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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2017
 
OR
 
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF  1934
 
For the transition period from           to         
 
Commission file number 001-33393

 
GENCO SHIPPING & TRADING LIMITED
(Exact name of registrant as specified in its charter)

Republic of the Marshall Islands	 	98-043-9758	
(State or other jurisdiction of
incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
299 Park Avenue, 12th Floor, New York, New York 10171
(Address of principal executive offices) (Zip Code)
(646) 443-8550
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒  No  ☐
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☒  No  ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 
 	 	 	 	 	 	 	
Large accelerated filer  ☐	 	Accelerated filer  ☐	 	Non-accelerated filer  ☒	 	Smaller reporting company  ☐	
 	 	 	 	(Do not check if a smaller reporting company)	 	Emerging growth company  ☐	
If emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act    ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
 
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes ☒ No ☐
 
The number of shares outstanding of each of the issuer’s classes of common stock, as of August 10, 2017: Common stock, $0.01 per share — 34,434,538 shares.

 
Table of Contents

Genco Shipping & Trading Limited 
 
 	 	Page	
 	 	 	
 	PART I — FINANCIAL INFORMATION	 	
 	 	 	
Item 1 .	Financial Statements (unaudited)	
4	
 	 	 	
 	a)	Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016	
4	
 	 	 	 	
 	b)	Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2017 and 2016	
5	
 	 	 	 	
 	c)	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months ended June 30, 2017 and 2016	
6	
 	 	 	 	
 	d)	Condensed Consolidated Statements of Equity for the Six Months ended June 30, 2017 and 2016	
7	
 	 	 	 	
 	e)	Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2017 and 2016	
8	
 	 	 	 	
 	f)	Notes to Condensed Consolidated Financial Statements	
9	
 	 	 	
Item 2.  	Management’s Discussion and Analysis of Financial Condition and Results of Operations	
40	
 	 	 	
Item 3.  	Quantitative and Qualitative Disclosures About Market Risk	
70	
 	 	 	
Item 4.  	Controls and Procedures	
71	
 	 	 	
 	PART II —OTHER INFORMATION
 	 	
Item 1.  	Legal Proceedings	
72	
 
Item 6.	 
Exhibits	
72	

2

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Website Information
 
We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor section. Accordingly, investors should monitor the Investor portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please submit your e-mail address at the Investor Relations Home page of the Investor section of our website. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.

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PART I. FINANCIAL INFORMATION 
 
ITEM 1. FINANCIAL STATEMENTS 
 
Genco Shipping & Trading Limited
Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 201  6
(U.S. Dollars in thousands, except for share and per share data)
(Unaudited)
 	 	 	 	 	 	 	 	
 	 	June 30, 	 	December 31, 	 	
 	    	2017	    	2016	 	
 	    	 	    	 	 	
Assets	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	147,153	 	$	133,400	 	
Restricted cash	 	 	8,335	 	 	8,242	 	
Due from charterers, net of a reserve of $132 and $283, respectively	 	 	6,433	 	 	10,373	 	
Prepaid expenses and other current assets	 	 	22,433	 	 	15,750	 	
Vessels held for sale	 	 	 —	 	 	4,840	 	
Total current assets	 	 	184,354	 	 	172,605	 	
 	 	 	 	 	 	 	 	
Noncurrent assets:	 	 	 	 	 	 	 	
Vessels, net of accumulated depreciation of $193,922 and $163,053, respectively	 	 	1,315,336	 	 	1,354,760	 	
Deferred drydock, net of accumulated amortization of $7,862 and $6,340 respectively	 	 	15,057	 	 	12,637	 	
Fixed assets, net of accumulated depreciation and amortization of $878 and $759, respectively	 	 	951	 	 	1,018	 	
Other noncurrent assets	 	 	514	 	 	514	 	
Restricted cash	 	 	25,507	 	 	27,426	 	
Total noncurrent assets	 	 	1,357,365	 	 	1,396,355	 	
 	 	 	 	 	 	 	 	
Total assets	 	$	1,541,719	 	$	1,568,960	 	
 	 	 	 	 	 	 	 	
Liabilities and Equity	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	
Accounts payable and accrued expenses	 	$	20,355	 	$	22,885	 	
Current portion of long-term debt	 	 	9,576	 	 	4,576	 	
Deferred revenue	 	 	1,648	 	 	1,488	 	
Total current liabilities:	 	 	31,579	 	 	28,949	 	
 	 	 	 	 	 	 	 	
Noncurrent liabilities:	 	 	 	 	 	 	 	
Long-term lease obligations	 	 	2,228	 	 	1,868	 	
Long-term debt, net of deferred financing costs of $10,204 and $11,357, respectively	 	 	506,044	 	 	508,444	 	
Total noncurrent liabilities	 	 	508,272	 	 	510,312	 	
 	 	 	 	 	 	 	 	
Total liabilities	 	 	539,851	 	 	539,261	 	
 	 	 	 	 	 	 	 	
Commitments and contingencies	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Equity:	 	 	 	 	 	 	 	
Series A Preferred Stock, par value $0.01; aggregate liquidation preference of $0 and $120,789 at June 30, 2017 and December 31, 2016, respectively	 	 	 —	 	 	120,789	 	
Common stock, par value $0.01; 500,000,000 shares authorized; issued and outstanding 34,434,538 and 7,354,449 shares at June 30, 2017 and December 31, 2016, respectively	 	 	344	 	 	74	 	
Additional paid-in capital	 	 	1,626,584	 	 	1,503,784	 	
Retained deficit	 	 	(625,060)	 	 	(594,948)	 	
Total equity	 	 	1,001,868	 	 	1,029,699	 	
Total liabilities and equity	 	$	1,541,719	 	$	1,568,960	 	
 
See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2017 and 201  6
(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)
(Unaudited)

 	  	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
 	 	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	    	2017	    	2016	    	2017	    	2016	   	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Voyage revenues	 	$	45,370	 	$	31,460	 	$	83,619	 	$	51,590	 	
Service revenues	 	 	 —	 	 	414	 	 	 —	 	 	1,225	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues	 	 	45,370	 	 	31,874	 	 	83,619	 	 	52,815	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Voyage expenses	 	 	951	 	 	3,074	 	 	4,192	 	 	6,970	 	
Vessel operating expenses	 	 	23,852	 	 	28,538	 	 	48,736	 	 	57,665	 	
General and administrative expenses (inclusive of nonvested stock amortization expense of $1,570,  $5,442,  $2,281 and $10,928, respectively)	 	 	5,752	 	 	11,589	 	 	10,661	 	 	22,158	 	
Technical management fees	 	 	1,871	 	 	2,264	 	 	3,852	 	 	4,550	 	
Depreciation and amortization	 	 	18,185	 	 	19,686	 	 	36,358	 	 	40,025	 	
Other operating income	 	 	 —	 	 	(182)	 	 	 —	 	 	(182)	 	
Impairment of vessel assets	 	 	3,339	 	 	67,594	 	 	3,339	 	 	69,278	 	
(Gain) loss on sale of vessels	 	 	(1,343)	 	 	77	 	 	(7,712)	 	 	77	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	52,607	 	 	132,640	 	 	99,426	 	 	200,541	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating loss	 	 	(7,237)	 	 	(100,766)	 	 	(15,807)	 	 	(147,726)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other (expense) income:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impairment of investment	 	 	 —	 	 	(2,696)	 	 	 —	 	 	(2,696)	 	
Other expense	 	 	(50)	 	 	(50)	 	 	(115)	 	 	(174)	 	
Interest income	 	 	338	 	 	33	 	 	512	 	 	95	 	
Interest expense	 	 	(7,564)	 	 	(7,013)	 	 	(14,702)	 	 	(14,127)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other expense	 	 	(7,276)	 	 	(9,726)	 	 	(14,305)	 	 	(16,902)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before reorganization items, net	 	 	(14,513)	 	 	(110,492)	 	 	(30,112)	 	 	(164,628)	 	
Reorganization items, net	 	 	 —	 	 	(65)	 	 	 —	 	 	(160)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before income taxes	 	 	(14,513)	 	 	(110,557)	 	 	(30,112)	 	 	(164,788)	 	
Income tax expense	 	 	 —	 	 	(96)	 	 	 —	 	 	(350)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(14,513)	 	$	(110,653)	 	$	(30,112)	 	$	(165,138)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per share-basic	 	$	(0.42)	 	$	(15.32)	 	$	(0.89)	 	$	(22.87)	 	
Net loss per share-diluted	 	$	(0.42)	 	$	(15.32)	 	$	(0.89)	 	$	(22.87)	 	
Weighted average common shares outstanding-basic	 	 	34,430,766	 	 	7,221,735	 	 	33,965,835	 	 	7,220,265	 	
Weighted average common shares outstanding-diluted	 	 	34,430,766	 	 	7,221,735	 	 	33,965,835	 	 	7,220,265	 	
 
See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Comprehensive Loss 
For the Three and Six Months Ended June 30, 2017 and 2016
(U.S. Dollars in Thousands)
(Unaudited)

 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
 	 	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	    	2017	    	2016	    	2017	    	2016	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(14,513)	 	$	(110,653)	 	$	(30,112)	 	$	(165,138)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive loss	 	 	 —	 	 	(864)	 	 	 —	 	 	(5)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive loss	 	$	(14,513)	 	$	(111,517)	 	$	(30,112)	 	$	(165,143)	 	
 
See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Equity 
For the Six Months Ended June 30, 2017 and 2016
(U.S. Dollars in Thousands)
(Unaudited)

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	Accumulated	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Other	 	 	 	 	 	 	
 	 	Series A	 	 	 	 	Additional	 	Comprehensive	 	 	 	 	 	 	
 	 	Preferred	 	Common	 	Paid-in	 	Income	 	Retained	 	 	 	
 	 	Stock	 	Stock	 	Capital	 	(Loss)	 	Deficit	 	Total Equity	 	
Balance — January 1, 2017	 	$	120,789	 	$	74	 	$	1,503,784	 	$	 —	 	$	(594,948)	 	$	1,029,699	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(30,112)	 	 	(30,112)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Conversion of 27,061,856 shares of Series A Preferred Stock	 	 	(120,789)	 	 	270	 	 	120,519	 	 	 	 	 	 	 	 	 —	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of 18,234 shares of vested RSUs	 	 	 	 	 	 —	 	 	 —	 	 	 	 	 	 	 	 	 —	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock amortization	 	 	 	 	 	 	 	 	2,281	 	 	 	 	 	 	 	 	2,281	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance — June 30, 2017	 	$	 —	 	$	344	 	$	1,626,584	 	$	 —	 	$	(625,060)	 	$	1,001,868	 	

 	  	 	 	 	 	 	  	 	 	  	 	 	  	 	 	  	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	Accumulated	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	Other	 	 	 	 	 	 	 	
 	 	Series A	 	 	 	 	Additional	 	Comprehensive	 	 	 	 	 	 	
 	 	Preferred	 	Common	 	Paid-in	 	Income	 	Retained	 	 	 	 	
 	 	Stock	 	Stock	 	Capital	 	(Loss)	 	Deficit	 	Total Equity	 	
Balance — January 1, 2016	 	$	 —	 	$	73	 	$	1,483,105	 	$	(21)	 	$	(377,191)	 	$	1,105,966	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(165,138)	 	 	(165,138)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive loss	 	 	 	 	 	 	 	 	 	 	 	(5)	 	 	 	 	 	(5)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of 61,244 shares of nonvested stock	 	 	 	 	 	 1	 	 	(1)	 	 	 	 	 	 	 	 	 —	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of 3,138 shares of vested RSUs	 	 	 	 	 	 —	 	 	 —	 	 	 	 	 	 	 	 	 —	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock amortization	 	 	 	 	 	 	 	 	10,928	 	 	 	 	 	 	 	 	10,928	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance - June 30, 2016	 	$	 —	 	$	74	 	$	1,494,032	 	$	(26)	 	$	(542,329)	 	$	951,751	 	
 
