UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2012
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-51442
GENCO SHIPPING & TRADING LIMITED
(Exact name of registrant as specified in its charter)
|
Republic of the Marshall Islands |
|
98-043-9758 |
|
(State or other jurisdiction of |
|
(I.R.S. Employer |
299 Park Avenue, 12th Floor, New York, New York 10171
(Address of principal executive offices) (Zip Code)
(646) 443-8550
(Registrant’s telephone number, including area code)
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 o
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 o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer o |
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Accelerated filer x |
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|
|
|
|
Non-accelerated filer o |
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of shares outstanding of each of the issuer’s classes of common stock, as of November 9, 2012: Common stock, $0.01 per share — 43,823,598 shares.
Genco Shipping & Trading Limited
Genco Shipping & Trading Limited
Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011
(U.S. Dollars in thousands, except for share and per share data)
(Unaudited)
|
|
|
September 30, 2012 |
|
December 31, |
| ||
|
Assets |
|
|
|
|
| ||
|
Current assets: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
87,778 |
|
$ |
227,968 |
|
|
Due from charterers, net of a reserve of $495 and $906, respectively |
|
8,616 |
|
13,688 |
| ||
|
Prepaid expenses and other current assets |
|
17,020 |
|
17,709 |
| ||
|
Total current assets |
|
113,414 |
|
259,365 |
| ||
|
|
|
|
|
|
| ||
|
Noncurrent assets: |
|
|
|
|
| ||
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Vessels, net of accumulated depreciation of $563,749 and $464,518, respectively |
|
2,695,638 |
|
2,794,860 |
| ||
|
Deferred drydock, net of accumulated amortization of $6,675 and $11,111, respectively |
|
13,723 |
|
6,934 |
| ||
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Other assets, net of accumulated amortization of $11,304 and $7,749, respectively |
|
31,907 |
|
17,795 |
| ||
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Fixed assets, net of accumulated depreciation and amortization of $3,077 and $2,422, respectively |
|
5,402 |
|
5,591 |
| ||
|
Other noncurrent assets |
|
514 |
|
514 |
| ||
|
Restricted cash |
|
10,150 |
|
9,750 |
| ||
|
Investments |
|
23,825 |
|
24,468 |
| ||
|
Total noncurrent assets |
|
2,781,159 |
|
2,859,912 |
| ||
|
|
|
|
|
|
| ||
|
Total assets |
|
$ |
2,894,573 |
|
$ |
3,119,277 |
|
|
|
|
|
|
|
| ||
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Liabilities and Equity |
|
|
|
|
| ||
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Current liabilities: |
|
|
|
|
| ||
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Accounts payable and accrued expenses |
|
$ |
25,150 |
|
$ |
30,712 |
|
|
Current portion of long-term debt |
|
— |
|
185,077 |
| ||
|
Deferred revenue |
|
1,876 |
|
4,227 |
| ||
|
Current portion of lease obligations |
|
642 |
|
— |
| ||
|
Fair value of derivative instruments |
|
609 |
|
1,686 |
| ||
|
Total current liabilities |
|
28,277 |
|
221,702 |
| ||
|
Noncurrent liabilities: |
|
|
|
|
| ||
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Long-term lease obligations |
|
2,056 |
|
1,823 |
| ||
|
Time charters acquired |
|
606 |
|
1,164 |
| ||
|
Fair value of derivative instruments |
|
18,261 |
|
23,654 |
| ||
|
Convertible senior note payable |
|
109,726 |
|
106,381 |
| ||
|
Long-term interest payable |
|
13,199 |
|
— |
| ||
|
Long-term debt |
|
1,413,439 |
|
1,402,935 |
| ||
|
Total noncurrent liabilities |
|
1,557,287 |
|
1,535,957 |
| ||
|
|
|
|
|
|
| ||
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Total liabilities |
|
1,585,564 |
|
1,757,659 |
| ||
|
|
|
|
|
|
| ||
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Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
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Equity: |
|
|
|
|
| ||
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Genco Shipping & Trading Limited shareholders’ equity: |
|
|
|
|
| ||
|
Common stock, par value $0.01; 100,000,000 shares authorized; issued and outstanding 43,821,098 and 36,307,598 shares at September 30, 2012 and December 31, 2011, respectively |
|
438 |
|
363 |
| ||
|
Additional paid-in capital |
|
862,488 |
|
809,443 |
| ||
|
Accumulated other comprehensive loss |
|
(11,798 |
) |
(17,549 |
) | ||
|
Retained earnings |
|
260,031 |
|
359,349 |
| ||
|
Total Genco Shipping & Trading Limited shareholders’ equity |
|
1,111,159 |
|
1,151,606 |
| ||
|
Noncontrolling interest |
|
197,850 |
|
210,012 |
| ||
|
Total equity |
|
1,309,009 |
|
1,361,618 |
| ||
|
|
|
|
|
|
| ||
|
Total liabilities and equity |
|
$ |
2,894,573 |
|
$ |
3,119,277 |
|
See accompanying notes to condensed consolidated financial statements.
Genco Shipping & Trading Limited
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2012 and 2011
(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)
(Unaudited)
|
|
|
For the Three Months |
|
For the Nine Months |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
Revenues: |
|
|
|
|
|
|
|
|
| ||||
|
Voyage revenues |
|
$ |
53,603 |
|
$ |
93,484 |
|
$ |
174,740 |
|
$ |
292,614 |
|
|
Service revenues |
|
828 |
|
828 |
|
2,466 |
|
2,457 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total revenues |
|
54,431 |
|
94,312 |
|
177,206 |
|
295,071 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Voyage expenses |
|
2,693 |
|
1,702 |
|
5,099 |
|
2,595 |
| ||||
|
Vessel operating expenses |
|
28,272 |
|
26,133 |
|
85,622 |
|
76,394 |
| ||||
|
General, administrative, and management fees |
|
8,622 |
|
8,759 |
|
25,680 |
|
25,908 |
| ||||
|
Depreciation and amortization |
|
35,038 |
|
34,378 |
|
103,954 |
|
101,484 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total operating expenses |
|
74,625 |
|
70,972 |
|
220,355 |
|
206,381 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Operating (loss) income |
|
(20,194 |
) |
23,340 |
|
(43,149 |
) |
88,690 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other (expense) income: |
|
|
|
|
|
|
|
|
| ||||
|
Other (expense) income |
|
(43 |
) |
31 |
|
(40 |
) |
(80 |
) | ||||
|
Interest income |
|
49 |
|
167 |
|
352 |
|
503 |
| ||||
|
Interest expense |
|
(21,546 |
) |
(21,793 |
) |
(65,160 |
) |
(64,654 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other expense |
|
(21,540 |
) |
(21,595 |
) |
(64,848 |
) |
(64,231 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
(Loss) income before income taxes |
|
(41,734 |
) |
1,745 |
|
(107,997 |
) |
24,459 |
| ||||
|
Income tax expense |
|
(303 |
) |
(328 |
) |
(918 |
) |
(1,041 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net (loss) income |
|
(42,037 |
) |
1,417 |
|
(108,915 |
) |
23,418 |
| ||||
|
Less: Net loss attributable to noncontrolling interest |
|
(3,588 |
) |
(145 |
) |
(9,626 |
) |
(1,662 |
) | ||||
|
Net (loss) income attributable to Genco Shipping & Trading Limited |
|
$ |
(38,449 |
) |
$ |
1,562 |
|
$ |
(99,289 |
) |
$ |
25,080 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net (loss) income per share-basic |
|
$ |
(0.90 |
) |
$ |
0.04 |
|
$ |
(2.40 |
) |
$ |
0.71 |
|
|
Net (loss) income per share-diluted |
|
$ |
(0.90 |
) |
$ |
0.04 |
|
$ |
(2.40 |
) |
$ |
0.71 |
|
|
Weighted average common shares outstanding-basic |
|
42,885,810 |
|
35,157,110 |
|
41,290,719 |
|
35,149,912 |
| ||||
|
Weighted average common shares outstanding-diluted |
|
42,885,810 |
|
35,212,840 |
|
41,290,719 |
|
35,212,041 |
| ||||
|
Dividends declared per share |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
See accompanying notes to condensed consolidated financial statements.
