charter rates; (vii) changes in the cost of other modes of bulk commodity transportation; (viii) changes in general domestic and international political conditions; (ix) changes in the condition of the Company's vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking costs); (x) and other factors listed from time to time in our filings with the Securities and Exchange Commission. This discussion also includes statistical data regarding world dry bulk fleet and orderbook and fleet age. We generated some of this data internally, and some were obtained from independent industry publications and reports that we believe to be reliable sources. We have not independently verified this data nor sought the consent of any organizations to refer to their reports in this quarterly report. We disclaim any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Overview
We are Eagle Bulk Shipping Inc., a Republic of Marshall Islands corporation headquartered in New York City. We own one of the largest fleets of Supramax dry bulk vessels in the world. Supramax dry bulk vessels range in size from 50,000 to 60,000 dwt. We transport a broad range of major and minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes. As of September 30, 2008, we owned and operated a modern fleet of 21 Handymax dry bulk vessels, 18 of which are of the Supramax class. We also have a Supramax newbuilding program for the construction of 35 newbuilding vessels in Japan and China. The first of these vessels was delivered to us in June 2008. Upon delivery of all newbuilding vessels by early 2012, our total fleet will consist of 55 vessels with a combined carrying capacity of 3 million dwt.
We are focused on maintaining a high quality fleet that is concentrated primarily in one vessel type - Handymax dry bulk carriers and its sub-category of Supramax vessels which are Handymax vessels ranging in size

Table of Contents

from 50,000 to 60,000 dwt. These vessels have the cargo loading and unloading flexibility of on-board cranes while offering cargo carrying capacities approaching that of Panamax dry bulk vessels, which range in size from 60,000 to 100,000 dwt and rely on port facilities to load and offload their cargoes. We believe that the cargo handling flexibility and cargo carrying capacity of the Supramax class vessels make them attractive to cargo interests and vessel charterers. The 21 vessels in our operating fleet, with an aggregate carrying capacity of 1,074,433 deadweight tons, have an average age of only 6 years compared to an average age for the world Handymax dry dulk fleet of over 15 years.
Each of our vessels is owned by us through a separate wholly owned Republic of the Marshall Islands limited liability company.
We maintain our principal executive offices at 477 Madison Avenue, New York, New York 10022. Our telephone number at that address is (212) 785-2500. Our website address is www.eagleships.com. Information contained on our website does not constitute part of this quarterly report.
Our financial performance since inception is based on the following key elements of our business strategy:
(1) concentration in one vessel category: Supramax class of Handymax dry bulk vessels, which we believe offer size, operational and geographical advantages (over Panamax and Capesize vessels),

(2) our strategy is to charter our vessels primarily pursuant to one- to three-year time charters to allow us to take advantage of the stable cash flow and high utilization rates that are associated with medium to long-term time charters. Reliance on the spot market contributes to fluctuations in revenue, cash flow, and net income. On the other hand, time charters provide a shipping company with a predictable level of revenues. We have entered into time charters for all of our vessels which range in length from approximately one to three years, and in the case of many of our newbuilding vessels for periods up to December 2018. Our time charters provide for fixed semi-monthly payments in advance. This strategy is effective in strong and weak dry bulk markets, giving us security and predictability of cashflows when we look at the volatility of the shipping markets,

(3) maintain high quality vessels and improve standards of operation through improved environmental procedures, crew training and maintenance and repair procedures, and

(4) maintain a balance between purchasing vessels as market conditions and opportunities arise and maintaining prudent financial ratios (e.g. leverage ratio).

We have employed all of our vessels in our operating fleet on time charters for periods ranging from approximately one to three years. The following table represents certain information about the Company's revenue earning charters on its operating fleet as of September 30, 2008:

                   Year                                              Daily Time
     Vessel        Built    Dwt     Time Charter Expiration (1)   Charter Hire Rate
     Cardinal      2004    55,408   May 2008 to August 2008            $28,000
                                    August 2008 to Jun/Sep 2009        $62,000

     Condor (2)    2001    50,296   May 2009 to August 2009            $20,500

     Falcon (3)    2001    50,296   April 2008 to July 2008            $20,950
                                    August 2008 to Apr/Jun 2010        $39,500

     Griffon       1995    46,635   March 2009 to June 2009            $20,075

     Harrier (4)   2001    50,296   June 2009 to September 2009        $24,000

     Hawk I        2001    50,296   April 2009 to June 2009            $22,000

     Heron (5)     2001    52,827   January 2011 to March 2011         $26,375

Table of Contents

                 Year                                                         Daily Time
Vessel           Built    Dwt     Time Charter Expiration (1)             Charter Hire Rate
Jaeger (6)       2004    52,248   July 2008 to August 2008                     $27,500
                                  August 2008 to November 2008                 $50,000

