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, 2009 and 2008. 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 the 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, 2009, we own and operate a modern fleet of 25 Handymax dry bulk vessels, 22 of which are of the Supramax class. We also have a Supramax newbuilding program for the construction of vessels in Japan and China. As of September 30, 2009, we have taken delivery of five vessels and an additional 22 vessels will be constructed and are expected to be delivered into our fleet through 2011, at which time, and assuming no disposition or acquisition of additional vessels, our total fleet will consist of 47 vessels with a combined carrying capacity of 2.55 million dwt. In October 2009 the Company took delivery of the Bittern.

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 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 25 vessels in our operating fleet, with an aggregate carrying capacity of 1,296,917 deadweight tons, have an average age of only six years compared to an average age for the world Handymax dry bulk 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. On the other hand, time charters provide a shipping company with a predictable level of revenues. We have entered into time charters for substantially all of our vessels in our operating fleet 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. We believe 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. During the nine months ended September 30, 2009, we took delivery of two newbuilding vessels, CRESTED EAGLE and STELLAR EAGLE, which promptly entered into their respective charters. The following table represents certain information about the Company's revenue earning charters on its operating fleet:

                                                        Daily Time
                                Time Charter           Charter Hire
Vessel      Year Built  Dwt     Expiration (1)             Rate
Cardinal                        September 2010 to
(2)            2004    55,362   November 2010             $16,250
Condor         2001    50,296   May 2010 to July 2010     $22,000
                                April 2010 to June
Falcon         2001    51,268   2010                      $39,500
                                February 2010 to May
Griffon        1995    46,635   2010                      $9,500
                                April 2010 to June
Harrier        2001    50,296   2010                      $13,500
                                May 2010 to August
Hawk I         2001    50,296   2010                      $13,000
                                January 2011 to May
Heron (3)      2001    52,827   2011                      $26,375
                                October 2009 to
Jaeger (4)     2004    52,248   January 2010              $10,100
                                March 2010 to July
Kestrel I      2004    50,326   2010                      $11,500
                                September 2009 to
Kite (5)       1997    47,195   January 2010              $9,500
                                December 2010 to March
Merlin (6)     2001    50,296   2011                      $25,000
                                October 2009 to
Osprey I       2002    50,206   December 2009             $25,000
Peregrine                       January 2010              $8,500
(7)            2001    50,913   Jan 2010 to Jan        $10,500 (with
                                2011/Mar 2011          Index share)
                                February 2010 to May
Sparrow (8)    2000    48,225   2010                      $10,000
                                December 2009 to March
Tern           2003    50,200   2010                      $8,500
                                May 2010 to August
Shrike         2003    53,343   2010                      $25,600
                                September 2010 to
Skua (9)       2003    53,350   November 2010              Index
Kittiwake                       June 2010 to September
(10)           2002    53,146   2010                       Index
Goldeneye
(11)           2002    52,421   May 2010 to July 2010      Index
                                Feb 2012                  $24,750
Wren (12)      2008    53,349   Feb 2012 to Dec        $18,000 (with
                                2018/Apr 2019          profit share)
Redwing                         August 2010 to October
(13)           2007    53,411   2010                       Index
Woodstar                        Jan 2014                  $18,300
(14)           2008    53,390   Jan 2014 to Dec        $18,000 (with
                                2018/Apr 2019          profit share)
Crowned                         September 2009 to
Eagle          2008    55,940   December 2009             $16,000
Crested                         December 2009 to March
Eagle (15)     2009    55,989   2010                      $10,500
Stellar                         February 2010 to May
Eagle          2009    55,989   2010                      $12,000

