GENCO SHIPPING & TRADING LTD, 10-Q filed on 8/15/2014
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2014
Aug. 15, 2014
Document and Entity Information
 
 
Entity Registrant Name
GENCO SHIPPING & TRADING LTD 
 
Entity Central Index Key
0001326200 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2014 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--12-31 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
61,410,362 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q2 
 
Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Current assets:
 
 
Cash and cash equivalents
$ 57,720 
$ 122,722 
Restricted cash
9,975 
9,850 
Due from charterers, net of a reserve of $639 and $632, respectively
12,000 
14,241 
Prepaid expenses and other current assets
23,312 
19,065 
Total current assets
103,007 
165,878 
Noncurrent assets:
 
 
Vessels, net of accumulated depreciation of $799,020 and $730,662, respectively
2,607,784 
2,673,795 
Deposits on vessels
28,634 
1,013 
Deferred drydock, net of accumulated amortization of $10,665 and $11,107, respectively
16,775 
11,069 
Deferred financing costs, net of accumulated amortization of $26,570 and $22,279, respectively
18,002 
22,011 
Fixed assets, net of accumulated depreciation and amortization of $3,873 and $3,438, respectively
4,052 
5,104 
Other noncurrent assets
514 
514 
Restricted cash
300 
300 
Investments
49,618 
77,570 
Total noncurrent assets
2,725,679 
2,791,376 
Total assets
2,828,686 
2,957,254 
Current liabilities not subject to compromise:
 
 
Accounts payable and accrued expenses
39,527 
27,359 
Current portion of long-term debt
4,250 
1,316,439 
Current interest payable
 
13,199 
Convertible senior note payable
 
115,881 
Deferred revenue
1,151 
1,597 
Time charters acquired
17 
 
Current portion of lease obligations
 
176 
Fair value of derivative instruments
 
6,975 
Total current liabilities not subject to compromise:
44,945 
1,481,626 
Noncurrent liabilities not subject to compromise:
 
 
Long-term lease obligations
2,658 
3,114 
Time charters acquired
 
84 
Long-term debt
161,500 
163,625 
Total noncurrent liabilities not subject to compromise
164,158 
166,823 
Total liabilities subject to compromise
1,443,575 
 
Total liabilities
1,652,678 
1,648,449 
Commitments and contingencies
   
   
Genco Shipping & Trading Limited shareholders' equity:
 
 
Common stock, par value $0.01; 100,000,000 shares authorized; issued and outstanding 44,449,407 shares at June 30, 2014 and December 31, 2013
445 
445 
Additional paid-in capital
847,547 
846,658 
Accumulated other comprehensive income
28,076 
53,722 
Retained (deficit) earnings
(32,986)
66,644 
Total Genco Shipping & Trading Limited shareholders' equity
843,082 
967,469 
Noncontrolling interest
332,926 
341,336 
Total equity
1,176,008 
1,308,805 
Total liabilities and equity
$ 2,828,686 
$ 2,957,254 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Noncurrent assets:
 
 
Due from charterers, reserve
$ 639 
$ 632 
Vessels, accumulated depreciation
799,020 
730,662 
Deferred drydock, accumulated amortization
10,665 
11,107 
Deferred financing costs, accumulated amortization
26,570 
22,279 
Fixed assets, accumulated depreciation and amortization
$ 3,873 
$ 3,438 
Genco Shipping & Trading Limited shareholders' equity:
 
 
Common stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Common stock, shares authorized (in shares)
100,000,000 
100,000,000 
Common stock, shares issued (in shares)
44,449,407 
44,449,407 
Common stock, shares outstanding (in shares)
44,449,407 
44,449,407 
Condensed Consolidated Statements of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Revenues:
 
 
 
 
Voyage revenues
$ 51,545 
$ 44,941 
$ 114,725 
$ 84,617 
Service revenues
819 
819 
1,629 
1,629 
Total revenues
52,364 
45,760 
116,354 
86,246 
Operating expenses:
 
 
 
 
Voyage expenses
1,983 
2,867 
3,940 
4,139 
Vessel operating expenses
30,545 
26,766 
61,768 
53,885 
General, administrative, and management fees
9,850 
8,480 
25,226 
16,672 
Depreciation and amortization
36,538 
34,722 
72,739 
69,100 
Total operating expenses
78,916 
72,835 
163,673 
143,796 
Operating loss
(26,552)
(27,075)
(47,319)
(57,550)
Other (expense) income:
 
 
 
 
Other expense
(50)
(33)
(107)
(13)
Interest income
25 
16 
45 
34 
Interest expense
(18,510)
(21,554)
(39,532)
(42,843)
Other expense
(18,535)
(21,571)
(39,594)
(42,822)
Loss before reorganization items, net
(45,087)
(48,646)
(86,913)
(100,372)
Reorganization items, net
(20,106)
 
(20,106)
 
Loss before income taxes
(65,193)
(48,646)
(107,019)
(100,372)
Income tax expense
(364)
(294)
(777)
(518)
Net loss
(65,557)
(48,940)
(107,796)
(100,890)
Less: Net loss attributable to noncontrolling interest
(5,033)
(3,571)
(8,166)
(7,358)
Net loss attributable to Genco Shipping & Trading Limited
$ (60,524)
$ (45,369)
$ (99,630)
$ (93,532)
Net loss per share-basic (in dollars per share)
$ (1.39)
$ (1.05)
$ (2.29)
$ (2.17)
Net loss per share-diluted (in dollars per share)
$ (1.39)
$ (1.05)
$ (2.29)
$ (2.17)
Weighted average common shares outstanding-basic (in shares)
43,568,942 
43,196,895 
43,568,942 
43,179,300 
Weighted average common shares outstanding-diluted (in shares)
43,568,942 
43,196,895 
43,568,942 
43,179,300 
Condensed Consolidated Statements of Comprehensive Loss (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Condensed Consolidated Statements of Comprehensive Loss
 
 
 
 
Net loss
$ (65,557)
$ (48,940)
$ (107,796)
$ (100,890)
Change in unrealized gain on investments
(13,737)
(3,276)
(27,952)
6,327 
Unrealized gain on cash flow hedges, net
1,078 
2,386 
2,306 
4,687 
Other comprehensive (loss) income
(12,659)
(890)
(25,646)
11,014 
Comprehensive loss
(78,216)
(49,830)
(133,442)
(89,876)
Less: Comprehensive loss attributable to noncontrolling interest
(5,033)
(3,571)
(8,166)
(7,358)
Comprehensive loss attributable to Genco Shipping & Trading Limited
$ (73,183)
$ (46,259)
$ (125,276)
$ (82,518)
Condensed Consolidated Statements of Equity (USD $)
In Thousands, unless otherwise specified
Total
Genco Shipping & Trading Limited Shareholders' Equity
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive (Loss) Income
Retained Earnings
Noncontrolling Interest
Balance at Dec. 31, 2012
$ 1,261,207 
$ 1,066,296 
$ 443 
$ 863,303 
$ (11,841)
$ 214,391 
$ 194,911 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net loss
(100,890)
(93,532)
 
 
 
(93,532)
(7,358)
Change in unrealized gain on investments
6,327 
6,327 
 
 
6,327 
 
 
Unrealized gain on cash flow hedges, net
4,687 
4,687 
 
 
4,687 
 
 
Issuance of 200,634 shares of nonvested stock, less forfeitures of 9,750 shares
 
 
(2)
 
 
 
Nonvested stock amortization
2,380 
1,565 
 
1,565 
 
 
815 
Issuance of common stock of Baltic Trading Limited
21,559 
(8,992)
 
(8,992)
 
 
30,551 
Cash dividends paid by Baltic Trading Limited
(347)
(4)
 
 
 
(4)
(343)
Vesting of restricted shares issued by Baltic Trading Limited
 
(26)
 
(26)
 
 
26 
Balance at Jun. 30, 2013
1,194,923 
976,321 
445 
855,848 
(827)
120,855 
218,602 
Balance at Dec. 31, 2013
1,308,805 
967,469 
445 
846,658 
53,722 
66,644 
341,336 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net loss
(107,796)
(99,630)
 
 
 
(99,630)
(8,166)
Change in unrealized gain on investments
(27,952)
(27,952)
 
 
(27,952)
 
 
Unrealized gain on cash flow hedges, net
2,306 
2,306 
 
 
2,306 
 
 
Nonvested stock amortization
2,691 
820 
 
820 
 
 
1,871 
Cash dividends paid by Baltic Trading Limited
(2,046)
(5)
 
(5)
 
 
(2,041)
Vesting of restricted shares issued by Baltic Trading Limited
 
74 
 
74 
 
 
(74)
Balance at Jun. 30, 2014
$ 1,176,008 
$ 843,082 
$ 445 
$ 847,547 
$ 28,076 
$ (32,986)
$ 332,926 
Condensed Consolidated Statements of Equity (Parenthetical)
6 Months Ended
Jun. 30, 2013
Condensed Consolidated Statements of Equity
 
Issuance of shares of nonvested stock
200,634 
Forfeiture of shares of nonvested stock
9,750 
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Cash flows from operating activities:
 
 
Net loss
$ (107,796)
$ (100,890)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
Depreciation and amortization
72,739 
69,100 
Amortization of deferred financing costs
4,291 
3,691 
Amortization of time charters acquired
(67)
(233)
Amortization of discount on Convertible Senior Notes
1,592 
2,388 
Interest expense related to the de-designation of the interest rate swap
953 
 
Unrealized loss on derivative instruments
 
Amortization of nonvested stock compensation expense
2,691 
2,380 
Change in assets and liabilities:
 
 
Decrease in due from charterers
2,241 
768 
Increase in prepaid expenses and other current assets
(4,227)
(2,901)
Increase in accounts payable and accrued expenses
14,064 
1,686 
(Decrease) increase in deferred revenue
(446)
13 
Increase in lease obligations
197 
125 
Deferred drydock costs incurred
(9,288)
(1,402)
Net cash used in operating activities
(23,056)
(25,270)
Cash flows from investing activities:
 
 
Purchase of vessels, including deposits
(29,790)
(54)
Purchase of other fixed assets
(391)
(195)
Changes in deposits of restricted cash
(125)
 
Net cash used in investing activities
(30,306)
(249)
Cash flows from financing activities:
 
 
Payment of dividend by subsidiary
(2,046)
(347)
Proceeds from issuance of common stock by subsidiary
 
21,838 
Payment of common stock issuance costs by subsidiary
(111)
(17)
Payment of deferred financing costs
(360)
 
Net cash (used in) provided by financing activities
(11,640)
22,474 
Net decrease in cash and cash equivalents
(65,002)
(3,045)
Cash and cash equivalents at beginning of period
122,722 
72,600 
Cash and cash equivalents at end of period
57,720 
69,555 
$100 Million Term Loan Facility
 
 
Cash flows from financing activities:
 
 
Repayments on Term Loan Facility
(1,923)
 
$253 Million Term Loan Facility
 
 
Cash flows from financing activities:
 
 
Repayments on Term Loan Facility
(5,075)
 
2010 Baltic Trading Credit Facility
 
 
Cash flows from financing activities:
 
 
Proceeds from Term Loan Facility
 
1,000 
Baltic Trading $22 Million Term Loan Facility
 
 
Cash flows from financing activities:
 
 
Repayments on Term Loan Facility
(750)
 
Baltic Trading $44 Million Term Loan Facility
 
 
Cash flows from financing activities:
 
 
Repayments on Term Loan Facility
$ (1,375)
 
Condensed Consolidated Statements of Cash Flows (Parenthetical) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Jun. 30, 2013
$100 Million Term Loan Facility
 
 
Maximum borrowing capacity
$ 100,000 
$ 100,000 
$253 Million Term Loan Facility
 
 
Maximum borrowing capacity
253,000 
253,000 
Baltic Trading $22 Million Term Loan Facility
 
 
Maximum borrowing capacity
22,000 
22,000 
Baltic Trading $44 Million Term Loan Facility
 
 
Maximum borrowing capacity
$ 44,000 
$ 44,000 
GENERAL INFORMATION
GENERAL INFORMATION

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 June 30, 2014, is the sole owner of all of the outstanding shares of the following subsidiaries: Genco Ship Management LLC; Genco Investments LLC; Genco RE Investments LLC; and the ship-owning subsidiaries as set forth below.  As of June 30, 2014, Genco Ship Management LLC is the sole owner of all of the outstanding shares of Genco Management (USA) Limited.

 

Bankruptcy Filing

 

On April 21, 2014 (the “Petition Date”), GS&T and its subsidiaries other than Baltic Trading Limited and its subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors continued to operate their businesses in the ordinary course as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Through the Chapter 11 Cases, the Debtors seek to implement a Prepackaged Plan of Reorganization of the Debtors Pursuant to Chapter 11 of the Bankruptcy Code for which the Company solicited votes from certain classes of its creditors prior to commencement of the Chapter 11 Cases in accordance with the Restructuring Support Agreement that the Debtors entered into with certain of its creditors on April 3, 2014.

 

The filing of the Chapter 11 Cases constituted an event of default with respect to each of the following agreements or instruments:

 

·         the Credit Agreement, dated as of July 20, 2007 (as amended to date), by and among the Company as borrower, the banks and other financial institutions named therein as lenders, Wilmington Trust, N.A., as successor administrative and collateral agent, and the other parties thereto, relating to approximately $1,055,912 of principal plus accrued and unpaid interest, fees, costs, and other expenses (the “2007 Credit Facility”);

 

·         the Loan Agreement, dated as of August 20, 2010 (as amended to date), by and among the Company as borrower, Genco Aquitane Limited and the other subsidiaries of the Company named therein as guarantors, the banks and financial institutions named therein as lenders, BNP Paribas, Credit Agricole Corporate and Investment Bank, DVB Bank SE, Deutsche Bank AG Filiale Deutschlandgeschaft, Skandinaviska Enskilda Banken AB (publ) as mandated lead arrangers, BNP Paribas, Credit Agricole Corporate and Investment Bank, DVB Bank SE, Deutsche Bank AG, Skandinaviska Enskilda Banken AB (publ) as swap providers, and Deutsche Bank Luxembourg S.A. as agent for the lenders and the assignee, relating to approximately $175,718 of principal and accrued and unpaid interest, fees, costs, and other expenses (the “$253 Million Term Loan Facility”);

 

·         the Loan Agreement, dated as of August 12, 2010 (as amended to date), by and among the Company as borrower, Genco Ocean Limited and the other subsidiaries of the Company named therein as guarantors, the banks and financial institutions named therein as lenders, and Credit Agricole Corporate and Investment Bank as agent and security trustee, relating to approximately $73,561 of principal plus accrued and unpaid interest, fees, costs, and other expenses (the “$100 Million Term Loan Facility”);

 

·         the Indenture and First Supplemental Indenture relating to $125,000 of principal plus accrued and unpaid interest outstanding of the Company’s 5.00% Convertible Senior Notes (the “2010 Notes”) due August 15, 2015 (the “Indenture”);

 

·         the outstanding interest rate swap with DnB NOR Bank, relating to a liability position of $5,622 as of June 30, 2014.

 

As a result of the filing of the Chapter 11 Cases, all indebtedness outstanding under the 2007 Credit Facility and the Indenture was accelerated and became due and payable, and indebtedness under the other agreements and instruments described above can be accelerated and become due and payable upon notice to the Company, subject to an automatic stay of any action to collect, assert, or recover a claim against the Company or the other Debtors and the application of the applicable provisions of the Bankruptcy Code.

 

On July 2, 2014, the Bankruptcy Court entered an order (the “Confirmation Order”), confirming the First Amended Prepackaged Plan of Reorganization of the Debtors Pursuant to Chapter 11 of the Bankruptcy Code (the “Plan”).  Capitalized terms used but not defined below shall have the meanings given to them in the Plan.  On July 9, 2014 (the “Effective Date”), the Debtors completed their financial restructuring and emerged from Chapter 11 through a series of transactions contemplated by the Plan, and the Plan became effective pursuant to its terms.

 

Key components of the Plan included:

 

·         The conversion of 100% of the Claims under the 2007 Credit Facility into 81.1% of the New Genco Common Stock (subject to dilution by the warrants issued under the Plan). On the Effective Date, the 2007 Credit Facility was terminated, and the liens and mortgages thereunder were released.  Refer to Note 9 — Debt for further information.

 

·         The conversion of 100% of the Claims under the 2010 Notes into 8.4% of the New Genco Common Stock (subject to dilution by the warrants issued under the Plan). On the Effective Date, the 2010 Notes and the Indenture were fully satisfied and discharged.   Refer to Note 10 — Convertible Senior Notes for further information.

 

·         A fully backstopped Rights Offering for approximately 8.7% of the New Genco Common Stock, in which holders of 2007 Credit Facility Claims were entitled to subscribe for up to 80% of the New Genco Common Stock offered, and holders of the 2010 Notes Claims were entitled to subscribe for up to 20% of the New Genco Common Stock being offered under the Rights Offering. Each Right entitled its holder to purchase one share of New Genco Common Stock at a subscription price of $18.62537, for an aggregate subscription price of $100,000.

 

·         The amendment and restatement of the $253 Million Term Loan Facility and the $100 Million Term Loan Facility as of the Effective Date, with extended maturities, a financial covenant holiday and certain other amendments, as discussed further in Note 9 - Debt.

 

·         The cancellation of the old common stock of Genco as of the Effective Date, with the holders thereof receiving warrants to acquire shares of New Genco Common Stock. Each New Genco Equity Warrant is exercisable for one share of New Genco Common Stock, and holders received an aggregate of 3,938,298 New Genco Equity Warrants for the old common stock of Genco. The New Genco Equity Warrants in the aggregate are exercisable for approximately 6% of New Genco Common Stock (subject to dilution).

 

·         Reinstatement, non-impairment or payment in full in the ordinary course of business during the pendency of the Chapter 11 Cases of all Allowed General Unsecured Claims, including Allowed Claims of trade vendors, suppliers, customers and charterers, per the approval by the Bankruptcy Court.

 

·         The non-impairment of all other General Unsecured Claims under section 1124 of the Bankruptcy Code.

 

·         A Management Incentive Program, which provides for the distribution of New Genco MIP Primary Equity in the form of shares representing 1.8% of the New Genco Common Stock and three tiers of New Genco MIP Warrants with staggered strike prices based on increasing equity values to the participating officers, directors, and other management of Reorganized Genco. These awards were made on August 7, 2014.

 

Registration Rights Agreement

 

On the Effective Date, Reorganized Genco and the Registration Rights Parties entered into the Registration Rights Agreement. The Registration Rights Agreement provided the Registration Rights Parties who receive 10% or more of New Genco Common Stock under the Plan with demand and piggyback registration rights. All other Registration Rights Parties have piggyback registration rights only.

 

New Genco Equity Warrant Agreement

 

On the Effective Date, pursuant to the Plan, the New Genco Equity Warrants were issued pursuant to the terms of the New Genco Equity Warrant Agreement. Each New Genco Equity Warrant has a 7-year term (commencing on the day following the Effective Date) and are exercisable for one share of New Genco Common Stock. The New Genco Equity Warrants are exercisable on a cashless basis at an exercise price of $20.99 per share. The New Genco Equity Warrant Agreement contains customary anti-dilution adjustments in the event of any stock split, reverse stock split, stock dividend, reclassification, dividend or other distributions (including, but not limited to, cash dividends), or business combination transaction.

 

The New Genco Equity Warrants were distributed to holders of the old common stock of the Company, which was cancelled as of the Effective Date. Shares of old common stock of the Company issued to directors, officers and employees of Genco under compensatory plans that were unvested as of the Effective Date were deemed vested automatically on the Effective Date, so that all New Genco Equity Warrants received in exchange therefor were deemed vested.

 

Accounting Guidance

 

The Company was required to apply Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations, effective on April 21, 2014, which is applicable to companies in Chapter 11, which generally does not change the manner in which financial statements are prepared. However, it does require that the financial statements for periods subsequent to the filing of the Chapter 11 Cases distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Revenues, expenses, realized gains and losses, and provisions for losses that can be directly associated with the reorganization and restructuring of the business must be reported separately as Reorganization items in the consolidated statements of operations beginning in the quarter ending June 30, 2014. The balance sheet must distinguish pre-petition Liabilities subject to compromise from both those pre-petition liabilities that are not subject to compromise and from post-petition liabilities. The Company has evaluated creditors’ claims for other claims that may also have priority over unsecured creditors. Liabilities that may be affected by a plan of reorganization must be reported at the amounts expected to be approved by the Bankruptcy Court, even if they may be settled for lesser amounts as a result of the plan or reorganization.  In addition, cash used by reorganization items in the consolidated statements of cash flows are disclosed in Note 4 — Cash Flow Information.

 

In connection with the emergence from the Chapter 11 Cases, the Company believes it qualifies for fresh-start accounting.   Upon adoption of fresh-start accounting, the Company’s  assets and liabilities will be recorded at their value as of the fresh-start reporting date.  The fair values of the Company’s assets and liabilities as of that date may differ materially from the recorded values of its assets and liabilities as reflected in its historical consolidated financial statements.  In addition, the Company’s adoptions of fresh-start accounting may materially affect its results of operations following the fresh-start reporting dates, as the Company will have a new basis in its assets and liabilities.  Consequently, the Company’s historical financial statements may not be reliable indicators of its financial condition and results of operations for any period after it adopts fresh-start accounting.  See Note 25 — Subsequent Events for a further discussion of fresh-start accounting.