See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 201  6
(U.S. Dollars in Thousands)
(Unaudited)

 	 	 	 	
 	 	 	 	 	 	
 	 	For the Six Months Ended	 	
 	 	June 30, 	 	
 	    	2017	    	2016	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	
Net loss	 	$	(30,112)	 	$	(165,138)	 	
Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	36,358	 	 	40,025	 	
Amortization of deferred financing costs	 	 	1,153	 	 	1,458	 	
PIK interest, net	 	 	3,028	 	 	 —	 	
Amortization of nonvested stock compensation expense	 	 	2,281	 	 	10,928	 	
Impairment of vessel assets	 	 	3,339	 	 	69,278	 	
(Gain) loss on sale of vessels	 	 	(7,712)	 	 	77	 	
Impairment of investment	 	 	 —	 	 	2,696	 	
Realized loss on sale of investment	 	 	 —	 	 	92	 	
Change in assets and liabilities:	 	 	 	 	 	 	 	
Decrease in due from charterers	 	 	3,940	 	 	2,337	 	
(Increase) decrease in prepaid expenses and other current assets	 	 	(6,683)	 	 	2,131	 	
Decrease in accounts payable and accrued expenses	 	 	(1,406)	 	 	(4,338)	 	
Increase (decrease) in deferred revenue	 	 	160	 	 	(63)	 	
Increase in lease obligations	 	 	360	 	 	360	 	
Deferred drydock costs incurred	 	 	(5,291)	 	 	(1,073)	 	
Net cash used in operating activities	 	 	(585)	 	 	(41,230)	 	
 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	
Purchase of vessels, including deposits	 	 	(252)	 	 	(380)	 	
Purchase of other fixed assets	 	 	(65)	 	 	(207)	 	
Net proceeds from sale of vessels	 	 	15,513	 	 	1,923	 	
Sale of AFS securities	 	 	 —	 	 	2,361	 	
Changes in deposits of restricted cash	 	 	1,826	 	 	 —	 	
Net cash provided by investing activities	 	 	17,022	 	 	3,697	 	
 	 	 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	
Repayments on the $400 Million Credit Facility	 	 	(200)	 	 	 —	 	
Repayments on the $100 Million Term Loan Facility	 	 	 —	 	 	(3,846)	 	
Repayments on the $253 Million Term Loan Facility	 	 	 —	 	 	(10,150)	 	
Repayments on the 2015 Revolving Credit Facility	 	 	 —	 	 	(3,282)	 	
Repayments on the $44 Million Term Loan Facility	 	 	 —	 	 	(1,375)	 	
Repayments on the $148 Million Credit Facility	 	 	 —	 	 	(5,994)	 	
Repayments on the $22 Million Term Loan Facility	 	 	 —	 	 	(750)	 	
Repayments on the 2014 Term Loan Facilities	 	 	(1,381)	 	 	(1,381)	 	
Cash settlement of non-accredited Note holders	 	 	 —	 	 	(101)	 	
Payment of Series A Preferred Stock issuance costs	 	 	(1,103)	 	 	 —	 	
Net cash used in financing activities	 	 	(2,684)	 	 	(26,879)	 	
 	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	 	 	13,753	 	 	(64,412)	 	
 	 	 	 	 	 	 	 	
Cash and cash equivalents at beginning of period	 	 	133,400	 	 	121,074	 	
Cash and cash equivalents at end of period	 	$	147,153	 	$	56,662	 	
 
See accompanying notes to condensed consolidated financial statements.

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Genco Shipping & Trading Limited
(U.S. Dollars in Thousands, Except Per Share and Share Data)
Notes to Condensed Consolidated Financial Statements (unaudited) 
 
1 - GENERAL INFORMATION
 
The accompanying condensed consolidated financial statements include the accounts of Genco Shipping & Trading Limited (“GS&T”) and its direct and indirect wholly-owned subsidiaries (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, 2017, is the direct or indirect owner of all of the outstanding shares or limited liability company interests of the following subsidiaries: Genco Ship Management LLC; Genco Investments LLC; Genco RE Investments LLC; Baltic Trading Limited; and the ship-owning subsidiaries as set forth below under “Other General Information.”  As of June 30, 2017, Genco Ship Management LLC is the sole owner of all of the outstanding limited liability company interests of Genco Management (USA) LLC (“Genco (USA)”).
 
On April 15, 2016, the shareholders of the Company approved, at a Special Meeting of Shareholders (the “Special Meeting”), proposals to amend the Second Amended and Restated Articles of Incorporation of the Company to (i) increase the number of authorized shares of common stock of the Company from 250,000,000 to 500,000,000 and (ii) authorize the issuance of up to 100,000,000 shares of preferred stock, in one or more classes or series as determined by the Board of Directors of the Company. The authorized shares did not change as a result of the reverse stock split as discussed below.  Following the Special Meeting on such date, the Company filed Articles of Amendment of its Second Amended and Restated Articles of Incorporation with the Registrar of Corporations of the Republic of the Marshall Islands to implement to the foregoing amendments. Additionally, at the Special Meeting, the shareholders of the Company approved a proposal to amend the Second Amended and Restated Articles of Incorporation of the Company to effect a reverse stock split of the issued and outstanding shares of Common Stock at a ratio between 1-for-2 and 1-for-25 with such reverse stock split to be effective at such time and date, if at all, as determined by the Board of Directors of the Company, but no later than one year after shareholder approval thereof .  
 
On July 7, 2016, the Company completed a one-for-ten reverse stock split of its common stock.  As a result, all share and per share information included for all periods presented in these condensed consolidated financial statements reflect the reverse stock split.  Refer to Note 6 — Net Loss per Common Share and Note 17 — Stock-Based Compensation. 
 
On October 13, 2016, Peter C. Georgiopoulos resigned as Chairman of the Board and a director of the Company.  The Board of Directors appointed Arthur L. Regan, a current director of the Company, as Interim Executive Chairman of the Board.  In connection with his departure, Mr. Georgiopoulos entered into a Separation Agreement and a Release Agreement with the Company on October 13, 2016.  Under the terms of these agreements, subject to customary conditions, Mr. Georgiopoulos received an amount equal to the annual Chairman’s fee awarded to him in recent years of $500 as a severance payment and full vesting of his unvested equity awards, which consisted of grants of 68,581 restricted shares of the Company’s common stock and warrants exercisable for approximately 213,937 shares of the Company’s common stock with an exercise price per share ranging $259.10 to $341.90.  Refer to Note 17 — Stock-Based Compensation.  The agreements also contain customary provisions pertaining to confidential information, releases of claims by Mr. Georgiopoulos, and other restrictive covenants.
 
On November 15, 2016, pursuant to the Purchase Agreements (as defined in Note 8 — Debt), the Company completed the private placement of 27,061,856 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) which included 25,773,196 shares at a price per share of $4.85 and an additional 1,288,660 shares issued as a commitment fee on a pro rata basis.  The Company received net proceeds of $120,789 after deducting placement agents’ fees and expenses.  On January 4, 2017, the Company’s shareholders approved at a Special Meeting of Shareholders the issuance of up to 27,061,856 shares of common stock of the Company upon the conversion of shares of the Series A Preferred Stock, par value $0.01 per share, which were purchased by certain investors in a private placement (the “Conversion Proposal”).  As a result of shareholder approval of the Conversion Proposal, all outstanding 27,061,856 shares of Series A Preferred Stock were automatically and mandatorily converted into 27,061,856 shares of common stock of the Company on January 4, 2017.

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Other General Information
 
Below is the list of the Company’s wholly owned ship-owning subsidiaries as of June 30, 2017:

Wholly Owned Subsidiaries	    	Vessel Acquired	    	Dwt	    	Delivery Date	    	Year Built	 	
 	 	 	 	 	 	 	 	 	 	