Kestrel I (7)    2004    50,326   April 2008 to June 2008                      $18,750
                                  June 2008 to April 2009                      $20,000

Kite             1997    47,195   September 2009 to January 2010               $21,000

Merlin(8)        2001    50,296   December 2010 to March 2011                  $25,000

Osprey I (9)     2002    50,206   July 2008 to November 2008                   $21,000
                                  November 2008 to December 2009               $25,000

Peregrine        2001    50,913   December 2008 to February 2009               $20,500

Sparrow (10)     2000    48,225   February 2010 to April 2010                  $34,500

Tern (11)        2003    50,200   February 2009 to April 2009                  $20,500

Shrike (12)      2003    53,343   April 2009 to June 2009                      $24,600
                                  June 2009 to Aug 2010                        $25,600

Skua (13)        2003    53,350   May 2009 to August 2009                      $24,200
                                  August 2009 to September 2010                $25,200

Kittiwake (14)   2002    53,146   May 2008 to August 2008                      $30,400
                                  August 2008 to July/Sep 2009                 $56,250

Goldeneye        2002    52,421   May 2009 to August 2009                      $61,000
                                                                               $24,750

Wren (15)        2008    53,100   Feb 2012                                     $18,000
                                  Feb 2012 to Dec 2018/Apr 2019           (withprofit share)

Redwing          2007    52,421   September 2008 to August/October 2009        $50,000

(1) The date range provided represents the earliest and latest date on which the charterer may redeliver the vessel to the Company upon the termination of the charter. The time charter hire rates presented are gross daily charter rates before brokerage commissions, ranging from 2.25% to 6.25%, to third party ship brokers.

(2) The charterer of the CONDOR has exercised its option to extend the charter period by 11 to 13 months at a time charter rate of $22,000 per day.

(3) Upon the conclusion of the current charter in July 2008, the FALCON commenced a new time charter with a rate of $39,500 per day for 21 to 23 months. The charterer has an option to extend the charter period by 11 to 13 months at a daily time charter rate of $41,000.

(4) The daily rate for the HARRIER is $27,000 for the first year and $21,000 for the second year. Revenue recognition is based on an average daily rate of $24,000.

(5) The previous time charter on the HERON at a daily rate of $24,000 ended in January 2008. The vessel commenced a new time charter with a rate of $26,375 per day for 36 to 39 months. The charterer has an option for a further 11 to 13 months at a time charter rate of $27,375 per day. The charterer has a second option for a further 11 to 13 months at a time charter rate of $28,375 per day.

(6) The JAEGER commenced a new time charter in August 2008 with a daily rate of $50,000 for a period of 3 to 5 months. The vessel was previously employed on a one year time charter at a daily rate which was based on the average time charter rate for the Baltic Supramax Index, but in no case be greater than $27,500 per day or less than $22,500 per day. The vessel earned the maximum $27,500 per day during the currency of that charter.

(7) The charterer of the KESTREL I has exercised its option to extend the charter period by 11 to 13 months at a daily time charter rate of $20,000 per day.

(8) The daily rate for the MERLIN is $27,000 for the first year, $25,000 for the second year and $23,000 for the third year. Revenue recognition is based on an average daily rate of $25,000.

Table of Contents

(9) The charterer of the OSPREY I has exercised its option to extend the charter period by up to 11 to 13 months at a time charter rate of $25,000 per day. The charterer has an additional option to extend for a further 11 to 13 months at a time charter rate of $25,000 per day.

(10) The SPARROW was previously on a time charter at a base rate of $24,000 per day for 11 to 13 months with a profit share of 30% of up to the first $3,000 per day over the base rate. This charter ended in February 2008.

(11) The TERN previously was on a time charter at a daily rate of $19,000. This charter ended in March 2008 and the charterer has exercised its option to extend the charter period by 11 to 13 months at a time charter rate of $20,500 per day.

(12) The charterer of the SHRIKE has exercised their option to extend the charter period by 12 to 14 months at a daily time charter rate of $25,600.

(13) The charterer of the SKUA has exercised an option to extend the charter period by 11 to 13 months at a daily time charter rate of $25,200.