Genco Shipping & Trading Limited
Condensed Consolidated Statements of Comprehensive (Loss) Income
For the Three and Nine Months Ended September 30, 2012 and 2011
(U.S. Dollars in Thousands)
(Unaudited)
|
|
|
For the Three Months Ended |
|
For the Nine Months |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net (loss) income |
|
$ |
(42,037 |
) |
$ |
1,417 |
|
$ |
(108,915 |
) |
$ |
23,418 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Change in unrealized gain on investments |
|
(3,561 |
) |
(14,602 |
) |
(643 |
) |
(26,866 |
) | ||||
|
Unrealized gain on cash flow hedges, net |
|
1,525 |
|
2,417 |
|
6,394 |
|
10,333 |
| ||||
|
Other comprehensive (loss) income |
|
(2,036 |
) |
(12,185 |
) |
5,751 |
|
(16,533 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Comprehensive (loss) income |
|
(44,073 |
) |
(10,768 |
) |
(103,164 |
) |
6,885 |
| ||||
|
Less: Comprehensive loss attributable to noncontrolling interest |
|
(3,588 |
) |
(145 |
) |
(9,626 |
) |
(1,662 |
) | ||||
|
Comprehensive (loss) income attributable to Genco Shipping & Trading Limited |
|
$ |
(40,485 |
) |
$ |
(10,623 |
) |
$ |
(93,538 |
) |
$ |
8,547 |
|
See accompanying notes to condensed consolidated financial statements.
Genco Shipping & Trading Limited
Condensed Consolidated Statements of Equity
For the Nine Months Ended September 30, 2012 and 2011
(U.S. Dollars in Thousands, except for share and per share data)
(Unaudited)
|
|
|
Common |
|
Additional |
|
Accumulated |
|
Retained |
|
Genco |
|
Noncontrolling |
|
Total Equity |
| |||||||
|
Balance — January 1, 2012 |
|
$ |
363 |
|
$ |
809,443 |
|
$ |
(17,549 |
) |
$ |
359,349 |
|
$ |
1,151,606 |
|
$ |
210,012 |
|
$ |
1,361,618 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net loss |
|
|
|
|
|
|
|
(99,289 |
) |
(99,289 |
) |
(9,626 |
) |
(108,915 |
) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Change in unrealized gain on investments |
|
|
|
|
|
(643 |
) |
|
|
(643 |
) |
— |
|
(643 |
) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Unrealized gain on cash flow hedges, net |
|
|
|
|
|
6,394 |
|
|
|
6,394 |
|
— |
|
6,394 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Issuance of 7,500,000 shares of common stock |
|
75 |
|
49,799 |
|
|
|
|
|
49,874 |
|
— |
|
49,874 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Issuance of 15,000 shares of nonvested stock, less forfeitures of 1,500 shares |
|
— |
|
— |
|
|
|
|
|
— |
|
— |
|
— |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Nonvested stock amortization |
|
|
|
3,214 |
|
|
|
|
|
3,214 |
|
1,377 |
|
4,591 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Cash dividends paid by Baltic Trading Limited |
|
|
|
|
|
|
|
(29 |
) |
(29 |
) |
(3,881 |
) |
(3,910 |
) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Vesting of restricted shares issued by Baltic Trading Limited |
|
|
|
32 |
|
|
|
|
|
32 |
|
(32 |
) |
— |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Balance — September 30, 2012 |
|
$ |
438 |
|
$ |
862,488 |
|
$ |
(11,798 |
) |
$ |
260,031 |
|
$ |
1,111,159 |
|
$ |
197,850 |
|
$ |
1,309,009 |
|
|
|
|
Common |
|
Additional |
|
Accumulated |
|
Retained |
|
Genco |
|
Noncontrolling |
|
Total Equity |
| |||||||
|
Balance — January 1, 2011 |
|
$ |
359 |
|
$ |
803,778 |
|
$ |
(5,210 |
) |
$ |
334,022 |
|
$ |
1,132,949 |
|
$ |
215,204 |
|
$ |
1,348,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net income (loss) |
|
|
|
|
|
|
|
25,080 |
|
25,080 |
|
(1,662 |
) |
23,418 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Change in unrealized gain on investments |
|
|
|
|
|
(26,866 |
) |
|
|
(26,866 |
) |
— |
|
(26,866 |
) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Unrealized gain on cash flow hedges, net |
|
|
|
|
|
10,333 |
|
|
|
10,333 |
|
— |
|
10,333 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Issuance of 15,000 shares of nonvested stock, less forfeitures of 1,100 shares |
|
— |
|
— |
|
|
|
|
|
— |
|
— |
|
— |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Nonvested stock amortization |
|
|
|
4,443 |
|
|
|
|
|
4,443 |
|
2,174 |
|
6,617 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Cash dividends paid by Baltic Trading Limited |
|
|
|
|
|
|
|
(45 |
) |
(45 |
) |
(5,530 |
) |
(5,575 |
) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Vesting of restricted shares issued by Baltic Trading Limited |
|
|
|
37 |
|
|
|
|
|
37 |
|
(37 |
) |
— |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Balance — September 30, 2011 |
|
$ |
359 |
|
$ |
808,258 |
|
$ |
(21,743 |
) |
$ |
359,057 |
|
$ |
1,145,931 |
|
$ |
210,149 |
|
$ |
1,356,080 |
|
See accompanying notes to condensed consolidated financial statements.
Genco Shipping & Trading Limited
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011
(U.S. Dollars in Thousands)
(Unaudited)
|
|
|
For the Nine Months |
| ||||
|
|
|
2012 |
|
2011 |
| ||
|
Cash flows from operating activities: |
|
|
|
|
| ||
|
Net (loss) income |
|
$ |
(108,915 |
) |
$ |
23,418 |
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |
|
|
|
|
| ||
|
Depreciation and amortization |
|
103,954 |
|
101,484 |
| ||
|
Amortization of deferred financing costs |
|
3,555 |
|
2,368 |
| ||
|
Amortization of time charters acquired |
|
(558 |
) |
(1,432 |
) | ||
|
Amortization of discount on Convertible Senior Notes |
|
3,345 |
|
2,999 |
| ||
|
Unrealized gain on derivative instruments |
|
(76 |
) |
(38 |
) | ||
|
Amortization of nonvested stock compensation expense |
|
4,591 |
|
6,617 |
| ||
|
Change in assets and liabilities: |
|
|
|
|
| ||
|
Decrease (increase) in due from charterers |
|
5,072 |
|
(2,275 |
) | ||
|
Decrease (increase) in prepaid expenses and other current assets |
|
689 |
|
(2,073 |
) | ||
|
Increase in other noncurrent assets |
|
— |
|
(514 |
) | ||
|
Decrease in accounts payable and accrued expenses |
|
(3,751 |
) |
(2,143 |
) | ||
|
Decrease in deferred revenue |
|
(2,351 |
) |
(5,359 |
) | ||
|
Increase in lease obligations |
|
875 |
|
953 |
| ||
|
Deferred drydock costs incurred |
|
(10,442 |
) |
(2,669 |
) | ||
|
|
|
|
|
|
| ||
|
Net cash (used in) provided by operating activities |
|
(4,012 |
) |
121,336 |
| ||
|
Cash flows from investing activities: |
|
|
|
|
| ||
|
Purchase of vessels |
|
(894 |
) |
(98,860 |
) | ||
|
Deposits on vessels |
|
— |
|
(87 |
) | ||
|
Purchase of other fixed assets |
|
(1,948 |
) |
(692 |
) | ||
|
Changes in deposits of restricted cash |
|
(400 |
) |
(750 |
) | ||
|
|
|
|
|
|
| ||
|
Net cash used in investing activities |
|
(3,242 |
) |
(100,389 |
) | ||
|
Cash flows from financing activities: |
|
|
|
|
| ||
|
Repayments on the 2007 Credit Facility |
|
(118,588 |
) |
(37,500 |
) | ||
|
Proceeds from the $100 Million Term Loan Facility |
|
— |
|
40,000 |
| ||
|
Repayments on the $100 Million Term Loan Facility |
|
(15,385 |
) |
(3,243 |
) | ||
|
Proceeds from the $253 Million Term Loan Facility |
|
— |
|
21,500 |
| ||
|
Repayments on the $253 Million Term Loan Facility |
|
(40,600 |
) |
(14,841 |
) | ||
|
Proceeds from issuance of common stock |
|
50,721 |
|
— |
| ||
|
Payment of common stock issuance costs |
|
(847 |
) |
— |
| ||
|
Payment of Convertible Senior Notes issuance costs |
|
— |
|
(51 |
) | ||
|
Payment of dividend by subsidiary |
|
(3,910 |
) |
(5,576 |
) | ||
|
Payment of deferred financing costs |
|
(4,327 |
) |
(328 |
) | ||
|
|
|
|
|
|
| ||
|
Net cash used in financing activities |
|
(132,936 |
) |
(39 |
) | ||
|
|
|
|
|
|
| ||
|
Net (decrease) increase in cash and cash equivalents |
|
(140,190 |
) |
20,908 |
| ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents at beginning of period |
|
227,968 |
|
270,877 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
87,778 |
|
$ |
291,785 |
|
See accompanying notes to condensed consolidated financial statements.