Genco Vigour Limited	 	Genco Vigour	 	73,941	 	12/15/04	 	
1999	 	
Genco Explorer Limited	 	Genco Explorer	 	29,952	 	12/17/04	 	
1999	 	
Genco Progress Limited	 	Genco Progress	 	29,952	 	1/12/05	 	
1999	 	
Genco Beauty Limited	 	Genco Beauty	 	73,941	 	2/7/05	 	
1999	 	
Genco Knight Limited	 	Genco Knight	 	73,941	 	2/16/05	 	
1999	 	
Genco Muse Limited	 	Genco Muse	 	48,913	 	10/14/05	 	
2001	 	
Genco Surprise Limited	 	Genco Surprise	 	72,495	 	11/17/06	 	
1998	 	
Genco Augustus Limited	 	Genco Augustus	 	180,151	 	8/17/07	 	
2007	 	
Genco Tiberius Limited	 	Genco Tiberius	 	175,874	 	8/28/07	 	
2007	 	
Genco London Limited	 	Genco London	 	177,833	 	9/28/07	 	
2007	 	
Genco Titus Limited	 	Genco Titus	 	177,729	 	11/15/07	 	
2007	 	
Genco Challenger Limited	 	Genco Challenger	 	28,428	 	12/14/07	 	
2003	 	
Genco Charger Limited	 	Genco Charger	 	28,398	 	12/14/07	 	
2005	 	
Genco Warrior Limited	 	Genco Warrior	 	55,435	 	12/17/07	 	
2005	 	
Genco Predator Limited	 	Genco Predator	 	55,407	 	12/20/07	 	
2005	 	
Genco Hunter Limited	 	Genco Hunter	 	58,729	 	12/20/07	 	
2007	 	
Genco Champion Limited	 	Genco Champion	 	28,445	 	1/2/08	 	
2006	 	
Genco Constantine Limited	 	Genco Constantine	 	180,183	 	2/21/08	 	
2008	 	
Genco Raptor LLC	 	Genco Raptor	 	76,499	 	6/23/08	 	
2007	 	
Genco Cavalier LLC	 	Genco Cavalier	 	53,617	 	7/17/08	 	
2007	 	
Genco Thunder LLC	 	Genco Thunder	 	76,588	 	9/25/08	 	
2007	 	
Genco Hadrian Limited	 	Genco Hadrian	 	169,694	 	12/29/08	 	
2008	 	
Genco Commodus Limited	 	Genco Commodus	 	169,025	 	7/22/09	 	
2009	 	
Genco Maximus Limited	 	Genco Maximus	 	169,025	 	9/18/09	 	
2009	 	
Genco Claudius Limited	 	Genco Claudius	 	169,025	 	12/30/09	 	
2010	 	
Genco Bay Limited	 	Genco Bay	 	34,296	 	8/24/10	 	
2010	 	
Genco Ocean Limited	 	Genco Ocean	 	34,409	 	7/26/10	 	
2010	 	
Genco Avra Limited	 	Genco Avra	 	34,391	 	5/12/11	 	
2011	 	
Genco Mare Limited	 	Genco Mare	 	34,428	 	7/20/11	 	
2011	 	
Genco Spirit Limited	 	Genco Spirit	 	34,432	 	11/10/11	 	
2011	 	
Genco Aquitaine Limited	 	Genco Aquitaine	 	57,981	 	8/18/10	 	
2009	 	
Genco Ardennes Limited	 	Genco Ardennes	 	57,981	 	8/31/10	 	
2009	 	
Genco Auvergne Limited	 	Genco Auvergne	 	57,981	 	8/16/10	 	
2009	 	
Genco Bourgogne Limited	 	Genco Bourgogne	 	57,981	 	8/24/10	 	
2010	 	
Genco Brittany Limited	 	Genco Brittany	 	57,981	 	9/23/10	 	
2010	 	
Genco Languedoc Limited	 	Genco Languedoc	 	57,981	 	9/29/10	 	
2010	 	
Genco Loire Limited	 	Genco Loire	 	53,416	 	8/4/10	 	
2009	 	
Genco Lorraine Limited	 	Genco Lorraine	 	53,416	 	7/29/10	 	
2009	 	
Genco Normandy Limited	 	Genco Normandy	 	53,596	 	8/10/10	 	
2007	 	
Genco Picardy Limited	 	Genco Picardy	 	55,257	 	8/16/10	 	
2005	 	
Genco Provence Limited	 	Genco Provence	 	55,317	 	8/23/10	 	
2004	 	
Genco Pyrenees Limited	 	Genco Pyrenees	 	57,981	 	8/10/10	 	
2010	 	
Genco Rhone Limited	 	Genco Rhone	 	58,018	 	3/29/11	 	
2011	 	
Baltic Lion Limited	 	Baltic Lion	 	179,185	 	4/8/15	(1)	
2012	 	
Baltic Tiger Limited	 	Genco Tiger	 	179,185	 	4/8/15	(1)	
2011	 	
Baltic Leopard Limited	 	Baltic Leopard	 	53,447	 	4/8/10	(2)	
2009	 	
Baltic Panther Limited	 	Baltic Panther	 	53,351	 	4/29/10	(2)	
2009	 	
Baltic Cougar Limited	 	Baltic Cougar	 	53,432	 	5/28/10	(2)	
2009	 	
Baltic Jaguar Limited	 	Baltic Jaguar	 	53,474	 	5/14/10	(2)	
2009	 	
Baltic Bear Limited	 	Baltic Bear	 	177,717	 	5/14/10	(2)	
2010	 	
Baltic Wolf Limited	 	Baltic Wolf	 	177,752	 	10/14/10	(2)	
2010	 	
Baltic Wind Limited	 	Baltic Wind	 	34,409	 	8/4/10	(2)	
2009	 	
Baltic Cove Limited	 	Baltic Cove	 	34,403	 	8/23/10	(2)	
2010	 	
Baltic Breeze Limited	 	Baltic Breeze	 	34,386	 	10/12/10	(2)	
2010	 	
Baltic Fox Limited	 	Baltic Fox	 	31,883	 	9/6/13	(2)	
2010	 	
Baltic Hare Limited	 	Baltic Hare	 	31,887	 	9/5/13	(2)	
2009	 	
Baltic Hornet Limited	 	Baltic Hornet	 	63,574	 	10/29/14	(2)	
2014	 	
Baltic Wasp Limited	 	Baltic Wasp	 	63,389	 	1/2/15	(2)	
2015	 	
Baltic Scorpion Limited	 	Baltic Scorpion	 	63,462	 	8/6/15	 	
2015	 	
Baltic Mantis Limited	 	Baltic Mantis	 	63,470	 	10/9/15	 	
2015	 	

	(1)		The delivery date for these vessels represents the date that the vessel was purchased from Baltic Trading Limited (“Baltic Trading”).	
	(2)		The delivery date for these vessels represents the date that the vessel was delivered to Baltic Trading.	

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The Company formerly provided technical services for drybulk vessels purchased by Maritime Equity Partners LLC (“MEP”).  These services included oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but did not include chartering services.  The services were initially 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.   On September 30, 2015, under the oversight of an independent committee of our Board of Directors, Genco (USA) entered into certain agreements which reduced the daily service fee from $750 to $650 per day, which was effective October 1, 2015. During January 2016, five of MEP’s vessels were sold to third parties and were no longer subject to the agency agreement.  Based upon the September 30, 2015 agreement, termination fees were due in the amount of $296 which was assumed by the new owners of the five MEP vessels that were sold and were paid in full during February 2016.  Additionally, during the three months ended September 30, 2016, the remaining seven of MEP’s vessels were sold to third parties, and the agency agreement was deemed terminated upon the sale of these vessels.  Based upon the September 30, 2015 agreement, termination fees were due in the amount of $830, which was assumed by the new owners of the seven MEP vessels that were sold and were paid in full as of September 30, 2016.  MEP has been dissolved, and all previous outstanding amounts have been settled as of December 31, 2016.  Refer to Note 7 — Related Party Transactions for amounts due to or from MEP as of June 30, 2017 and December 31, 2016. 
 
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 includes the accounts of GS&T and its direct and indirect wholly-owned subsidiaries, including Baltic Trading.  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, 2016 (the “2016 10-K”).  The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the operating results to be expected for the year ending December 31, 2017.
 
Segment reporting
 
The Company reports financial information and evaluates its operations by charter revenues and not by the length of ship employment for its customers, i.e., spot or time charters.  Each of the Company’s vessels serve the same type of customer, have similar operations and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, the Company has determined that it operates in one reportable segment which is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. 
 
General and administrative expenses  
 
During the three months and year ended December 31, 2016, the Company opted to break out expenses previously classified as General, administrative and management fees into two separate categories to provide a greater level of detail of the underlying expenses.  These fees were broken out into General and administrative expenses and Technical management fees.  This change was made retrospectively for comparability purposes, and there was no effect on the Net Loss for the three and six months ended June 30, 2017 and 2016.

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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, 2017 and 2016 was $16,892 and $18,541, respectively.  Depreciation expense for vessels for the six months ended June 30, 2017 and 2016 was $33,598 and $37,675, 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 $310 per lightweight ton (“lwt”) times the weight of the ship noted in lwt.    
 
Vessels held for sale
 
During December 2016, the Board of Directors authorized the sale of the Genco Success, Genco Prosperity and Genco Wisdom.  As such, these vessel assets were classified as held for sale in the Condensed Consolidated Balance Sheet as of December 31, 2016.  During the six months ended June 30, 2017, these vessels were sold.  Refer to Note 4 — Vessel Acquisitions and Dispositions for additional information.
 
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, 2017 and December 31, 2016, the Company had an accrual of $481 and $220, 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. These expenses are borne by the Company during spot market voyage charterers.  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. Additionally, the Company records lower of cost or market adjustments to re-value the bunker fuel on a quarterly basis.  These differences in bunkers, including lower of cost or market adjustments, resulted in a net gain (loss) of $1,440 and ($1,508) during the three months ended June 30, 2017 and 2016, respectively, and $935 and ($3,805) during the six months ended June 30, 2017 and 2016, respectively.  Additionally, voyage expenses include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.

United States Gross Transportation Tax
 
The Company believes that it will not qualify for the Section 883 exemption during the year ended December 31, 2017.  In the absence of the exemption, 50% of the Company’s gross shipping income attributable to transportation beginning or ending in the U.S. (but not both beginning and ending in the U.S.) will be subject to a 4% tax without allowance for deductions (the “U.S. gross transportation tax”) during the year ended December 31, 2017.  During the three and six months ended June 30, 2017, the Company has recorded estimated U.S. gross transportation tax of $61 and $97, respectively, which has been recorded in Voyage expenses in the Condensed Consolidated Statements of Operation. 

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During the year ended December 31, 2016, the Company qualified for the Section 883 exemption and, therefore, did not record any U.S. gross transportation tax.
 
Other operating income  
 
During the three and six months ended June 30, 2016, the Company recorded other operating income of $182.  There was no operating income earned during the three and six months ended June 30, 2017.  Other operating income recorded during the three and six months ended June 30, 2016 consisted primarily of $157 received from Samsun Logix Corporation (“Samsun”) pursuant to the revised rehabilitation plan that was approved by the South Korean courts on April 8, 2016.  Refer to Note 16 — Commitments and Contingencies for further information regarding the bankruptcy settlement with Samsun. 
 
Impairment of vessel assets
 
During the three months ended June 30, 2017 and 2016, the Company recorded $3,339 and $67,594, respectively, related to the impairment of vessel assets in accordance with Accounting Standards Codification (“ASC”) 360 — “Property, Plant and Equipment” (“ASC 360”).  Additionally, during the six months ended June 30, 2017 and 2016, the Company recorded $3,339 and $69,278, respectively, related to the impairment of vessel assets in accordance with ASC 360.
 
At June 30, 2017, the Company determined that the sum of the estimated undiscounted future cash flows attributable to the Genco Surprise did not exceed the carrying value of the vessel at June 30, 2017 and reduced the carrying value of the Genco Surprise, a 1998-built Panamax vessel, to its fair market value as of June 30, 2017.  This resulted in an impairment loss of $3,339 during the three and six months ended June 30, 2017. 
At June 8, 2016, the Company determined that the scrapping of nine of its vessels, the Genco Acheron, Genco Carrier, Genco Leader, Genco Pioneer, Genco Prosperity, Genco Reliance, Genco Success, Genco Sugar, and Genco Wisdom, was more likely than not pursuant to the Commitment Letter entered into for the $400 Million Credit Facility as defined and disclosed in Note 8 — Debt.  Therefore, at June 8, 2016, the time utilized to determine the recoverability of the carrying value of the vessel assets was significantly reduced.  After determining that the sum of the estimated undiscounted future cash flows attributable to the aforementioned nine vessels did not exceed the carrying value of the vessels at June 8, 2016, the Company reduced the carrying value of the nine vessels to their net realizable value, which was based on the expected net proceeds from scrapping the vessels.  This resulted in an impairment loss of $67,594 during the three and six months ended June 30, 2016.  Refer to Note 4 — Vessel Acquisitions and Dispositions for further information about the sale of these vessels.
At March 31, 2016, the Company determined that the scrapping of the Genco Marine was more likely than not based on discussions with the Company’s Board of Directors.  Therefore, at March 31, 2016, the time utilized to determine the recoverability of the carrying value of the vessel asset was significantly reduced.  After determining that the sum of the estimated undiscounted future cash flows attributable to the Genco Marine did not exceed the carrying value of the vessel at March 31, 2016, the Company reduced the carrying value of the Genco Marine to its net realizable value, which was based on the expected proceeds from scrapping the vessel.  This resulted in an impairment loss of $0 and $1,684 during the three and six months ended June 30, 2016, respectively.  On April 5, 2016, the Board of Directors unanimously approved scrapping the Genco Marine, and the sale of the Genco Marine to the scrap yard was completed on May 17, 2016. 
 
(Gain) loss on sale of vessels
 
During the three and six months ended June 30, 2017, the Company recorded a net gain of $1,343 and $7,712, respectively, related to the sale of vessels.  The net gain of $1,343 recorded during the three months ended June 30, 2017 related primarily to the sale of the Genco Prosperity and the net gain of $7,712 recorded during the six months ended June 30, 2017 related primarily to the sale of the Genco Wisdom, the Genco Reliance, the Genco Carrier, the Genco Success and the Genco Prosperity. 