 

Other General Information

 

Below is the list of GS&T’s wholly owned ship-owning subsidiaries as of June 30, 2014:

 

Wholly Owned Subsidiaries

 

Vessel 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

 

Wholly Owned Subsidiaries

 

Vessel Acquired

 

Dwt

 

Delivery Date

 

Year Built

 

 

 

 

 

 

 

 

 

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 June 30, 2014 and December 31, 2013, Genco Investments LLC owned 6,356,471 shares of Baltic Trading’s Class B Stock, which represented an 11.04% and 11.05% ownership interest in Baltic Trading, respectively, and 65.06% and 65.08% 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 Equity Incentive Plans.

 

Below is the list of Baltic Trading’s wholly owned ship-owning subsidiaries as of June 30, 2014:

 

Baltic Trading’s Wholly Owned
Subsidiaries

 

Vessel Acquired

 

Dwt

 

Delivery Date

 

Year
Built

 

 

 

 

 

 

 

 

 

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

Baltic Fox Limited

 

Baltic Fox

 

31,883

 

9/6/13

 

2010

Baltic Hare Limited

 

Baltic Hare

 

31,887

 

9/5/13

 

2009

Baltic Lion Limited

 

Baltic Lion

 

179,185

 

12/27/13

 

2012

Baltic Tiger Limited

 

Baltic Tiger

 

179,185

 

11/26/13

 

2011

Baltic Hornet Limited

 

Baltic Hornet

 

64,000

 

Q3 2014 (1)

 

2014 (1)

Baltic Wasp Limited

 

Baltic Wasp

 

64,000

 

Q4 2014 (1)

 

2014 (1)

Baltic Scorpion Limited

 

Baltic Scorpion

 

64,000

 

Q2 2015 (1)

 

2015 (1)

Baltic Mantis Limited

 

Baltic Mantis

 

64,000

 

Q3 2015 (1)

 

2015 (1)

 

 

(1)     Built dates and dates for vessels being delivered in the future are estimates based on the guidance received from the sellers and the respective shipyards.

 

The Company provides technical services for drybulk vessels purchased by Maritime Equity Partners LLC (“MEP”).  Peter C. Georgiopoulos, Chairman of the Board of Directors of GS&T, controls and has a minority interest in MEP.  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 were 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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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, 2013 (the “2013 10-K”).  The results of operations for the three and six month periods ended June 30, 2014 and 2013 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 which 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 June 30, 2014 and 2013 was $34,557 and $33,102, respectively.  Depreciation expense for vessels for the six months ended June 30, 2014 and 2013 was $68,717 and $65,841, 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 per lightweight ton (“lwt”) times the weight of the ship in lwt’s.

 

Deferred revenue

 

Deferred revenue primarily relates to cash received from charterers prior to it being earned. These amounts are recognized as income when earned. Additionally, deferred revenue includes estimated customer claims mainly due to time charter performance issues. As of June 30, 2014 and December 31, 2013, the Company had an accrual of $459 and $536, respectively, related to these estimated customer claims.

 

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) losses of ($184) and $21 during the three months ended June 30, 2014 and 2013, respectively, and ($249) and ($343) during the six months ended June 30, 2014 and 2013, 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 six months ended June 30, 2014 and 2013 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, in vessel pools or on spot market-related time charters.  The spot market represents immediate chartering of a vessel, usually for single voyages.  At June 30, 2014, the noncontrolling interest held an 88.96% economic interest in Baltic Trading while only holding 34.94% of the voting power.  At  December 31, 2013, the noncontrolling interest held an 88.95% economic interest in Baltic Trading while only holding 34.92% of the 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 June 30, 2014 and 2013 was $1,841 and $1,515, respectively, of which $1,022 and $696, respectively, eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $764 associated with these activities for the three months ended June 30, 2014.  This resulted in estimated tax expense of $339 for the three months ended June 30, 2014.  After allocation of certain expenses, there was taxable income of $625 associated with these activities for the three months ended June 30, 2013.  This resulted in income tax expense of $281 for the three months ended June 30, 2013.

 

Total revenue earned for these services during the six months ended June 30, 2014 and 2013 was $3,696 and $3,005, respectively, of which $2,067 and $1,376, respectively, were eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $1,650 associated with these activities for the six months ended June 30, 2014. This resulted in estimated income tax expense of $740 for the six months ended June 30, 2014. After allocation of certain expenses, there was taxable income of $1,217 associated with these activities for the six months ended June 30, 2013. This resulted in income tax expense of $505 for the six months ended June 30, 2013.

 

Baltic Trading is subject to income tax on its United States source income.  During the three months ended June 30, 2014 and 2013, Baltic Trading had United States operations which resulted in United States source income of $1,245 and $639, respectively.  Baltic Trading’s estimated United States income tax expense for the three months ended June 30, 2014 and 2013 was $25 and $13, respectively.

 

During the six months ended June 30, 2014 and 2013, Baltic Trading had United States operations which resulted in United

States source income of $1,813 and $639, respectively. Baltic Trading’s United States income tax expense for the six months ended

June 30, 2014 and 2013 was $37 and $13, respectively.

SEGMENT INFORMATION
SEGMENT INFORMATION

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 reportable 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 or in vessel pools.  Segment results are evaluated based on net (loss) income.  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 six months ended June 30, 2014 and 2013.

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Voyage revenue from external customers

 

 

 

 

 

 

 

 

 

GS&T

 

$

40,842

 

$

38,562

 

$

90,931

 

$

72,252

 

Baltic Trading

 

10,703

 

6,379

 

23,794

 

12,365

 

Total operating segments

 

51,545

 

44,941

 

114,725

 

84,617

 

Eliminating revenue

 

 

 

 

 

Total consolidated voyage revenue from external customers

 

$

51,545

 

$

44,941

 

$

114,725

 

$

84,617

 

 

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 six months ended June 30, 2014 and 2013. 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
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Intersegment revenue

 

 

 

 

 

 

 

 

 

GS&T

 

$

1,022

 

$

696

 

$

2,067

 

$

1,376

 

Baltic Trading

 

 

 

 

 

Total operating segments

 

1,022

 

696

 

2,067

 

1,376

 

Eliminating revenue

 

(1,022

)

(696

)

(2,067

)

(1,376

)

Total consolidated intersegment revenue

 

$

 

$

 

$

 

$

 

 

The following table presents a reconciliation of total net loss for the Company’s two operating segments to total consolidated net loss for the three and six months ended June 30, 2014 and 2013. 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 due to GS&T from Baltic Trading for its Class B shares of Baltic Trading.

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Net loss

 

 

 

 

 

 

 

 

 

GS&T

 

$

(59,874

)

$

(44,297

)

$

(98,444

)

$

(91,145

)

Baltic Trading

 

(5,674

)

(4,625

)

(9,207

)

(9,708

)

Total operating segments

 

(65,548

)

(48,922

)

(107,651

)

(100,853

)

Eliminating net loss

 

9

 

18

 

145

 

37

 

Total consolidated net loss

 

$

(65,557

)

$

(48,940

)

$

(107,796

)

$

(100,890

)

 

The following table presents a reconciliation of total assets for the Company’s two operating segments to total consolidated assets as of June 30, 2014 and December 31, 2013. 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 June 30, 2014 and December 31, 2013.

 

 

 

June 30, 2014

 

December 31,
2013

 

Total assets

 

 

 

 

 

GS&T

 

$

2,286,604

 

$

2,404,811

 

Baltic Trading

 

546,861

 

557,367

 

Total operating segments

 

2,833,465

 

2,962,178

 

Eliminating assets

 

(4,779

)

(4,924

)

Total consolidated assets

 

$

2,828,686

 

$

2,957,254

 

CASH FLOW INFORMATION
CASH FLOW INFORMATION

4 - CASH FLOW INFORMATION

 

As of June 30, 2014 and December 31, 2013, the Company had one and four interest rate swaps, respectively, which are described and discussed in Note 11 — Interest Rate Swap Agreements. At June 30, 2014, the fair value of the swap is in a liability position of $5,622, all of which was classified within Liabilities subject to compromise.  At December 31, 2013, the four swaps were in a liability position of $6,975, all of which was classified within current liabilities.

 

For the six months ended June 30, 2014, 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 $250 for the purchase of vessels, including deposits and $43 for the purchase of other fixed assets.  For the six months ended June 30, 2014, 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 consisting of $20 associated with the purchase of other fixed assets.  Additionally, for the six months ended June 30, 2014, the Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Liabilities subject to compromise consisting of $13,199 associated with deferred financing fees.

 

Of the $20,106 of Reorganization items, net for the six months ended June 30, 2014 (refer to Note 20), $1,204 was paid through June 30, 2014 and $18,902 is included in accounts payable and accrued expenses.

 

For the six months ended June 30, 2013, 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 $14 for the purchase of other fixed assets.  For the six months ended June 30, 2013, 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 consisting of $262 for the payment of common stock issuance costs by its subsidiary.  For the six months ended June 30, 2013, the Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in current Interest payable consisting of $13,199 associated with deferred financing fees.

 

During the six months ended June 30, 2014, the Company made a reclassification of $984 from fixed assets to vessel assets for items that should be capitalized and depreciated over the remaining life of the respective vessels.

 

During the six months ended June 30, 2014 and 2013, cash paid for interest, net of amounts capitalized, and including bond coupon interest paid, was $38,238 and $37,772, respectively.

 

During the six months ended June 30, 2014 and 2013, cash paid for estimated income taxes was $1,495 and $493, respectively.

 

On April 9, 2014, Baltic Trading made grants of nonvested common stock in the amount of 36,345 shares to directors of Baltic Trading.  The aggregate fair value of such nonvested stock was $225.

 

On May 16, 2013, the Company made grants of nonvested common stock under the Genco Shipping & Trading Limited 2012 Equity Incentive Plan in the amount of 200,634 shares in the aggregate to directors of the Company.  As of June 30, 2014, these shares did not vest since an annual stockholders meeting had not been held during 2014.  The aggregate fair value of such nonvested stock was $315.  On May 16, 2013, Baltic Trading made grants of nonvested common stock in the amount of 59,680 shares to directors of Baltic Trading.  These shares vested on April 9, 2014.  The aggregate fair value of such nonvested stock was $225.

VESSEL ACQUISITIONS
VESSEL ACQUISITIONS

5 - VESSEL ACQUISITIONS

 

On July 2, 2013, Baltic Trading entered into agreements to purchase two Handysize drybulk vessels from subsidiaries of Clipper Group for an aggregate purchase price of $41,000. The Baltic Hare, a 2009-built Handysize vessel, was delivered on September 5, 2013 and the Baltic Fox, a 2010-built Handysize vessel, was delivered on September 6, 2013. Baltic Trading financed the vessel acquisitions with proceeds from its May 28, 2013 common stock offering and borrowings under its $22 Million Term Loan Facility entered into on August 30, 2013.

 

On October 31, 2013, Baltic Trading entered into agreements to purchase two Capesize drybulk vessels from affiliates of SK Shipping Co. Ltd. for an aggregate purchase price of $103,000. The Baltic Lion, a 2012-built Capesize vessel, was delivered on December 27, 2013, and the Baltic Tiger, a 2011-built Capesize vessel, was delivered on November 26, 2013. Baltic Trading financed the vessel acquisitions with cash on hand and borrowings under its $44 Million Term Loan Facility entered into on December 3, 2013.

 

On November 13, 2013, Baltic Trading entered into agreements to purchase up to four 64,000 dwt Ultramax newbuilding drybulk vessels from Yangfan Group Co., Ltd. for a purchase price of $28,000 per vessel, or up to $112,000 in the aggregate.  Baltic Trading agreed to purchase two such vessels, to be renamed the Baltic Hornet and Baltic Wasp, and obtained an option to purchase up to two additional such vessels for the same purchase price, which Baltic Trading exercised on January 8, 2014. These vessels are to be renamed the Baltic Mantis and the Baltic Scorpion. The purchases are subject to completion of customary additional documentation and closing conditions. The Baltic Hornet and Baltic Wasp are expected to be delivered to Baltic Trading during the third and fourth quarters of 2014, respectively. The Baltic Scorpion and the Baltic Mantis are expected to be delivered to Baltic Trading during the second and third quarters of 2015, respectively. As of June 30, 2014 and December 31, 2013, deposits on vessels were $28,634 and $1,013, respectively.  Baltic Trading intends to use a combination of cash on hand, future cash flow from operations as well as debt or equity financing to fully finance the acquisition of these four Ultramax newbuilding drybulk vessels.

 

Refer to Note 1 — General Information for a listing of the vessel delivery dates for the vessels in the Company’s fleet and the estimated delivery dates for vessels that Baltic Trading has entered into agreements to purchase.

 

Below market time charters, including those acquired during previous periods, were amortized as an increase to voyage revenue in the amount of $18 and $100 for the three months ended June 30, 2014 and 2013, respectively, and $67 and $233 for the six months ended June 30, 2014 and 2013, respectively.

 

Capitalized interest expense associated with the newbuilding contracts entered into by Baltic Trading for the three months ended June 30, 2014 and 2013 was $177 and $0, respectively, and $276 and $0 for the six months ended June 30, 2014 and 2013, respectively.

 

INVESTMENTS
INVESTMENTS

6 - INVESTMENTS

 

The Company holds an investment in the capital stock of Jinhui Shipping and Transportation Limited (“Jinhui”) and Korea Line Corporation (“KLC”).  Jinhui is a drybulk shipping owner and operator focused on the Supramax segment of drybulk shipping.  KLC is a marine transportation service company which operates a fleet of carriers which includes carriers for iron ore, liquefied natural gas and tankers for oil and petroleum products.  These investments are designated as Available For Sale (“AFS”) and are reported at fair value, with unrealized gains and losses recorded in equity as a component of accumulated other comprehensive income (loss) (“AOCI”).  At June 30, 2014 and December 31, 2013, the Company held 16,335,100 shares of Jinhui capital stock which is recorded at its fair value of $49,540 and $77,488, respectively, based on the last closing price during each respective quarter on June 30, 2014 and December 30, 2013, respectively.  At June 30, 2014 and December 31, 2013, the Company held 3,355 shares of KLC stock which is recorded at its fair value of $78 and $82, respectively, based on the last closing price during each respective quarter on June 30, 2014 and December 30, 2013.

 

The Company reviews the investment in Jinhui and KLC for impairment on a quarterly basis.  There were no impairment charges recognized for the three and six months ended June 30, 2014 and 2013.

 

The unrealized gain (losses) on the Jinhui capital stock and KLC stock are a component of AOCI since these investments are designated as AFS securities.

 

Refer to Note 12 — Accumulated Other Comprehensive Income (Loss) for a breakdown of the components of AOCI.

 

NET LOSS PER COMMON SHARE
NET LOSS PER COMMON SHARE

7 — NET LOSS PER COMMON SHARE

 

The computation of basic net loss per share is based on the weighted-average number of common shares outstanding during the year. The computation of diluted net loss per share assumes the vesting of nonvested stock awards (refer to Note 22 — 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 880,465 nonvested shares outstanding at June 30, 2014 (refer to Note 22 — Nonvested Stock Awards), all are anti-dilutive.  The Company’s diluted net loss 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 earnings 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 per share and diluted net loss per share are as follows:

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding, basic:

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

43,568,942

 

43,196,895

 

43,568,942

 

43,179,300

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding, diluted:

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

43,568,942

 

43,196,895

 

43,568,942

 

43,179,300

 

 

 

 

 

 

 

 

 

 

 

Dilutive effect of convertible notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dilutive effect of restricted stock awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, diluted

 

43,568,942

 

43,196,895

 

43,568,942

 

43,179,300

 

 

The following table sets forth a reconciliation of the net loss attributable to GS&T and the net loss attributable to GS&T for diluted net loss per share under the “if-converted” method:

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to GS&T

 

$

(60,524

)

$

(45,369

)

$

(99,630

)

$

(93,532

)

 

 

 

 

 

 

 

 

 

 

Interest expense related to convertible notes, if dilutive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to GS&T for the computation of diluted net loss per share

 

$

(60,524

)

$

(45,369

)

$

(99,630

)

$

(93,532

)

RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS

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 six months ended June 30, 2014 and 2013, the Company invoiced $72 and $75, respectively, to GMC, which includes time associated with such internal audit services and other expenditures.  Additionally, during the six months ended June 30, 2014 and 2013, the Company incurred travel and other office related expenditures totaling $49 and $54, respectively, reimbursable to GMC or its service provider.  At June 30, 2014, the amount due to the Company from GMC was $16.  At December 31, 2013, the amount due to GMC from the Company was $16.

 

During the six months ended June 30, 2014 and 2013, the Company incurred legal services (primarily in connection with vessel acquisitions) aggregating $3 and $7, respectively, from Constantine Georgiopoulos, the father of Peter C. Georgiopoulos, Chairman of the Board.  At June 30, 2014 and December 31, 2013, the amount due to Constantine Georgiopoulos was $0 and $25, respectively.

 

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 six months ended June 30, 2014 and 2013, Aegean supplied lubricating oils to the Company’s vessels aggregating $1,087 and $746, respectively.  At June 30, 2014 and December 31, 2013, $237 and $263 remained outstanding, respectively.

 

During the six months ended June 30, 2014 and 2013, the Company invoiced MEP for technical services provided and expenses paid on MEP’s behalf aggregating $1,671 and $1,708, respectively.  Peter C. Georgiopoulos, Chairman of the Board, controls and has a minority interest in MEP.  At June 30, 2014 and December 31, 2013, $10 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 six months ended June 30, 2014 and 2013 was $1,629 and $1,629, respectively.

DEBT
DEBT

9 - DEBT

 

Long-term debt consists of the following:

 

 

 

June 30, 2014

 

December 31,
2013

 

 

 

Balance prior to
Financial
Statement
Classification

 

Amounts
Classified as
Subject to
Compromise

 

Total Debt

 

Total Debt

 

 

 

 

 

 

 

 

 

 

 

2007 Credit Facility

 

$

1,055,912

 

$

(1,055,912

)

$

 

$

1,055,912

 

$100 Million Term Loan Facility

 

73,561

 

(73,561

)

 

75,484

 

$253 Million Term Loan Facility

 

175,718

 

(175,718

)

 

180,793

 

2010 Baltic Trading Credit Facility

 

102,250

 

 

102,250

 

102,250

 

Baltic Trading $22 Million Term Loan Facility

 

20,875

 

 

20,875

 

21,625

 

Baltic Trading $44 Million Term Loan Facility

 

42,625

 

 

42,625

 

44,000

 

Less: Current portion

 

(4,250

)

 

(4,250

)

(1,316,439

)

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

$

1,466,691

 

$

(1,305,191

)

$

161,500

 

$

163,625

 

 

2007 Credit Facility

 

On July 20, 2007, the Company entered into the 2007 Credit Facility with DnB NOR Bank ASA. The maximum amount that may be borrowed under the 2007 Credit Facility at June 30, 2014 is $1,055,912.  As of June 30, 2014, the Company had utilized its maximum borrowing capacity under the 2007 Credit Facility.

 

In 2009, the Company obtained a waiver of the collateral maintenance covenant under this facility until the Company can represent that it is in compliance with all of its financial covenants and is otherwise able to pay a dividend and purchase or redeem shares of common stock under the terms of the facility in effect before the waiver.  The Company’s cash dividends and share repurchases were suspended until the collateral maintenance financial covenant could be satisfied.

 

The maximum leverage ratio covenant and minimum permitted consolidated interest ratio covenants were waived for the periods ending on and including December 31, 2013 pursuant to the August 1, 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 “August 2012 Agreements”).

 

The gross interest-bearing debt to total capital covenant ended during the period ending on and including December 31, 2013 pursuant to the August 2012 Agreements.  This covenant limited the ratio of the Company’s interest-bearing indebtedness to the sum of its interest-bearing indebtedness and its consolidated net worth in accordance with U.S. GAAP to 62.5% on the last day of any fiscal quarter during the waiver period.

 

Additionally, pursuant to the August 2012 Agreements, the total applicable margin over LIBOR payable on the principal amount of debt outstanding increased from 2.0% to 3.0% per annum.  The minimum cash balance required was also increased from $500 to $750 per vessel mortgaged under this facility pursuant to the August 2012 Agreements.

 

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 June 30, 2014, the Company was not in compliance with certain of the financial covenants under its 2007 Credit Facility, as amended.  As a result of the commencement of the Chapter 11 Cases, the debt outstanding under this facility of $1,055,912 has been classified as Liabilities subject to compromise in the Condensed Consolidated Balance Sheets as of June 30, 2014.

 

At June 30, 2014, there were no letters of credit issued under the 2007 Credit Facility.

 

To allow discussions with our creditors concerning our restructuring to continue into April 2014 without the need to file for immediate bankruptcy relief, on March 31, 2014, we entered into agreements with certain of the lenders under our 2007 Credit Facility, our $100 Million Term Loan Facility, and our $253 Million Term Loan Facility (our “Credit Facilities”) to obtain waivers or forbearances with respect to certain potential or actual events of default as of March 31, 2014 as follows (the “Relief Agreements”):

 

·       not making the scheduled amortization payment on March 31, 2014 under our 2007 Credit Facility;

 

·       not meeting the consolidated interest ratio covenant for the period ended March 31, 2014;

 

·       not meeting the maximum leverage ratio covenant for the period ending March 31, 2014;

 

·       not meeting the collateral maintenance test under the 2007 Credit Facility;

 

·       not meeting the minimum cash balance covenant under the 2007 Credit Facility;

 

·       not furnishing audited financial statements to the lenders within 90 days after year end for the year ended December 31, 2013;

 

·       a cross-default with respect to our outstanding interest rate swap with respect to the foregoing;

 

·       cross-defaults among our credit facilities with respect to the foregoing; and

 

·       any related defaults or events of default resulting from the failure to give notice with respect to any of the foregoing.