Genco Shipping & Trading Limited
(U.S. Dollars in Thousands, Except Per Share and Share Data)
Notes to Condensed Consolidated Financial Statements (unaudited)
1 - GENERAL INFORMATION
The accompanying condensed consolidated financial statements include the accounts of Genco Shipping & Trading Limited (“GS&T”), its wholly-owned subsidiaries, and its subsidiary, Baltic Trading Limited (collectively, the “Company”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. GS&T is incorporated under the laws of the Marshall Islands and as of September 30, 2012, is the sole owner of all of the outstanding shares of the following subsidiaries: Genco Ship Management LLC; Genco Investments LLC; Genco Management (USA) Limited; and the ship-owning subsidiaries set forth below.
Below is the list of GS&T’s wholly owned ship-owning subsidiaries as of September 30, 2012:
|
Wholly Owned Subsidiaries |
|
Vessels Acquired |
|
Dwt |
|
Delivery Date |
|
Year Built |
|
|
|
|
|
|
|
|
|
|
|
Genco Reliance Limited |
|
Genco Reliance |
|
29,952 |
|
12/6/04 |
|
1999 |
|
Genco Vigour Limited |
|
Genco Vigour |
|
73,941 |
|
12/15/04 |
|
1999 |
|
Genco Explorer Limited |
|
Genco Explorer |
|
29,952 |
|
12/17/04 |
|
1999 |
|
Genco Carrier Limited |
|
Genco Carrier |
|
47,180 |
|
12/28/04 |
|
1998 |
|
Genco Sugar Limited |
|
Genco Sugar |
|
29,952 |
|
12/30/04 |
|
1998 |
|
Genco Pioneer Limited |
|
Genco Pioneer |
|
29,952 |
|
1/4/05 |
|
1999 |
|
Genco Progress Limited |
|
Genco Progress |
|
29,952 |
|
1/12/05 |
|
1999 |
|
Genco Wisdom Limited |
|
Genco Wisdom |
|
47,180 |
|
1/13/05 |
|
1997 |
|
Genco Success Limited |
|
Genco Success |
|
47,186 |
|
1/31/05 |
|
1997 |
|
Genco Beauty Limited |
|
Genco Beauty |
|
73,941 |
|
2/7/05 |
|
1999 |
|
Genco Knight Limited |
|
Genco Knight |
|
73,941 |
|
2/16/05 |
|
1999 |
|
Genco Leader Limited |
|
Genco Leader |
|
73,941 |
|
2/16/05 |
|
1999 |
|
Genco Marine Limited |
|
Genco Marine |
|
45,222 |
|
3/29/05 |
|
1996 |
|
Genco Prosperity Limited |
|
Genco Prosperity |
|
47,180 |
|
4/4/05 |
|
1997 |
|
Genco Muse Limited |
|
Genco Muse |
|
48,913 |
|
10/14/05 |
|
2001 |
|
Genco Acheron Limited |
|
Genco Acheron |
|
72,495 |
|
11/7/06 |
|
1999 |
|
Genco Surprise Limited |
|
Genco Surprise |
|
72,495 |
|
11/17/06 |
|
1998 |
|
Genco Augustus Limited |
|
Genco Augustus |
|
180,151 |
|
8/17/07 |
|
2007 |
|
Genco Tiberius Limited |
|
Genco Tiberius |
|
175,874 |
|
8/28/07 |
|
2007 |
|
Genco London Limited |
|
Genco London |
|
177,833 |
|
9/28/07 |
|
2007 |
|
Genco Titus Limited |
|
Genco Titus |
|
177,729 |
|
11/15/07 |
|
2007 |
|
Genco Challenger Limited |
|
Genco Challenger |
|
28,428 |
|
12/14/07 |
|
2003 |
|
Genco Charger Limited |
|
Genco Charger |
|
28,398 |
|
12/14/07 |
|
2005 |
|
Genco Warrior Limited |
|
Genco Warrior |
|
55,435 |
|
12/17/07 |
|
2005 |
|
Genco Predator Limited |
|
Genco Predator |
|
55,407 |
|
12/20/07 |
|
2005 |
|
Genco Hunter Limited |
|
Genco Hunter |
|
58,729 |
|
12/20/07 |
|
2007 |
|
Genco Champion Limited |
|
Genco Champion |
|
28,445 |
|
1/2/08 |
|
2006 |
|
Genco Constantine Limited |
|
Genco Constantine |
|
180,183 |
|
2/21/08 |
|
2008 |
|
Genco Raptor LLC |
|
Genco Raptor |
|
76,499 |
|
6/23/08 |
|
2007 |
|
Genco Cavalier LLC |
|
Genco Cavalier |
|
53,617 |
|
7/17/08 |
|
2007 |
|
Genco Thunder LLC |
|
Genco Thunder |
|
76,588 |
|
9/25/08 |
|
2007 |
|
Genco Hadrian Limited |
|
Genco Hadrian |
|
169,694 |
|
12/29/08 |
|
2008 |
|
Genco Commodus Limited |
|
Genco Commodus |
|
169,025 |
|
7/22/09 |
|
2009 |
|
Genco Maximus Limited |
|
Genco Maximus |
|
169,025 |
|
9/18/09 |
|
2009 |
|
Genco Claudius Limited |
|
Genco Claudius |
|
169,025 |
|
12/30/09 |
|
2010 |
|
Genco Bay Limited |
|
Genco Bay |
|
34,296 |
|
8/24/10 |
|
2010 |
|
Genco Ocean Limited |
|
Genco Ocean |
|
34,409 |
|
7/26/10 |
|
2010 |
|
Genco Avra Limited |
|
Genco Avra |
|
34,391 |
|
5/12/11 |
|
2011 |
|
Genco Mare Limited |
|
Genco Mare |
|
34,428 |
|
7/20/11 |
|
2011 |
|
Genco Spirit Limited |
|
Genco Spirit |
|
34,432 |
|
11/10/11 |
|
2011 |
|
Genco Aquitaine Limited |
|
Genco Aquitaine |
|
57,981 |
|
8/18/10 |
|
2009 |
|
Genco Ardennes Limited |
|
Genco Ardennes |
|
57,981 |
|
8/31/10 |
|
2009 |
|
Genco Auvergne Limited |
|
Genco Auvergne |
|
57,981 |
|
8/16/10 |
|
2009 |
|
Genco Bourgogne Limited |
|
Genco Bourgogne |
|
57,981 |
|
8/24/10 |
|
2010 |
|
Genco Brittany Limited |
|
Genco Brittany |
|
57,981 |
|
9/23/10 |
|
2010 |
|
Genco Languedoc Limited |
|
Genco Languedoc |
|
57,981 |
|
9/29/10 |
|
2010 |
|
Genco Loire Limited |
|
Genco Loire |
|
53,416 |
|
8/4/10 |
|
2009 |
|
Genco Lorraine Limited |
|
Genco Lorraine |
|
53,416 |
|
7/29/10 |
|
2009 |
|
Genco Normandy Limited |
|
Genco Normandy |
|
53,596 |
|
8/10/10 |
|
2007 |
|
Genco Picardy Limited |
|
Genco Picardy |
|
55,257 |
|
8/16/10 |
|
2005 |
|
Genco Provence Limited |
|
Genco Provence |
|
55,317 |
|
8/23/10 |
|
2004 |
|
Genco Pyrenees Limited |
|
Genco Pyrenees |
|
57,981 |
|
8/10/10 |
|
2010 |
|
Genco Rhone Limited |
|
Genco Rhone |
|
58,018 |
|
3/29/11 |
|
2011 |
Baltic Trading Limited (“Baltic Trading”) was a wholly-owned indirect subsidiary of GS&T until Baltic Trading completed its initial public offering, or IPO, on March 15, 2010. As of September 30, 2012 and December 31, 2011, GS&T’s wholly-owned subsidiary Genco Investments LLC owned 5,699,088 shares of Baltic Trading’s Class B Stock, which represented a 25.09% and 25.11% ownership interest in Baltic Trading, respectively, and 83.40% and 83.41% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock, respectively. Additionally, pursuant to the subscription agreement between Genco Investments LLC and Baltic Trading, for so long as GS&T directly or indirectly holds at least 10% of the aggregate number of outstanding shares of Baltic Trading’s common stock and Class B stock, Genco Investments LLC will be entitled to receive an additional number of shares of Baltic Trading’s Class B stock equal to 2% of the number of common shares issued in the future, other than shares issued under Baltic Trading’s 2010 Equity Incentive Plan.