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During the three and six months ended June 30, 2016, the Company recorded a net loss of $77 related to the sale of the Genco Marine.
 
Investments
 
The Company previously held an investment in the capital stock of Jinhui Shipping and Transportation Limited (“Jinhui”) and in 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.  The investments in Jinhui and KLC were designated as Available For Sale (“AFS”) and were reported at fair value, with unrealized gains and losses recorded in equity as a component of accumulated other comprehensive income (loss) (“AOCI”).  The Company classified the investments as current or noncurrent assets based on the Company’s intent to hold the investments at each reporting date.  As of December 31, 2016, the Company no longer held investments in Jinhui or KLC.  Refer to Note 5 — Investments.
 
Investments were reviewed quarterly to identify possible other-than-temporary impairment in accordance with ASC Subtopic 320-10, “Investments — Debt and Equity Securities” (“ASC 320-10”).  When evaluating its investments, the Company reviewed factors such as the length of time and extent to which fair value has been below the cost basis, the financial condition of the issuer, the underlying net asset value of the issuer’s assets and liabilities, and the Company’s ability and intent to hold the investment for a period of time which may be sufficient for anticipated recovery in market value.  Should the decline in the value of any investment be deemed to be other-than-temporary, the investment basis would be written down to fair market value, and the write-down would be recorded to earnings as a loss.  Refer to Note 5 — Investments.
 
Income taxes
 
Pursuant to certain agreements, GS&T technically and commercially managed vessels for Baltic Trading until the merger with Baltic Trading on July 17, 2015, and also provided technical management of vessels for MEP in exchange for specified fees for such services until the sale of all of MEP’s vessels.  These services were performed by Genco (USA), which elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) was subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services.  Genco (USA) entered into a cost-sharing agreement with the Company and Genco Ship Management LLC, collectively Manco, pursuant to which Genco (USA) agreed 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.
 
There was no income tax expense recorded during the three and six months ended June 30, 2017 as there was no revenue earned by Genco (USA).
 
Total revenue earned by the Company for these services during the three months ended June 30, 2016 was $414, of which $0 was eliminated upon consolidation. After allocation of certain expenses, there was taxable income of $228 associated with these activities for the three months ended June 30, 2016. This resulted in estimated income tax expense of $96 for the three months ended June 30, 2016. 
 
Total revenue earned by the Company for these services during the six months ended June 30, 2016 was $1,225, of which $0 eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $791 associated with these activities for the six months ended June 30, 2016.  This resulted in estimated income tax expense of $350 for the six months ended June 30, 2016.
 
Recent accounting pronouncements
 
In May 2017, the FASB issued ASU No. 2017-09, “Compensation – Stock Compensation (Topic 718), Scope of Modification Account” (“ASU 2017-09”).  This ASU provides guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification account.  This ASU is effective for

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fiscal years beginning after December 15, 2017, and for interim periods within those years and early adoption is permitted.  ASU 2017-09 must be applied prospectively to an award modified on or after the adoption date.  The Company will adopt ASU 2017-09 during the first quarter of 2018.
 
In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”).  This ASU adds or clarifies the guidance in ASC 230 – Statement of Cash Flows regarding the classification and presentation of restricted cash in the statement of cash flows.  ASU 2016-18 requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flow.  This ASU is effective for fiscal years beginning after December 15, 2017, and for interim periods within those years and early adoption is permitted.  ASU 2016-18 must be adopted retrospectively.  Other than presentation, we do not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.
 
In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230):  Classification of Certain Cash Receipts and Cash Payments.”  This ASU adds or clarifies the guidance in ASC 230 – Statement of Cash Flows regarding the classification of certain cash receipts and payments in the statement of cash flows.  This ASU is effective for fiscal years beginning after December 15, 2017, and for interim periods within those years and early adoption is permitted.  This ASU shall be applied retrospectively to all periods presented, but may be applied prospectively from the earliest date practicable if retrospective application would be impracticable. The Company is currently evaluating the impact of this adoption on its consolidated financial statements.
 
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which replaces the existing guidance in ASC 840 – Leases.  This ASU requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases.  Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset and for operating leases, the lessee would recognize a straight-line total lease expense.  This ASU is effective for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years.  Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase in required disclosures. The Company is currently evaluating the impact of this adoption on its consolidated financial statements.
 
In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). This ASU will require that equity investments be measured at fair value with changes in fair value recognized in net income (loss). ASU 2016-01 will be effective for annual periods beginning after December 15, 2017, and interim periods within those years. The Company is currently evaluating the impact of this adoption on its consolidated financial statements.
 
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date.  The FASB also permitted early adoption of the standard, but not before the original effective date of December 15, 2016.   The Company is evaluating the potential impact of this adoption on its consolidated financial statements. Subsequent to the issuance of ASU 2014-09, the FASB issued the following ASU’s which amend or provide additional guidance on topics addressed in ASU 2014-09.  In March 2016, the FASB issued ASU No. 2016-08, “Revenue Recognition - Principal versus Agent” (reporting revenue gross versus net). In April 2016, the FASB issued ASU No. 2016-10, “Revenue Recognition - Identifying Performance Obligations and Licenses.”   Lastly, in May 2016 and December 2016, the FASB issued ASU No. 2016-12, “Revenue Recognition - Narrow Scope Improvements and Practical Expedients” and ASU No. 2016-20, “Technical Corrections and Improvements to Top 606, Revenue from Contracts with Customers.”  The Company intends

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to adopt the aforementioned ASUs for the interim periods after December 31, 2017, using the modified retrospective transition method applied to those contracts which were not completed as of that date. Upon adoption, the Company will recognize the cumulative effect of adopting this guidance as an adjustment to its opening balance of retained earnings as of January 1, 2018. Prior periods will not be retrospectively adjusted. The Company is currently evaluating the impact of the adoption of the aforementioned ASUs on its condensed consolidated financial statements, including the presentation of revenues in its consolidated statements of operations.
 
3 - CASH FLOW INFORMATION
 
For the six months ended June 30, 2017, 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 $9 for the Purchase of vessels, including deposits and $52 for the Purchase of other fixed assets.
 
Professional fees and trustee fees in the amount of $0 were recognized by the Company in Reorganization items, net for the six months ended June 30, 2017 (refer to Note 15 —  Reorganizations Items, net).  During this period, $25 of professional fees and trustee fees were paid through June 30, 2017 and $0 is included in Accounts payable and accrued expenses as of June 30, 2017.
 
For the six months ended June 30, 2016, 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 $80 for the Purchase of vessels, including deposits and $81 for the Purchase of other fixed assets.  Additionally, for the six months ended June 30, 2016, 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 $41 associated with the sale of AFS securities.
 
Professional fees and trustee fees in the amount of $160 were recognized by the Company in Reorganization items, net for the six months ended June 30, 2016 (refer to Note 15 — Reorganizations Items, net).  During this period, $142 of professional fees and trustee fees were paid through June 30, 2016 and $65 is included in Accounts payable and accrued expenses as of June 30, 2016.
 
During the six months ended June 30, 2017 and 2016, cash paid for interest, net of amounts capitalized, was $12,174 and $12,923, respectively.
 
During the six months ended June 30, 2017 and 2016, cash paid for estimated income taxes was $0 and $512, respectively.
 
On May 17, 2017, the Company issued 25,197 restricted stock units to certain members of the Board of Directors.  The aggregate fair value of these restricted stock units was $255.  Refer to Note 17 — Stock-Based Compensation.   
 
On March 23, 2017, the Company issued 292,398 restricted stock units and options to purchase 133,000 shares with an exercise price of $11.13 per share to John C. Wobensmith, Chief Executive Officer and President. The fair value of these restricted stock units and stock options were $3,254 and $853, respectively.  Refer to Note 17 — Stock-Based Compensation.   
 
On May 18, 2016, the Company issued 666,664 restricted stock units, or 66,666 restricted stock units on a post-reverse stock split basis, to certain members of the Board of Directors.  The aggregate fair value of these restricted stock units was $340.  Refer to Note 17 — Stock-Based Compensation.   
 
On February 17, 2016, the Company granted 408,163 and 204,081 shares of nonvested stock, or 40,816 and 20,408 shares on a post-reverse stock split basis, under the 2015 Equity Incentive Plan to Peter C. Georgiopoulos, former Chairman of the Board of Directors, and John C. Wobensmith, Chief Executive Officer and President, respectively.  The grant date fair value of such nonvested stock was $318.  Refer to Note 17 — Stock-Based Compensation.

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4 - VESSEL ACQUISITIONS AND DISPOSITIONS
 
During December 2016, the Board of Directors unanimously approved the sale of the Genco Success, Genco Prosperity and Genco Wisdom and these vessel assets were classified as held for sale in the Condensed Consolidated Balance Sheet as of December 31, 2016.  These vessels were sold during the six months ended June 30, 2017, as described below. 
 
On December 19, 2016, the Board of Directors unanimously approved selling the Genco Prosperity, a 1997-built Handymax vessel, and on December 21, 2016, the Company reached an agreement to sell the Genco Prosperity to a third party for $3,050 less a 3.5% broker commission payable to a third party.  The sale was completed on May 16, 2017.
 
On December 5, 2016, the Board of Directors unanimously approved selling the Genco Success, a 1997-built Handymax vessel, and on December 15, 2016, the Company reached an agreement to sell the Genco Success to a third party for $2,800 less a 3.0% broker commission payable to a third party.  The sale was completed on March 19, 2017. 
 
During January 2017, the Board of Directors unanimously approved selling the Genco Carrier, a 1998-built Handymax vessel, and on January 25, 2017, the Company reached an agreement to sell the Genco Carrier to a third party for $3,560 less a $92 broker commission payable to a third party.  The sale was completed on February 16, 2017. 
 
During January 2017, the Board of Directors unanimously approved selling the Genco Reliance, a 1999-built Handysize vessel, and on January 12, 2017, the Company reached an agreement to sell the Genco Reliance to a third party for $3,500 less a 3.5% broker commission payable to a third party.  The sale was completed on February 9, 2017.
 
On December 19, 2016, the Board of Directors unanimously approved selling the Genco Wisdom, a 1997-built Handymax vessel. On December 21, 2016, the Company reached an agreement to sell the Genco Wisdom to a third party for $3,250 less a 3.5% broker commission payable to a third party.  The sale was completed on January 9, 2017.
 
On November 7, 2016, the Board of Directors unanimously approved selling the Genco Acheron, a 1999-built Panamax vessel, and on November 14, 2016, the Company reached an agreement to sell the Genco Acheron to a third party for $3,480 less a 5.5% broker commission payable to a third party.  The sale was completed on December 12, 2016.
 
On October 24, 2016, the Board of Directors unanimously approved selling the Genco Leader, a 1999-built Panamax vessel, and on October 25, 2016, the Company reached an agreement to sell the Genco Leader to a third party for $3,470 less a 3.0% broker commission payable to a third party.  The sale was completed on November 4, 2016.  On November 4, 2016, the Company utilized the net proceeds from the sale to pay down $3,366 on the $148 Million Credit Facility, as the Genco Leader was a collateralized vessel under this facility prior to the refinancing of the $148 Million Credit Facility with the $400 Million Credit Facility, refer to Note 8 —  Debt.
 