(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 1.25% to 6.25%, to third party ship brokers.
(2) Upon conclusion of the previous charter in September 2009, the CARDINAL commenced a new one year charter at $16,250 per day.
(3) The charterer of the HERON has an option to extend the charter period by 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.
(4) In December 2008, the JAEGER commenced a charter for one year at an average daily rate of approximately $10,100 based on a charter rate of $5,000 per day for the first 50 days and $11,000 per day for the balance of the year. Revenue recognition is based on an average daily rate of $10,100.
(5) In March 2009, the charterer of the KITE paid in advance for the duration of the charter an amount equal to the difference between the prevailing daily charter rate of $21,000 and a new rate of $9,500 per day. This amount has been recorded in Deferred Revenue in the Company's financial statements and has been recognized into revenue ratably until September 2009.
(6) 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.
(7) The charterer of the PEREGRINE has exercised the option to extend the charter period by 11 to 13 months. The rate for the option period is index based with a minimum daily time charter rate of $10,500 and a profit share which is equal to 50% of the difference between the base rate and the average of the trailing Baltic Supramax Index for each 30 day hire period.
(8) In March 2009, the charterer of the SPARROW paid in advance for the duration of the charter an amount equal to the difference between the prevailing daily charter rate of $34,500 and a new rate of $10,000 per day. This amount has been recorded in Deferred Revenue in the Company's financial statements and is being recognized into revenue ratably over the charter period such that the daily charter rate remains effectively $34,500 per day. The cash payment received by the Company has been adjusted by a present value interest rate factor of 3%.

(9) Upon conclusion of the previous time charter in August 2009, the SKUA commenced an index based one year charter with a minimum rate of $8,500 per day. The index rate will be an average of the trailing Baltic Supramax Index for each 15 day hire period. For the first 45 days of the charter the index rate will be a maximum of $19,000 per day.
(10) Upon conclusion of the previous time charter, in July 2009, the KITTIWAKE performed a short term charter at $18,000 per day and then entered into another short term time charter at $25,000 per day. Subsequently, in October 2009, the KITTIWAKE will enter into an index based charter for one year with a minimum rate of $8,500 per day. The index rate will be an average of the trailing Baltic Supramax Index for each 15 day hire period. For the first 45 days of the charter the index rate will be a maximum of $19,000 per day.
(11) Upon conclusion of the previous time charter, in September 2009, the GOLDENEYE commenced an index based one year charter with a minimum rate of $8,500 per day. The index rate will be an average of the trailing Baltic Supramax Index for each 15 day hire period. For the first 50 days of the charter the index rate is $15,000 per day.
(12) 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.
(13) Upon conclusion of the previous time charter in August 2009, the REDWING commenced an index based one year charter with a minimum rate of $8,500 per day. The index rate will be an average of the trailing Baltic Supramax Index for each 15 day hire period. For the first 45 days of the charter the index rate will be a maximum of $19,000 per day.
(14) The WOODSTAR has entered into a long-term charter. The charter rate until January 2014 is $18,300 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 $18,152.
(15) The charterer of the CRESTED EAGLE has an option to extend the charter period by 11 to 13 months at a base time charter rate of $11,500 plus 50% of the difference between the base rate and the BSI time charter average (provided the BSI TC average is greater than the base rate). The profit share to be calculated each month is based on the trailing BSI TC average for the month.

The following table, as of September 30, 2009, represents certain information about the Company's newbuilding vessels being constructed and their employment upon delivery:

Vessel           Dwt   Year Built - Time Charter Employment Daily Time
                         Expected   Expiration (2)           Charter     Profit Share
                       Delivery (1)                         Hire Rate
                                                               (3)
Bittern (4)     58,000   Oct 2009   Dec 2014                 $18,850          -
                                    Dec 2014 to Dec
                                    2018/Apr 2019            $18,000   50% over $22,000
Canary          58,000    2009Q4    Jan 2015                 $18,850          -
                                    Jan 2015 to Dec
                                    2018/Apr 2019            $18,000   50% over $22,000
Thrasher        53,100    2009Q4    Feb 2016                 $18,400          -
                                    Feb 2016 to Dec
                                    2018/Apr 2019            $18,000   50% over $22,000
Crane           58,000    2010Q1    Feb 2015                 $18,850          -
                                    Feb 2015 to Dec
                                    2018/Apr 2019            $18,000   50% over $22,000
Avocet          53,100    2010Q1    Mar 2016                 $18,400          -
                                    Mar 2016 to Dec
                                    2018/Apr 2019            $18,000   50% over $22,000
Egret (5)       58,000    2010Q1    Sep 2012 to Jan 2013     $17,650   50% over $20,000
Golden Eagle    56,000    2010Q1    Charter Free                -             -
Imperial Eagle  56,000    2010Q1    Charter Free                -             -
Gannet (5)      58,000    2010Q1    Oct 2012 to Feb 2013     $17,650   50% over $20,000
Grebe(5)        58,000    2010Q2    Nov 2012 to Mar 2013     $17,650   50% over $20,000
Ibis (5)        58,000    2010Q2    Dec 2012 to Apr 2013     $17,650   50% over $20,000
Jay             58,000    2010Q2    Sep 2015                 $18,500   50% over $21,500
                                    Sep 2015 to Dec
                                    2018/Apr 2019            $18,000   50% over $22,000
Kingfisher      58,000    2010Q3    Oct 2015                 $18,500   50% over $21,500
                                    Oct 2015 to Dec
                                    2018/Apr 2019            $18,000   50% over $22,000
Martin          58,000    2010Q3    Dec 2016 to Dec 2017     $18,400          -
Thrush          53,100    2010Q4    Charter Free                -             -
Nighthawk       58,000    2011Q1    Sep 2017 to Sep 2018     $18,400          -
Oriole          58,000    2011Q3    Jan 2018 to Jan 2019     $18,400          -
Owl             58,000    2011Q3    Feb 2018 to Feb 2019     $18,400          -
Petrel (5)      58,000    2011Q4    Jun 2014 to Oct 2014     $17,650   50% over $20,000
Puffin (5)      58,000    2011Q4    Jul 2014 to Nov 2014     $17,650   50% over $20,000
Roadrunner (5)  58,000    2011Q4    Aug 2014 to Dec 2014     $17,650   50% over $20,000
Sandpiper (5)   58,000    2011Q4    Sep 2014 to Jan 2015     $17,650   50% over $20,000

CONVERTED INTO OPTIONS

Cernicalo (6,7)  58,000 2011Q1 Charter Free - -
Fulmar (6,7)     58,000 2011Q3 Charter Free - -
  Besra (6,7)    58,000 2011Q4 Charter Free - -
Goshawk (6,7)    58,000 2011Q4 Charter Free - -
Snipe (7)        58,000 2012Q1 Charter Free - -
Swift (7)        58,000 2012Q1 Charter Free - -
Raptor (7)       58,000 2012Q2 Charter Free - -
Saker (7)        58,000 2012Q2 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 rate presented are gross daily charter rates before brokerage commissions ranging from 1.25% to 6.25% to third party ship brokers.
(4) The BITTERN was delivered in October 2009.
(5) The charterer has an option to extend the charter by 2 periods of 11 to 13 months each.
(6) Options for construction declared on December 27, 2007.
(7) Firm contracts converted to options in December 2008.

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.

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 thirty shore based personnel, including our senior management team and our office staff, who either directly or through this subsidiary, provides the following services:

• commercial operations and technical supervision;
• safety monitoring;
• vessel acquisition; and
• financial, accounting and information technology services.

The technical management of our fleet is provided by our unaffiliated third party technical managers, V. Ships, Wilhelmsen Ship Management, and Anglo Eastern International Ltd., that we believe are three of the world's largest providers of independent ship management and related services. In conjunction with our management, V. Ships, Wilhelmsen, and Anglo Eastern International Ltd., 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 technical managers on an ongoing basis and may add or change technical managers. In the third quarter of 2009, the Company set up its own in-house technical management capability in order to establish a vessel management bench-mark with its external technical managers.

Our third-party 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, 2009 and 2008, the technical management fee averaged $8,983 and $8,913 per vessel per month, respectively. For the nine-month periods ended September 30, 2009 and 2008, the technical management fee averaged $9,017 and $9,049 per vessel per month, respectively. Management fees paid to our third-party 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, 2008.

Results of Operations for the three month and nine-month periods ended September 30, 2009 and 2008:

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, 2009 September 30, 2008 September 30, 2009 September 30, 2008

Ownership
Days              2,300              1,866              6,713              5,160
Available
Days              2,271              1,862              6,657              5,117
Operating
Days              2,264              1,845              6,634              5,094
Fleet
Utilization       99.7%              99.1%              99.7%              99.6%

• 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. Ownership days for the three month period ended September 30, 2009, increased 23% from the corresponding period in 2008 as we operated 25 vessels in the third quarter of 2009 compared to 21 vessels in the corresponding period in 2008.

• Available days: We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to vessel familiarization upon acquisition, scheduled repairs or repairs under . . .