 

The Relief Agreement for our 2007 Credit Facility provided that the agent and consenting lenders would forbear to exercise their rights and remedies through 11:59 p.m. on April 1, 2014 with respect to the foregoing potential or actual events of default, subject to earlier termination if a subsequent event of default occurs under our credit agreements other than those described above or if we breach the terms of the Relief Agreement. The Relief Agreements for our other two Credit Facilities provided that the agent and lenders waived through 11:59 p.m. on April 1, 2014 the foregoing potential or actual events of default, subject to earlier termination if a subsequent event of default occurs under our credit agreements or if we breach the terms of the Relief Agreements. Notwithstanding such waivers and forbearances, the fact that we did not make the scheduled amortization payment on March 31, 2014 constituted an event of default under our currently outstanding interest rate swap. In addition, under the indenture and supplemental indenture (the “Indenture”) governing our 5.0% Convertible Senior Notes issued on July 27, 2010 (the “2010 Notes”), our failure to make such payment would constitute an event of default under the Indenture if we fail to cure such default within 30 days after notice from the trustee under the Indenture.

 

On April 1, 2014, we entered into new agreements with the other parties to the Relief Agreements that extended the expiration of the forbearances and waivers under the Relief Agreements from 11:59 p.m. on April 1, 2014 to 11:59 p.m. on April 21, 2014. Also, the forbearances and waivers would have terminated if a definitive agreement for our restructuring was not effective by 11:59 p.m. on April 4, 2014. We avoided this termination through our entry into the Support Agreement. Such new agreements are otherwise on substantially the same terms and conditions as the Relief Agreements.

 

As of July 9, 2014, the Effective Date, the 2007 Credit Facility was terminated and the liens and mortgages related thereto were released as part of the Plan.  Refer to the “Bankruptcy Filing” section of Note 1 — General Information for further information regarding the Chapter 11 Cases.

 

$100 Million Term Loan Facility

 

On August 12, 2010, the Company entered into the $100 Million Term Loan Facility. As of June 30, 2014, the Company had utilized its maximum borrowing capacity of $100,000. 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 June 30, 2014, 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 the August 2012 Agreements, the maximum leverage ratio covenant and the minimum permitted consolidated interest ratio covenant were waived for the periods ending on and including December 31, 2013.

 

As of June 30, 2014, the Company was not in compliance with certain of the financial covenants under the $100 Million Term Loan Facility, as amended.  As such, the debt outstanding under this facility of $73,561 has been classified as Liabilities subject to compromise in the Condensed Consolidated Balance Sheets as of June 30, 2014.

 

See above in this note under the heading “2007 Credit Facilities” for a description of the agreement the Company entered into to obtain waivers with respect to certain events of default relating to the $100 Million Term Loan Facility. See the “Bankruptcy Filing” section under Note 1 — General Information for the Company’s restructuring plans, including the filing of its Chapter 11 Cases and the Company’s subsequent emergence from Chapter 11.

 

On the Effective Date, Genco entered into the Amended and Restated $100 Million Term Loan Facility and the Amended and Restated $253 Million Term Loan Facility.  The Amended and Restated Credit Facilities included, among other things:

 

·         A paydown as of the Effective Date with respect to payments which became due under the prepetition credit facilities between the Petition Date and the Effective Date and were not paid during the pendency of the Chapter 11 Cases ($1,923 for the $100 Million Term Loan Facility and $5,075 for the $253 Million Term Loan Facility).

 

·         Extension of the maturity dates to August 31, 2019 from August 17, 2017 for the $100 Million Term Loan Facility and August 15, 2015 for the $253 Million Term Loan Facility.

 

·         Relief from compliance with financial covenants governing the Company’s maximum leverage ratio, minimum consolidated interest coverage ratio and consolidated net worth through and including the quarter ending March 31, 2015 (with quarterly testing commencing June 30, 2015).

 

·         A fleetwide minimum liquidity covenant requiring maintenance of cash of $750 per vessel for all vessels owned by Genco (excluding those owned by Baltic Trading).

 

·         An increase in the interest rate to LIBOR plus 3.50% per year from 3.00% previously for the $100 Million Term Loan Facility and the $253 Million Term Loan Facility.

 

The obligations under the Amended and Restated $100 Million Term Loan Facility are secured by a first priority security interest in the vessels and other collateral securing the $100 Million Term Loan Facility.  The Amended and Restated $100 Million Term Loan Facility requires quarterly repayment installments in accordance with the original terms of the $100 Million Term Loan Facility.

 

$253 Million Term Loan Facility

 

On August 20, 2010, the Company entered into the $253 Million Term Loan Facility.  As of June 30, 2014, the Company had utilized its maximum borrowing capacity of $253,000 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 June 30, 2014, there was no availability under the $253 Million Term Loan Facility.

 

Pursuant to the amendment to the $253 Million Term Loan Facility that was entered into on December 21, 2011 and the August 2012 Agreements, the maximum leverage ratio covenant and the minimum permitted consolidated interest ratio covenant were waived for the periods ending on and including December 31, 2013.

 

As of June 30, 2014 and December 31, 2013, the Company has deposited $9,875 and $9,750, respectively, that has been reflected as restricted cash.  Restricted cash will be released only if the underlying collateral is sold or disposed of.

 

As of June 30, 2014, the Company was not in compliance with certain of the financial covenants under the $253 Million Term Loan Facility, as amended.  As a result of the commencement of the Chapter 11 Cases, the debt outstanding under this facility of $175,718 has been classified as Liabilities subject to compromise in the Condensed Consolidated Balance Sheets as of June 30, 2014.

 

See above in this note under the heading “2007 Credit Facility” for a description of the agreement the Company entered into to obtain waivers with respect to certain events of default relating to the $253 Million Term Loan Facility.  See the “Bankruptcy Filing” section under Note 1 — General Information for the Company’s restructuring plans, including the filing of its Chapter 11 Cases and the Company’s subsequent emergence from Chapter 11.

 

Refer to the “$100 Million Term Loan Facility” section above for a description of the Amended and Restated $253 Million Term Loan Facility that was entered into by the Company on the Effective Date.  The obligations under the Amended and Restated $253 Million Term Loan Facility are secured by a first priority security interest in the vessels and other collateral securing the $253 Million Term Loan Facility.  The Amended and Restated $253 Million Term Loan Facility requires quarterly repayment installments in accordance with the original terms of the $253 Million Term Loan Facility.

 

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.  An additional amendment to the 2010 Baltic Trading Credit Facility was entered into by Baltic Trading effective August 29, 2013 (the “August 2013 Amendment”).  Among other things, the August 2013 Amendment implements the following modifications to the 2010 Baltic Trading Credit Facility:

 

·         The requirement that certain additional vessels acquired by Baltic Trading be mortgaged as collateral under the 2010 Baltic Trading Credit Facility was eliminated.

 

·         Restrictions on the incurrence of indebtedness by Baltic Trading and its subsidiaries were amended to apply only to those subsidiaries acting as guarantors under the 2010 Baltic Trading Credit Facility.

 

·         The total commitment under this facility was reduced to $110,000 and will be further reduced in three consecutive semi-annual reductions of $5,000 commencing on May 30, 2015.

 

·         Borrowings bear interest at an applicable margin over LIBOR of 3.00% per annum if the ratio of the maximum facility amount of the aggregate appraised value of vessels mortgaged under the facility is 55% or less, measured quarterly; otherwise, the applicable margin is 3.35% per annum.

 

·         Financial covenants corresponding to the liquidity and leverage under the Baltic Trading $22 Million Term Loan Facility (as defined below) have been incorporated into the 2010 Baltic Trading Credit Facility.

 

As of June 30, 2014, $7,750 remained available under the 2010 Baltic Trading Credit Facility as the total commitment was reduced to $110,000 on August 29, 2013.  The total available working capital borrowings of $25,000 are subject to the total remaining availability under the 2010 Baltic Trading Credit Facility, therefore, only $7,750 is available for working capital purposes as of June 30, 2014.

 

As of June 30, 2014, the Company believes Baltic Trading is in compliance with all of the financial covenants under the 2010 Baltic Trading Credit Facility.

 

Baltic Trading $22 Million Term Loan Facility

 

On August 30, 2013, Baltic Hare Limited and Baltic Fox Limited, wholly-owned subsidiaries of Baltic Trading, entered into a secured loan agreement with DVB Bank SE for a term loan facility of up to $22,000 (the “Baltic Trading $22 Million Term Loan Facility”).  Amounts borrowed and repaid under the Baltic Trading $22 Million Term Loan Facility may not be reborrowed.  This facility has a maturity date of the sixth anniversary of the drawdown date for borrowings for the second vessel to be purchased, or September 4, 2019.  Borrowings under the Baltic Trading $22 Million Term Loan Facility bear interest at the three-month LIBOR rate plus an applicable margin of 3.35% per annum. A commitment fee of 1.00% per annum is payable on the unused daily portion of the credit facility, which began accruing on August 30, 2013 and ended on September 4, 2013, the date which the entire $22,000 was borrowed.  Borrowings are to be repaid in 23 quarterly installments of $375 each commencing three months after the last vessel delivery date, or December 4, 2013, and a final payment of $13,375 due on the maturity date.

 

Borrowings under the Baltic Trading $22 Million Term Loan Facility are secured by liens on Baltic Trading’s vessels purchased with borrowings under the facility, namely the Baltic Fox and the Baltic Hare, and other related assets.  Under a Guarantee and Indemnity entered into concurrently with the Baltic Trading $22 Million Term Loan Facility, Baltic Trading agreed to guarantee the obligations of its subsidiaries under the Baltic Trading $22 Million Term Loan Facility.

 

On September 4, 2013, Baltic Hare Limited and Baltic Fox Limited made drawdowns of $10,730 and $11,270 for the Baltic Hare and the Baltic Fox, respectively.  As of June 30, 2014, Baltic Trading has utilized its maximum borrowing capacity of $22,000 and there was no further availability.  At June 30, 2014 and December 31, 2013, the total outstanding debt balance was $20,875 and $21,625, respectively, as required repayments began on December 4, 2013.

 

As of June 30, 2014 the Company believes Baltic Trading is in compliance with all of the financial covenants under the Baltic Trading $22 Million Term Loan Facility.

 

Baltic Trading $44 Million Term Loan Facility

 

On December 3, 2013, Baltic Tiger Limited and Baltic Lion Limited, wholly-owned subsidiaries of Baltic Trading, entered into a secured loan agreement with DVB Bank SE for a term loan facility of up to $44,000 (the “Baltic Trading $44 Million Term Loan Facility”). Amounts borrowed and repaid under the Baltic Trading $44 Million Term Loan Facility may not be reborrowed.  The Baltic Trading $44 Million Term Loan Facility has a maturity date of the sixth anniversary of the drawdown date for borrowings for the second vessel to be purchased, or December 23, 2019.  Borrowings under the Baltic Trading $44 Million Term Loan Facility bear interest at the three-month LIBOR rate plus an applicable margin of 3.35% per annum. A commitment fee of 0.75% per annum is payable on the unused daily portion of the credit facility, which began accruing on December 3, 2013 and ended on December 23, 2013, the date which the entire $44,000 was borrowed.  Borrowings are to be repaid in 23 quarterly installments of $688 each commencing three months after the last drawdown date, or March 24, 2014, and a final payment of $28,188 due on the maturity date.

 

Borrowings under the Baltic Trading $44 Million Term Loan Facility are to be secured by liens on Baltic Trading’s vessels to be financed or refinanced with borrowings under the facility, namely the Baltic Tiger and the Baltic Lion, and other related assets. Upon the prepayment of $18,000 plus any additional amounts necessary to maintain compliance with the collateral maintenance covenant, Baltic Trading may have the lien on the Baltic Tiger released. Under a Guarantee and Indemnity entered into concurrently with the Baltic Trading $44 Million Term Loan Facility, Baltic Trading agreed to guarantee the obligations of its subsidiaries under the Baltic Trading $44 Million Term Loan Facility.

 

On December 23, 2013, Baltic Tiger Limited and Baltic Lion Limited made drawdowns of $21,400 and $22,600 for the Baltic Tiger and Baltic Lion, respectively.  As of June 30, 2014, Baltic Trading has utilized its maximum borrowing capacity of $44,000 and there was no further availability.  At June 30, 2014 and December 31, 2013, the total outstanding debt balance was $42,625 and $44,000, respectively, as required repayments began on March 24, 2014.

 

As of June 30, 2014, the Company believes Baltic Trading is in compliance with all of the financial covenants under the Baltic Trading $44 Million Term Loan Facility.

 

Change of Control

 

If the Company’s ownership in Baltic Trading were to decrease to less than 10% of the aggregate number of shares of common stock and Class B Stock of Baltic Trading, the outstanding Baltic Trading Class B Stock held by the Company would automatically convert into common stock, and the voting power held by the Company in Baltic Trading would likewise decrease to less than 30%. This would result in a change of control as defined under the Baltic Trading 2010 Credit Facility, the Baltic Trading $22 Million Term Loan Facility and the Baltic Trading $44 Million Term Loan Facility, and would therefore constitute an event of default. Additionally, a change of control constituting an event of default under Baltic Trading’s credit facilities would also occur if any party other than the Company or certain other permitted holders beneficially owns more than 30% of the Company’s outstanding voting or economic equity interests, which may occur if a party were deemed to control Genco. Refer to Note 1 — General Information for discussion of the Company’s current economic status.

 

Interest payable

 

As required under the August 2012 Agreements, 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 Sheets at June 30, 2014 as Liabilities subject to compromise, consistent with the classification of the principal amount of the 2007 Credit Facility.  Refer to Note 1 — General Information for further information regarding the Chapter 11 Cases.

 

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 1.0% facility fee for the 2007 Credit Facility as noted above. Additionally, it includes the range of interest rates on the debt, excluding the impact of swaps and unused commitment fees:

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Effective Interest Rate

 

4.31

%

4.72

%

4.33

%

4.73

%

Range of Interest Rates (excluding impact of swaps and unused commitment fees)

 

3.15% to 5.15

%

3.19% to 4.31

%

3.15% to 5.15

%

3.19% to 4.38

%

 

CONVERTIBLE SENIOR NOTES
CONVERTIBLE SENIOR NOTES

10 — CONVERTIBLE SENIOR NOTES

 

The Company issued $125,000 of the 2010 Notes on July 27, 2010.  The Indenture for the 2010 Notes includes customary agreements and covenants by the Company, including with respect to events of default.  As noted in Note 1 — General Information, the filing of the Chapter 11 Cases by the Company on April 21, 2014 constituted an event of default with respect to the 2010 Notes.  On this date, the Company ceased recording interest expense related to the 2010 Notes.  During the three and six months ended June 30 2014, interest expense of $2,266, including the amortization of the discount of the liability component and the bond coupon interest expense, was not recorded which would have been incurred had the indebtedness not been reclassified as a Liability subject to compromise.  On the Effective Date, when the Company emerged from Chapter 11, the 2010 Notes and the Indenture were fully satisfied and discharged.

 

The following tables provide additional information about the Company’s 2010 Notes:

 

 

 

June 30, 2014

 

December 31,
2013

 

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

 

7,527

 

9,119

 

Net carrying amount of the liability component

 

117,473

 

115,881

 

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Effective interest rate on liability component

 

10.0

%

10.0

%

10.0

%

10.0

%

Cash interest expense recognized

 

$

345

 

$

1,571

 

$

1,886

 

$

3,112

 

Non-cash interest expense recognized

 

293

 

1,209

 

1,592

 

2,388

 

Non-cash deferred financing amortization costs included in interest expense

 

39

 

179

 

216

 

356

 

 

Refer to Note 1 — General Information for additional information regarding defaults relating to the 2010 Notes. In accordance with applicable accounting guidance, the liability related to the 2010 Notes was classified as Liabilities subject to compromise in the condensed Consolidated Balance Sheets as of June 30, 2014.

INTEREST RATE SWAP AGREEMENTS
INTEREST RATE SWAP AGREEMENTS

11 - INTEREST RATE SWAP AGREEMENTS

 

As of December 31, 2013, the Company had four interest swap agreements outstanding with DNB Bank ASA to manage interest costs and the risk associated with variable interest rates related to the Company’s 2007 Credit Facility.  The total notional principal amount of the swaps at December 31, 2013 was $306,233 and the swaps had specified rates and durations.   Three of the swaps that were outstanding at December 31, 2013 expired during the six months ended June 30, 2014, prior to the Petition Date.

 

As of March 31, 2014, the Company was in default under covenants of its 2007 Credit Facility due to the default on the scheduled debt amortization payment due on March 31, 2014. Refer to Note 1 — General Information for additional information regarding defaults relating to the swap.   The default under the 2007 Credit Facility requires the Company to elect interest periods of only one-month, therefore the Company no longer qualified for hedge accounting under the original designation and hedge accounting was terminated effective March 31, 2014.  Additionally, the filing of the Chapter 11 Cases by the Company on the Petition Date constituted an event of default with respect to the outstanding interest rate swap with DNB Bank ASA.  As a result, DNB Bank ASA terminated all transactions under the remaining swap agreement effective April 30, 2014 and filed a secured claim with the Bankruptcy Court of $5,622. As such, in accordance with applicable accounting guidance, the liability related to the interest rate swap outstanding as of June 30, 2014 was classified as Liabilities subject to compromise in the Condensed Consolidated Balance Sheets as of June 30, 2014 and is no longer considered a derivative.

 

The following table summarizes the interest rate swaps designated as cash flow hedges that were in place as of June 30, 2014 and December 31, 2013:

 

 

 

 

 

 

 

 

 

June 30, 2014

 

December 31,
2013

 

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

 

3/29/06

 

5.25

%

1/2/07

 

1/1/14

 

 

50,000

 

1/9/09

 

2.05

%

1/22/09

 

1/22/14

 

 

100,000

 

2/11/09

 

2.45

%

2/23/09

 

2/23/14

 

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

$

306,233

 

 

The following table summarizes the derivative asset and liability balances at June 30, 2014 and December 31, 2013:

 

 

 

Asset Derivatives

 

Liability Derivatives

 

 

 

Balance

 

Fair Value

 

Balance

 

Fair Value

 

 

 

Sheet
Location

 

June 30,
2014

 

December
31, 2013

 

Sheet
Location

 

June 30,
2014

 

December
31, 2013

 

Derivatives designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

Fair value of derivative instruments (Current Assets)

 

$

 

$

 

Fair value of derivative instruments (Current Liabilities)

 

$

 

$

6,975

 

Interest rate contracts

 

Fair value of derivative instruments (Noncurrent Assets)

 

 

 

Fair value of derivative instruments (Noncurrent Liabilities)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total derivatives designated as hedging instruments

 

 

 

 

 

 

 

 

6,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Derivatives

 

 

 

$

 

$

 

 

 

$

 

$

6,975

 

 

The differentials to be paid or received for these swap agreements are recognized as an adjustment to interest expense as incurred.  The Company utilized cash flow hedge accounting for these swaps through March 31, 2014, whereby the effective portion of the change in the value of the swaps is reflected as a component of AOCI.  The ineffective portion is recognized as other expense, which is a component of other (expense) income.  On March 31, 2014, the cash flow hedge accounting on the remaining swap agreement was discontinued.  Once cash flow hedge accounting was discontinued, the changes in the fair value of the interest rate swaps are recorded in the Condensed Consolidated Statement of Operations in interest expense and the remaining amounts included in AOCI are amortized to interest expense over the original term of the hedging relationship.

 

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 June 30, 2014

 

Derivatives in Cash
Flow Hedging

 

Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)

 

Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective

 

Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)

 

Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective

 

Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)

 

Relationships

 

2014

 

Portion)

 

2014

 

Portion)

 

2014

 

Interest rate contracts

 

$

 

Interest Expense

 

$

(1,078

)

Other Income (Expense)

 

$

 

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Three-Month Period Ended June 30, 2013

 

Derivatives in Cash
Flow Hedging

 

Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)

 

Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective

 

Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)

 

Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective

 

Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)

 

Relationships

 

2013

 

Portion)

 

2013

 

Portion)

 

2013

 

Interest rate contracts

 

$

(91

)

Interest Expense

 

$

(2,477

)

Other Income (Expense)

 

$

(2

)

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Three-Month Period Ended June 30, 2014 and 2013

 

Derivatives not designated
as Hedging 

 

Location of
Gain (Loss)
Recognized in Income

 

Amount of
Gain (Loss) Recognized in Income on
Derivative

 

Instruments

 

on Derivative

 

2014

 

2013

 

Interest rate contracts

 

Interest Expense

 

$

(225

)

$

 

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Six-Month Period Ended June 30, 2014

 

Derivatives in Cash
Flow Hedging

 

Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)

 

Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective

 

Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)

 

Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective

 

Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)

 

Relationships

 

2014

 

Portion)

 

2014

 

Portion)

 

2014

 

Interest rate contracts

 

$

(179

)

Interest Expense

 

$

(2,485

)

Other Income (Expense)

 

$

 

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Six-Month Period Ended June 30, 2013

 

Derivatives in Cash
Flow Hedging

 

Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)

 

Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective

 

Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)

 

Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective

 

Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)

 

Relationships

 

2013

 

Portion)

 

2013

 

Portion)

 

2013

 

Interest rate contracts

 

$

(229

)

Interest Expense

 

$

(4,916

)

Other Income (Expense)

 

$

(5

)

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Six-Month Period Ended June 30, 2014 and 2013

 

Derivatives not designated
as Hedging 

 

Location of
Gain (Loss)
Recognized in Income

 

Amount of
Gain (Loss) Recognized in Income on
Derivative

 

Instruments

 

on Derivative

 

2014

 

2013

 

Interest rate contracts

 

Interest Expense

 

$

(225

)

$

 

 

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 June 30, 2014, the Company’s 35 vessels mortgaged under the 2007 Credit Facility served as collateral in the aggregate amount of $100,000.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

12 - ACCUMULATED OTHER COMPREHENSIVE INCOME (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 gains (losses) from investments in Jinhui stock and KLC stock as of June 30, 2014 and December 31, 2013.