On September 30, 2016, the Board of Directors unanimously approved selling the Genco Pioneer, a 1999-built Handysize vessel, and on October 8, 2016, the Company reached an agreement to sell the Genco Pioneer to a third party for $2,650 less a 5.5% broker commission payable to a third party.  The sale was completed on October 26, 2016.  On October 26, 2016 the Company utilized the net proceeds from the sale to pay down $2,504 on the $148 Million Credit Facility, as the Genco Pioneer was a collateralized vessel under this facility prior to the refinancing of the $148 Million Credit Facility with the $400 Million Credit Facility, refer to Note 8 —   Debt.
 
On September 30, 2016, the Board of Directors unanimously approved selling the Genco Sugar, a 1998-built Handysize vessel, and on October 10, 2016, the Company reached an agreement to sell the Genco Sugar to a third party for $2,450 less a 5.5% broker commission payable to a third party.  The sale was completed on October 20, 2016.  On October 21, 2016, the Company utilized the net proceeds from the sale to pay down $2,315 on the $100 Million Term Loan Facility, as the Genco Sugar was a collateralized vessel under this facility prior to the refinancing of the $100 Million Term Loan Facility with the $400 Million Credit Facility, refer to Note 8 —  Debt.
 
On April 5, 2016, the Board of Directors unanimously approved scrapping the Genco Marine.  The Company reached an agreement on May 6, 2016 to sell the Genco Marine, a 1996-built Handymax vessel, to be scrapped with Ace

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Exim Pte Ltd., a demolition yard, for a net amount $2,187 less a 2.0% broker commission payable to a third party.  On May 17, 2016, the Company completed the sale of the Genco Marine.  
 
Refer to Note 1 — General Information for a listing of the delivery dates for the vessels in the Company’s fleet.
 
5 – INVESTMENTS
 
The Company held an investment in the capital stock of Jinhui and the stock of 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 were designated as AFS and were reported at fair value, with unrealized gains and losses recorded in equity as a component of AOCI.  At June 30, 2017 and December 31, 2016, the Company did not hold any shares of Jinhui capital stock or shares of KLC stock.
 
Prior to the sale of its remaining shares of Jinhui capital stock, the Company reviewed the investment in Jinhui for indicators of other-than-temporary impairment in accordance with ASC 320-10. Based on the Company’s review, it deemed the investment in Jinhui to be other-than-temporarily impaired as of June 30, 2016 due to the duration and severity of the decline in its market value versus its cost basis and the absence of the intent and ability to recover the initial carrying value of the investment.  As a result, the Company recorded an impairment charge in the Condensed Consolidated Statement of Operations of $2,696 during the three and six months ended June 30, 2016. The Company reviewed its investments in Jinhui and KLC for impairment on a quarterly basis.  The Company’s investment in Jinhui was a Level 1 item under the fair value hierarchy, refer to Note 10 — Fair Value of Financial Instruments for the fair value hierarchy.
 
The unrealized gain (losses) on the Jinhui capital stock and KLC stock were a component of AOCI since these investments were designated as AFS securities.  If the investment in Jinhui was deemed other-than-temporarily impaired, the cost basis for the investment would be revised to its fair value on that date.
 
Refer to Note 9 — Accumulated Other Comprehensive Income (Loss) for a breakdown of the components of AOCI during the three and six months ended June 30, 2016, including any effects of any sales of Jinhui shares and other-than-temporary impairment of the investment in Jinhui, if applicable.
 
6 - 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 reporting period. The computation of diluted net loss per share assumes the vesting of nonvested stock awards and the exercise of stock options (refer to Note 17 — Stock-Based Compensation), 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 340,455 and 201,930 nonvested shares outstanding, including RSUs, and the 133,000 and 0 stock options outstanding at June 30, 2017 and 2016, respectively, (refer to Note 17 — Stock-Based Compensation), all are anti-dilutive. The Company’s diluted net loss per share will also reflect the assumed conversion of the equity warrants issued on the Effective Date and MIP Warrants issued by the Company (refer to Note 17 — Stock-Based Compensation) if the impact is dilutive under the treasury stock method.  Of the 713,122 and 5,704,974 of unvested MIP Warrants outstanding at June 30, 2017 and 2016, respectively, and 3,936,761 of equity warrants outstanding at June 30, 2017 and 2016, all are anti-dilutive. 
 
On July 7, 2016, the Company completed a one-for-ten reverse stock split of its common stock.  As a result, all share and per share information included for all periods presents in these condensed consolidated financial statements reflect the reverse stock split. 

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The components of the denominator for the calculation of basic and diluted net loss per share are as follows:

 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
 	 	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	 	2017	    	2016	    	2017	    	2016	 	
 	 	 	 	 	 	 	 	 	 	
Common shares outstanding, basic:	 	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding, basic 	 	34,430,766	 	7,221,735	 	33,965,835	 	7,220,265	 	
 	 	 	 	 	 	 	 	 	 	
Common shares outstanding, diluted:	 	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding, basic 	 	34,430,766	 	7,221,735	 	33,965,835	 	7,220,265	 	
 	 	 	 	 	 	 	 	 	 	
Dilutive effect of warrants 	 	 —	 	 —	 	 —	 	 —	 	
 	 	 	 	 	 	 	 	 	 	
Dilutive effect of stock options	 	 —	 	 —	 	 —	 	 —	 	
 	 	 	 	 	 	 	 	 	 	
Dilutive effect of restricted stock awards 	 	 —	 	 —	 	 —	 	 —	 	
 	 	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding, diluted 	 	34,430,766	 	7,221,735	 	33,965,835	 	7,220,265	 	

 
7 - RELATED PARTY TRANSACTIONS
 
On October 13, 2016, Peter C. Georgiopoulos resigned as Chairman of the Board and a Director of the Company. Refer to Note 1 — General Information. During the three and six months ended June 30, 2017, the Company did not identify any related party transactions. The following represent related party transactions reflected in these condensed consolidated financial statements during the six months ended June 30, 2016:
 
The Company incurred travel and other office related expenditures from Gener8 Maritime, Inc. (“Gener8”), where the Company’s former Chairman, Peter C. Georgiopoulos, serves as Chairman of the Board.  During the six months ended June 30, 2016, the Company incurred travel and other office related expenditures totaling $47 reimbursable to Gener8 or its service provider. At December 31, 2016, the amount due to Gener8 from the Company was $0.
 
During the six months ended June 30, 2016, the Company did not incur any expenses for legal services (primarily in connection with vessel acquisitions) from Constantine Georgiopoulos, the father of Peter C. Georgiopoulos.  At June 30, 2017 and December 31, 2016, the amount due to Constantine Georgiopoulos was $0 and $10, respectively.
 
The Company has entered into agreements with Aegean Marine Petroleum Network, Inc. (“Aegean”) to purchase lubricating oils for certain vessels in its fleet.  Peter C. Georgiopoulos was formerly the Chairman of the Board of Aegean.  During the six months ended June 30, 2016, Aegean supplied lubricating oils and bunkers to the Company’s vessels aggregating $793.  At December 31, 2016, $0 remained outstanding.
 
During the six months ended June 30, 2016, the Company invoiced MEP for technical services provided, including termination fees, and expenses paid on MEP’s behalf aggregating $1,208. Peter C. Georgiopoulos was a director of and had a minority interest in MEP.  At December 31, 2016, $0 was due to the Company from MEP.  Total service revenue earned by the Company, including termination fees, for technical service provided to MEP for the six months ended June 30, 2016 was $1,225.  

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8 – DEBT
 
Long-term debt, net consists of the following:

 	 	June 30, 	 	December 31, 	 	
 	    	2017	    	2016	 	
Principal amount 	 	$	521,996	 	$	523,577	 	
PIK interest	 	 	3,828	 	 	800	 	
Less:  Unamortized debt issuance costs 	 	 	(10,204)	 	 	(11,357)	 	
Less: Current portion 	 	 	(9,576)	 	 	(4,576)	 	
 	 	 	 	 	 	 	 	
Long-term debt, net	 	$	506,044	 	$	508,444	 	

 	 	June 30, 2017	 	December 31, 2016	 	
 	 	 	 	 	Unamortized	 	 	 	 	Unamortized	 	
 	 	 	 	 	Debt Issuance	 	 	 	 	Debt Issuance	 	
 	    	Principal	    	Cost	    	Principal	    	Cost	 	
$400 Million Credit Facility	 	$	399,800	 	$	7,156	 	$	400,000	 	$	7,967	 	
$98 Million Credit Facility	 	 	95,271	 	 	1,621	 	 	95,271	 	 	1,868	 	
2014 Term Loan Facilities	 	 	26,925	 	 	1,427	 	 	28,306	 	 	1,522	 	
PIK interest	 	 	3,828	 	 	 —	 	 	800	 	 	 —	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total debt	 	$	525,824	 	$	10,204	 	$	524,377	 	$	11,357	 	
 
As of June 30, 2017 and December 31, 2016,  $10,204 and $11,357 of deferred financing costs, respectively, were presented as a direct deduction within the outstanding debt balance in the Company’s Condensed Consolidated Balance Sheet. Amortization expense for deferred financing costs was $580   and $729 for the three months ended June 30, 2017 and 2016, respectively, and $1,153 and $1,458 for the six months ended June 30, 2017 and 2016, respectively.  This amortization expense is recorded as a component of Interest expense in the Condensed Consolidated Statements of Operations.
 
Commitment Letter
 
On June 8, 2016, the Company entered into a Commitment Letter (the “Commitment Letter”) for a senior secured loan facility (the “$400 Million Credit Facility”) for an aggregate principal amount of up to $400,000 with Nordea Bank Finland plc, New York Branch, Skandinaviska Enskilda Banken AB (publ), DVB Bank SE, ABN AMRO Capital USA LLC, Crédit Agricole Corporate and Investment Bank, Deutsche Bank AG Filiale Deutschlandgeschäft, Crédit Industriel et Commercial, and BNP Paribas.  The $400 Million Credit Facility refinanced the Company’s $100 Million Term Loan Facility, $253 Million Term Loan Facility, $148 Million Credit Facility, $22 Million Term Loan Facility, $44 Million Term Loan Facility and 2015 Revolving Credit Facility, each as defined below (collectively, the “Prior Facilities”) and was finalized on November 10, 2016 (refer to $400 Million Credit Facility section below).  As a condition to the effectiveness of the Commitment Letter, the Company entered into separate equity commitment letters for a portion of such financing on June 8, 2016 with each of the following: (i) funds or related entities managed by Centerbridge Partners, L.P. or its affiliates (“Centerbridge”) for approximately $31,200, (ii) funds or related entities managed by Strategic Value Partners, LLC (“SVP”) for approximately $17,300, and (iii) funds managed by affiliates of Apollo Global Management, LLC (“Apollo”) for approximately $14,000, each of which are subject to a number of conditions.  Additionally, pursuant to the Commitment Letter, the waivers with regard to the collateral maintenance covenants under the $100 Million Term Loan Facility, $253 Million Term Loan Facility, $148 Million Credit Facility, $22 Million Term Loan Facility, $44 Million Term Loan Facility and the 2015 Revolving Credit Facility, as defined below, were initially extended to July 29, 2016 subject to the entry into a definitive purchase agreement for the equity financing referred to above by June 30, 2016.