Below is the list of Baltic Trading’s wholly owned ship-owning subsidiaries as of September 30, 2012:
|
Baltic Trading’s Wholly Owned |
|
Vessel |
|
Dwt |
|
Delivery Date |
|
Year |
|
|
|
|
|
|
|
|
|
|
|
Baltic Leopard Limited |
|
Baltic Leopard |
|
53,447 |
|
4/8/10 |
|
2009 |
|
Baltic Panther Limited |
|
Baltic Panther |
|
53,351 |
|
4/29/10 |
|
2009 |
|
Baltic Cougar Limited |
|
Baltic Cougar |
|
53,432 |
|
5/28/10 |
|
2009 |
|
Baltic Jaguar Limited |
|
Baltic Jaguar |
|
53,474 |
|
5/14/10 |
|
2009 |
|
Baltic Bear Limited |
|
Baltic Bear |
|
177,717 |
|
5/14/10 |
|
2010 |
|
Baltic Wolf Limited |
|
Baltic Wolf |
|
177,752 |
|
10/14/10 |
|
2010 |
|
Baltic Wind Limited |
|
Baltic Wind |
|
34,409 |
|
8/4/10 |
|
2009 |
|
Baltic Cove Limited |
|
Baltic Cove |
|
34,403 |
|
8/23/10 |
|
2010 |
|
Baltic Breeze Limited |
|
Baltic Breeze |
|
34,386 |
|
10/12/10 |
|
2010 |
The Company provides technical services for drybulk vessels purchased by Maritime Equity Partners LLC (“MEP”), which is managed by a company owned by Peter C. Georgiopoulos, Chairman of the Board of Directors of GS&T. These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services. The services are provided for a fee of $750 per ship per day plus reimbursement of out-of-pocket costs and will be provided for an initial term of one year. MEP has the right to cancel provision of services on 60 days’ notice with payment of a one-year termination fee upon a change in control of the Company. The Company may terminate provision of the services at any time on 60 days’ notice. Peter C. Georgiopoulos, the Company’s Chairman of the Board, is a minority investor in MEP, and affiliates of Oaktree Capital Management, L.P., of which Stephen A. Kaplan, a director of the Company, is a principal, are majority investors in MEP.
On February 28, 2012, the Company closed on an equity offering of 7,500,000 shares of common stock at an offering price of $7.10 per share. The Company received net proceeds of $49,874 after deducting underwriters’ fees and expenses.
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which include the accounts of GS&T, its wholly-owned subsidiaries and Baltic Trading, a subsidiary in which the Company owns a majority of the voting interests and exercises control. All intercompany accounts and transactions have been eliminated in consolidation.
Basis of presentation
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and operating results have been included in the statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2011 (the “2011 10-K”). The results of operations for the three and nine month period ended September 30, 2012 and 2011 are not necessarily indicative of the operating results for the full year.
Vessels, net
Vessels, net is stated at cost less accumulated depreciation. Included in vessel costs are acquisition costs directly attributable to the acquisition of a vessel and expenditures made to prepare the vessel for its initial voyage. The Company also capitalizes interest costs for a vessel under construction as a cost that is directly attributable to the acquisition of a vessel. Vessels are depreciated on a straight-line basis over their estimated useful lives, determined to be 25 years from the date of initial delivery from the shipyard. Depreciation expense for vessels for the three months ended September 30, 2012 and 2011 was $33,462 and $33,054, respectively. Depreciation expense for vessels for the nine months ended September 30, 2012 and 2011 was $99,646 and $96,773, respectively.
Depreciation expense is calculated based on cost less the estimated residual scrap value. The costs of significant replacements, renewals and betterments are capitalized and depreciated over the shorter of the vessel’s remaining estimated useful life or the estimated life of the renewal or betterment. Undepreciated cost of any asset component being replaced that was acquired after the initial vessel purchase is written off as a component of vessel operating expense. Expenditures for routine maintenance and repairs are expensed as incurred. Scrap value is estimated by the Company by taking the estimated scrap value of $245/lwt multiplied by the weight of the ship in lightweight tons (lwt).
Deferred revenue
Deferred revenue primarily relates to cash received from charterers prior to it being earned. These amounts are recognized as revenue when earned. Additionally, deferred revenue includes estimated customer claims mainly due to time charter performance issues. As of September 30, 2012 and December 31, 2011, the Company had an accrual of $563 and $762, respectively, related to these estimated customer claims.
Voyage revenues
Since the Company’s inception, revenues have been generated from time charter agreements, pool agreements and spot market-related time charters. A time charter involves placing a vessel at the charterer’s disposal for a set period of time during which the charterer may use the vessel in return for the payment by the charterer of a specified daily hire rate, including any ballast bonus payments received pursuant to the time charter agreement. Spot market-related time charters are the same as other time charter agreements, except the time charter rates are variable and are based on a percentage of the average daily rates as published by the Baltic Dry Index (“BDI”). Voyage revenues also include sale of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.
Voyage expense recognition
In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. There are certain other non-specified voyage expenses such as commissions, which are typically borne by the Company. At the inception of a time charter, the Company records the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses. These differences in bunkers resulted in net gains of $242 and $666 during the three months ended September 30, 2012 and 2011, respectively, and $1,665 and $2,319 during the nine months ended September 30, 2012 and 2011, respectively. Additionally, voyage expenses include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.
Noncontrolling interest
Net loss attributable to noncontrolling interest during the three and nine months ended September 30, 2012 and 2011 reflects the noncontrolling interest’s share of the net loss of Baltic Trading, a subsidiary of the Company, which owns and employs drybulk vessels in the spot market or on spot market-related time charters. The spot market represents immediate chartering of a vessel, usually for single voyages. At September 30, 2012, the noncontrolling interest held a 74.91% economic interest in Baltic Trading while only holding 16.60% of voting power. At December 31, 2011, the noncontrolling interest held a 74.89% economic interest in Baltic Trading while only holding 16.59% of voting power.
Income taxes
Pursuant to certain agreements, GS&T technically and commercially manages vessels for Baltic Trading as well as provides technical management of vessels for MEP in exchange for specified fees for these services provided. These services are performed by Genco Management (USA) Limited (“Genco (USA)”), which has elected to be taxed as a corporation for United States federal income tax purposes. As such, Genco (USA) is subject to United States federal income tax on its worldwide net income, including the net
income derived from providing these services. Genco (USA) has entered into a cost-sharing agreement with the Company and Genco Ship Management LLC, collectively Manco, pursuant to which Genco (USA) agrees to reimburse Manco for the costs incurred by Genco (USA) for the use of Manco’s personnel and services in connection with the provision of the services for both Baltic Trading and MEP’s vessels.
Total revenue earned for these services during the three months ended September 30, 2012 and 2011 was $1,530 and $1,588, respectively, of which $703 and $760, respectively, eliminated upon consolidation. After allocation of certain expenses, there was taxable income of $664 associated with these activities for the three months ended September 30, 2012. This resulted in estimated tax expense of $299 for the three months ended September 30, 2012. After allocation of certain expenses, there was taxable income of $668 associated with these activities for the three months ended September 30, 2011. This resulted in income tax expense of $319 for the three months ended September 30, 2011.
Total revenue earned for these services during the nine months ended September 30, 2012 and 2011 was $4,575 and $4,689, respectively, of which $2,109 and $2,232, respectively, eliminated upon consolidation. After allocation of certain expenses, there was taxable income of $1,985 associated with these activities for the nine months ended September 30, 2012. This resulted in estimated tax expense of $892 for the nine months ended September 30, 2012. After allocation of certain expenses, there was taxable income of $2,113 associated with these activities for the nine months ended September 30, 2011. This resulted in income tax expense of $1,010 for the nine months ended September 30, 2011.
Baltic Trading is subject to income tax on its United States source income. During the three months ended September 30, 2012 and 2011, Baltic Trading had United States source income of $200 and $452, respectively. Baltic Trading’s United States income tax expense for the three months ended September 30, 2012 and 2011 was $4 and $9, respectively.
During the nine months ended September 30, 2012 and 2011, Baltic Trading had United States source income of $1,321 and $2,909, respectively. Baltic Trading’s United States income tax expense for the nine months ended September 30, 2012 and 2011 was $26 and $31, respectively.