 

Changes in AOCI by Component

Forthe Three-Month Period Ended June 30, 2014

 

 

 

Net Unrealized
Gain (Loss) on
Cash Flow
Hedges

 

Net Unrealized
Gain
on
Investments

 

Total

 

AOCI — April 1, 2014

 

$

(5,748

)

$

46,483

 

$

40,735

 

 

 

 

 

 

 

 

 

OCI before reclassifications

 

 

(13,737

)

(13,737

)

Amounts reclassified from AOCI

 

1,078

 

 

1,078

 

Net current-period OCI

 

1,078

 

(13,737

)

(12,659

)

 

 

 

 

 

 

 

 

AOCI — June 30, 2014

 

$

(4,670

)

$

32,746

 

$

28,076

 

 

Changes in AOCI by Component

For the Three-Month Period Ended June 30, 2013

 

 

 

Net Unrealized
Gain (Loss) on
Cash Flow
Hedges

 

Net Unrealized
Gain
on
Investments

 

Total

 

AOCI — April 1, 2013

 

$

(13,756

)

$

13,819

 

$

63

 

 

 

 

 

 

 

 

 

OCI before reclassifications

 

4,863

 

(3,276

)

1,587

 

Amounts reclassified from AOCI

 

(2,477

)

 

(2,477

)

Net current-period OCI

 

2,386

 

(3,276

)

(890

)

 

 

 

 

 

 

 

 

AOCI — June 30, 2013

 

$

(11,370

)

$

10,543

 

$

(827

)

 

Changes in AOCI by Component

Forthe Six-Month Period Ended June 30, 2014

 

 

 

Net Unrealized
Gain (Loss) on
Cash Flow
Hedges

 

Net Unrealized
Gain
on
Investments

 

Total

 

AOCI — January 1, 2014

 

$

(6,976

)

$

60,698

 

$

53,722

 

 

 

 

 

 

 

 

 

OCI before reclassifications

 

(179

)

(27,952

)

(28,131

)

Amounts reclassified from AOCI

 

2,485

 

 

2,485

 

Net current-period OCI

 

2,306

 

(27,952

)

(25,646

)

 

 

 

 

 

 

 

 

AOCI — June 30, 2014

 

$

(4,670

)

$

32,746

 

$

28,076

 

 

Changes in AOCI by Component

For the Six-Month Period Ended June 30, 2013

 

 

 

Net Unrealized
Gain (Loss) on
Cash Flow
Hedges

 

Net Unrealized
Gain
on
Investments

 

Total

 

AOCI — January 1, 2013

 

$

(16,057

)

$

4,216

 

$

(11,841

)

 

 

 

 

 

 

 

 

OCI before reclassifications

 

9,603

 

6,327

 

15,930

 

Amounts reclassified from AOCI

 

(4,916

)

 

(4,916

)

Net current-period OCI

 

4,687

 

6,327

 

11,014

 

 

 

 

 

 

 

 

 

AOCI — June 30, 2013

 

$

(11,370

)

$

10,543

 

$

(827

)

 

Reclassifications Out of AOCI

For the Three-Month Period Ended June 30, 2014 and 2013

 

 

 

Amount Reclassified from AOCI

 

 

 

 

 

Three Months Ended
June 30,

 

Affected Line Item in
the Statement Where

 

Details about AOCI Components

 

2014

 

2013

 

Net Loss is Presented

 

Gains and losses on cash flow hedges

 

 

 

 

 

 

 

Interest rate contracts

 

$

1,078

 

$

2,477

 

Interest expense

 

 

 

 

 

 

 

 

 

Total reclassifications for the period

 

$

1,078

 

$

2,477

 

 

 

 

Reclassifications Out of AOCI

For the Six-Month Period Ended June 30, 2014 and 2013

 

 

 

Amount Reclassified from AOCI

 

 

 

 

 

Six Months Ended
June 30,

 

Affected Line Item in
the Statement Where

 

Details about AOCI Components

 

2014

 

2013

 

Net Loss is Presented

 

Gains and losses on cash flow hedges

 

 

 

 

 

 

 

Interest rate contracts

 

$

2,485

 

$

4,916

 

Interest expense

 

 

 

 

 

 

 

 

 

Total reclassifications for the period

 

$

2,485

 

$

4,916

 

 

 

 

FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS

13 - FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The fair values and carrying values of the Company’s financial instruments at June 30, 2014 and December 31, 2013 which are required to be disclosed at fair value, but not recorded at fair value, are noted below.

 

 

 

June 30, 2014

 

December 31, 2013

 

 

 

Carrying
Value

 

Fair Value

 

Carrying
Value

 

Fair Value

 

Cash and cash equivalents

 

$

57,720

 

$

57,720

 

$

122,722

 

$

122,722

 

Restricted cash

 

10,275

 

10,275

 

10,150

 

10,150

 

Floating rate debt

 

1,470,941

 

See Below

 

1,480,064

 

See Below

 

2010 Notes

 

117,473

 

122,500

 

115,881

 

63,438

 

 

The fair value of the floating rate debt under the $100 Million Term Loan Facility and $253 Million Term Loan Facility are based on management’s estimate utilizing rates the Company believes it would be able to obtain for these credit facilities.  However, a portion of the floating rate debt of the 2007 Credit Facility was traded in a private transaction for an amount that is not determinable by the Company, which Management believes was lower than the debt’s current carrying value.  The fair value of the 2010 Baltic Trading Credit Facility is based on rates Baltic Trading has recently obtained pursuant to the amendment to the existing 2010 Baltic Trading Credit Facility on August 29, 2013.  The fair value of the Baltic Trading $22 Million Term Loan Facility and the Baltic Trading $44 Million Term Loan Facility is based on rates that Baltic Trading recently obtained upon the effective dates of these facilities on August 30, 2013 and December 3, 2013, respectively.  Additionally, the Company considers its creditworthiness in determining the fair value of floating rate debt under the credit facilities.  The carrying value approximates the fair market value for these floating rate loans, except for the 2007 Credit Facility.  The fair value of the convertible senior notes payable represents the market value based on recent transactions of the 2010 Notes at June 30, 2014 and December 31, 2013 without bifurcating the value of the conversion option.  The fair value of the interest rate swaps is the estimated amount the Company would receive to terminate the swap agreements at the reporting date, taking into account current interest rates and the creditworthiness of both the swap counterparty and the Company.  The carrying amounts of the Company’s other financial instruments at June 30, 2014 and December 31, 2013 (principally Due from charterers and Accounts payable and accrued expenses), approximate fair values because of the relatively short maturity of these instruments.

 

ASC Subtopic 820-10, “Fair Value Measurements & Disclosures” (“ASC 820-10”), applies to all assets and liabilities that are being measured and reported on a fair value basis.  This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumption (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

 

·          Level 1—Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.

 

·          Level 2—Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

 

·          Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

 

As of June 30, 2014 and December 31, 2013, the fair values of the Company’s financial assets and liabilities are categorized as follows:

 

 

 

June 30, 2014

 

 

 

Total

 

Quoted
Market
Prices in
Active
Markets
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Investments

 

$

49,618

 

$

49,618

 

$

 

Derivative instruments — liability position (Refer to Note 11)

 

5,622

 

 

5,622

 

 

 

 

December 31, 2013

 

 

 

Total

 

Quoted
Market
Prices in
Active
Markets
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Investments

 

$

77,570

 

$

77,570

 

$

 

Derivative instruments — liability position

 

6,975

 

 

6,975

 

 

The Company holds an investment in the capital stock of Jinhui, which is classified as a long-term investment.  The stock of Jinhui is publicly traded on the Oslo Stock Exchange and is considered a Level 1 item.  The Company also holds an investment in the stock of KLC, which is classified as a long-term investment.  The stock of KLC is publicly traded on the Korea Stock Exchange and is considered a Level 1 item.  The Company’s only interest rate derivative instrument is a pay-fixed, receive-variable interest rate swaps based on LIBOR.  The Company has elected to use the income approach to value this derivative, using observable Level 2 market inputs at measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact.  Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets (specifically futures contracts on LIBOR for the first two years) and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR cash and swap rates and credit risk at commonly quoted intervals).  Mid-market pricing is used as a practical expedient for fair value measurements.  Refer to Note 11 — Interest Rate Swap Agreements for further information regarding the Company’s interest rate swap agreements.  ASC 820-10 states that the fair value measurement of an asset or liability must reflect the nonperformance risk of the entity and the counterparty. Therefore, the impact of the counterparty’s creditworthiness when in an asset position and the Company’s creditworthiness when in a liability position have also been factored into the fair value measurement of the derivative instruments.  This credit valuation adjustment did not have a material impact on the fair value measurement of the derivative instruments.   Refer to Note 1 — General Information for additional information regarding defaults relating to the swap.  Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. Floating rate debt is considered to be a Level 2 item as the Company considers the estimate of rates it could obtain for similar debt or based upon transaction amongst third parties. The 2010 Notes were publicly traded in the over-the-counter market; however, they were not considered to be actively traded. As such, the 2010 Notes are considered to be a Level 2 item.  The Company did not have any Level 3 financial assets or liabilities during the six months ended June 30, 2014 and 2013.

PREPAID EXPENSES AND OTHER CURRENT AND NONCURRENT ASSETS
PREPAID EXPENSES AND OTHER CURRENT AND NONCURRENT ASSETS

14 - PREPAID EXPENSES AND OTHER CURRENT AND NONCURRENT ASSETS

 

Prepaid expenses and other current assets consist of the following:

 

 

 

June 30, 2014

 

December
31, 2013

 

Lubricant inventory, fuel oil and diesel oil inventory and other stores

 

$

12,635

 

$

11,342

 

Prepaid items

 

5,439

 

5,000

 

Insurance receivable

 

2,171

 

1,096

 

Other

 

3,067

 

1,627

 

Total prepaid expenses and other current assets

 

$

23,312

 

$

19,065

 

 

Other noncurrent assets in the amount of $514 at June 30, 2014 and December 31, 2013 represent the security deposit related to the operating lease entered into effective April 4, 2011. Refer to Note 21 — Commitments and Contingencies for further information related to the lease agreement.

DEFERRED FINANCING COSTS
DEFERRED FINANCING COSTS

15 — DEFERRED FINANCING COSTS

 

Deferred financing costs include fees, commissions and legal expenses associated with securing loan facilities and other debt offerings and amending existing loan facilities. Total net deferred financing costs consist of the following as of June 30, 2014 and December 31, 2013:

 

 

 

June 30, 2014

 

December
31, 2013

 

 

 

 

 

 

 

2007 Credit Facility

 

$

29,568

 

$

29,568

 

$ 100 Million Term Loan Facility

 

1,857

 

1,783

 

$253 Million Term Loan Facility

 

4,884

 

4,708

 

2010 Notes

 

3,637

 

3,637

 

2010 Baltic Trading Credit Facility

 

3,339

 

3,339

 

Baltic Trading $22 Million Term Loan Facility

 

529

 

518

 

Baltic Trading $44 Million Term Loan Facility

 

758

 

737

 

Total deferred financing costs

 

44,572

 

44,290

 

Less: accumulated amortization

 

26,570

 

22,279

 

Total

 

$

18,002

 

$

22,011

 

 

Amortization expense for deferred financing costs for the three months ended June 30, 2014 and 2013 was $2,071 and $1,856, respectively, and $4,291 and $3,691, respectively.  This amortization expense is recorded as a component of interest expense in the Condensed Consolidated Statements of Operations.

FIXED ASSETS
FIXED ASSETS

16 - FIXED ASSETS

 

Fixed assets consist of the following:

 

 

 

June 30, 2014

 

December
31, 2013

 

Fixed assets, at cost:

 

 

 

 

 

Vessel equipment

 

$

3,666

 

$

4,323

 

Leasehold improvements

 

2,679

 

2,679

 

Furniture and fixtures

 

786

 

786

 

Computer equipment

 

794

 

754

 

Total costs

 

7,925

 

8,542

 

Less: accumulated depreciation and amortization

 

3,873

 

3,438

 

Total

 

$

4,052

 

$

5,104

 

 

Depreciation and amortization expense for fixed assets for the three months ended June 30, 2014 and 2013 was $220 and $226, respectively, and $439 and $454 for the six months ended June 30, 2014 and 2013, respectively.  Refer to Note 4 — Cash Flow Information for information regarding the reclassification from fixed assets to vessels assets during the six months ended June 30, 2014.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES
ACCOUNTS PAYABLE AND ACCRUED EXPENSES

17 — ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consist of the following:

 

 

 

June 30, 2014

 

December
31, 2013

 

Accounts payable

 

$

12,777

 

$

5,643

 

Accrued general and administrative expenses

 

14,122

 

8,960

 

Accrued vessel operating expenses

 

12,628

 

12,756

 

Total

 

$

39,527

 

$

27,359

 

LIABILITIES SUBJECT TO COMPROMISE
LIABILITIES SUBJECT TO COMPROMISE

18 — LIABILITIES SUBJECT TO COMPROMISE

 

As a result of the filing of the Chapter 11 Cases on April 21, 2014, the payment of pre-petition indebtedness is subject to compromise or other treatment under a plan of reorganization. Generally, actions to enforce or otherwise effect payment of pre-bankruptcy filing liabilities are stayed.  Although payment of pre-petition claims generally is not permitted, the Bankruptcy Court granted the Company authority to pay certain pre-petition claims in designated categories and subject to certain terms and conditions. This relief generally was designed to preserve the value of the Company’s businesses and assets.  Among other things, the Bankruptcy Court authorized the Company to pay certain pre-petition claims relating to employee wages and benefits, customers, vendors, and suppliers in the ordinary course of business.

 

The Company has been paying and intends to continue to pay undisputed post-petition claims in the ordinary course of business.  With respect to pre-petition claims, the Company has notified all known claimants of the deadline to file a proof of claim with the Bankruptcy Court. The Company’s Liabilities subject to compromise represent the Company’s current estimate of claims expected to be allowed by the Bankruptcy Court. As of June 30, 2014, the Company cannot reasonably estimate the value of the claims that will ultimately be allowed by the Bankruptcy Court since the Company’s evaluation, investigation and reconciliation of the filed claims has not been completed.

 

Pre-petition liabilities that are subject to compromise are required to be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts.  The amounts currently classified as “Liabilities subject to compromise” may be subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, or other events. Management expects that certain amounts currently classified as “Liabilities subject to compromise” may in fact be paid in the ordinary course as they come due. Any resulting changes in classification will be reflected in subsequent financial statements.

 

As of June 30, 2014, Liabilities subject to compromise consist of the following:

 

 

 

June 30, 2014

 

2007 Credit Facility

 

$

1,055,912

 

$ 100 Million Term Loan Facility

 

73,561

 

$ 253 Million Term Loan Facility

 

175,718

 

Interest payable

 

13,199

 

Terminated interest rate swap liability

 

5,622

 

Convertible senior note payable

 

117,473

 

Bond coupon interest payable

 

1,105

 

Lease obligation for prior office space

 

828

 

Pre-petition accounts payable

 

157

 

Total

 

$

1,443,575

REVENUE FROM TIME CHARTERS
REVENUE FROM TIME CHARTERS

19 - REVENUE FROM TIME CHARTERS

 

Total voyage revenue earned on time charters, including revenue earned in vessel pools and spot market-related time charters, as well as the sale of bunkers consumed during short-term time charters, for the three months ended June 30, 2014 and 2013 was $51,545 and $44,941, respectively, and for the six months ended June 30, 2014 and 2013 was $114,725 and $84,617, respectively.  There was no profit sharing revenue earned during the three and six months ended June 30, 2014 and 2013.  Future minimum time charter revenue, based on vessels committed to noncancelable time charter contracts as of August 9, 2014, is expected to be $7,132 for the remainder of 2014, assuming off-hire due to any scheduled drydocking and that no additional off-hire time is incurred.  For drydockings, the Company assumes twenty days of offhire.  Future minimum revenue excludes revenue earned for the vessels currently in pool arrangements and vessels that are currently on or will be on spot market-related time charters, as spot rates cannot be estimated, as well as profit sharing revenue.

REORGANIZATION ITEMS, NET
REORGANIZATION ITEMS, NET

20 — REORGANIZATION ITEMS, NET

 

Reorganization items, net represent amounts incurred and recovered subsequent to the bankruptcy filing as a direct result

of the filing of the Chapter 11 Cases and are comprised of the following for the three and six months ended June 30, 2014:

 

 

 

For the Three and
Six Months Ended
June 30, 2014

 

Professional fees incurred

 

$

19,855

 

Trustee fees incurred

 

251

 

Total

 

$

20,106

 

 

During the three and six months ended June 30, 2014, there were no items netted with the reorganization items.

COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES

21 - COMMITMENTS AND CONTINGENCIES

 

In September 2005, the Company entered into a 15-year lease for office space in New York, New York for which there was a free rental period from September 1, 2005 to July 31, 2006.  On January 6, 2012, the Company ceased the use of this space. The Debtors rejected this lease agreement During the three months ended June 30, 2014 and 2013, net rent expense of ($28) and $22, respectively, and ($28) and $131 during the six months ended June 30, 2014 and 2013, respectively, was recorded representing the adjustment of the present value of the Company’s estimating remaining rent expense for the duration of the lease after taking into account estimated future sublease income based on the sublease agreement entered into effective November 1, 2013. The current and long-term lease obligations related to this lease agreement as of December 31, 2013 of $176 and $744, respectively, are recorded in the condensed consolidated balance sheet in Current portion of lease obligations and Long-term lease obligation, respectively.  As a result of the Chapter 11 Cases, the current and long-term lease obligations as of June 30, 2014 related to this lease agreement in the amount of $162 and $666, respectively, have been recorded as Liabilities subject to compromise.  Pursuant to the Plan that was approved by the Bankruptcy Court, the Debtors rejected this lease agreement on the Effective Date.

 

Prior to the rejection of this lease agreement, future minimum rental payments on the above lease for the next five years and thereafter would be as follows: $259 for the remainder of 2014, $518 for 2015, $529 for 2016, $550 annually for 2017 and 2018 and a total of $1,421 for the remaining term of the lease.  The rental payments would be offset by the contract sublease income, as follows: $170 for 2014; $340 annually for 2015 through 2016, $347 for 2017, $380 for 2018 and a total of $983 for the remaining term of the sublease.

 

Effective April 4, 2011, the Company entered into a seven-year sub-sublease agreement for additional office space in New York, New York.  The term of the sub-sublease commenced June 1, 2011, with a free base rental period until October 31, 2011. Following the expiration of the free base rental period, the monthly base rental payments are $82 per month until May 31, 2015 and thereafter will be $90 per month until the end of the seven-year term.  Pursuant to the sub-sublease agreement, the sublessor was obligated to contribute $472 toward the cost of the Company’s alterations to the sub-subleased office space.  The Company has also entered into a direct lease with the over-landlord of such office space that will commence immediately upon the expiration of such sub-sublease agreement, for a term covering the period from May 1, 2018 to September 30, 2025; the direct lease provides for a free base rental period from May 1, 2018 to September 30, 2018.  Following the expiration of the free base rental period, the monthly base rental payments will be $186 per month from October 1, 2018 to April 30, 2023 and $204 per month from May 1, 2023 to September 30, 2025.  For accounting purposes, the sub-sublease agreement and direct lease agreement with the landlord constitutes one lease agreement.  As a result of the straight-line rent calculation generated by the free rent period and the tenant work credit, the monthly straight-line rental expense for the term of the entire lease from June 1, 2011 to September 30, 2025 will be $130.  The Company had a long-term lease obligation at June 30, 2014 and December 31, 2013 of $2,658 and $2,370, respectively.  Rent expense pertaining to this lease for the three months ended June 30, 2014 and 2013 was $390 during both periods.  Rent expense pertaining to this lease for the six months ended June 30, 2014 and 2013 was $779 during both periods.

 

Future minimum rental payments on the above lease for the next five years and thereafter are as follows: $491 for the remainder of 2014, $1,037 for 2015, $1,076 annually for 2016 and 2017, $916 for 2018 and a total of $15,590 for the remaining term of the lease.

NONVESTED STOCK AWARDS
NONVESTED STOCK AWARDS

22 - NONVESTED STOCK AWARDS

 

The table below summarizes the Company’s nonvested stock awards for the six months ended June 30, 2014 under the Genco Shipping & Trading Limited 2005 and 2012 Equity Incentive Plans (the “GS&T Plans”):

 

 

 

Number of
Shares

 

Weighted
Average Grant
Date Price

 

Outstanding at January 1, 2014

 

880,465

 

$

7.77

 

Granted

 

 

 

Vested

 

 

 

Forfeited

 

 

 

 

 

 

 

 

 

Outstanding at June 30, 2014

 

880,465

 

$

7.77

 

 

The total fair value of shares that vested under the GS&T Plans during the six months ended June 30, 2014 and 2013 was $0 and $110, respectively.  The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.