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On June 30, 2016 the Company entered into an amendment and restatement of the Commitment Letter (the “Amended Commitment Letter”).  This amendment extended the collateral maintenance waivers under the Prior Facilities through 11:59 p.m. on September 30, 2016, which were further extended to October 7, 2016 pursuant to an additional agreement entered into with the lenders on September 30, 2016.  On October 6, 2016, the collateral maintenance waivers were further extended through November 15, 2016 pursuant to the Second Amended Commitment Letter (as defined below).  Additionally, the Second Amended Commitment Letter (as defined below), as well as the Amended $98 Million Credit Facility Commitment Letter (refer to the “$98 Million Credit Facility” section below) provided for waivers of the Company’s company-wide minimum cash covenants, so long as cash and cash equivalents of the Company are at least $25,000, and of the Company’s maximum leverage ratio through November 15, 2016.  Lastly, the collateral maintenance waivers and maximum leverage ratio waivers under the 2014 Term Loan Facility were extended through November 15, 2016 pursuant to a waiver entered into on October 14, 2016.  In addition, from August 31 through November 15, 2016, the amount of cash the Company would need to maintain under its minimum cash covenants applicable only to obligors in each Prior Facility would be reduced by up to $250 per vessel, subject to an overall maximum cash withdrawal of $10,000 to pay expenses and additional conditions.  The effectiveness of such new waivers and waiver extensions was conditioned on extension of the equity commitment letters entered into on June 8, 2016 as described above through September 30, 2016, which were so extended by amendments entered into on June 29, 2016.   The Amended Commitment Letter also conditioned such waivers on the Company entering into a definitive purchase agreement or file a registration statement for an equity financing by 11:59 p.m. on August 15, 2016.  Pursuant to additional agreements entered into with the lenders on August 12, 2016, August 30, 2016, September 14, 2016 and September 30, 2016, the deadline to enter into a definitive purchase agreement or file a registration statement for an equity financing was further extended to October 7, 2016.  Stock purchase agreements were entered into on October 6, 2016 pursuant to the Second Amended Commitment Letter as defined below.
 
On October 6, 2016, the Company entered into a second amendment and restatement of the Commitment Letter (the “Second Amended Commitment Letter”).  This amendment further extended the collateral maintenance waivers under the Prior Facilities through November 15, 2016. As a condition to the effectiveness of the Second Amended Commitment Letter, the Company entered into stock purchase agreements (the “Purchase Agreements”) effective as of October 4, 2016 with Centerbridge, SVP and Apollo (the “Investors”) for the purchase of the Company’s Series A Preferred Stock for an aggregate of up to $125,000 in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended.  The Series A Preferred Stock to be sold pursuant to the Purchase Agreements will be automatically and mandatorily convertible into the Company’s common stock, par value $0.01 per share, upon approval by the Company’s shareholders of such conversion.  The purchase price of the Series A Preferred Stock under each of the Purchase Agreements is $4.85 per share.  An additional 1,288,660 shares of Series A Preferred Stock are to be issued to Centerbridge, SVP and Apollo as a commitment fee on a pro rata basis.  The purchase price and the other terms and conditions of the transaction were established in arm’s length negotiations between an independent special committee of the Board of the Directors of the Company (the “Special Committee”).  The Special Committee unanimously approved the transaction.
 
Under the Purchase Agreements, Centerbridge made a firm commitment to purchase 6,597,938 shares of Series A Preferred Stock for an aggregate purchase price of $32,000, SVP made a firm commitment to purchase 7,628,866 shares of Series A Preferred Stock for an aggregate purchase price of $37,000, and Apollo made a firm commitment to purchase 3,587,629 shares of Series A Preferred Stock for an aggregate purchase price of $17,400.  In addition, Centerbridge, SVP and Apollo agreed to provide a backstop commitment to purchase up to 3,402,062,  2,371,134 and 2,185,568 additional shares of Series A Preferred Stock, respectively, for $4.85 per share.
 
Subsequently, on October 27, 2016, the Company entered into a stock purchase agreement (the “Additional Purchase Agreement”) with certain of the Investors; John C. Wobensmith, the Company’s Chief Executive Officer and President; and other investors for the sale of shares of Series A Preferred Stock for an aggregate purchase price of $38,600 at a purchase price of $4.85 per share.  The purchase price and the other terms and conditions of these transactions were established in arm’s length negotiations between an independent special committee of the board of directors of the Company (the “Special Committee”) and the investors.  The Special Committee unanimously approved the transactions.

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On November 15, 2016, pursuant to the Purchase Agreements, the Company completed the private placement of 27,061,856 shares of Series A Preferred Stock which included 25,773,196 shares at a price per share of $4.85 and an additional 1,288,660 shares issued as a commitment fee on a pro rate basis as noted above. These shares were converted to common shares on January 4, 2017.  Refer to Note 1 — General Information.
$400 Million Credit Facility
On November 10, 2016, the Company entered into a senior secured term loan facility, the $400 Million Credit Facility, in an aggregate principal amount of up to $400,000 with Nordea Bank Finland plc, New York Branch, Skandinaviska Enskilda Banken AB (publ), DVB Bank SE, ABN AMRO Capital USA LLC, Crédit Agricole Corporate and Investment Bank, Deutsche Bank AG Filiale Deutschlandgeschäft, Crédit Industriel et Commercial and BNP Paribas.  On November 15, 2016, the proceeds under the $400 Million Credit Facility were used to refinance the Prior Facilities (as defined above under “Commitment Letter”).  The $400 Million Credit Facility is collateralized by 45 of the Company’s vessels and at December 31, 2016 required the Company to sell five remaining unencumbered vessels, which were sold during the six months ended June 30, 2017.  Refer to Note 4 — Vessel Acquisitions and Dispositions.
 
On November 14, 2016, the Company borrowed the maximum available amount of $400,000.  As of June 30, 2017, there was no availability under the $400 Million Credit Facility.  Total debt repayments of $100 and $0 were made during the three months ended June 30, 2017 and 2016, respectively, and total debt repayments of $200 and $0 were made during the six months ended June 30, 2017 and 2016, respectively, under the $400 Million Credit Facility.  As of June 30, 2017 and December 31, 2016, the total outstanding net debt balance, including PIK interest as defined below, was $396,472 and $392,833, respectively.
 
The $400 Million Credit Facility has a final maturity date of November 15, 2021 and the principal borrowed under the facility will bear interest at the London Interbank Offered Rate (“LIBOR”) for an interest period of three months plus a margin of 3.75%.  The Company has the option to pay 1.50% of such rate in-kind (“PIK interest”) through December 31, 2018, of which will be payable on the maturity date of the facility.  The Company has opted to make the PIK interest election and as of June 30, 2017 and December 31, 2016, has recorded $3,828 and $800, respectively, of PIK interest which has been recorded in Long-term debt in the Condensed Consolidated Balance Sheet.  The $400 Million Credit Facility has scheduled amortization payments of (i) $100 per quarter through December 31, 2018, (ii) $7,610 per quarter from March 31, 2019 through December 31, 2020, (iii) $18,571 per quarter from March 31, 2021 through September 30, 2021 and (iv) $282,605 upon final maturity on November 15, 2021, which does not include PIK interest. 
 
There is no collateral maintenance testing for the $400 Million Credit Facility prior to June 30, 2018.  Thereafter, there will be required collateral maintenance testing with a gradually increasing threshold calculated as the value of the collateral under the facility as a percentage of the loan outstanding as follows: 105% from June 30, 2018 to December 30, 2018, 115% from December 31, 2018 to December 30, 2020 and 135% thereafter. 
 
The $400 Million Credit Facility requires the Company to comply with a number of covenants substantially similar to those in the Company’s other credit facilities, including financial covenants related to debt to total book capitalization, minimum working capital, minimum liquidity, and dividends; collateral maintenance requirements (as described above); and other customary covenants.  The Company is required to maintain a ratio of total indebtedness to total capitalization of not greater than 0.70 to 1.00 at all times.  Minimum working capital as defined in the $400 Million Credit Facility is not to be less than $0 at all times.  The $400 Million Credit Facility has minimum liquidity requirements at all times for all vessels in its fleet of (i) $250 per vessel to and including December 31, 2018, (ii) $400 per vessel from January 1, 2019 to and including December 31, 2019 and (iii) $700 per vessel from January 1, 2020 and thereafter. The Company is prohibited from paying dividends without lender consent through December 31, 2020.  The Company may establish non-recourse subsidiaries to incur indebtedness or make investments, but it will be restricted from incurring indebtedness or making investments (other than through non-recourse subsidiaries).  Excess cash from the collateralized vessels under the $400 Million Credit Facility are subject to a cash sweep.  The cash flow sweep will be 100% of excess cash flow through December 31, 2018, 75% through December 31, 2020 and the lesser of 50% of excess cash flow or an amount that would reflect a 15-year average vessel age repayment profile thereafter; provided no 

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prepayment under the cash sweep is required from the first $10,000 in aggregate of the prepayments otherwise required under the cash sweep.
 
At June 30, 2017 and December 31, 2016, the Company has deposited $11,180 that has been reflected as noncurrent restricted cash.  Noncurrent restricted cash as of June 30, 2017 and December 31, 2016 includes $11,180 which represents restricted pledged liquidity amounts pursuant to the $400 Million Credit Facility. 
 
As of June 30, 2017, the Company believed it was in compliance with all of the financial covenants under the $400 Million Credit Facility.
 
$98 Million Credit Facility
 
On November 4, 2015, thirteen of the Company’s wholly-owned subsidiaries entered into a Facility Agreement, by and among such subsidiaries as borrowers (collectively, the “Borrowers”); Genco Holdings Limited, a newly formed direct subsidiary of Genco of which the Borrowers are direct subsidiaries (“Holdco”); certain funds managed or advised by Hayfin Capital Management, Breakwater Capital Ltd, or their nominee, as lenders; and Hayfin Services LLP, as agent and security agent (the “$98 Million Credit Facility”).
 
The Borrowers borrowed the maximum available amount of $98,271 under the facility on November 10, 2015. As of June 30, 2017, there was no availability under the $98 Million Credit Facility.  During the three and six months ended June 30, 2017 and 2016, there were no debt repayments made under the $98 Million Credit Facility.  As of June 30, 2017 and December 31, 2016, the total outstanding net debt balance was $93,650 and $93,403, respectively.
 
Borrowings under the facility are available for working capital purposes.  The facility has a final maturity date of September 30, 2020, and the principal borrowed under the facility will bear interest at LIBOR for an interest period of three months plus a margin of 6.125% per annum.  The facility has no fixed amortization payments for the first two years and fixed amortization payments of $2,500 per quarter thereafter.  To the extent the value of the collateral under the facility is 182% or less of the loan amount outstanding, the Borrowers are to prepay the loan from earnings received from operation of the thirteen collateral vessels after deduction of the following amounts:  costs, fees, expenses, interest, and fixed principal repayments under the facility; operating expenses relating to the thirteen vessels; and the Borrowers’ pro rata share of general and administrative expenses based on the number of vessels they own.
 
The Facility Agreement requires the Borrowers and, in certain cases, the Company and Holdco to comply with a number of covenants substantially similar to those in the other credit facilities of Genco and its subsidiaries, including financial covenants related to maximum leverage, minimum consolidated net worth, minimum liquidity, and dividends; collateral maintenance requirements; and other customary covenants. The Company is prohibited from paying dividends under this facility until December 31, 2018. Following December 31, 2018, the amount of dividends the Company may pay is limited based on the amount of the repayment of at least $25 million of the loan under such facility, as well as the ratio of the value of vessels and certain other collateral pledged under such facility.  The Facility Agreement includes usual and customary events of default and remedies for facilities of this nature.
 