Recent accounting pronouncements
In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (Topic 820) — Fair Value Measurement” (“ASU 2011-04”), to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements, particularly for Level 3 fair value measurements. This standard was effective for interim and annual periods beginning after December 15, 2011 and is applied on a prospective basis. The Company has adopted ASU 2011-04 and the impact of adoption is not material to the Company’s condensed consolidated financial statements.
In June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220), Presentation of Comprehensive Income” (“ASU 2011-05”), to require an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of equity. The standard does not change the items that must be reported for other comprehensive income, how such items are measured or when they must be reclassified to net income. This standard was effective for interim and annual periods beginning after December 15, 2011 and was to be applied retrospectively. The FASB has deferred the requirement to present reclassification adjustments for each component of accumulate other comprehensive income in both net income and other comprehensive income. Companies are required to either present amounts reclassified out of other comprehensive income on the face of the financial statements or disclose those amounts in the notes to the financial statements. During the deferral period, there is no requirement to separately present or disclose the reclassification adjustments into net income. The effective date of this deferral will be consistent with the effective date of ASU 2011-05. The Company has adopted ASU 2011-05 and disclosed comprehensive income in our condensed consolidated statements of comprehensive (loss) income. This guidance only affects financial statement presentation and has no impact on the Company’s consolidated results of operations, financial position and cash flows.
3 - SEGMENT INFORMATION
The Company determines its operating segments based on the information utilized by the chief operating decision maker to assess performance. Based on this information, the Company has two operating segments, GS&T and Baltic Trading. Both GS&T and Baltic Trading are engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of
drybulk carrier vessels. GS&T seeks to deploy its vessels on time charters, spot market-related time charters or in vessel pools trading in the spot market and Baltic Trading seeks to deploy its vessel charters in the spot market, which represents immediate chartering of a vessel, usually for single voyages, or employing vessels on spot market-related time charters. Segment results are evaluated based on net income (loss). The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company’s condensed consolidated financial statements.
The following table presents a reconciliation of total voyage revenue from external (third party) customers for the Company’s two operating segments to total consolidated voyage revenue from external customers for the Company for the three and nine months ended September 30, 2012 and 2011.
|
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
Voyage revenue from external customers |
|
|
|
|
|
|
|
|
| ||||
|
GS&T |
|
$ |
47,312 |
|
$ |
82,586 |
|
$ |
154,552 |
|
$ |
262,259 |
|
|
Baltic Trading |
|
6,291 |
|
10,898 |
|
20,188 |
|
30,355 |
| ||||
|
Total operating segments |
|
53,603 |
|
93,484 |
|
174,740 |
|
292,614 |
| ||||
|
Eliminating revenue |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Total consolidated voyage revenue from external customers |
|
$ |
53,603 |
|
$ |
93,484 |
|
$ |
174,740 |
|
$ |
292,614 |
|
The following table presents a reconciliation of total intersegment revenue, which eliminates upon consolidation, for the Company’s two operating segments for the three and nine months ended September 30, 2012 and 2011. The intersegment revenue noted in the following table represents revenue earned by GS&T pursuant to the management agreement entered into with Baltic Trading, which includes commercial service fees, technical service fees and sale and purchase fees, if any.
|
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
Intersegment revenue |
|
|
|
|
|
|
|
|
| ||||
|
GS&T |
|
$ |
703 |
|
$ |
760 |
|
$ |
2,109 |
|
$ |
2,232 |
|
|
Baltic Trading |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Total operating segments |
|
703 |
|
760 |
|
2,109 |
|
2,232 |
| ||||
|
Eliminating revenue |
|
(703 |
) |
(760 |
) |
(2,109 |
) |
(2,232 |
) | ||||
|
Total consolidated intersegment revenue |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
The following table presents a reconciliation of total net (loss) income for the Company’s two operating segments to total consolidated net (loss) income for the three and nine months ended September 30, 2012 and 2011. The eliminating net loss noted in the following table consists of the elimination of intercompany transactions between GS&T and Baltic Trading, as well as dividends received by GS&T from Baltic Trading for its Class B shares of Baltic Trading.
|
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
Net (loss) income |
|
|
|
|
|
|
|
|
| ||||
|
GS&T |
|
$ |
(36,969 |
) |
$ |
2,144 |
|
$ |
(94,779 |
) |
$ |
27,422 |
|
|
Baltic Trading |
|
(4,822 |
) |
(194 |
) |
(12,942 |
) |
(2,241 |
) | ||||
|
Total operating segments |
|
(41,791 |
) |
1,950 |
|
(107,721 |
) |
25,181 |
| ||||
|
Eliminating net loss |
|
(246 |
) |
(533 |
) |
(1,194 |
) |
(1,763 |
) | ||||
|
Total consolidated net (loss) income |
|
$ |
(42,037 |
) |
$ |
1,417 |
|
$ |
(108,915 |
) |
$ |
23,418 |
|
The following table presents a reconciliation of total assets for the Company’s two operating segments to total consolidated assets as of September 30, 2012 and December 31, 2011. The eliminating assets noted in the following table consist of the elimination of intercompany transactions resulting from the capitalization of fees paid to GS&T by Baltic Trading as vessel assets, including related accumulated depreciation, as well as the outstanding receivable balance due to GS&T from Baltic Trading as of September 30, 2012 and December 31, 2011.
|
|
|
September 30, 2012 |
|
December 31, |
| ||
|
Total assets |
|
|
|
|
| ||
|
GS&T |
|
$ |
2,529,964 |
|
$ |
2,737,988 |
|
|
Baltic Trading |
|
368,127 |
|
384,955 |
| ||
|
Total operating segments |
|
2,898,091 |
|
3,122,943 |
| ||
|
Eliminating assets |
|
(3,518 |
) |
(3,666 |
) | ||
|
Total consolidated assets |
|
$ |
2,894,573 |
|
$ |
3,119,277 |
|
4 - CASH FLOW INFORMATION
As of September 30, 2012 and December 31, 2011, the Company had five and eight interest rate swaps, respectively, which are described and discussed in Note 11 — Interest Rate Swap Agreements. The fair value of all five of the swaps is in a liability position of $18,870, $609 of which was classified within current liabilities, as of September 30, 2012. At December 31, 2011, the eight swaps were in a liability position of $25,340, $1,686 of which was classified within current liabilities.
For the nine months ended September 30, 2012, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in accounts payable and accrued expenses consisting of $31 for the purchase of vessels and $77 for the purchase of other fixed assets. Additionally, for the nine months ended September 30, 2012, the Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in accounts payable and accrued expenses and long-term interest payable consisting of $246 and $13,199, respectively, associated with deferred financing fees.
For the nine months ended September 30, 2011, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in accounts payable and accrued expenses consisting of $804 for the purchase of vessels, $26 associated with deposits on vessels and $1,305 for the purchase of other fixed assets. Additionally, for the nine months ended September 30, 2011, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in prepaid expenses and other current assets as of September 30, 2011 consisting of $15 interest receivable associated with deposits on vessels.
For the nine months ended September 30, 2011, the Company made a reclassification of $10,354 from deposits on vessels to vessels, net of accumulated depreciation, due to the completion of the purchase of the Genco Rhone, Genco Avra and Genco Mare.
During the nine months ended September 30, 2012 and 2011, cash paid for interest, net of amounts capitalized and including bond coupon interest paid, was $61,632 and $61,642, respectively.
During the nine months ended September 30, 2012 and 2011, cash paid for estimated income taxes was $926 and $1,010, respectively.
On May 12, 2011, the Company made grants of nonvested common stock under the Genco Shipping & Trading Limited 2005 Equity Incentive Plan in the amount of 15,000 shares in the aggregate to directors of the Company. The fair value of such nonvested stock was $120. These shares vested on May 17, 2012. On May 12, 2011, Baltic Trading made grants of nonvested common stock in the amount of 12,500 shares to directors of Baltic Trading. The fair value of such nonvested stock was $87. These shares vested on May 17, 2012.
On May 17, 2012, the Company made grants of nonvested common stock under the Genco Shipping & Trading Limited 2005 Equity Incentive Plan in the amount of 15,000 shares in the aggregate to directors of the Company. The fair value of such nonvested stock was $53. On May 17, 2012, Baltic Trading made grants of nonvested common stock in the amount of 12,500 shares to directors of Baltic Trading. The fair value of such nonvested stock was $48.