 

For the three and six months ended June 30, 2014 and 2013, the Company recognized nonvested stock amortization expense for the GS&T Plans, which is included in general, administrative and management fees, as follows:

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

General, administrative, and management fees

 

$

393

 

$

796

 

$

820

 

$

1,565

 

 

The fair value of nonvested stock at the grant date is equal to the closing stock price on that date.  The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures.  As of June 30, 2014, unrecognized compensation cost of $1,583 related to nonvested stock will be recognized over a weighted-average period of 1.69 years.

 

On March 13, 2014, Baltic Trading’s Board of Directors approved an amendment to the Baltic Trading Limited 2010 Equity Incentive Plan (the “Baltic Trading Plan”) that increased the aggregate number of shares of common stock available for awards from 2,000,000 to 6,000,000 shares.  Additionally, on April 9, 2014, at Baltic Trading’s 2014 Annual Meeting of Shareholders, Baltic Trading’s shareholders approved the amendment to the Baltic Trading Plan.

 

The following table presents a summary of Baltic Trading’s nonvested stock awards for the six months ended June 30, 2014 under the Baltic Trading Plan:

 

 

 

Number of Baltic
Trading
Common
Shares

 

Weighted
Average Grant
Date Price

 

Outstanding at January 1, 2014

 

1,381,429

 

$

6.03

 

Granted

 

36,345

 

6.19

 

Vested

 

(176,180

)

10.53

 

Forfeited

 

 

 

 

 

 

 

 

 

Outstanding at June 30, 2014

 

1,241,594

 

$

5.39

 

 

The total fair value of shares that vested under the Baltic Trading Plan during the six months ended June 30, 2014 and 2013 was $1,143 and $643, respectively.  The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.

 

For the three and six months ended June 30, 2014 and 2013, the Company recognized nonvested stock amortization expense for the Baltic Trading Plan, which is included in general, administrative and management fees, as follows:

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

General, administrative, and management fees

 

$

908

 

$

351

 

$

1,871

 

$

815

 

 

The Company is amortizing Baltic Trading’s grants over the applicable vesting periods, net of anticipated forfeitures.  As of June 30, 2014, unrecognized compensation cost of $4,288 related to nonvested stock will be recognized over a weighted-average period of 3.01 years.

 

SHARE REPURCHASE PROGRAM
SHARE REPURCHASE PROGRAM

 

23 - SHARE REPURCHASE PROGRAM

 

Since the inception of its share repurchase program through June 30, 2014, the Company has repurchased and retired 278,300 shares of its common stock for $11,500.  Currently, the terms of the 2007 Credit Facility require the Company to suspend all share repurchases until the Company can represent that it is in a position to again satisfy the collateral maintenance covenant.  No share repurchases were made during the three and six months ended June 30, 2014 and 2013.

LEGAL PROCEEDINGS
LEGAL PROCEEDINGS

24 - LEGAL PROCEEDINGS

 

Refer to Note 1 — General Information for information concerning the Chapter 11 Cases.

 

On March 28, 2014, the Genco Auvergne was arrested due to a disputed claim with the charterer of one of the Company’s other vessels, namely the Genco Ardennes. In order for the Company to release the Genco Auvergne from its arrest, the Company entered into a cash collateralized $900 bank guarantee with Skandinaviska Enskilda Banken AB (the “SEB Bank Guarantee”) on April 3, 2014. The vessel has since been released from its arrest and the bank guarantee will remain in an escrow account until the arbitration related to this case is completed. The SEB Bank Guarantee resulted in additional indebtedness by the Company. As the Company is currently in default under the covenants of its 2007 Credit Facility due to the default on a scheduled debt amortization payment due on March 31, 2014, on April 3, 2014 the Company received a consent from the lenders under the 2007 Credit Facility to incur this additional indebtedness. Also, under the $253 Million Term Loan Facility for which the Genco Auvergne is collateralized, the Company may not incur additional indebtedness related to its collateralized vessels under this facility. The Company also received a consent from the lenders under the $253 Million Term Loan Facility on April 3, 2014 in order to enter the SEB Bank Guarantee.  The $900 to collateralize the bank guarantee has been recorded as Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets as of June 30, 2014.

 

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.  The Company is not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material effect on the Company, its financial condition, results of operations or cash flows besides those noted above.

SUBSEQUENT EVENTS
SUBSEQUENT EVENTS

25 - SUBSEQUENT EVENTS

 

Under ASC 852, Reorganizations, fresh-start accounting is required upon emergence from Chapter 11 if (i) the value of the assets of the emerging entity immediately before the date of confirmation is less than the total of all post-petition liabilities and allowed claims; and (ii) holders of existing voting shares immediately before confirmation receive less than 50% of the voting shares of the emerging entity.

 

The value of the assets of the Company immediately before the date of confirmation were approximately $1,390, which is expected to be less than the total of all post-petition liabilities and allowed claims.  For purposes of this determination, the Company utilized the estimated total of all post-petition liabilities and allowed claims at June 30, 2014 of $1,538.  Although there may be a substantial increase in allowed claims by the Effective Date, it is not expected that any such increase would result in a different determination.  Additionally, the holders of the existing voting shares immediately before the Effective Date held less than 50% of the voting shares of the emerging entity.

 

Accordingly, the Company will adopt fresh-start accounting as of the Effective Date. Adopting fresh-start accounting results in a new reporting entity with no beginning retained earnings or deficit. The cancellation of all existing shares outstanding on the Effective Date and issuance of new shares of the reorganized entity caused a related change of control of the Company under ASC 852.  Fresh-start accounting also requires that the reporting entity allocate the reorganization value to its assets and liabilities in relation to their fair values upon emergence from Chapter 11.

 

On July 29, 2014, Baltic Trading declared a dividend of $0.01 per share to be paid on or about August 21, 2014 to shareholders of record as of August 14, 2014.  The aggregate amount of the dividend is expected to be approximately $576, of which approximately $512 will be paid to minority shareholders, which Baltic Trading anticipates will be funded from cash on hand at the time payment is to be made.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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, 2013 (the “2013 10-K”).  The results of operations for the three and six month periods ended June 30, 2014 and 2013 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 which 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 June 30, 2014 and 2013 was $34,557 and $33,102, respectively.  Depreciation expense for vessels for the six months ended June 30, 2014 and 2013 was $68,717 and $65,841, 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 per lightweight ton (“lwt”) times the weight of the ship in lwt’s.

Deferred revenue

 

Deferred revenue primarily relates to cash received from charterers prior to it being earned. These amounts are recognized as income when earned. Additionally, deferred revenue includes estimated customer claims mainly due to time charter performance issues. As of June 30, 2014 and December 31, 2013, the Company had an accrual of $459 and $536, respectively, related to these estimated customer claims.

 

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) losses of ($184) and $21 during the three months ended June 30, 2014 and 2013, respectively, and ($249) and ($343) during the six months ended June 30, 2014 and 2013, 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 six months ended June 30, 2014 and 2013 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, in vessel pools or on spot market-related time charters.  The spot market represents immediate chartering of a vessel, usually for single voyages.  At June 30, 2014, the noncontrolling interest held an 88.96% economic interest in Baltic Trading while only holding 34.94% of the voting power.  At  December 31, 2013, the noncontrolling interest held an 88.95% economic interest in Baltic Trading while only holding 34.92% of the 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 June 30, 2014 and 2013 was $1,841 and $1,515, respectively, of which $1,022 and $696, respectively, eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $764 associated with these activities for the three months ended June 30, 2014.  This resulted in estimated tax expense of $339 for the three months ended June 30, 2014.  After allocation of certain expenses, there was taxable income of $625 associated with these activities for the three months ended June 30, 2013.  This resulted in income tax expense of $281 for the three months ended June 30, 2013.

 

Total revenue earned for these services during the six months ended June 30, 2014 and 2013 was $3,696 and $3,005, respectively, of which $2,067 and $1,376, respectively, were eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $1,650 associated with these activities for the six months ended June 30, 2014. This resulted in estimated income tax expense of $740 for the six months ended June 30, 2014. After allocation of certain expenses, there was taxable income of $1,217 associated with these activities for the six months ended June 30, 2013. This resulted in income tax expense of $505 for the six months ended June 30, 2013.

 

Baltic Trading is subject to income tax on its United States source income.  During the three months ended June 30, 2014 and 2013, Baltic Trading had United States operations which resulted in United States source income of $1,245 and $639, respectively.  Baltic Trading’s estimated United States income tax expense for the three months ended June 30, 2014 and 2013 was $25 and $13, respectively.

 

During the six months ended June 30, 2014 and 2013, Baltic Trading had United States operations which resulted in United

States source income of $1,813 and $639, respectively. Baltic Trading’s United States income tax expense for the six months ended

June 30, 2014 and 2013 was $37 and $13, respectively.

GENERAL INFORMATION (Tables)

Below is the list of GS&T’s wholly owned ship-owning subsidiaries as of June 30, 2014:

 

Wholly Owned Subsidiaries

 

Vessel 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

 

Wholly Owned Subsidiaries

 

Vessel Acquired

 

Dwt

 

Delivery Date

 

Year Built

 

 

 

 

 

 

 

 

 

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

 

Below is the list of Baltic Trading’s wholly owned ship-owning subsidiaries as of June 30, 2014:

 

Baltic Trading’s Wholly Owned
Subsidiaries

 

Vessel Acquired

 

Dwt

 

Delivery Date

 

Year
Built

 

 

 

 

 

 

 

 

 

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

Baltic Fox Limited

 

Baltic Fox

 

31,883

 

9/6/13

 

2010

Baltic Hare Limited

 

Baltic Hare

 

31,887

 

9/5/13

 

2009

Baltic Lion Limited

 

Baltic Lion

 

179,185

 

12/27/13

 

2012

Baltic Tiger Limited

 

Baltic Tiger

 

179,185

 

11/26/13

 

2011

Baltic Hornet Limited

 

Baltic Hornet

 

64,000

 

Q3 2014 (1)

 

2014 (1)

Baltic Wasp Limited

 

Baltic Wasp

 

64,000

 

Q4 2014 (1)

 

2014 (1)

Baltic Scorpion Limited

 

Baltic Scorpion

 

64,000

 

Q2 2015 (1)

 

2015 (1)

Baltic Mantis Limited

 

Baltic Mantis

 

64,000

 

Q3 2015 (1)

 

2015 (1)

 

 

(1)     Built dates and dates for vessels being delivered in the future are estimates based on the guidance received from the sellers and the respective shipyards.

SEGMENT INFORMATION (Tables)

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Voyage revenue from external customers

 

 

 

 

 

 

 

 

 

GS&T

 

$

40,842

 

$

38,562

 

$

90,931

 

$

72,252

 

Baltic Trading

 

10,703

 

6,379

 

23,794

 

12,365

 

Total operating segments

 

51,545

 

44,941

 

114,725

 

84,617

 

Eliminating revenue

 

 

 

 

 

Total consolidated voyage revenue from external customers

 

$

51,545

 

$

44,941

 

$

114,725

 

$

84,617

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Intersegment revenue

 

 

 

 

 

 

 

 

 

GS&T

 

$

1,022

 

$

696

 

$

2,067

 

$

1,376

 

Baltic Trading

 

 

 

 

 

Total operating segments

 

1,022

 

696

 

2,067

 

1,376

 

Eliminating revenue

 

(1,022

)

(696

)

(2,067

)

(1,376

)

Total consolidated intersegment revenue

 

$

 

$

 

$

 

$

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Net loss

 

 

 

 

 

 

 

 

 

GS&T

 

$

(59,874

)

$

(44,297

)

$

(98,444

)

$

(91,145

)

Baltic Trading

 

(5,674

)

(4,625

)

(9,207

)

(9,708

)

Total operating segments

 

(65,548

)

(48,922

)

(107,651

)

(100,853

)

Eliminating net loss

 

9

 

18

 

145

 

37

 

Total consolidated net loss

 

$

(65,557

)

$

(48,940

)

$

(107,796

)

$

(100,890

)

 

 

June 30, 2014

 

December 31,
2013

 

Total assets

 

 

 

 

 

GS&T

 

$

2,286,604

 

$

2,404,811

 

Baltic Trading

 

546,861

 

557,367

 

Total operating segments

 

2,833,465

 

2,962,178

 

Eliminating assets

 

(4,779

)

(4,924

)

Total consolidated assets

 

$

2,828,686

 

$

2,957,254

 

NET LOSS PER COMMON SHARE (Tables)

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding, basic:

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

43,568,942

 

43,196,895

 

43,568,942

 

43,179,300

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding, diluted:

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

43,568,942

 

43,196,895

 

43,568,942

 

43,179,300

 

 

 

 

 

 

 

 

 

 

 

Dilutive effect of convertible notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dilutive effect of restricted stock awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, diluted

 

43,568,942

 

43,196,895

 

43,568,942

 

43,179,300

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to GS&T

 

$

(60,524

)

$

(45,369

)

$

(99,630

)

$

(93,532

)

 

 

 

 

 

 

 

 

 

 

Interest expense related to convertible notes, if dilutive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to GS&T for the computation of diluted net loss per share

 

$

(60,524

)

$

(45,369

)

$

(99,630

)

$

(93,532

)

DEBT (Tables)

 

 

 

June 30, 2014

 

December 31,
2013

 

 

 

Balance prior to
Financial
Statement
Classification

 

Amounts
Classified as
Subject to
Compromise

 

Total Debt

 

Total Debt

 

 

 

 

 

 

 

 

 

 

 

2007 Credit Facility

 

$

1,055,912

 

$

(1,055,912

)

$

 

$

1,055,912

 

$100 Million Term Loan Facility

 

73,561

 

(73,561

)

 

75,484

 

$253 Million Term Loan Facility

 

175,718

 

(175,718

)

 

180,793

 

2010 Baltic Trading Credit Facility

 

102,250

 

 

102,250

 

102,250

 

Baltic Trading $22 Million Term Loan Facility

 

20,875

 

 

20,875

 

21,625

 

Baltic Trading $44 Million Term Loan Facility

 

42,625

 

 

42,625

 

44,000

 

Less: Current portion

 

(4,250

)

 

(4,250

)

(1,316,439

)

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

$

1,466,691

 

$

(1,305,191

)

$

161,500

 

$

163,625

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Effective Interest Rate

 

4.31

%

4.72

%

4.33

%

4.73

%

Range of Interest Rates (excluding impact of swaps and unused commitment fees)

 

3.15% to 5.15

%

3.19% to 4.31

%

3.15% to 5.15

%

3.19% to 4.38

%

CONVERTIBLE SENIOR NOTES (Tables)

 

 

June 30, 2014

 

December 31,
2013

 

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

 

7,527

 

9,119

 

Net carrying amount of the liability component

 

117,473

 

115,881

 

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Effective interest rate on liability component

 

10.0

%

10.0

%

10.0

%

10.0

%

Cash interest expense recognized

 

$

345

 

$

1,571

 

$

1,886

 

$

3,112

 

Non-cash interest expense recognized

 

293

 

1,209

 

1,592

 

2,388

 

Non-cash deferred financing amortization costs included in interest expense

 

39

 

179

 

216

 

356

 

INTEREST RATE SWAP AGREEMENTS (Tables)

 

 

 

 

 

 

 

 

 

June 30, 2014

 

December 31,
2013

 

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

 

3/29/06

 

5.25

%

1/2/07

 

1/1/14

 

 

50,000

 

1/9/09

 

2.05

%

1/22/09

 

1/22/14

 

 

100,000

 

2/11/09

 

2.45

%

2/23/09

 

2/23/14

 

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

$

 

 

 

Asset Derivatives

 

Liability Derivatives

 

 

 

Balance

 

Fair Value

 

Balance

 

Fair Value

 

 

 

Sheet
Location

 

June 30,
2014

 

December
31, 2013

 

Sheet
Location

 

June 30,
2014

 

December
31, 2013

 

Derivatives designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

Fair value of derivative instruments (Current Assets)

 

$

 

$

 

Fair value of derivative instruments (Current Liabilities)

 

$

 

$

6,975

 

Interest rate contracts

 

Fair value of derivative instruments (Noncurrent Assets)

 

 

 

Fair value of derivative instruments (Noncurrent Liabilities)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total derivatives designated as hedging instruments

 

 

 

 

 

 

 

 

6,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Derivatives

 

 

 

$

 

$

 

 

 

$

 

$

6,975

 

 

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Three-Month Period Ended June 30, 2014

 

Derivatives in Cash
Flow Hedging

 

Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)

 

Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective

 

Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)

 

Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective

 

Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)

 

Relationships

 

2014

 

Portion)

 

2014

 

Portion)

 

2014

 

Interest rate contracts

 

$

 

Interest Expense

 

$

(1,078

)

Other Income (Expense)

 

$

 

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Three-Month Period Ended June 30, 2013

 

Derivatives in Cash
Flow Hedging

 

Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)

 

Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective

 

Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)

 

Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective

 

Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)

 

Relationships

 

2013

 

Portion)

 

2013

 

Portion)

 

2013

 

Interest rate contracts

 

$

(91

)

Interest Expense

 

$

(2,477

)

Other Income (Expense)

 

$

(2

)

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Three-Month Period Ended June 30, 2014 and 2013

 

Derivatives not designated
as Hedging 

 

Location of
Gain (Loss)
Recognized in Income

 

Amount of
Gain (Loss) Recognized in Income on
Derivative

 

Instruments

 

on Derivative

 

2014

 

2013

 

Interest rate contracts

 

Interest Expense

 

$

(225

)

$

 

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Six-Month Period Ended June 30, 2014

 

Derivatives in Cash
Flow Hedging

 

Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)

 

Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective

 

Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)

 

Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective

 

Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)

 

Relationships

 

2014

 

Portion)

 

2014

 

Portion)

 

2014

 

Interest rate contracts

 

$

(179

)

Interest Expense

 

$

(2,485

)

Other Income (Expense)

 

$

 

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Six-Month Period Ended June 30, 2013

 

Derivatives in Cash
Flow Hedging

 

Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)

 

Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective

 

Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)

 

Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective

 

Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)

 

Relationships

 

2013

 

Portion)

 

2013

 

Portion)

 

2013

 

Interest rate contracts

 

$

(229

)

Interest Expense

 

$

(4,916

)

Other Income (Expense)

 

$

(5

)

 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

For the Six-Month Period Ended June 30, 2014 and 2013

 

Derivatives not designated
as Hedging 

 

Location of
Gain (Loss)
Recognized in Income

 

Amount of
Gain (Loss) Recognized in Income on
Derivative

 

Instruments

 

on Derivative

 

2014

 

2013

 

Interest rate contracts

 

Interest Expense

 

$

(225

)

$

 

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

 

Changes in AOCI by Component

Forthe Three-Month Period Ended June 30, 2014

 

 

 

Net Unrealized
Gain (Loss) on
Cash Flow
Hedges

 

Net Unrealized
Gain
on
Investments

 

Total

 

AOCI — April 1, 2014

 

$

(5,748

)

$

46,483

 

$

40,735

 

 

 

 

 

 

 

 

 

OCI before reclassifications

 

 

(13,737

)

(13,737

)

Amounts reclassified from AOCI

 

1,078

 

 

1,078

 

Net current-period OCI

 

1,078

 

(13,737

)

(12,659

)

 

 

 

 

 

 

 

 

AOCI — June 30, 2014

 

$

(4,670

)

$

32,746

 

$

28,076

 

 

Changes in AOCI by Component

For the Three-Month Period Ended June 30, 2013

 

 

 

Net Unrealized
Gain (Loss) on
Cash Flow
Hedges

 

Net Unrealized
Gain
on
Investments

 

Total

 

AOCI — April 1, 2013

 

$

(13,756

)

$

13,819

 

$

63

 

 

 

 

 

 

 

 

 

OCI before reclassifications

 

4,863

 

(3,276

)

1,587

 

Amounts reclassified from AOCI

 

(2,477

)

 

(2,477

)

Net current-period OCI

 

2,386

 

(3,276

)

(890

)

 

 

 

 

 

 

 

 

AOCI — June 30, 2013

 

$

(11,370

)

$

10,543

 

$

(827

)

 

Changes in AOCI by Component

Forthe Six-Month Period Ended June 30, 2014

 

 

 

Net Unrealized
Gain (Loss) on
Cash Flow
Hedges

 

Net Unrealized
Gain
on
Investments

 

Total

 

AOCI — January 1, 2014

 

$

(6,976

)

$

60,698

 

$

53,722

 

 

 

 

 

 

 

 

 

OCI before reclassifications

 

(179

)

(27,952

)

(28,131

)

Amounts reclassified from AOCI

 

2,485

 

 

2,485

 

Net current-period OCI

 

2,306

 

(27,952

)

(25,646

)

 

 

 

 

 

 

 

 

AOCI — June 30, 2014

 

$

(4,670

)

$

32,746

 

$

28,076

 

 

Changes in AOCI by Component

For the Six-Month Period Ended June 30, 2013

 

 

 

Net Unrealized
Gain (Loss) on
Cash Flow
Hedges

 

Net Unrealized
Gain
on
Investments

 

Total

 

AOCI — January 1, 2013

 

$

(16,057

)

$

4,216

 

$

(11,841

)

 

 

 

 

 

 

 

 

OCI before reclassifications

 

9,603

 