(14) The KITTIWAKE commenced a new time charter in August 2008 with a daily rate of $56,250 for 11 to 13 months.
The KITTIWAKE
was previously
employed on a
time charter
for 11 to
13 months at a
charter rate
which was
based on the
average time
charter rate
for the Baltic
Supramax
Index, but in
no case be
greater than
$30,400 per
day or less
than $24,400
per day. The
vessel earned
the maximum
$30,400 per
day during the
currency of
that charter.

(15) The WREN has entered into a long-term charter. The charter rate until February 2012 is $24,750 per day. Subsequently, the charter until redelivery in December 2018 to April 2019 will be profit share based. The base charter rate will be $18,000 with a 50% profit share for earned rates over $22,000 per day. Revenue recognition for the base rate from commencement of the charter is based on an average daily base rate of $20,306.

The Company has entered into a 35 vessel construction program. The first of these vessels, the Wren, was constructed in China and delivered to the Company in June 2008. As of September 30, 2008, the Company has contracts for 34 vessels to be constructed in China and Japan. The following table represents certain information about the Company's newbuilding vessels and their employment upon delivery:

                    Year Built                                     Daily Time
                    - Expected                                    Charter Hire
Vessel      Dwt     Delivery(1)   Time Charter Expiration(2)        Rate(3)        Profit Share
Woodstar   53,100    Oct 2008     Jan 2014                          $18,300             -
(4)
                                  Jan 2014 to Dec 2018/Apr 2019     $18,000      50% over $22,000

Crowned    56,000    Nov 2008     Nov 2008 to Oct 2009              $16,000             -
Eagle

Crested    56,000    Feb 2009     Charter Free                         -                -
Eagle

Stellar    56,000    Apr 2009     Charter Free                         -                -
Eagle

Thrush     53,100    Sep 2009     Charter Free                         -                -

Bittern    58,000    Sep 2009     Dec 2014                          $18,850             -
                                  Dec 2014 to Dec 2018/Apr 2019     $18,000      50% over $22,000

Canary     58,000    Oct 2009     Jan 2015                          $18,850             -
                                  Jan 2015 to Dec 2018/Apr 2019     $18,000      50% over $22,000

Thrasher   53,100    Nov 2009     Feb 2016                          $18,400             -
                                  Feb 2016 to Dec 2018/Apr 2019     $18,000      50% over $22,000

Crane      58,000    Nov 2009     Feb 2015                          $18,850             -
                                  Feb 2015 to Dec 2018/Apr 2019     $18,000      50% over $22,000

Avocet     53,100    Dec 2009     Mar 2016                          $18,400             -
                                  Mar 2016 to Dec 2018/Apr 2019     $18,000      50% over $22,000

Egret      58,000    Dec 2009     Sep 2012 to Jan 2013              $17,650      50% over $20,000
(5)

Golden     56,000    Jan 2010     Charter Free                         -                -
Eagle

Gannet     58,000    Jan 2010     Oct 2012 to Feb 2013              $17,650      50% over $20,000
(5)

Imperial   56,000    Feb 2010     Charter Free                         -                -
Eagle

Grebe(5)   58,000    Feb 2010     Nov 2012 to Mar 2013              $17,650      50% over $20,000

Table of Contents

                          Year Built                                     Daily Time
                          - Expected                                    Charter Hire
Vessel            Dwt     Delivery(1)   Time Charter Expiration(2)        Rate(3)        Profit Share
Ibis (5)         58,000    Mar 2010     Dec 2012 to Apr 2013              $17,650      50% over $20,000

Jay              58,000    Apr 2010     Sep 2015                          $18,500      50% over $21,500
                                        Sep 2015 to Dec 2018/Apr 2019     $18,000      50% over $22,000

Kingfisher       58,000    May 2010     Oct 2015                          $18,500      50% over $21,500
                                        Oct 2015 to Dec 2018/Apr 2019     $18,000      50% over $22,000

Martin           58,000    Jun 2010     Dec 2016 to Dec 2017              $18,400             -

Besra (6)        58,000    Oct 2010     Charter Free                         -                -

Cernicalo (6)    58,000    Jan 2011     Charter Free                         -                -

Nighthawk        58,000    Mar 2011     Sep 2017 to Sep 2018              $18,400             -

Oriole           58,000    Jul 2011     Jan 2018 to Jan 2019              $18,400             -

Fulmar (6)       58,000    Jul 2011     Charter Free                         -                -

Owl              58,000    Aug 2011     Feb 2018 to Feb 2019              $18,400             -

Petrel (5)       58,000    Sep 2011     Jun 2014 to Oct 2014              $17,650      50% over $20,000

Goshawk (6)      58,000    Sep 2011     Charter Free                         -                -

Puffin (5)       58,000    Oct 2011     Jul 2014 to Nov 2014              $17,650      50% over $20,000

Roadrunner (5)   58,000    Nov 2011     Aug 2014 to Dec 2014              $17,650      50% over $20,000

Sandpiper (5)    58,000    Dec 2011     Sep 2014 to Jan 2015              $17,650      50% over $20,000

Snipe(6)         58,000    Jan 2012     Charter Free                         -                -

Swift (6)        58,000    Feb 2012     Charter Free                         -                -

Raptor (6)       58,000    Mar 2012     Charter Free                         -                -

Saker (6)        58,000    Apr 2012     Charter Free                         -                -

(1) Vessel build and delivery dates are estimates based on guidance received from shipyard.