5 - VESSEL ACQUISITIONS AND DISPOSITIONS
On March 29, 2011, GS&T took delivery of the Genco Rhone, a 58,000 dwt Supramax vessel, which was purchased from Bourbon S.A. (“Bourbon”) pursuant to the Master Agreement dated June 24, 2010 between GS&T and Bourbon. The Genco Rhone was the last of 13 vessels to be acquired and retained by GS&T under such agreements. GS&T paid a total purchase price of approximately $35.7 million for the Genco Rhone which was financed with available cash, including proceeds from its concurrent offerings of common stock and 5.00% Convertible Senior Notes due August 15, 2015, which were completed on July 27, 2010. The
Company drew down from the $253 million term loan facility to refund $21.5 million associated with the purchase of the Genco Rhone on March 30, 2011.
On May 12, 2011, July 20, 2011 and November 10, 2011, GS&T took delivery of the Genco Avra, Genco Mare and Genco Spirit, respectively. These vessels are approximately 34,400 dwt Handysize newbuildings which were purchased from companies within the Metrostar group of companies pursuant to the agreement dated June 3, 2010 to acquire five Handysize vessels. These three vessels were the last vessels delivered pursuant to the aforementioned agreement. GS&T utilized available cash of $29.8 million, as well as $60.0 million under its $100 million term loan facility, to pay the remaining balance of $89.8 million.
Refer to Note 1 — General Information for a listing of the vessel delivery dates for the vessel acquisitions discussed herein.
The Genco Avra and Genco Spirit had existing below market time charters at the time of acquisition. GS&T recorded a liability for time charters acquired of $372 during the second quarter of 2011 upon the delivery of the Genco Avra to its charterer and $205 during the fourth quarter of 2011 upon the delivery of the Genco Spirit to its charterer. Below market time charters, including those acquired during previous periods, were amortized as an increase to voyage revenue in the amount of $187 and $463 for the three months ended September 30, 2012 and 2011, respectively, and $558 and $1,432 for the nine months ended September 30, 2012 and 2011, respectively.
Capitalized interest associated with newbuilding contracts for the three months ended September 30, 2012 and 2011 was $0 and $33, respectively. Capitalized interest associated with newbuilding contracts for the nine months ended September 30, 2012 and 2011 was $0 and $165, respectively.
6 - INVESTMENTS
The Company holds an investment in the capital stock of Jinhui Shipping and Transportation Limited (“Jinhui”). Jinhui is a drybulk shipping owner and operator focused on the Supramax segment of drybulk shipping. This investment is designated as Available For Sale (“AFS”) and is reported at fair value, with unrealized gains and losses recorded in shareholders’ equity as a component of accumulated other comprehensive loss (“AOCI”). At September 30, 2012 and December 31, 2011, the Company held 16,335,100 shares of Jinhui capital stock, which is recorded at its fair value of $23,825 and $24,468, respectively, based on the closing price on September 28, 2012 and December 30, 2011, respectively.
The Company reviews the investment in Jinhui for other than temporary impairment on a quarterly basis. There were no impairment charges recognized for the three and nine months ended September 30, 2012 and 2011.
The unrealized gain on the Jinhui capital stock remains a component of AOCI, since this investment is designated as an AFS security.
Refer to Note 12 — Accumulated Other Comprehensive Loss for a breakdown of the components of AOCI.
7 — NET (LOSS) INCOME PER COMMON SHARE
The computation of basic net (loss) income per share is based on the weighted-average number of common shares outstanding during the year. The computation of diluted net loss (income) per share assumes the vesting of nonvested stock awards (refer to Note 20 — Nonvested Stock Awards), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive. Of the 935,287 nonvested shares outstanding at September 30, 2012 (refer to Note 20 — Nonvested Stock Awards), all are anti-dilutive. The Company’s diluted net (loss) income per share will also reflect the assumed conversion under the Company’s convertible debt if the impact is dilutive under the “if converted” method. The impact of the shares convertible under the Company’s convertible notes is excluded from the computation of diluted net (loss) income per share when interest expense per common share obtainable upon conversion is greater than basic earnings per share.
The components of the denominator for the calculation of basic net (loss) income per share and diluted net (loss) income per share are as follows:
|
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding, basic: |
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding, basic |
|
42,885,810 |
|
35,157,110 |
|
41,290,719 |
|
35,149,912 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding, diluted: |
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding, basic |
|
42,885,810 |
|
35,157,110 |
|
41,290,719 |
|
35,149,912 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of convertible notes |
|
— |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of restricted stock awards |
|
— |
|
55,730 |
|
— |
|
62,129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding, diluted |
|
42,855,810 |
|
35,212,840 |
|
41,290,719 |
|
35,212,041 |
|
The following table sets forth a reconciliation of the net (loss) income attributable to GS&T and the net (loss) income attributable to GS&T for diluted earnings per share under the “if-converted” method:
|
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net (loss) income attributable to GS&T |
|
$ |
(38,449 |
) |
$ |
1,562 |
|
$ |
(99,289 |
) |
$ |
25,080 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense related to convertible notes, if dilutive |
|
— |
|
— |
|
— |
|
— |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net (loss) income attributable to GS&T for the computation of diluted net (loss) income per share |
|
$ |
(38,449 |
) |
$ |
1,562 |
|
$ |
(99,289 |
) |
$ |
25,080 |
|
8 - RELATED PARTY TRANSACTIONS
The following represent related party transactions reflected in these condensed consolidated financial statements:
The Company makes available employees performing internal audit services to General Maritime Corporation (“GMC”), where the Company’s Chairman, Peter C. Georgiopoulos, also serves as Chairman of the Board. For the nine months ended September 30, 2012 and 2011, the Company invoiced $140 and $136, respectively, to GMC, which includes time associated with such internal audit services and other expenditures. Additionally, during the nine months ended September 30, 2012 and 2011, the Company incurred travel and other expenditures totaling $45 and $168, respectively, reimbursable to GMC or its service provider. At September 30, 2012, the amount due to the Company from GMC was $21. At December 31, 2011, the amount due to the Company from GMC was $114, of which $90 was reserved for pursuant to GMC’s bankruptcy proceedings.
During the nine months ended September 30, 2012 and 2011, the Company incurred legal services (primarily in connection with vessel acquisitions) aggregating $16 and $38, respectively, from Constantine Georgiopoulos, the father of Peter C. Georgiopoulos, Chairman of the Board. At September 30, 2012 and December 31, 2011, $16 and $29, respectively, was outstanding to Constantine Georgiopoulos.
During the nine months ended September 30, 2012 and 2011, the Company utilized the services of North Star Maritime, Inc. (“NSM”) which is owned and operated by one of GS&T’s directors, Rear Admiral Robert C. North, USCG (ret.). NSM, a marine industry consulting firm, specializes in international and domestic maritime safety, security and environmental protection issues. NSM billed $0 and $2 for services rendered during the nine months ended September 30, 2012 and 2011. There are no amounts due to NSM at September 30, 2012 and December 31, 2011.
GS&T and Baltic Trading have entered into agreements with Aegean Marine Petroleum Network, Inc. (“Aegean”) to purchase lubricating oils for certain vessels in their fleets. Peter C. Georgiopoulos, Chairman of the Board of the Company, is Chairman of the Board of Aegean. During the nine months ended September 30, 2012 and 2011, Aegean supplied lubricating oils to the Company’s vessels aggregating $1,170 and $1,342, respectively. At September 30, 2012 and December 31, 2011, $98 and $408 remained outstanding, respectively.
During the nine months ended September 30, 2012 and 2011, the Company invoiced MEP for technical services provided and expenses paid on MEP’s behalf aggregating $2,541 and $2,514, respectively. MEP is managed by a company owned by Peter C.
Georgiopoulos, Chairman of the Board. At September 30, 2012 and December 31, 2011, $3 and $7, respectively, was due to the Company from MEP. Total service revenue earned by the Company for technical service provided to MEP for the nine months ended September 30, 2012 and 2011 was $2,466 and $2,457, respectively.