6,327

 

15,930

 

Amounts reclassified from AOCI

 

(4,916

)

 

(4,916

)

Net current-period OCI

 

4,687

 

6,327

 

11,014

 

 

 

 

 

 

 

 

 

AOCI — June 30, 2013

 

$

(11,37

 

Reclassifications Out of AOCI

For the Three-Month Period Ended June 30, 2014 and 2013

 

 

 

Amount Reclassified from AOCI

 

 

 

 

 

Three Months Ended
June 30,

 

Affected Line Item in
the Statement Where

 

Details about AOCI Components

 

2014

 

2013

 

Net Loss is Presented

 

Gains and losses on cash flow hedges

 

 

 

 

 

 

 

Interest rate contracts

 

$

1,078

 

$

2,477

 

Interest expense

 

 

 

 

 

 

 

 

 

Total reclassifications for the period

 

$

1,078

 

$

2,477

 

 

 

 

Reclassifications Out of AOCI

For the Six-Month Period Ended June 30, 2014 and 2013

 

 

 

Amount Reclassified from AOCI

 

 

 

 

 

Six Months Ended
June 30,

 

Affected Line Item in
the Statement Where

 

Details about AOCI Components

 

2014

 

2013

 

Net Loss is Presented

 

Gains and losses on cash flow hedges

 

 

 

 

 

 

 

Interest rate contracts

 

$

2,485

 

$

4,916

 

Interest expense

 

 

 

 

 

 

 

 

 

Total reclassifications for the period

 

$

2,485

 

$

4,916

 

 

 

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

 

 

 

June 30, 2014

 

December 31, 2013

 

 

 

Carrying
Value

 

Fair Value

 

Carrying
Value

 

Fair Value

 

Cash and cash equivalents

 

$

57,720

 

$

57,720

 

$

122,722

 

$

122,722

 

Restricted cash

 

10,275

 

10,275

 

10,150

 

10,150

 

Floating rate debt

 

1,470,941

 

See Below

 

1,480,064

 

See Below

 

2010 Notes

 

117,473

 

122,500

 

115,881

 

63,438

 

 

 

 

June 30, 2014

 

 

 

Total

 

Quoted
Market
Prices in
Active
Markets
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Investments

 

$

49,618

 

$

49,618

 

$

 

Derivative instruments — liability position (Refer to Note 11)

 

5,622

 

 

5,622

 

 

 

 

December 31, 2013

 

 

 

Total

 

Quoted
Market
Prices in
Active
Markets
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Investments

 

$

77,570

 

$

77,570

 

$

 

Derivative instruments — liability position

 

6,975

 

 

6,975

 

PREPAID EXPENSES AND OTHER CURRENT AND NONCURRENT ASSETS (Tables)
Schedule of prepaid expenses and other current assets

 

 

 

June 30, 2014

 

December
31, 2013

 

Lubricant inventory, fuel oil and diesel oil inventory and other stores

 

$

12,635

 

$

11,342

 

Prepaid items

 

5,439

 

5,000

 

Insurance receivable

 

2,171

 

1,096

 

Other

 

3,067

 

1,627

 

Total prepaid expenses and other current assets

 

$

23,312

 

$

19,065

 

DEFERRED FINANCING COSTS (Tables)
Schedule of deferred financing costs

 

 

 

June 30, 2014

 

December
31, 2013

 

 

 

 

 

 

 

2007 Credit Facility

 

$

29,568

 

$

29,568

 

$ 100 Million Term Loan Facility

 

1,857

 

1,783

 

$253 Million Term Loan Facility

 

4,884

 

4,708

 

2010 Notes

 

3,637

 

3,637

 

2010 Baltic Trading Credit Facility

 

3,339

 

3,339

 

Baltic Trading $22 Million Term Loan Facility

 

529

 

518

 

Baltic Trading $44 Million Term Loan Facility

 

758

 

737

 

Total deferred financing costs

 

44,572

 

44,290

 

Less: accumulated amortization

 

26,570

 

22,279

 

Total

 

$

18,002

 

$

22,011

 

FIXED ASSETS (Tables)
Schedule of fixed assets

 

 

 

June 30, 2014

 

December
31, 2013

 

Fixed assets, at cost:

 

 

 

 

 

Vessel equipment

 

$

3,666

 

$

4,323

 

Leasehold improvements

 

2,679

 

2,679

 

Furniture and fixtures

 

786

 

786

 

Computer equipment

 

794

 

754

 

Total costs

 

7,925

 

8,542

 

Less: accumulated depreciation and amortization

 

3,873

 

3,438

 

Total

 

$

4,052

 

$

5,104

 

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)
Schedule of accounts payable and accrued expenses

 

 

 

June 30, 2014

 

December
31, 2013

 

Accounts payable

 

$

12,777

 

$

5,643

 

Accrued general and administrative expenses

 

14,122

 

8,960

 

Accrued vessel operating expenses

 

12,628

 

12,756

 

Total

 

$

39,527

 

$

27,359

 

LIABILITIES SUBJECT TO COMPROMISE (Tables)
Schedule of liabilities subject to compromise

 

 

 

June 30, 2014

 

2007 Credit Facility

 

$

1,055,912

 

$ 100 Million Term Loan Facility

 

73,561

 

$ 253 Million Term Loan Facility

 

175,718

 

Interest payable

 

13,199

 

Terminated interest rate swap liability

 

5,622

 

Convertible senior note payable

 

117,473

 

Bond coupon interest payable

 

1,105

 

Lease obligation for prior office space

 

828

 

Pre-petition accounts payable

 

157

 

Total

 

$

1,443,575

 

REORGANIZATION ITEMS, NET (Tables)
Schedule of reorganization items, net represent amounts incurred and recovered subsequent to the bankruptcy filing as a direct result of the filing of the Chapter 11 Cases

 

 

 

For the Three and
Six Months Ended
June 30, 2014

 

Professional fees incurred

 

$

19,855

 

Trustee fees incurred

 

251

 

Total

 

$

20,106

 

NONVESTED STOCK AWARDS (Tables)

 

 

 

Number of
Shares

 

Weighted
Average Grant
Date Price

 

Outstanding at January 1, 2014

 

880,465

 

$

7.77

 

Granted

 

 

 

Vested

 

 

 

Forfeited

 

 

 

 

 

 

 

 

 

Outstanding at June 30, 2014

 

880,465

 

$

7.77

 

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

General, administrative, and management fees

 

$

393

 

$

796

 

$

820

 

$

1,565

 

 

 

 

Number of Baltic
Trading
Common
Shares

 

Weighted
Average Grant
Date Price

 

Outstanding at January 1, 2014

 

1,381,429

 

$

6.03

 

Granted

 

36,345

 

6.19

 

Vested

 

(176,180

)

10.53

 

Forfeited

 

 

 

 

 

 

 

 

 

Outstanding at June 30, 2014

 

1,241,594

 

$

5.39

 

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

General, administrative, and management fees

 

$

908

 

$

351

 

$

1,871

 

$

815

 

GENERAL INFORMATION (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended
Jun. 30, 2014
5.00% convertible senior notes
Dec. 31, 2013
5.00% convertible senior notes
Jun. 30, 2014
2007 Credit Facility
Dec. 31, 2013
2007 Credit Facility
Jun. 30, 2014
$253 Million Term Loan Facility
Mar. 31, 2014
$253 Million Term Loan Facility
Dec. 31, 2013
$253 Million Term Loan Facility
Aug. 20, 2010
$253 Million Term Loan Facility
Jun. 30, 2014
$100 Million Term Loan Facility
Mar. 31, 2014
$100 Million Term Loan Facility
Dec. 31, 2013
$100 Million Term Loan Facility
Aug. 12, 2010
$100 Million Term Loan Facility
Jun. 30, 2014
Chapter 11
$253 Million Term Loan Facility
Jun. 30, 2014
Chapter 11
$100 Million Term Loan Facility
Apr. 21, 2014
GS&T and wholly-owned subsidiaries excluding Baltic Trading Limited
Chapter 11
Interest rate swap
Apr. 21, 2014
GS&T and wholly-owned subsidiaries excluding Baltic Trading Limited
Chapter 11
5.00% convertible senior notes
Apr. 21, 2014
GS&T and wholly-owned subsidiaries excluding Baltic Trading Limited
Chapter 11
2007 Credit Facility
Apr. 21, 2014
GS&T and wholly-owned subsidiaries excluding Baltic Trading Limited
Chapter 11
$253 Million Term Loan Facility
Apr. 21, 2014
GS&T and wholly-owned subsidiaries excluding Baltic Trading Limited
Chapter 11
$100 Million Term Loan Facility
Jul. 9, 2014
Subsequent Event
Chapter 11
New Genco Equity Warrants
Jul. 9, 2014
Subsequent Event
Chapter 11
Common Stock
Jul. 9, 2014
Subsequent Event
Chapter 11
Common Stock
New Genco Equity Warrants
Jul. 9, 2014
Subsequent Event
Chapter 11
Common Stock
Backstopped rights offering
Jul. 9, 2014
Subsequent Event
Chapter 11
5.00% convertible senior notes
Jul. 9, 2014
Subsequent Event
Chapter 11
5.00% convertible senior notes
Common Stock
Jul. 9, 2014
Subsequent Event
Chapter 11
5.00% convertible senior notes
Common Stock
Backstopped rights offering
Jul. 9, 2014
Subsequent Event
Chapter 11
2007 Credit Facility
Jul. 9, 2014
Subsequent Event
Chapter 11
2007 Credit Facility
Common Stock
Jul. 9, 2014
Subsequent Event
Chapter 11
2007 Credit Facility
Common Stock
Backstopped rights offering
Chapter 11 Cases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding amount of credit facility
 
 
 
$ 1,055,912 
 
 
$ 180,793 
 
 
 
$ 75,484 
 
 
 
 
 
$ 1,055,912 
$ 175,718 
$ 73,561 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
1,055,912 
 
253,000 
253,000 
253,000 
253,000 
100,000 
100,000 
100,000 
100,000 
253,000 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal amount of the 2010 Notes
125,000 
125,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
125,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate on convertible notes (as a percent)
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding amount of derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,622 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bankruptcy claims settled by conversion into shares of entity (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
100.00% 
 
 
New stock issued for bankruptcy claims settlement (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.40% 
 
 
81.10% 
 
Percentage of new stock offered under offering
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.70% 
 
 
 
 
 
 
Maximum percentage of subscription of new stock under offering
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20.00% 
 
 
80.00% 
Number of shares of new stock in which each warrant or right can be converted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subscription price (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 20.99 
 
 
$ 18.62537 
 
 
 
 
 
 
Aggregate subscription price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 100,000 
 
 
 
 
 
 
Number of warrants issued for old common stock of Genco
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,938,298 
 
 
 
 
 
 
 
 
 
Warrants exercisable as percentage of new stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.00% 
 
 
 
 
 
 
 
New Genco MIP Primary Equity shares distribution as percentage of new stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.80% 
 
 
 
 
 
 
 
 
Minimum percentage of new stock providing demand and piggyback registration rights under the registration rights agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.00% 
 
 
 
 
 
 
 
 
Term of warrants
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7 years 
 
 
 
 
 
 
 
 
 
GENERAL INFORMATION (Details 2)
Jun. 30, 2014
item
Genco Reliance Limited |
Genco Reliance
 
Vessels
 
Capacity of vessels
29,952 
Genco Vigour Limited |
Genco Vigour
 
Vessels
 
Capacity of vessels
73,941 
Genco Explorer Limited |
Genco Explorer
 
Vessels
 
Capacity of vessels
29,952 
Genco Carrier Limited |
Genco Carrier
 
Vessels
 
Capacity of vessels
47,180 
Genco Sugar Limited |
Genco Sugar
 
Vessels
 
Capacity of vessels
29,952 
Genco Pioneer Limited |
Genco Pioneer
 
Vessels
 
Capacity of vessels
29,952 
Genco Progress Limited |
Genco Progress
 
Vessels
 
Capacity of vessels
29,952 
Genco Wisdom Limited |
Genco Wisdom
 
Vessels
 
Capacity of vessels
47,180 
Genco Success Limited |
Genco Success
 
Vessels
 
Capacity of vessels
47,186 
Genco Beauty Limited |
Genco Beauty
 
Vessels
 
Capacity of vessels
73,941 
Genco Knight Limited |
Genco Knight
 
Vessels
 
Capacity of vessels
73,941 
Genco Leader Limited |
Genco Leader
 
Vessels
 
Capacity of vessels
73,941 
Genco Marine Limited |
Genco Marine
 
Vessels
 
Capacity of vessels
45,222 
Genco Prosperity Limited |
Genco Prosperity
 
Vessels
 
Capacity of vessels
47,180 
Genco Muse Limited |
Genco Muse
 
Vessels
 
Capacity of vessels
48,913 
Genco Acheron Limited |
Genco Acheron
 
Vessels
 
Capacity of vessels
72,495 
Genco Surprise Limited |
Genco Surprise
 
Vessels
 
Capacity of vessels
72,495 
Genco Augustus Limited |
Genco Augustus
 
Vessels
 
Capacity of vessels
180,151 
Genco Tiberius Limited |
Genco Tiberius
 
Vessels
 
Capacity of vessels
175,874 
Genco London Limited |
Genco London
 
Vessels
 
Capacity of vessels
177,833 
Genco Titus Limited |
Genco Titus
 
Vessels
 
Capacity of vessels
177,729 
Genco Challenger Limited |
Genco Challenger
 
Vessels
 
Capacity of vessels
28,428 
Genco Charger Limited |
Genco Charger
 
Vessels
 
Capacity of vessels
28,398 
Genco Warrior Limited |
Genco Warrior
 
Vessels
 
Capacity of vessels
55,435 
Genco Predator Limited |
Genco Predator
 
Vessels
 
Capacity of vessels
55,407 
Genco Hunter Limited |
Genco Hunter
 
Vessels
 
Capacity of vessels
58,729 
Genco Champion Limited |
Genco Champion
 
Vessels
 
Capacity of vessels
28,445 
Genco Constantine Limited |
Genco Constantine
 
Vessels
 
Capacity of vessels
180,183 
Genco Raptor LLC |
Genco Raptor
 
Vessels
 
Capacity of vessels
76,499 
Genco Cavalier LLC |
Genco Cavalier
 
Vessels
 
Capacity of vessels
53,617 
Genco Thunder LLC |
Genco Thunder
 
Vessels
 
Capacity of vessels
76,588 
Genco Hadrian Limited |
Genco Hadrian
 
Vessels
 
Capacity of vessels
169,694 
Genco Commodus Limited |
Genco Commodus
 
Vessels
 
Capacity of vessels
169,025 
Genco Maximus Limited |
Genco Maximus
 
Vessels
 
Capacity of vessels
169,025 
Genco Claudius Limited |
Genco Claudius
 
Vessels
 
Capacity of vessels
169,025 
Genco Bay Limited |
Genco Bay
 
Vessels
 
Capacity of vessels
34,296 
Genco Ocean Limited |
Genco Ocean
 
Vessels
 
Capacity of vessels
34,409 
Genco Avra Limited |
Genco Avra
 
Vessels
 
Capacity of vessels
34,391 
Genco Mare Limited |
Genco Mare
 
Vessels
 
Capacity of vessels
34,428 
Genco Spirit Limited |
Genco Spirit
 
Vessels
 
Capacity of vessels
34,432 
Genco Aquitaine Limited |
Genco Aquitaine
 
Vessels
 
Capacity of vessels
57,981 
Genco Ardennes Limited |
Genco Ardennes
 
Vessels
 
Capacity of vessels
57,981 
Genco Auvergne Limited |
Genco Auvergne
 
Vessels
 
Capacity of vessels
57,981 
Genco Bourgogne Limited |
Genco Bourgogne
 
Vessels
 
Capacity of vessels
57,981 
Genco Brittany Limited |
Genco Brittany
 
Vessels
 
Capacity of vessels
57,981 
Genco Languedoc Limited |
Genco Languedoc
 
Vessels
 
Capacity of vessels
57,981 
Genco Loire Limited |
Genco Loire
 
Vessels
 
Capacity of vessels
53,416 
Genco Lorraine Limited |
Genco Lorraine
 
Vessels
 
Capacity of vessels
53,416 
Genco Normandy Limited |
Genco Normandy
 
Vessels
 
Capacity of vessels
53,596 
Genco Picardy Limited |
Genco Picardy
 
Vessels
 
Capacity of vessels
55,257 
Genco Provence Limited |
Genco Provence
 
Vessels
 
Capacity of vessels
55,317 
Genco Pyrenees Limited |
Genco Pyrenees
 
Vessels
 
Capacity of vessels
57,981 
Genco Rhone Limited |
Genco Rhone
 
Vessels
 
Capacity of vessels
58,018 
Baltic Leopard Limited |
Baltic Leopard
 
Vessels
 
Capacity of vessels
53,447 
Baltic Panther Limited |
Baltic Panther
 
Vessels
 
Capacity of vessels
53,351 
Baltic Cougar Limited |
Baltic Cougar
 
Vessels
 
Capacity of vessels
53,432 
Baltic Jaguar Limited |
Baltic Jaguar
 
Vessels
 
Capacity of vessels
53,474 
Baltic Bear Limited |
Baltic Bear
 
Vessels
 
Capacity of vessels
177,717 
Baltic Wolf Limited |
Baltic Wolf
 
Vessels
 
Capacity of vessels
177,752 
Baltic Wind Limited |
Baltic Wind
 
Vessels
 
Capacity of vessels
34,409 
Baltic Cove Limited |
Baltic Cove
 
Vessels
 
Capacity of vessels
34,403 
Baltic Breeze Limited |
Baltic Breeze
 
Vessels
 
Capacity of vessels
34,386 
Baltic Fox Limited |
Baltic Fox
 
Vessels
 
Capacity of vessels
31,883 
Baltic Hare Limited |
Baltic Hare
 
Vessels
 
Capacity of vessels
31,887 
Baltic Lion Limited |
Baltic Lion
 
Vessels
 
Capacity of vessels
179,185 
Baltic Tiger Limited |
Baltic Tiger
 
Vessels
 
Capacity of vessels
179,185 
Baltic Hornet Limited |
Baltic Hornet
 
Vessels
 
Capacity of vessels
64,000 
Baltic Wasp Limited |
Baltic Wasp
 
Vessels
 
Capacity of vessels
64,000 
Baltic Scorpion Limited |
Baltic Scorpion
 
Vessels
 
Capacity of vessels
64,000 
Baltic Mantis Limited |
Baltic Mantis
 
Vessels
 
Capacity of vessels
64,000 
GENERAL INFORMATION (Details 3) (USD $)
6 Months Ended
Jun. 30, 2014
Dec. 31, 2013
MEP
 
 
General information
 
 
Technical services fee per ship per day
$ 750 
 
Initial term of provision of technical service
1 year 
 
Notice period for cancellation of provision of technical services
60 days 
 
Period for termination fee upon change of control
1 year 
 
Notice period for cancellation of provision of technical services by company
60 days 
 
Genco Investment LLC |
Baltic Trading Limited
 
 
General information
 
 
Ownership interest held (as a percent)
11.04% 
11.05% 
Aggregate voting power held (as a percent)
65.06% 
65.08% 
Genco Investment LLC |
Baltic Trading Limited |
Minimum
 
 
General information
 
 
Ownership interest held (as a percent)
10.00% 
 
Genco Investment LLC |
Baltic Trading Limited |
Class B stock
 
 
General information
 
 
Number of shares owned by Genco Investment LLC (in shares)
6,356,471 
6,356,471 
Percentage of additional shares to be received by Genco Investment LLC (as a percent)
2.00% 
 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Vessels, net
 
 
 
 
 
Estimated useful life
 
 
25 years 
 
 
Depreciation expense
$ 34,557 
$ 33,102 
$ 68,717 
$ 65,841 
 
Estimated scrap value (in dollars per lightweight ton)
 
 
245 
 
 
Deferred revenue
 
 
 
 
 
Accrual related to estimated customer claims
$ 459 
 
$ 459 
 
$ 536 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Voyage expense recognition
 
 
 
 
Net (gains) losses on purchase and sale of bunker fuel
$ (184)
$ 21 
$ (249)
$ (343)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (Baltic Trading Limited)
Jun. 30, 2014
Dec. 31, 2013
Baltic Trading Limited
 
 
Noncontrolling interest
 
 
Economic interest held by noncontrolling interest (as a percent)
88.96% 
88.95% 
Voting power (as a percent)
34.94% 
34.92% 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Income Taxes
 
 
 
 
Total revenue earned
$ 819 
$ 819 
$ 1,629 
$ 1,629 
Taxable income
(65,193)
(48,646)
(107,019)
(100,372)
Income tax expense
364 
294 
777 
518 
Vessel Management Services
 
 
 
 
Income Taxes
 
 
 
 
Total revenue earned
1,841 
1,515 
3,696 
3,005 
Taxable income
764 
625 
1,650 
1,217 
Income tax expense
339 
281 
740 
505 
Baltic Trading |
United States
 
 
 
 
Income Taxes
 
 
 
 
Taxable income
1,245 
639 
1,813 
639 
Income tax expense
25 
13 
37 
13 
Intersegment Elimination
 
 
 
 
Income Taxes
 
 
 
 
Total revenue earned
$ (1,022)
$ (696)
$ (2,067)
$ (1,376)
SEGMENT INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
item
Jun. 30, 2013
Dec. 31, 2013
SEGMENT INFORMATION
 
 
 
 
 