(2) The date range represents the earliest and latest date on which the charterer may redeliver the vessel to the Company upon the termination of the charter.

(3) The time charter hire rates presented are gross daily charter rates before brokerage commissions, ranging from 2.25% to 6.25%, to third party ship brokers. Revenue recognition for the long term charters with base rates will be based on an average daily base rate over the life of the charter from commencement of the charter.

(4) The WOODSTAR was constructed and delivered into the Company fleet in October 2008. The vessel immediately commenced its scheduled charter.

(5) The charterer has an option to extend the charter by two periods of 11 to 13 months each.

(6) Options for construction exercised on December 27, 2007.

Fleet Management
The management of our fleet includes the following functions:
� Strategic management. We locate, obtain financing and insurance for, purchase and sell vessels.

� Commercial management. We obtain employment for our vessels and manage our relationships with charterers.

� Technical management. The technical manager performs day-to-day operations and maintenance of our vessels.

Commercial and Strategic Management
We carry out the commercial and strategic management of our fleet through our wholly owned subsidiary, Eagle Shipping International (USA) LLC, a Republic of the Marshall Islands limited liability company that maintains its principal executive offices in New York City. We currently have a total of twenty one shore based personnel, including our senior management team and our office staff, who either directly or through this subsidiary, provides the following services:

Table of Contents

� commercial operations and technical supervision;

� safety monitoring;

� vessel acquisition; and

� financial, accounting and information technology services.

Technical Management
The technical management of our fleet is provided by unaffiliated third party technical managers V. Ships, whom we believe is the world's largest provider of independent ship management and related services, and Wilhelmsen Ship Management (formerly Barber Ship Management), a leading internationally recognized ship manager. In conjunction with our management, V. Ships and Wilhelmsen, we have established an operating expense budget for each vessel. All deviations from the budgeted amounts are for our account. We review the performance of our ship managers on an ongoing basis and may add or change technical managers.
Our technical managers are paid a fixed management fee for each vessel in our operating fleet for the technical management services provided. For the three-month periods ended September 30, 2008 and 2007, the technical management fee averaged $8,913 and $8,851 per vessel per month, respectively. For the nine month periods ended September 30, 2008 and 2007, the technical management fee averaged $9,390 and $8,990 per vessel per month, respectively. Management fees paid to our technical managers are recorded under Vessel Expenses. Value of Assets and Cash Requirements
The replacement costs of comparable new vessels may be above or below the book value of our fleet. The market value of our fleet may be below book value when market conditions are weak and exceed book value when markets conditions are strong. Customary with industry practice, we may consider asset redeployment which at times may include the sale of vessels at less than their book value.
The Company's results of operations and cash flow may be significantly affected by future charter markets.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations is based upon our interim, unaudited, consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, and the rules and regulations of the SEC which apply to interim financial statements. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions and conditions.
Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions and conditions. As the discussion and analysis of our financial condition and results of operations is based upon our interim, unaudited, consolidated financial statements, they do not include all of the information on critical accounting policies normally included in consolidated financial statements. Accordingly, a detailed description of these critical accounting policies should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Reports on Form 10-K. There have been no material changes from the "Critical Accounting Policies" previously disclosed in our Form 10-K for the year ended December 31, 2007.

Table of Contents

Results of Operations for the three month periods ended September 30, 2008 and 2007:
Fleet Data
We believe that the measures for analyzing future trends in our results of operations consist of the following:

                                                                   Three Months Ended                                    Nine Months Ended
                                                     September 30, 2008        September 30, 2007          September 30, 2008        September 30, 2007
Ownership Days                                                 1,866                       1,656                      5,160                     4,510
Available Days                                                 1,862                       1,607                      5,117                     4,440
Operating Days                                                 1,845                       1,595                      5,094                     4,417
Fleet Utilization                                               99.1 %                      99.3 %                     99.6 %                    99.5 %


� 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. . . .