9 - LONG-TERM DEBT
Long-term debt consists of the following:
|
|
|
September 30, 2012 |
|
December 31, 2011 |
| ||
|
|
|
|
|
|
| ||
|
2007 Credit Facility |
|
$ |
1,055,912 |
|
$ |
1,174,500 |
|
|
$100 Million Term Loan Facility |
|
75,484 |
|
90,869 |
| ||
|
$253 Million Term Loan Facility |
|
180,793 |
|
221,393 |
| ||
|
2010 Baltic Trading Credit Facility |
|
101,250 |
|
101,250 |
| ||
|
Less: Current portion |
|
— |
|
(185,077 |
) | ||
|
|
|
|
|
|
| ||
|
Long-term debt |
|
$ |
1,413,439 |
|
$ |
1,402,935 |
|
August 2012 Credit Facility Agreements
On August 1, 2012, the Company entered into agreements (the “August 2012 Agreements”) to amend or waive certain provisions of the agreements for the 2007 Credit Facility, $100 Million Term Loan Facility and the $253 Million Term Loan Facility (as defined below). The agreements implement, among other things, the following:
· The current waiver of the Company’s compliance with its existing maximum leverage ratio covenant and minimum permitted consolidated interest ratio covenant that commenced on October 1, 2011 and ends on and includes March 31, 2013 has been extended to end on and include December 31, 2013 (which we refer to as the extended waiver period).
· Scheduled amortization payments through and including the quarter ending December 31, 2013 have been deferred until the final payment at maturity under the 2007 Credit Facility and prepaid under the other two credit facilities. The next scheduled amortization payments under these facilities will be due in the first quarter of 2014 in the aggregate principal amount of $55,193.
· Commencing September 30, 2012, the Company is to repay the 2007 Credit Facility on a quarterly basis using excess cash, defined as the balance over $100,000 in the Company’s and certain of its subsidiaries’ accounts pledged under the 2007 Credit Facility. Of such repayments, 25% will be allocated to the final payment at maturity, and 75% will be applied entirely against each successive scheduled mandatory principal repayment beginning with the payment due March 31, 2014. Certain other mandatory repayments under the existing terms of this facility as well as voluntary prepayments will be applied in the same manner. These obligations continue until the later of December 31, 2013 and the date on which the appraised value of certain mortgaged vessels is equal to at least 100% of the aggregate principal amount of the Company’s loans, letters of credit and certain hedge obligations under the 2007 Credit Facility.
· The Company and its subsidiaries (other than Baltic Trading and its subsidiaries) will not increase the amount of principal indebtedness currently outstanding under each of its three credit agreements or change their maturity dates.
· Indebtedness that the Company and its subsidiaries (other than Baltic Trading and its subsidiaries) may incur in connection with vessel acquisitions will be limited to 60% of the lesser of the vessel’s acquisition cost and fair market value. Any newly acquired vessel will subject to a security interest under the 2007 Credit Facility.
· The applicable margin over LIBOR payable on the principal amount outstanding under the 2007 Credit Facility increased from 2.0% to 3.0% per annum.
· The minimum cash balance required under the 2007 Credit Facility increased from $500 to $750 per vessel mortgaged under the 2007 Credit Facility.
· The Company agreed to grant additional security for its obligations under the 2007 Credit Facility, consisting of a pledge of the Class B Stock of Baltic Trading held by Genco Investments LLC and a second priority security interest in vessels
pledged under its other two credit facilities or in connection with any new indebtedness (excluding in each case vessels owned by Baltic Trading and its subsidiaries).
· Consenting lenders under each of the three credit facilities received an upfront fee of 0.25% on the amount of outstanding loans.
As required under the August 2012 Agreements, the Company prepaid $57,893 under its 2007 Credit Facility, $30,450 under its $253 Million Term Loan Facility, and $11,538 under its $100 Million Term Loan Facility on August 1, 2012. The prepayment under the 2007 Credit Facility was applied to the final payment due under the facility. The prepayments under the other two facilities were applied in order of maturity and fulfilled all scheduled amortization payments through December 31, 2013 under these facilities. In addition, lenders under the 2007 Credit Facility will receive a fee equal to 1.25% of the principal amount outstanding following such prepayment, or $13,199, on the earlier date of the maturity date of this facility or the date on which all obligations under this facility have been paid in full. The $13,199 has been recorded in the condensed consolidated balance sheet at September 30, 2012 as Long-term interest payable. The agreements are subject to completion of certain post-closing actions, including effecting a second priority security interest in certain of the Company’s vessels as described above.
2007 Credit Facility
On July 20, 2007, the Company entered into a credit facility with DnB NOR Bank ASA (as amended, the “2007 Credit Facility”). The maximum amount that may be borrowed under the 2007 Credit Facility at September 30, 2012 is $1,055,912. As of September 30, 2012, the Company has utilized its maximum borrowing capacity under the 2007 Credit Facility.
The collateral maintenance financial covenant, maximum leverage ratio covenant and minimum permitted consolidated interest ratio covenants are currently waived for the periods ending on and including December 31, 2013 pursuant to the August 2012 Agreements and the Company’s cash dividends and share repurchases have been suspended until the collateral maintenance financial covenant can be satisfied.
Pursuant to the amendment to the 2007 Credit Facility which was entered into on December 21, 2011, the Company was subject to a facility fee of 2.0% per annum on the average daily outstanding principal amount of the loans outstanding, payable quarterly in arrears, which was subject to a reduction to 1.0% if the Company consummated an equity offering resulting in an aggregate amount of $50,000 of gross proceeds. On February 28, 2012, the Company completed an equity offering of 7,500,000 shares which resulted in gross proceeds of $53,250. As such, effective February 28, 2012, the facility fee was reduced to 1.0%.
As of September 30, 2012, the Company believes it is in compliance with all of the financial covenants under its 2007 Credit Facility, as amended.
At September 30, 2012, there were no letters of credit issued under the 2007 Credit Facility.
$100 Million Term Loan Facility
On August 12, 2010, the Company entered into the $100,000 secured term loan facility (“$100 Million Term Loan Facility”). As of September 30, 2012, the Company has utilized its maximum borrowing capacity as $100,000 of drawdowns have been made. The Company has used the $100 Million Term Loan Facility to fund or refund the Company a portion of the purchase price of the acquisition of five vessels from companies within the Metrostar group of companies. As of September 30, 2012, there was no availability under the $100 Million Term Loan Facility.
Pursuant to the amendments to the $100 Million Term Loan Facility that were entered into on December 21, 2011 and August 1, 2012, the maximum leverage ratio covenant and the minimum permitted consolidated interest ratio covenant are currently waived for the periods ending on and including December 31, 2013.
As of September 30, 2012, the Company believes it is in compliance with all of the financial covenants under the $100 Million Term Loan Facility, as amended.
$253 Million Term Loan Facility
On August 20, 2010, the Company entered into the $253,000 senior secured term loan facility (“$253 Million Term Loan Facility”). As of September 30, 2012, the Company has utilized its maximum borrowing capacity as $253,000 of drawdowns have been made to fund or refund to the Company a portion of the purchase price of the 13 vessels purchased from Bourbon SA during the third quarter of 2010 and first quarter of 2011. As of September 30, 2012, there was no availability under the $253 Million Term Loan Facility.
Pursuant to the amendments to the $253 Million Term Loan Facility that were entered into on December 21, 2011 and August 1, 2012, the maximum leverage ratio covenant and the minimum permitted consolidated interest ratio covenant are currently waived for the periods ending on and including December 31, 2013.
As of September 30, 2012, the Company believes it is in compliance with all of the financial covenants under the $253 Million Term Loan Facility, as amended.
2010 Baltic Trading Credit Facility
On April 16, 2010, Baltic Trading entered into a $100,000 senior secured revolving credit facility with Nordea Bank Finland plc, acting through its New York branch (as amended, the “2010 Baltic Trading Credit Facility”). An amendment to the 2010 Baltic Trading Credit Facility was entered into by Baltic Trading effective November 30, 2010. Among other things, this amendment increased the commitment amount of the 2010 Baltic Trading Credit Facility from $100,000 to $150,000. As of September 30, 2012, total available working capital borrowings were $23,500 as $1,500 was drawn down during 2010 for working capital purposes. Pursuant to the amended 2010 Baltic Trading Credit Facility, the total commitment of $150,000 will be reduced in 11 consecutive semi-annual reductions of $5,000 which commenced on the six month anniversary of the effective date, or May 31, 2011. As of September 30, 2012, $33,750 remained available under the 2010 Credit Facility as the total commitment was reduced to $135,000 on May 31, 2012.
As of September 30, 2012, the Company believes Baltic Trading is in compliance with all of the financial covenants under the 2010 Baltic Trading Credit Facility.