Number of reportable segments
 
 
 
 
Number of operating segments
 
 
 
 
Voyage revenue from external customers
 
 
 
 
 
Total consolidated voyage revenue from external customers
$ 51,545 
$ 44,941 
$ 114,725 
$ 84,617 
 
Intersegment revenue
 
 
 
 
 
Total consolidated intersegment revenue
819 
819 
1,629 
1,629 
 
Net loss
 
 
 
 
 
Net loss
(65,557)
(48,940)
(107,796)
(100,890)
 
Total assets
 
 
 
 
 
Total consolidated assets
2,828,686 
 
2,828,686 
 
2,957,254 
Operating Segments
 
 
 
 
 
Voyage revenue from external customers
 
 
 
 
 
Total consolidated voyage revenue from external customers
51,545 
44,941 
114,725 
84,617 
 
Net loss
 
 
 
 
 
Net loss
(65,548)
(48,922)
(107,651)
(100,853)
 
Total assets
 
 
 
 
 
Total consolidated assets
2,833,465 
 
2,833,465 
 
2,962,178 
Operating Segments |
Intersegment Revenue
 
 
 
 
 
Intersegment revenue
 
 
 
 
 
Total consolidated intersegment revenue
1,022 
696 
2,067 
1,376 
 
GS&T
 
 
 
 
 
Voyage revenue from external customers
 
 
 
 
 
Total consolidated voyage revenue from external customers
40,842 
38,562 
90,931 
72,252 
 
Net loss
 
 
 
 
 
Net loss
(59,874)
(44,297)
(98,444)
(91,145)
 
Total assets
 
 
 
 
 
Total consolidated assets
2,286,604 
 
2,286,604 
 
2,404,811 
GS&T |
Intersegment Revenue
 
 
 
 
 
Intersegment revenue
 
 
 
 
 
Total consolidated intersegment revenue
1,022 
696 
2,067 
1,376 
 
Baltic Trading
 
 
 
 
 
Voyage revenue from external customers
 
 
 
 
 
Total consolidated voyage revenue from external customers
10,703 
6,379 
23,794 
12,365 
 
Net loss
 
 
 
 
 
Net loss
(5,674)
(4,625)
(9,207)
(9,708)
 
Total assets
 
 
 
 
 
Total consolidated assets
546,861 
 
546,861 
 
557,367 
Intersegment Elimination
 
 
 
 
 
Intersegment revenue
 
 
 
 
 
Total consolidated intersegment revenue
(1,022)
(696)
(2,067)
(1,376)
 
Net loss
 
 
 
 
 
Net loss
18 
145 
37 
 
Total assets
 
 
 
 
 
Total consolidated assets
$ (4,779)
 
$ (4,779)
 
$ (4,924)
CASH FLOW INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
item
Dec. 31, 2013
item
CASH FLOW INFORMATION
 
 
Number of interest rate swaps
Fair value of interest rate swaps in a liability position (Liabilities subject to compromise)
$ 5,622 
 
Fair value of interest rate swaps in a liability position (Current Liabilities)
 
$ 6,975 
CASH FLOW INFORMATION (Details 2) (USD $)
In Thousands, unless otherwise specified
1 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2014
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Non-cash investing and financing activities
 
 
 
 
 
Reorganization items, net
 
$ 20,106 
$ 20,106 
 
 
Cash paid for Reorganization items
1,204 
 
 
 
 
Cash paid for interest
 
 
38,238 
37,772 
 
Cash paid for estimated income taxes
 
 
1,495 
493 
 
Fixed assets
4,052 
4,052 
4,052 
 
5,104 
Reclassification
 
 
 
 
 
Non-cash investing and financing activities
 
 
 
 
 
Fixed assets
(984)
(984)
(984)
 
 
Vessel assets
984 
984 
984 
 
 
Current Interest Payable
 
 
 
 
 
Non-cash investing and financing activities
 
 
 
 
 
Non-cash financing activities deferred financing costs
 
 
 
13,199 
 
Liabilities subject to compromise
 
 
 
 
 
Non-cash investing and financing activities
 
 
 
 
 
Non-cash financing activities deferred financing costs
 
 
13,199 
 
 
Accounts payable and accrued expenses
 
 
 
 
 
Non-cash investing and financing activities
 
 
 
 
 
Non-cash investing activities purchase of vessels, including deposits
 
 
250 
 
 
Non-cash investing activities purchase of other fixed assets
 
 
43 
14 
 
Non-cash financing activities common stock issuance costs
 
 
 
262 
 
Reorganization items, net
18,902 
 
 
 
 
Prepaid expenses and other current assets
 
 
 
 
 
Non-cash investing and financing activities
 
 
 
 
 
Purchase of fixed assets
 
 
$ 20 
 
 
CASH FLOW INFORMATION (Details 3) (Directors, USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended
Apr. 9, 2014
May 16, 2013
2012 GS&T Plan
 
 
Nonvested Stock Awards
 
 
Nonvested common stock granted (in shares)
 
200,634 
Fair value of nonvested stock
 
$ 315 
Baltic Trading Limited
 
 
Nonvested Stock Awards
 
 
Nonvested common stock granted (in shares)
36,345 
59,680 
Fair value of nonvested stock
$ 225 
$ 225 
VESSEL ACQUISITIONS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Jun. 30, 2014
Baltic Trading Limited
Jun. 30, 2013
Baltic Trading Limited
Jun. 30, 2014
Baltic Trading Limited
Jun. 30, 2013
Baltic Trading Limited
Dec. 3, 2013
Agreement to Purchase Capesize Drybulk Vessels
Purchase agreement with SK Shipping Co LTD
Baltic Trading Limited
Oct. 31, 2013
Agreement to Purchase Capesize Drybulk Vessels
Purchase agreement with SK Shipping Co LTD
Baltic Trading Limited
item
Aug. 30, 2013
Handysize Vessel purchase
Subsidiaries of Clipper Group
Baltic Trading Limited
Jul. 2, 2013
Handysize Vessel purchase
Subsidiaries of Clipper Group
Baltic Trading Limited
item
Nov. 13, 2013
Yangfan Group Co., LTD
Agreement to Purchase Ultramax Drybulk Vessels
Baltic Trading Limited
item
Nov. 13, 2013
Yangfan Group Co., LTD
Agreement to Purchase Ultramax Drybulk Vessels
Baltic Trading Limited
Maximum
item
VESSEL ACQUISITIONS AND DISPOSITIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of vessels purchased
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate purchase price
 
 
 
 
 
 
 
 
 
 
$ 103,000 
 
$ 41,000 
$ 112,000 
 
Total purchase price per vessel
 
 
 
 
 
 
 
 
 
 
 
 
 
28,000 
 
Number of vessels purchased under option to be acquired per purchase agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of vessels committed to be acquired under purchase agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capacity of vessels
 
 
 
 
 
 
 
 
 
 
 
 
 
64,000 
 
Face amount of term loan facility
 
 
 
 
 
 
 
 
 
44,000 
 
22,000 
 
 
 
Deposits on vessels
28,634 
 
28,634 
 
1,013 
 
 
 
 
 
 
 
 
 
 
Amortization of time charters acquired
18 
100 
67 
233 
 
 
 
 
 
 
 
 
 
 
 
Capitalized interest associated with newbuilding contracts
 
 
 
 
 
$ 177 
$ 0 
$ 276 
$ 0 
 
 
 
 
 
 
INVESTMENTS (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Schedule of Investments
 
 
 
 
 
Fair value of investment in capital stock
$ 49,618 
 
$ 49,618 
 
$ 77,570 
Jinhui Shipping and Transportation Limited
 
 
 
 
 
Schedule of Investments
 
 
 
 
 
Investment in the capital stock (in shares)
16,335,100 
 
16,335,100 
 
16,335,100 
Fair value of investment in capital stock
49,540 
 
49,540 
 
77,488 
Impairment of investment
 
Korea Line Corporation
 
 
 
 
 
Schedule of Investments
 
 
 
 
 
Investment in the capital stock (in shares)
3,355 
 
3,355 
 
3,355 
Fair value of investment in capital stock
78 
 
78 
 
82 
Impairment of investment
$ 0 
$ 0 
$ 0 
$ 0 
 
NET LOSS PER COMMON SHARE (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
NET LOSS PER COMMON SHARE
 
 
 
 
Nonvested shares outstanding
880,465 
 
880,465 
 
Anti-dilutive shares (in shares)
 
 
880,465 
 
Common shares outstanding, basic:
 
 
 
 
Weighted-average common shares outstanding, basic (in shares)
43,568,942 
43,196,895 
43,568,942 
43,179,300 
Common shares outstanding, diluted:
 
 
 
 
Weighted-average common shares outstanding, basic (in shares)
43,568,942 
43,196,895 
43,568,942 
43,179,300 
Weighted-average common shares outstanding, diluted (in shares)
43,568,942 
43,196,895 
43,568,942 
43,179,300 
Reconciliation of the net loss attributable to GS&T and the net loss attributable to GS&T for diluted net loss per share
 
 
 
 
Net loss attributable to GS&T
$ (60,524)
$ (45,369)
$ (99,630)
$ (93,532)
Net loss attributable to GS&T for the computation of diluted net loss per share
$ (60,524)
$ (45,369)
$ (99,630)
$ (93,532)
RELATED PARTY TRANSACTIONS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended 6 Months Ended 6 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
General Maritime Corporation
Jun. 30, 2013
General Maritime Corporation
Dec. 31, 2013
General Maritime Corporation
Jun. 30, 2014
Constantine Georgiopoulos
Jun. 30, 2013
Constantine Georgiopoulos
Dec. 31, 2013
Constantine Georgiopoulos
Jun. 30, 2014
Aegean Marine Petroleum Network Inc.
Jun. 30, 2013
Aegean Marine Petroleum Network Inc.
Dec. 31, 2013
Aegean Marine Petroleum Network Inc.
Jun. 30, 2014
MEP
Jun. 30, 2013
MEP
Dec. 31, 2013
MEP
Related Party Transaction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount invoiced for services performed and expenses paid
 
 
 
 
$ 72 
$ 75 
 
 
 
 
 
 
 
$ 1,671 
$ 1,708 
 
Expenses incurred from transactions with related party
 
 
 
 
49 
54 
 
 
1,087 
746 
 
 
 
 
Amount due to the related party
 
 
 
 
 
 
16 
 
25 
237 
 
263 
 
 
 
Amount due to the entity from a related party
 
 
 
 
16 
 
 
 
 
 
 
 
 
10 
 
Service revenues
$ 819 
$ 819 
$ 1,629 
$ 1,629 
 
 
 
 
 
 
 
 
 
$ 1,629 
$ 1,629 
 
DEBT (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended 6 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 1 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
item
Jun. 30, 2013
Dec. 31, 2013
Jun. 30, 2014
Minimum
Jun. 30, 2014
Maximum
Aug. 1, 2012
August 2012 Credit Facility Agreements
Jun. 30, 2014
5.00% convertible senior notes
Jun. 30, 2014
Chapter 11
Jun. 30, 2014
Chapter 11
5.00% convertible senior notes
Feb. 28, 2012
2007 Credit Facility
Dec. 21, 2011
2007 Credit Facility
Jun. 30, 2014
2007 Credit Facility
Dec. 31, 2013
2007 Credit Facility
Aug. 1, 2012
2007 Credit Facility
August 2012 Credit Facility Agreements
Jun. 30, 2014
2007 Credit Facility
August 2012 Credit Facility Agreements
Feb. 28, 2012
2007 Credit Facility
December 2011 Credit Facility Agreements
Jun. 30, 2014
2007 Credit Facility
Chapter 11
Jun. 30, 2014
2007 Credit Facility
Chapter 11
August 2012 Credit Facility Agreements
Jun. 30, 2014
$100 Million Term Loan Facility
Mar. 31, 2014
$100 Million Term Loan Facility
Dec. 31, 2013
$100 Million Term Loan Facility
Aug. 12, 2010
$100 Million Term Loan Facility
item
Jun. 30, 2014
$100 Million Term Loan Facility
Chapter 11
Jul. 9, 2014
$100 Million Term Loan Facility
Chapter 11
Subsequent Event
Jun. 30, 2014
$253 Million Term Loan Facility
Mar. 31, 2014
$253 Million Term Loan Facility
Dec. 31, 2013
$253 Million Term Loan Facility
Aug. 20, 2010
$253 Million Term Loan Facility
item
Jun. 30, 2014
$253 Million Term Loan Facility
Chapter 11
Jul. 9, 2014
$253 Million Term Loan Facility
Chapter 11
Subsequent Event
Aug. 31, 2013
2010 Baltic Trading Credit Facility
item
Jun. 30, 2014
2010 Baltic Trading Credit Facility
Dec. 31, 2013
2010 Baltic Trading Credit Facility
Aug. 29, 2013
2010 Baltic Trading Credit Facility
Nov. 30, 2010
2010 Baltic Trading Credit Facility
Apr. 16, 2010
2010 Baltic Trading Credit Facility
Jun. 30, 2014
Baltic Trading $22 Million Term Loan Facility
item
Dec. 31, 2013
Baltic Trading $22 Million Term Loan Facility
Aug. 30, 2013
Baltic Trading $22 Million Term Loan Facility
Sep. 4, 2013
Baltic Trading $22 Million Term Loan Facility
Baltic Hare
Sep. 4, 2013
Baltic Trading $22 Million Term Loan Facility
Baltic Fox
Jun. 30, 2014
Baltic Trading $44 Million Term Loan Facility
item
Dec. 31, 2013
Baltic Trading $44 Million Term Loan Facility
Dec. 3, 2013
Baltic Trading $44 Million Term Loan Facility
Dec. 23, 2013
Baltic Trading $44 Million Term Loan Facility
Baltic Tiger
Dec. 23, 2013
Baltic Trading $44 Million Term Loan Facility
Baltic Lion
Line of Credit Facility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, gross (Balance prior to Financial Statement Classification)
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,055,912 
 
 
 
 
 
 
$ 73,561 
 
 
 
 
 
$ 175,718 
 
 
 
 
 
 
$ 102,250 
 
 
 
 
$ 20,875 
 
 
 
 
$ 42,625 
 
 
 
 
Current portion (Balance prior to Financial Statement Classification)
(4,250)
 
(4,250)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt (Balance prior to Financial Statement Classification)
1,466,691 
 
1,466,691 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, gross (Amounts Classified as Subject to Compromise)
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,055,912)
 
 
 
 
 
 
(73,561)
 
 
 
 
 
(175,718)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt (Amounts Classified as Subject to Compromise)
(1,305,191)
 
(1,305,191)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, gross
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,055,912 
 
 
 
 
 
 
 
75,484 
 
 
 
 
 
180,793 
 
 
 
 
102,250 
102,250 
 
 
 
20,875 
21,625 
 
 
 
42,625 
44,000 
 
 
 
Current portion
(4,250)
 
(4,250)
 
(1,316,439)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
161,500 
 
161,500 
 
163,625 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
1,055,912 
 
 
 
 
 
 
100,000 
100,000 
100,000 
100,000 
100,000 
 
253,000 
253,000 
253,000 
253,000 
253,000 
 
 
 
 
110,000 
150,000 
100,000 
22,000 
22,000 
22,000 
 
 
44,000 
44,000 
44,000 
 
 
Debt outstanding classified as liabilities subject to compromise
 
 
 
 
 
 
 
 
117,473 
 
117,473 
 
 
 
 
 
 
 
1,055,912 
 
 
 
 
 
73,561 
 
 
 
 
 
175,718 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of days after year end audited financial statements are to be furnished to lenders
 
 
90 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of credit facilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate on convertible notes (as a percent)
 
 
 
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of days after notice from trustee to cure default
 
 
 
 
 
 
 
 
30 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of interest-bearing indebtedness to the sum of interest-bearing indebtedness and consolidated net worth (as a percent)
 
 
 
 
 
 
 
62.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Applicable margin over reference rate for interest payable, before increase (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
 
 
 
 
3.00% 
 
 
 
 
 
3.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Applicable margin over reference rate for interest payable (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.00% 
 
 
 
 
 
 
 
 
 
3.50% 
 
 
 
 
 
3.50% 
 
 
 
 
 
 
3.35% 
 
 
 
 
3.35% 
 
 
 
 
Minimum cash balance required per vessel mortgaged, before increase
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unpaid amount of facility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,923 
 
 
 
 
 
5,075 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Minimum cash balance required per vessel mortgaged
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
750 
 
 
 
 
 
 
 
 
 
750 
 
 
 
 
 
750 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Facility fee (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reduction in facility fee if equity offering results in desired gross proceeds (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds to be received on issuance of common stock
 
 
 
 
 
 
 
 
 
 
 
 
50,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of common stock (in shares)
 
 
 
 
 
 
 
 
 
 
 
7,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross proceeds from issuance of common stock
 
 
 
 
 
 
 
 
 
 
 
53,250 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of letters of credit issued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of vessels acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Final payment amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13,375 
 
 
 
 
28,188 
 
 
 
 
Amount of prepayments to have liens released
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
18,000 
 
 
 
 
Reference rate for interest payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR 
 
 
 
 
 
 
 
 
 
LIBOR 
 
 
 
 
 
LIBOR 
LIBOR 
 
 
 
 
 
Three-month LIBOR 
 
 
 
 
Three-month LIBOR 
 
 
 
 
Commitment fee on unused daily average unutilized commitment (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
0.75% 
 
 
 
 
Available working capital borrowings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,750 
 
 
 
25,000 
 
 
 
 
 
 
 
 
 
 
Drawdowns during the period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,730 
11,270 
 
 
 
21,400 
22,600 
Restricted cash
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,875 
 
9,750 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,750 
 
 
 
 
 
 
 
 
 
 
 
 
Number of consecutive semi-annual reductions in total commitment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of semi-annual reductions in maximum borrowing capacity through the maturity date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Applicable margin over reference rate for condition one (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of maximum facility amount to aggregate appraised value of vessels mortgaged (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
55.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Applicable margin over reference rate for condition two (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.35% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of quarterly installments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23 
 
 
 
 
23 
 
 
 
 
Amount of periodic payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
375 
 
 
 
 
688 
 
 
 
 
Period after latest vessel delivery date for first periodic repayment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 months 
 
 
 
 
3 months 
 
 
 
 
Amendment fee (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rates on debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Interest Rate (as a percent)
4.31% 
4.72% 
4.33% 
4.73% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Range of Interest Rates, minimum (excluding impact of swaps and unused commitment fees) (as a percent)
3.15% 
3.19% 
3.15% 
3.19% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Range of Interest Rates, maximum (excluding impact of swaps and unused commitment fees) (as a percent)
5.15% 
4.31% 
5.15% 
4.38% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change of Control
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of ownership interest held by Parent (as a percent)
 
 
 
 
 
 
10.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate voting power held (as a percent)
 
 
 
 
 
 
30.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership interest held (as a percent)
 
 
 
 
 
30.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest payable classified as liabilities subject to compromise
 
 
 
 
 
 
 
 
 
$ 13,199 
 
 
 
 
 
 
 
 
 
$ 13,199 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONVERTIBLE SENIOR NOTES (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 3 Months Ended 6 Months Ended
Jul. 27, 2010
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Convertible senior notes
 
 
 
 
 
 
Net carrying amount of the liability component
 
 
 
 
 
$ 115,881 
Non-cash interest expense recognized
 
 
 
1,592 
2,388 
 
Non-cash deferred financing amortization costs included in interest expense
 
2,071 
1,856 
4,291 
3,691 
 
2010 Notes
 
 
 
 
 
 
Convertible senior notes
 
 
 
 
 
 
Proceeds from convertible debt
125,000 
 
 
 
 
 
Interest expense
 
2,266 
 
2,266 
 
 
Carrying amount of the equity component (additional paid-in capital)
 
24,375 
 
24,375 
 
24,375 
Principal amount of the 2010 Notes
 
125,000 
 
125,000 
 
125,000 
Unamortized discount of the liability component
 
7,527 
 
7,527 
 
9,119 
Net carrying amount of the liability component
 
 
 
 
 
115,881 
Debt outstanding classified as liabilities subject to compromise
 
117,473 
 
117,473 
 
 
Effective interest rate on liability component (as a percent)
 
10.00% 
10.00% 
10.00% 
10.00% 
 
Cash interest expense recognized
 
345 
1,571 
1,886 
3,112 
 
Non-cash interest expense recognized
 
293 
1,209 
1,592 
2,388 
 
Non-cash deferred financing amortization costs included in interest expense
 
$ 39 
$ 179 
$ 216 
$ 356 
 
INTEREST RATE SWAP AGREEMENTS (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 6 Months Ended
Jun. 30, 2014
item
Dec. 31, 2013
item
Dec. 31, 2013
Interest Rate Swap, 4.485%
Dec. 31, 2013
Interest Rate Swap, 5.25%
Dec. 31, 2013
Interest Rate Swap, 2.05%
Dec. 31, 2013
Interest Rate Swap, 2.45%
Apr. 30, 2014
Chapter 11
DNB Bank ASA
Jun. 30, 2014
2007 Credit Facility
INTEREST RATE SWAP AGREEMENTS
 
 
 
 
 
 
 
 
Number of interest rate swap agreements outstanding
 
 
 
 
 
 
Number of expired interest rate swap agreements
 
 
 
 
 
 
 
Interest rate swaps designated as cash flow hedges
 
 
 
 
 
 
 
 
Term of interest periods when Company is in default under covenants of 2007 Credit Facility
 