Borrowings under the facility are secured by first priority mortgage on the vessels owned by the Borrowers, namely the Genco Constantine, the Genco Augustus, the Genco London, the Genco Titus, the Genco Tiberius, the Genco Hadrian, the Genco Knight, the Genco Beauty, the Genco Vigour, the Genco Predator, the Genco Cavalier, the Genco Champion, and the Genco Charger, and related collateral.  Pursuant to the Facility Agreement and a separate Guarantee executed by the Company, the Company and Holdco are acting as guarantors of the obligations of the Borrowers and each other under the Facility Agreement and its related documentation.
 
On June 29, 2016, the Company entered into a commitment letter (the “$98 Million Credit Facility Commitment Letter”) which provided for certain covenant relief through September 30, 2016.  For such period, compliance with the company-wide minimum cash covenant was waived so long as cash and cash equivalents of the Company were at least $25,000; compliance with the maximum leverage ratio was waived; and the ratio required to be maintained under the Company’s collateral maintenance covenant was 120% rather than 140%.  An amendment to the $98 Million Credit Facility Commitment Letter was entered into on September 30, 2016 (the “Amended $98 Million

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Credit Facility Commitment Letter”) which extended this covenant relief through November 15, 2016.  Refer to the “Commitment Letter” section above for further discussion.
 
On November 15, 2016, the Company entered into an Amending and Restating Agreement which amended and restated the credit agreements and the guarantee for the $98 Million Credit Facility (the “Restated $98 Million Credit Facility”).  The Restated $98 Million Credit Facility provides for the following: reductions in the minimum liquidity requirements consistent with the $400 Million Credit Facility, except the minimum liquidity amount for the collateral vessels under this facility is $750 per vessel, which is reflected as restricted cash; netting of certain amounts against the measurements of the collateral maintenance covenant, which remains in place with a 140% value to loan threshold; a portion of amounts required to be maintained under the minimum liquidity covenant for this facility may, under certain circumstances, be used to prepay the facility to maintain compliance with the collateral maintenance covenant; elimination of the original maximum leverage ratio and minimum net worth covenants; and restrictions on incurring indebtedness, making investments (other than through non-recourse subsidiaries) or paying dividends, similar to those provided for in the $400 Million Credit Facility.  The minimum working capital and the total indebtedness to total capitalization are the same as the $400 Million Credit Facility. 
 
As of June 30, 2017 and December 31, 2016, the Company had deposited $8,335 and $8,242, respectively, that has been reflected as current restricted cash.  As of June 30, 2017 and December 31, 2016, the Company had deposited $14,012 and $15,931, respectively, that has been reflected as noncurrent restricted cash.  These amounts include certain restricted deposits associated with the Debt Service Account and Capex Account as defined in the $98 Million Credit Facility.
 
As of June 30, 2017, the Company believed it was in compliance with all of the financial covenants under the Restated $98 Million Credit Facility.
 
2014 Term Loan Facilities
 
On October 8, 2014, Baltic Trading and its wholly-owned subsidiaries, Baltic Hornet Limited and Baltic Wasp Limited, each entered into a loan agreement and related documentation for a credit facility in a principal amount of up to $16,800 with ABN AMRO Capital USA LLC and its affiliates (the “2014 Term Loan Facilities”) to partially finance the newbuilding Ultramax vessel that each subsidiary acquired, namely the Baltic Hornet and Baltic Wasp, respectively.  Amounts borrowed under the 2014 Term Loan Facilities may not be reborrowed.  The 2014 Term Loan Facilities have a ten-year term, and the facility amount is to be the lowest of 60% of the delivered cost per vessel, $16,800 per vessel, and 60% of the fair market value of each vessel at delivery.  The 2014 Term Loan Facilities are insured by the China Export & Credit Insurance Corporation (Sinosure) in order to cover political and commercial risks for 95% of the outstanding principal plus interest, which was recorded in deferred financing fees.  Borrowings under the 2014 Term Loan Facilities bear interest at the three or six-month LIBOR rate plus an applicable margin of 2.50% per annum.  Borrowings are to be repaid in 20 equal consecutive semi-annual installments of 1/24 of the facility amount plus a balloon payment of 1/6 of the facility amount at final maturity.  Principal repayments commenced six months after the actual delivery date for each respective vessel.
 
Borrowings under the 2014 Term Loan Facilities are secured by liens on the vessels acquired with borrowings under these facilities, namely the Baltic Hornet and Baltic Wasp, and other related assets. The Company guarantees the obligations of the Baltic Hornet and Baltic Wasp under the 2014 Term Loan Facilities.
 
As of June 30, 2017, the Company had utilized its maximum borrowing capacity, and there was no further availability. Total debt repayments of $700 were made during the three months ended June 30, 2017 and 2016 and $1,381 were made during the six months ended June 30, 2017 and 2016 under the 2014 Term Loan Facilities.  At June 30, 2017 and December 31, 2016, the total outstanding net debt balance was $25,498 and $26,784, respectively. 
 
A waiver was entered into on June 30, 2016 with the lenders under the 2014 Term Loan Facilities which waived the collateral maintenance covenant through September 30, 2016.  On August 9, 2016, the Company entered into waiver agreements which extend the existing collateral maintenance covenant through October 15, 2016 and provided for

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waivers of the maximum leverage ratio covenant through such time.  On October 14, 2016, these waivers were further extended to November 15, 2016. 
 
On November 15, 2016, the Company entered into Supplemental Agreements with lenders under our 2014 Term Loan Facilities which, among other things, amended the Company’s collateral maintenance covenants under the 2014 Term Loan Facilities to provide that such covenants will not be tested through December 30, 2017 and the minimum collateral value to loan ratio will be 100% from December 31, 2017, 105% from June 30, 2018, 115% from December 31, 2018 and 135% from December 31, 2019.  These Supplemental Agreements also provided for certain other amendments to the 2014 Term Loan Facilities, which included reductions in the minimum liquidity requirements consistent with the $400 Million Credit Facility and restrictions on incurring indebtedness, making investments (other than through non-recourse subsidiaries) or paying dividends, similar to the $400 Million Credit Facility. Additionally, the minimum working capital required is the same as under the $400 Million Credit Facility.  Lastly, the maximum leverage requirement is equivalent to the debt to total capitalization requirement in the $400 Million Credit Facility.
 
As of June 30, 2017, the Company believed it was in compliance with all of the financial covenants under the 2014 Term Loan Facilities.
 
2015 Revolving Credit Facility
 
On April 7, 2015, the Company’s wholly-owned subsidiaries, Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited (collectively, the “Subsidiaries”) entered into a loan agreement by and among the Subsidiaries, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent, security agent, and as lender, providing for a $59,500 revolving credit facility, with an uncommitted accordion feature that has since expired (the “2015 Revolving Credit Facility”).  On April 7, 2015, the Company entered into a guarantee of the obligations of the Subsidiaries under the 2015 Revolving Credit Facility, in favor of ABN AMRO Capital USA LLC.
 
On April 7, 2016, the Company entered into a waiver agreement with the lenders under the 2015 Revolving Credit Facility to postpone the due date of the $1,641 amortization payment due April 7, 2016 to May 31, 2016.  As a condition thereof, the amount of the debt service required under the 2015 Revolving Credit Facility was $3,241 through May 30, 2016.  Refer to the “Commitment Letter” section above for additional waivers entered into by the Company which have extended the waivers of certain financial covenants through November 15, 2016.
 
During the three and six months ended June 30, 2016, the Company made total debt repayments of $1,641 and $3,282, respectively, under the 2015 Revolving Credit Facility.
 
During the three and six months ended June 30, 2016, borrowings under the 2015 Revolving Credit Facility bore interest at LIBOR plus a margin based on a combination of utilization levels under the 2015 Revolving Credit Facility and a security maintenance cover ranging from 3.40% per annum to 4.25% per annum.  The commitment under the 2015 Revolving Credit Facility was subject to quarterly reductions of $1,641. Borrowings under the 2015 Revolving Credit Facility were subject to 20 equal consecutive quarterly installment repayments commencing three months after the date of the loan agreement, or July 7, 2015.
 
On November 15, 2016, the 2015 Revolving Credit Facility was refinanced with the $400 Million Credit Facility; refer to the “Commitment Letter” and “$400 Million Credit Facility” sections above.  At June 30, 2017 and December 31, 2016, the total outstanding debt balance was $0.     
 
$148 Million Credit Facility
 
On December 31, 2014, Baltic Trading entered into a $148,000 senior secured credit facility with Nordea Bank Finland plc, New York Branch (“Nordea”), as Administrative and Security Agent, Nordea and Skandinaviska Enskilda Banken AB (Publ) (“SEB”), as Mandated Lead Arrangers, Nordea, as Bookrunner, and the lenders (including Nordea and SEB) party thereto (the “$148 Million Credit Facility”).  The $148 Million Credit Facility was comprised of an $115,000 revolving credit facility and $33,000 term loan facility.  Borrowings under the revolving credit facility were

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used to refinance Baltic Trading’s outstanding indebtedness under the 2010 Credit Facility.  Amounts borrowed under the revolving credit facility of the $148 Million Credit Facility could not be re-borrowed.  Borrowings under the term loan facility of the $148 Million Credit Facility could be incurred pursuant to two single term loans in an amount of $16,500 each that were used to finance, in part, the purchase of two newbuilding Ultramax vessels that the Company had agreed to acquire, namely the Baltic Scorpion and Baltic Mantis.  Amounts borrowed under the term loan facility of the $148 Million Credit Facility could not be re-borrowed.
 
A waiver was entered into on April 12, 2016 which extended the cure period for the collateral maintenance covenants to May 31, 2016.  Pursuant to additional agreements with the lenders under the $ 148 Million Credit Facility entered into on May 31, 2016, June 3, 2016 and June 8, 2016, the waiver was further extended through June 8, 2016.  Refer to the “Commitment Letter” section above for additional waivers entered into by the Company which have extended the waivers of certain financial covenants through November 15, 2016.
 
During the three and six months ended June 30, 2016, the Company made total debt repayments of $2,997 and $5,994, respectively, under the $148 Million Credit Facility.
 
During the three and six months ended June 30, 2016, borrowings under this facility bore interest at LIBOR plus an applicable margin of 3.00% per annum.  The commitment under the revolving credit facility of the $148 Million Credit Facility was subject to equal consecutive quarterly reductions of $2,447 each beginning June 30, 2015 through September 30, 2019.  Borrowings under the term loan facility of the $148 Million Credit Facility were subject to equal consecutive quarterly installment repayments commencing three months after delivery of the relevant newbuilding Ultramax vessel, each in the amount of 1/60 of the aggregate outstanding term loan.  All remaining amounts outstanding under the $148 Million Credit Facility were to be repaid in full on the maturity date, December 31, 2019.
 
On November 15, 2016, the $148 Million Credit Facility was refinanced with the $400 Million Credit Facility; refer to the “Commitment Letter” and “$400 Million Credit Facility” sections above.  As of June 30, 2017 and December 31, 2016, the outstanding debt under the $148 Million Credit Facility was $0.
 
$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 “$44 Million Term Loan Facility”). Amounts borrowed and repaid under the $44 Million Term Loan Facility could not be reborrowed.  Borrowings under the $44 Million Term Loan Facility bore interest at the three-month LIBOR rate plus an applicable margin of 3.35% per annum. Borrowings were 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.
 