Interest rates
The following tables sets forth the effective interest rate associated with the interest expense for the Company’s debt facilities noted above, including the rate differential between the pay fixed, receive variable rate on the interest rate swap agreements that were in effect (refer to Note 11 — Interest Rate Swap Agreements), combined, the cost associated with unused commitment fees as well as the facility fee for the 2007 Credit Facility which was reduced from 2.0% to 1.0% on February 28, 2012 as noted above. Additionally, it includes the range of interest rates on the debt, excluding the impact of swaps and unused commitment fees:
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| ||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
Effective Interest Rate |
|
4.65 |
% |
4.36 |
% |
4.60 |
% |
4.41 |
% |
|
Range of Interest Rates (excluding impact of swaps and unused commitment fees) |
|
3.22% to 4.50 |
% |
2.25% to 3.33 |
% |
3.22% to 4.63 |
% |
2.19% to 3.33 |
% |
10 — CONVERTIBLE SENIOR NOTES
The Company issued $125,000 of 5.0% Convertible Senior Notes on July 27, 2010 (the “2010 Notes”). The Indenture includes customary agreements and covenants by the Company, including with respect to events of default.
The following tables provide additional information about the Company’s 2010 Notes:
|
|
|
September 30, 2012 |
|
December 31, |
| ||
|
Carrying amount of the equity component (additional paid-in capital) |
|
$ |
24,375 |
|
$ |
24,375 |
|
|
Principal amount of the 2010 Notes |
|
125,000 |
|
125,000 |
| ||
|
Unamortized discount of the liability component |
|
15,274 |
|
18,619 |
| ||
|
Net carrying amount of the liability component |
|
109,726 |
|
106,381 |
| ||
|
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
Effective interest rate on liability component |
|
10.0 |
% |
10.0 |
% |
10.0 |
% |
10.0 |
% | ||||
|
Cash interest expense recognized |
|
$ |
1,580 |
|
$ |
1,584 |
|
$ |
4,696 |
|
$ |
4,677 |
|
|
Non-cash interest expense recognized |
|
1,158 |
|
1,046 |
|
3,345 |
|
2,999 |
| ||||
|
Non-cash deferred financing amortization costs included in interest expense |
|
181 |
|
181 |
|
540 |
|
538 |
| ||||
The remaining period over which the unamortized discount will be recognized is 2.9 years. As of September 30, 2012, the if-converted value of the 2010 Notes does not exceed their principal amount.
Due to the 2015 maturity of the 2010 Notes and the Company’s intent to hold the 2010 Notes until maturity, the 2010 Notes have been classified as a noncurrent liability on the condensed consolidated balance sheets as of September 30, 2012 and December 31, 2011.
11 - INTEREST RATE SWAP AGREEMENTS
As of September 30, 2012 and December 31, 2011, the Company had five and eight interest rate swap agreements outstanding, respectively, with DnB NOR Bank ASA to manage interest costs and the risk associated with changing interest rates related to the Company’s 2007 Credit Facility. The total notional principal amount of the swaps at September 30, 2012 and December 31, 2011 was $356,233 and $606,233, respectively, and the swaps have specified rates and durations.
The following table summarizes the interest rate swaps designated as cash flow hedges that were in place as of September 30, 2012 and December 31, 2011:
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
| ||
|
Interest Rate Swap Detail |
|
Notional |
|
Notional |
| ||||||||
|
Trade |
|
Fixed |
|
Start Date |
|
End Date |
|
Amount |
|
Amount |
| ||
|
Date |
|
Rate |
|
of Swap |
|
of Swap |
|
Outstanding |
|
Outstanding |
| ||
|
9/6/05 |
|
4.485 |
% |
9/14/05 |
|
7/29/15 |
|
$ |
106,233 |
|
$ |
106,233 |
|
|
3/29/06 |
|
5.25 |
% |
1/2/07 |
|
1/1/14 |
|
50,000 |
|
50,000 |
| ||
|
3/24/06 |
|
5.075 |
% |
1/2/08 |
|
1/2/13 |
|
50,000 |
|
50,000 |
| ||
|
8/9/07 |
|
5.07 |
% |
1/2/08 |
|
1/3/12 |
|
— |
|
100,000 |
| ||
|
8/16/07 |
|
4.985 |
% |
3/31/08 |
|
3/31/12 |
|
— |
|
50,000 |
| ||
|
8/16/07 |
|
5.04 |
% |
3/31/08 |
|
3/31/12 |
|
— |
|
100,000 |
| ||
|
1/9/09 |
|
2.05 |
% |
1/22/09 |
|
1/22/14 |
|
100,000 |
|
100,000 |
| ||
|
2/11/09 |
|
2.45 |
% |
2/23/09 |
|
2/23/14 |
|
50,000 |
|
50,000 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
$ |
356,233 |
|
$ |
606,233 |
|
The following table summarizes the derivative asset and liability balances at September 30, 2012 and December 31, 2011:
|
|
|
Asset Derivatives |
|
Liability Derivatives |
| ||||||||||||
|
|
|
Balance |
|
Fair Value |
|
Balance |
|
Fair Value |
| ||||||||
|
|
|
Sheet |
|
September 30, |
|
December |
|
Sheet |
|
September 30, |
|
December |
| ||||
|
Derivatives designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest rate contracts |
|
Fair value of derivative instruments (Current Assets) |
|
$ |
— |
|
$ |
— |
|
Fair value of derivative instruments (Current Liabilities) |
|
$ |
609 |
|
$ |
1,686 |
|
|
Interest rate contracts |
|
Fair value of derivative instruments (Noncurrent Assets) |
|
— |
|
— |
|
Fair value of derivative instruments (Noncurrent Liabilities) |
|
18,261 |
|
23,654 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total derivatives designated as hedging instruments |
|
|
|
— |
|
— |
|
|
|
18,870 |
|
25,340 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total Derivatives |
|
|
|
$ |
— |
|
$ |
— |
|
|
|
$ |
18,870 |
|
$ |
25,340 |
|
The following tables present the impact of derivative instruments and their location within the Condensed Consolidated Statement of Operations:
The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Three-Month Period Ended September 30, 2012
|
Derivatives in Cash |
|
Amount of |
|
Location of |
|
Amount of |
|
Location of |
|
Amount of |
| |||
|
Relationships |
|
2012 |
|
Portion) |
|
2012 |
|
Portion) |
|
2012 |
| |||
|
Interest rate contracts |
|
$ |
(1,434 |
) |
Interest Expense |
|
$ |
2,959 |
|
Other Income (Expense) |
|
$ |
30 |
|
The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Three-Month Period Ended September 30, 2011
|
Derivatives in Cash |
|
Amount of |
|
Location of |
|
Amount of |
|
Location of |
|
Amount of |
| |||
|
Relationships |
|
2011 |
|
Portion) |
|
2011 |
|
Portion) |
|
2011 |
| |||
|
Interest rate contracts |
|
$ |
(5,021 |
) |
Interest Expense |
|
$ |
7,438 |
|
Other Income (Expense) |
|
$ |
18 |
|
The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Nine-Month Period Ended September 30, 2012
|
Derivatives in Cash |
|
Amount of |
|
Location of |
|
Amount of |
|
Location of |
|
Amount of |
| |||
|
Relationships |
|
2012 |
|
Portion) |
|
2012 |
|
Portion) |
|
2012 |
| |||
|
Interest rate contracts |
|
$ |
(3,999 |
) |
Interest Expense |
|
$ |
10,392 |
|
Other Income (Expense) |
|
$ |
76 |
|
The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Nine-Month Period Ended September 30, 2011
|
Derivatives in Cash |
|
Amount of |
|
Location of |
|
Amount of |
|
Location of |
|
Amount of |
| |||
|
Relationships |
|
2011 |
|
Portion) |
|
2011 |
|
Portion) |
|
2011 |
| |||
|
Interest rate contracts |
|
$ |
(11,705 |
) |
Interest Expense |
|
$ |
22,038 |
|
Other Income (Expense) |
|
$ |
38 |
|
At September 30, 2012, ($10,082) of AOCI is expected to be reclassified into interest expense over the next 12 months associated with interest rate derivatives.
The Company is required to provide collateral in the form of vessel assets to support the interest rate swap agreements, excluding vessel assets of Baltic Trading. At September 30, 2012, the Company’s 35 vessels mortgaged under the 2007 Credit Facility served as collateral in the aggregate amount of $100,000.
12 - ACCUMULATED OTHER COMPREHENSIVE LOSS
The components of AOCI included in the accompanying condensed consolidated balance sheets consist of net unrealized gain (loss) on cash flow hedges and net unrealized gain from investments in Jinhui stock as of September 30, 2012 and December 31, 2011.
|
|
|
Net Unrealized |
|
Unrealized |
|
AOCI |
| |||
|
AOCI — January 1, 2012 |
|
$ |
(25,245 |
) |
$ |
7,696 |
|
$ |
(17,549 | |