 
 
 
 
 
 
1 month 
Secured claim issued with the Bankruptcy Court
 
 
 
 
 
 
$ 5,622 
 
Fixed rate (as a percent)
 
 
4.485% 
5.25% 
2.05% 
2.45% 
 
 
Notional amount outstanding
 
$ 306,233 
$ 106,233 
$ 50,000 
$ 100,000 
$ 50,000 
 
 
INTEREST RATE SWAP AGREEMENTS (Details 2) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2013
Liability Derivatives
 
Fair value of derivative instruments
$ 6,975 
Interest rate contracts
 
Liability Derivatives
 
Total Derivatives
6,975 
Interest rate contracts |
Derivatives designated as hedging instruments
 
Liability Derivatives
 
Fair value of derivative instruments
6,975 
Total Derivatives
$ 6,975 
INTEREST RATE SWAP AGREEMENTS (Details 3) (Interest rate contracts, USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Impact of derivative instruments and their location within Condensed Consolidated Statement of Operations
 
 
 
 
Number of vessels mortgaged
35 
 
35 
 
Aggregate amount of collateral
$ 100,000 
 
$ 100,000 
 
Derivatives in cash flow hedging relationships
 
 
 
 
Impact of derivative instruments and their location within Condensed Consolidated Statement of Operations
 
 
 
 
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion)
 
(91)
(179)
(229)
Interest Expense |
Derivatives in cash flow hedging relationships
 
 
 
 
Impact of derivative instruments and their location within Condensed Consolidated Statement of Operations
 
 
 
 
Amount of Gain (Loss) Reclassified from AOCI into income (Effective Portion)
(1,078)
(2,477)
(2,485)
(4,916)
Interest Expense |
Derivatives not designated as Hedging
 
 
 
 
Impact of derivative instruments and their location within Condensed Consolidated Statement of Operations
 
 
 
 
Amount of Gain (Loss) Recognized in Income on Derivative
(225)
 
(225)
 
Other Expense |
Derivatives in cash flow hedging relationships
 
 
 
 
Impact of derivative instruments and their location within Condensed Consolidated Statement of Operations
 
 
 
 
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
 
$ (2)
 
$ (5)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Changes in AOCI by Component
 
 
 
 
Balance at the beginning of the period
$ 40,735 
$ 63 
$ 53,722 
$ (11,841)
OCI before reclassifications
(13,737)
1,587 
(28,131)
15,930 
Amounts reclassified from AOCI
1,078 
(2,477)
2,485 
(4,916)
Other comprehensive (loss) income
(12,659)
(890)
(25,646)
11,014 
Balance at the end of the period
28,076 
(827)
28,076 
(827)
Net Unrealized Gain (Loss) on Cash Flow Hedges
 
 
 
 
Changes in AOCI by Component
 
 
 
 
Balance at the beginning of the period
(5,748)
(13,756)
(6,976)
(16,057)
OCI before reclassifications
 
4,863 
(179)
9,603 
Amounts reclassified from AOCI
1,078 
(2,477)
2,485 
(4,916)
Other comprehensive (loss) income
1,078 
2,386 
2,306 
4,687 
Balance at the end of the period
(4,670)
(11,370)
(4,670)
(11,370)
Net Unrealized Gain on Investments
 
 
 
 
Changes in AOCI by Component
 
 
 
 
Balance at the beginning of the period
46,483 
13,819 
60,698 
4,216 
OCI before reclassifications
(13,737)
(3,276)
(27,952)
6,327 
Other comprehensive (loss) income
(13,737)
(3,276)
(27,952)
6,327 
Balance at the end of the period
$ 32,746 
$ 10,543 
$ 32,746 
$ 10,543 
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Reclassifications Out of AOCI
 
 
 
 
Interest expense
$ 18,510 
$ 21,554 
$ 39,532 
$ 42,843 
Net loss attributable to Genco Shipping & Trading Limited
60,524 
45,369 
99,630 
93,532 
Amount Reclassified from Accumulated Other Comprehensive Income
 
 
 
 
Reclassifications Out of AOCI
 
 
 
 
Net loss attributable to Genco Shipping & Trading Limited
1,078 
2,477 
2,485 
4,916 
Gains and losses on cash flow hedges |
Interest rate contracts |
Amount Reclassified from Accumulated Other Comprehensive Income
 
 
 
 
Reclassifications Out of AOCI
 
 
 
 
Interest expense
$ 1,078 
$ 2,477 
$ 2,485 
$ 4,916 
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
$100 Million Term Loan Facility
Mar. 31, 2014
$100 Million Term Loan Facility
Dec. 31, 2013
$100 Million Term Loan Facility
Aug. 12, 2010
$100 Million Term Loan Facility
Jun. 30, 2014
$253 Million Term Loan Facility
Mar. 31, 2014
$253 Million Term Loan Facility
Dec. 31, 2013
$253 Million Term Loan Facility
Aug. 20, 2010
$253 Million Term Loan Facility
Jun. 30, 2014
Baltic Trading $22Million Term Loan Facility
Dec. 31, 2013
Baltic Trading $22Million Term Loan Facility
Jun. 30, 2014
Baltic Trading $44 Million Term Loan Facility
Dec. 31, 2013
Baltic Trading $44 Million Term Loan Facility
Jun. 30, 2014
Carrying Value
Dec. 31, 2013
Carrying Value
Jun. 30, 2014
Fair value
Dec. 31, 2013
Fair value
Fair value of financial instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
 
 
 
 
 
 
 
$ 57,720 
$ 122,722 
$ 57,720 
$ 122,722 
Restricted cash
 
 
 
 
9,875 
 
9,750 
 
 
 
 
 
10,275 
10,150 
10,275 
10,150 
Floating rate debt
 
 
 
 
 
 
 
 
 
 
 
 
1,470,941 
1,480,064 
 
 
2010 Notes
 
 
 
 
 
 
 
 
 
 
 
 
117,473 
115,881 
122,500 
63,438 
Face amount of term loan facility
$ 100,000 
$ 100,000 
$ 100,000 
$ 100,000 
$ 253,000 
$ 253,000 
$ 253,000 
$ 253,000 
$ 22,000 
$ 22,000 
$ 44,000 
$ 44,000 
 
 
 
 
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Dec. 31, 2013
Fair value of financial instruments
 
 
Investments
$ 49,618 
$ 77,570 
Derivative instruments - liability position
5,622 
6,975 
Period to determine fair value inputs for valuation
2 years 
 
Quoted Market Prices in Active Markets (Level 1)
 
 
Fair value of financial instruments
 
 
Investments
49,618 
77,570 
Significant Other Observable Inputs (Level 2)
 
 
Fair value of financial instruments
 
 
Derivative instruments - liability position
$ 5,622 
$ 6,975 
PREPAID EXPENSES AND OTHER CURRENT AND NONCURRENT ASSETS (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
PREPAID EXPENSES AND OTHER CURRENT AND NONCURRENT ASSETS
 
 
Lubricant inventory, fuel oil and diesel oil inventory and other stores
$ 12,635 
$ 11,342 
Prepaid items
5,439 
5,000 
Insurance receivable
2,171 
1,096 
Other
3,067 
1,627 
Total prepaid expenses and other current assets
23,312 
19,065 
Security deposit related to operating lease included in other noncurrent assets
$ 514 
$ 514 
DEFERRED FINANCING COSTS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Jun. 30, 2014
2010 Notes
Jun. 30, 2013
2010 Notes
Jun. 30, 2014
2010 Notes
Jun. 30, 2013
2010 Notes
Dec. 31, 2013
2010 Notes
Jun. 30, 2014
2007 Credit Facility
Dec. 31, 2013
2007 Credit Facility
Jun. 30, 2014
$100 Million Term Loan Facility
Mar. 31, 2014
$100 Million Term Loan Facility
Dec. 31, 2013
$100 Million Term Loan Facility
Aug. 12, 2010
$100 Million Term Loan Facility
Jun. 30, 2014
$253 Million Term Loan Facility
Mar. 31, 2014
$253 Million Term Loan Facility
Dec. 31, 2013
$253 Million Term Loan Facility
Aug. 20, 2010
$253 Million Term Loan Facility
Jun. 30, 2014
2010 Baltic Trading Credit Facility
Dec. 31, 2013
2010 Baltic Trading Credit Facility
Aug. 29, 2013
2010 Baltic Trading Credit Facility
Nov. 30, 2010
2010 Baltic Trading Credit Facility
Apr. 16, 2010
2010 Baltic Trading Credit Facility
Jun. 30, 2014
Baltic Trading $22 Million Term Loan Facility
Dec. 31, 2013
Baltic Trading $22 Million Term Loan Facility
Jun. 30, 2014
Baltic Trading $44 Million Term Loan Facility
Dec. 31, 2013
Baltic Trading $44 Million Term Loan Facility
Other assets, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
$ 1,055,912 
 
$ 100,000 
$ 100,000 
$ 100,000 
$ 100,000 
$ 253,000 
$ 253,000 
$ 253,000 
$ 253,000 
 
 
$ 110,000 
$ 150,000 
$ 100,000 
$ 22,000 
$ 22,000 
$ 44,000 
$ 44,000 
Total deferred financing costs
44,572 
 
44,572 
 
44,290 
3,637 
 
3,637 
 
3,637 
29,568 
29,568 
1,857 
 
1,783 
 
4,884 
 
4,708 
 
3,339 
3,339 
 
 
 
529 
518 
758 
737 
Less: accumulated amortization
26,570 
 
26,570 
 
22,279 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
18,002 
 
18,002 
 
22,011 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of deferred financing costs
$ 2,071 
$ 1,856 
$ 4,291 
$ 3,691 
 
$ 39 
$ 179 
$ 216 
$ 356 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIXED ASSETS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
FIXED ASSETS
 
 
 
 
 
Total cost
$ 7,925 
 
$ 7,925 
 
$ 8,542 
Less: accumulated depreciation and amortization
3,873 
 
3,873 
 
3,438 
Total
4,052 
 
4,052 
 
5,104 
Depreciation and amortization
36,538 
34,722 
72,739 
69,100 
 
Vessel equipment
 
 
 
 
 
FIXED ASSETS
 
 
 
 
 
Total cost
3,666 
 
3,666 
 
4,323 
Leasehold improvements
 
 
 
 
 
FIXED ASSETS
 
 
 
 
 
Total cost
2,679 
 
2,679 
 
2,679 
Furniture and fixtures
 
 
 
 
 
FIXED ASSETS
 
 
 
 
 
Total cost
786 
 
786 
 
786 
Computer equipment
 
 
 
 
 
FIXED ASSETS
 
 
 
 
 
Total cost
794 
 
794 
 
754 
Property, plant, and equipment excluding vessels
 
 
 
 
 
FIXED ASSETS
 
 
 
 
 
Depreciation and amortization
$ 220 
$ 226 
$ 439 
$ 454 
 
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 
 
Accounts payable
$ 12,777 
$ 5,643 
Accrued general and administrative expenses
14,122 
8,960 
Accrued vessel operating expenses
12,628 
12,756 
Total
$ 39,527 
$ 27,359 
LIABILITIES SUBJECT TO COMPROMISE (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Jun. 30, 2014
5.00% convertible senior notes
Jun. 30, 2014
Chapter 11
Jun. 30, 2014
Chapter 11
5.00% convertible senior notes
Jun. 30, 2014
2007 Credit Facility
Jun. 30, 2014
2007 Credit Facility
Chapter 11
Jun. 30, 2014
$100 Million Term Loan Facility
Mar. 31, 2014
$100 Million Term Loan Facility
Dec. 31, 2013
$100 Million Term Loan Facility
Aug. 12, 2010
$100 Million Term Loan Facility
Jun. 30, 2014
$100 Million Term Loan Facility
Chapter 11
Jun. 30, 2014
$253 Million Term Loan Facility
Mar. 31, 2014
$253 Million Term Loan Facility
Dec. 31, 2013
$253 Million Term Loan Facility
Aug. 20, 2010
$253 Million Term Loan Facility
Jun. 30, 2014
$253 Million Term Loan Facility
Chapter 11
Liabilities subject to compromise
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt
 
$ 117,473 
 
$ 117,473 
 
$ 1,055,912 
 
 
 
 
$ 73,561 
 
 
 
 
$ 175,718 
Interest payable
 
 
13,199 
 
 
 
 
 
 
 
 
 
 
 
 
 
Terminated interest rate swap liability
 
 
5,622 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bond coupon interest payable
 
 
1,105 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease obligation for prior office space
 
 
828 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-petition accounts payable
 
 
157 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
1,443,575 
 
1,443,575 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
$ 1,055,912 
 
$ 100,000 
$ 100,000 
$ 100,000 
$ 100,000 
$ 100,000 
$ 253,000 
$ 253,000 
$ 253,000 
$ 253,000 
$ 253,000 
REVENUE FROM TIME CHARTERS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
REVENUE FROM TIME CHARTERS
 
 
 
 
Voyage revenues
$ 51,545 
$ 44,941 
$ 114,725 
$ 84,617 
Profit sharing revenue
Future minimum time charter revenue
 
 
 
 
Remainder of 2014
$ 7,132 
 
$ 7,132 
 
Offhire period
 
 
20 days 
 
REORGANIZATION ITEMS, NET (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2014
Reorganization items, net
 
 
Total
$ 20,106 
$ 20,106 
Chapter 11
 
 
Reorganization items, net
 
 
Professional fees incurred
19,855 
19,855 
Trustee fees incurred
251 
251 
Total
$ 20,106 
$ 20,106 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Thousands, unless otherwise specified
1 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2014
Dec. 31, 2013
Jun. 30, 2014
Period until May 31, 2015
Jun. 30, 2014
Period after May 31, 2015 until April 30, 2018
Jun. 30, 2014
Period from October 1, 2018 to April 30, 2023
Jun. 30, 2014
Period from May 1, 2023 to September 30, 2025
Sep. 30, 2005
Lease agreement entered into September 2005
Jun. 30, 2014
Lease agreement entered into September 2005
Jun. 30, 2013
Lease agreement entered into September 2005
Jun. 30, 2014
Lease agreement entered into September 2005
Jun. 30, 2013
Lease agreement entered into September 2005
Dec. 31, 2013
Lease agreement entered into September 2005
Jun. 30, 2014
Lease agreement entered into September 2005
Chapter 11
Apr. 4, 2011
Lease agreement entered into April 2011
Jun. 30, 2014
Lease agreement entered into April 2011
Jun. 30, 2013
Lease agreement entered into April 2011
Jun. 30, 2014
Lease agreement entered into April 2011
Jun. 30, 2013
Lease agreement entered into April 2011
Dec. 31, 2013
Lease agreement entered into April 2011
Jun. 30, 2014
Lease agreement entered into April 2011
Period during June 1, 2011 to September 30, 2025
Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease term
 
 
 
 
 
 
15 years 
 
 
 
 
 
 
7 years 
 
 
 
 
 
 
Rent expense
 
 
 
 
 
 
 
$ (28)
$ 22 
$ (28)
$ 131 
 
 
 
$ 390 
$ 390 
$ 779 
$ 779 
 
 
Current portion of lease obligations
 
176 
 
 
 
 
 
 
 
 
 
176 
 
 
 
 
 
 
 
 
Long-term lease obligations
2,658 
3,114 
 
 
 
 
 
 
 
 
 
744 
 
 
2,658 
 
2,658 
 
2,370 
 
Current lease obligations classified as subject to compromise
 
 
 
 
 
 
 
 
 
 
 
 
162 
 
 
 
 
 
 
 
Long-term lease obligations classified as subject to compromise
 
 
 
 
 
 
 
 
 
 
 
 
666 
 
 
 
 
 
 
 
Future minimum rental payments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remainder of 2014
 
 
 
 
 
 
 
259 
 
259 
 
 
 
 
491 
 
491 
 
 
 
2015
 
 
 
 
 
 
 
518 
 
518 
 
 
 
 
1,037 
 
1,037 
 
 
 
2016
 
 
 
 
 
 
 
529 
 
529 
 
 
 
 
1,076 
 
1,076 
 
 
 
2017
 
 
 
 
 
 
 
550 
 
550 
 
 
 
 
1,076 
 
1,076 
 
 
 
2018
 
 
 
 
 
 
 
550 
 
550 
 
 
 
 
916 
 
916 
 
 
 
Remaining term of the lease
 
 
 
 
 
 
 
1,421 
 
1,421 
 
 
 
 
15,590 
 
15,590 
 
 
 
Future contract sublease income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remainder of 2014
 
 
 
 
 
 
 
170 
 
170 
 
 
 
 
 
 
 
 
 
 
2015
 
 
 
 
 
 
 
340 
 
340 
 
 
 
 
 
 
 
 
 
 
2016
 
 
 
 
 
 
 
340 
 
340 
 
 
 
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
 
347 
 
347 
 
 
 
 
 
 
 
 
 
 
2018
 
 
 
 
 
 
 
380 
 
380 
 
 
 
 
 
 
 
 
 
 
Remaining term of the sublease
 
 
 
 
 
 
 
983 
 
983 
 
 
 
 
 
 
 
 
 
 
Monthly rental payment
 
 
82 
90 
186 
204 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Monthly straight-line rental expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
130 
Obligation of sublessor towards the cost of alterations of office space
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 472 
 
 
 
NONVESTED STOCK AWARDS (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Mar. 13, 2014
Mar. 12, 2014
Number of Shares
 
 
 
 
Balance at the end of the period (in shares)
880,465 
 
 
 
2005 and 2012 GS&T Plans
 
 
 
 
Number of Shares
 
 
 
 
Balance at the beginning of the period (in shares)
880,465 
 
 
 
Balance at the end of the period (in shares)
880,465 
 
 
 
Weighted Average Grant Date Price
 
 
 
 
Balance at the beginning of the period (in dollars per share)
$ 7.77 
 
 
 
Balance at the end of the period (in dollars per share)
$ 7.77 
 
 
 
Additional disclosures
 
 
 
 
Total fair value of shares vested
$ 0 
$ 110 
 
 
Unrecognized compensation cost related to nonvested stock awards [Abstract]
 
 
 
 
Unrecognized compensation cost
1,583 
 
 
 
Weighted-average period for recognition of unrecognized compensation cost
1 year 8 months 8 days 
 
 
 
Baltic Trading Plan |
Baltic Trading Limited
 
 
 
 
Number of Shares
 
 
 
 
Balance at the beginning of the period (in shares)
1,381,429 
 
 
 
Granted (in shares)
36,345 
 
 
 
Vested (in shares)
(176,180)
 
 
 
Balance at the end of the period (in shares)
1,241,594 
 
 
 
Weighted Average Grant Date Price
 
 
 
 
Balance at the beginning of the period (in dollars per share)
$ 6.03 
 
 
 
Granted (in dollars per share)
$ 6.19 
 
 
 
Vested (in dollars per share)
$ 10.53 
 
 
 
Balance at the end of the period (in dollars per share)
$ 5.39 
 
 
 
Additional disclosures
 
 
 
 
Total fair value of shares vested
1,143 
643 
 
 
Unrecognized compensation cost related to nonvested stock awards [Abstract]
 
 
 
 
Unrecognized compensation cost
$ 4,288 
 
 
 
Weighted-average period for recognition of unrecognized compensation cost
3 years 4 days 
 
 
 
Aggregate number of shares of common stock available for awards
 
 
6,000,000 
2,000,000 
NONVESTED STOCK AWARDS (Details 2) (General, administrative and management fees, USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
2005 and 2012 GS&T Plans
 
 
 
 
NONVESTED STOCK AWARDS
 
 
 
 
Recognized nonvested stock amortization expense
$ 393 
$ 796 
$ 820 
$ 1,565 
Baltic Trading Plan
 
 
 
 
NONVESTED STOCK AWARDS
 
 
 
 
Recognized nonvested stock amortization expense
$ 908 
$ 351 
$ 1,871 
$ 815 
SHARE REPURCHASE PROGRAM (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
SHARE REPURCHASE PROGRAM
 
 
 
 
Shares of common stock repurchased and retired
 
 
278,300 
 
Value of common stock repurchased and retired
 
 
$ 11,500 
 
Common stock repurchased (in shares)
LEGAL PROCEEDINGS (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 3, 2014
Jun. 30, 2014
$253 Million Term Loan Facility
Mar. 31, 2014
$253 Million Term Loan Facility
Dec. 31, 2013
$253 Million Term Loan Facility
Aug. 20, 2010
$253 Million Term Loan Facility
Line of Credit Facility
 
 
 
 
 
Cash collateralized bank guarantee
$ 900 
 
 
 
 
Face amount of term loan facility
 
$ 253,000 
$ 253,000 
$ 253,000 
$ 253,000 
SUBSEQUENT EVENTS (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
0 Months Ended
Jun. 30, 2014
Jul. 2, 2014
Subsequent Event
Jul. 8, 2014
Subsequent Event
Maximum
Jul. 29, 2014
Subsequent Event
Baltic Trading Limited
Jul. 29, 2014
Subsequent Event
Baltic Trading Limited
Minority Shareholders
Subsequent Event
 
 
 
 
 
Assets before date of confirmation
 
$ 1,390 
 
 
 
Estimated post-petition liabilities and allowed claims
1,538 
 
 
 
 
Shares held by existing voting shareholders as a percentage of voting shares of the emerging entity
 
 
50.00% 
 
 
Dividends declared per share (in dollars per share)
 
 
 
$ 0.01 
 
Aggregate amount of the dividend
 
 
 
$ 576 
$ 512