On June 8, 2016, the Company entered into an amendment to the $44 Million Term Loan Facility which provided for cross-collateralization with the $22 Million Term Loan Facility.  Pursuant to this amendment, the security coverage ratio (collateral maintenance calculation) was revised to include the fair market value of the Genco Tiger, Baltic Lion, Baltic Fox and Baltic Hare less the outstanding indebtedness under the $22 Million Term Loan Facility as the total security effective June 30, 2016. Refer also to the “Commitment Letter” section above for additional waivers entered into by the Company which have extended the waivers of certain financial covenants through November 15, 2016.
 
During the three and six months ended June 30, 2016, the Company made total debt repayments of $687 and $1,375, respectively, under the $44 Million Term Loan Facility. 
 
On November 15, 2016, the $44 Million Term Loan Facility was refinanced with the $400 Million Credit Facility; refer to the “Commitment Letter” and “$400 Million Credit Facility” sections above.  At June 30, 2017 and December 31, 2016, the total outstanding net debt balance was $0. 

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$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 “$22 Million Term Loan Facility”).  Amounts borrowed and repaid under the $22 Million Term Loan Facility were not to be reborrowed.  Borrowings under the $22 Million Term Loan Facility bore interest at the three-month LIBOR rate plus an applicable margin of 3.35% per annum. Borrowings were 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.
 
On June 8, 2016, the Company entered into an amendment to the $22 Million Term Loan Facility which provided for cross-collateralization with the $44 Million Term Loan Facility.  Pursuant to this amendment, the security coverage ratio (collateral maintenance calculation) was revised to include the fair market value of the Baltic Fox, Baltic Hare, Genco Tiger and Baltic Lion less the outstanding indebtedness under the $44 Million Term Loan Facility as the total security effective June 30, 2016.  Additionally, this amendment increased the collateral maintenance requirement to 125% from 110% commencing July 1, 2016.  Refer also to the “Commitment Letter” section above for additional waivers entered into by the Company which have extended the waivers of certain financial covenants through November 15, 2016.
 
During the three and six months ended June 30, 2016, the Company made total debt repayments of $375 and $750, respectively, under the $22 Million Term Loan Facility. 
 
On November 15, 2016, the $22 Million Term Loan Facility was refinanced with the $400 Million Credit Facility; refer to the “Commitment Letter” and “$400 Million Credit Facility” sections above.  At June 30, 2017 and December 31, 2016, the total outstanding net debt balance was $0.
 
$253 Million Term Loan Facility
 
On August 20, 2010, the Company entered into the $253 Million Term Loan Facility. The Company utilized the $253 Million Term Loan Facility to fund a portion of the purchase price of the acquisition of 13 vessels from affiliates of Bourbon SA. Borrowings were to be repaid quarterly with outstanding principal amortized on a per vessel basis and any outstanding amount under the $253 Million Term Loan Facility was to be paid in full on the maturity date.  Repaid amounts were no longer available and could not be reborrowed.  During the three and six months ended June 30, 2016, borrowings under the $253 Million Term Loan Facility bore interest at LIBOR plus an applicable margin of 3.50% per annum. 
 
A waiver was entered into on March 11, 2016 which required the Company to prepay the $5,075 debt amortization payment due on April 11, 2016 and which waived the collateral maintenance covenant through April 11, 2016. On April 11, 2016, the Company entered into additional agreements with the lenders under the $253 Million Term Loan Facility which extended the waiver through May 31, 2016. Pursuant to additional agreements with the lenders under the $253 Million Term Loan Facility entered into on May 31, 2016, June 3, 2016 and June 8, 2016, the waiver was further extended through June 10, 2016.  Refer to the “Commitment Letter” section above for additional waivers entered into by the Company which have extended the waivers of certain financial covenants through November 15, 2016.
 
During the three and six months ended June 30, 2016, the Company made total debt repayments of $0 and $10,150, respectively, under the $253 Million Term Loan Facility.
 
On November 15, 2016, the $253 Million Term Loan Facility was refinanced with the $400 Million Credit Facility; refer to the “Commitment Letter” and “$400 Million Credit Facility” sections above.  At June 30, 2017 and December 31, 2016, the total outstanding net debt balance was $0.

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$100 Million Term Loan Facility
 
On August 12, 2010, the Company entered into the $100 Million Term Loan Facility. The Company 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. Borrowings were to be repaid quarterly, with the outstanding principal amortized on a 13-year profile, with any outstanding amount under the $100 Million Term Loan Facility to be paid in full on the final maturity date.  Repaid amounts were no longer available and could not be reborrowed.  During the three and six months ended June 30, 2016, borrowings under the $100 Million Term Loan Facility bore interest at LIBOR plus an applicable margin of 3.50% per annum.
 
A waiver was entered into on March 29, 2016 which required the Company to prepay the $1,923 debt amortization payment due on June 30, 2016 and which waived the collateral maintenance covenant through April 11, 2016. On April 11, 2016, the Company entered into additional agreements with the lenders under the $100 Million Term Loan Facility which extended the waiver through May 31, 2016.  Pursuant to additional agreements with the lenders under the $100 Million Term Loan Facility entered into on May 31, 2016, June 3, 2016 and June 8, 2016, the waiver was further extended through June 10, 2016.  Refer to the “Commitment Letter” section above for additional waivers entered into by the Company which have extended the waivers of certain financial covenants through November 15, 2016.
 
During the three and six months ended June 30, 2016, the Company made total debt repayments of $1,923 and $3,846, respectively, under the $100 Million Term Loan Facility.
 
On November 15, 2016, the $100 Million Term Loan Facility was refinanced with the $400 Million Credit Facility; refer to the “Commitment Letter” and “$400 Million Credit Facility” sections above.  At June 30, 2017 and December 31, 2016, the total outstanding net debt balance was $0.
 
Interest rates
 
The following table sets forth the effective interest rate associated with the interest expense for the Company’s debt facilities noted above, including the cost associated with unused commitment fees, if applicable. The following table also includes the range of interest rates on the debt, excluding the impact of unused commitment fees, if applicable:

 	 	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	    	2017	 	 	2016	 	2017	 	  	2016	 	
Effective Interest Rate 	 	5.27	%  	 	4.37	%  	5.14	%  	  	4.36	%  	
Range of Interest Rates (excluding unused commitment fees) 	 	3.50 % to 7.42	%  	 	3.11 % to 6.76	%  	3.36 % to 7.42	%  	  	2.69 % to 6.76	%  	

9 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 
The components of AOCI included in the accompanying Condensed Consolidated Statements of Equity consist of net unrealized gains (losses) from investments in Jinhui stock and KLC stock.  The Company sold its remaining shares of Jinhui and KLC stock during the three months ended December 31, 2016.  Therefore, there was no AOCI activity recorded during the three and six months ended June 30, 2017, and the opening AOCI balance at January 1, 2017 was $0.  Refer to Note 5 — Investments for further information.

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Changes in AOCI by Component
For the Three Months Ended June 30, 2016

 	    	Net Unrealized	 	
 	 	Gain (Loss)	 	
 	 	on	 	
 	 	Investments	 	
AOCI — April 1, 2016	 	$	838	 	
 	 	 	 	 	
OCI before reclassifications	 	 	(3,560)	 	
Amounts reclassified from AOCI	 	 	2,696	 	
Net current-period OCI	 	 	(864)	 	
 	 	 	 	 	
AOCI — June 30, 2016	 	$	(26)	 	

 

 

 

 

 
 
Changes in AOCI by Component
For the Six Months Ended June 30, 2016

 

 

 

 	    	Net Unrealized	 	
 	 	Gain (Loss)	 	
 	 	on	 	
 	 	Investments	 	
AOCI — January 1, 2016	 	$	(21)	 	
 	 	 	 	 	
OCI before reclassifications	 	 	(2,701)	 	
Amounts reclassified from AOCI	 	 	2,696	 	
Net current-period OCI	 	 	(5)	 	
 	 	 	 	 	
AOCI — June 30, 2016	 	$	(26)	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	Reclassifications Out of AOCI	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	For the Three Months Ended	 	For the Six Months Ended	 	Affected Line Item in	 	
 	 	June 30, 	 	June 30, 	 	the Statement Where	 	
Details about AOCI Components	 	2017	    	2016	    	2017	    	2016	 	Net Loss is Presented	 	
Net unrealized loss on investments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
    Impairment of AFS investment	 	 	 —	 	 	(2,696)	 	 	 —	 	 	(2,696)	 	Impairment of investment	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total reclassifications for the period	 	$	 —	 	$	(2,696)	 	$	 —	 	$	(2,696)	 	 	 	

 

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10 - FAIR VALUE OF FINANCIAL INSTRUMENTS
 
The fair values and carrying values of the Company’s financial instruments at June 30, 2017 and December 31, 2016 which are required to be disclosed at fair value, but not recorded at fair value, are noted below.

 	 	June 30, 2017	 	December 31, 2016	 	
 	    	Carrying	    	 	 	    	Carrying	    	 	 	 	
 	    	Value	    	Fair Value	    	Value	    	Fair Value	 	
Cash and cash equivalents	 	$	147,153	 	$	147,153	 	$	133,400	 	$	133,400	 	
Restricted cash	 	 	33,842	 	 	33,842	 	 	35,668	 	 	35,668	 	
Floating rate debt	 	 	525,824	 	 	525,824	 	 	524,377	 	 	524,377	 	
 
The fair value of the floating rate debt under the $400 Million Credit Facility is based on rates obtained on the effective date of the facility, November 10, 2016.  The fair value of the floating rate debt under the $98 Million Credit Facility is based on rates the Company obtained upon the effective date of this facility on November 4, 2015, which did not change under the Restated $98 Million Credit Facility effective on November 15, 2016. The fair value of the 2014 Term Loan Facilities is based on rates that Baltic Trading initially obtained upon the effective dates of these facilities which did not change pursuant to the Amended 2014 Term Loan Facilities effective on November 15, 2016.  Refer to Note 8 — Debt for further information.  The carrying value approximates the fair market value for these floating rate loans.  The carrying amounts of the Company’s other financial instruments at June 30, 2017 and December 31, 2016 (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 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.	
 
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 transactions amongst third parties. Nonrecurring fair value measurements include a vessel impairment assessment completed at June 30, 2017 and during the interim period during the year ended December 31, 2016 as determined based on third-party scrap quotes, which are Level 2 inputs.  As of June 30, 2017, the vessel asset for the Genco Surprise was written down as part of the impairment recorded during the three and six months ended June 30, 2017. The vessels held for sale as of December 31, 2016 were written down as part of the impairment recorded in the interim period during the year ended December 31, 2016.  There were no additional adjustments required as of December 31, 2016 when the held for sale criteria was met.  Refer to “Impairment of vessel assets” and “Vessels held for sale” sections in Note 2 — Summary of Significant Accounting Policies.  The Company did not have any Level 3 financial assets or liabilities as of June 30, 2017 and December 31, 2016.

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11 - PREPAID EXPENSES AND OTHER CURRENT AND NONCURRENT ASSETS
 
Prepaid expenses and other current assets consist of the following:

 	    	June 30, 	    	December 31, 	 	
 	    	2017	    	2016	 	
Lubricant inventory, fuel oil and diesel oil inventory and other stores	 	$	9,320	 	$	9,634	 	
Prepaid items	 	 	2,809	 	 	2,552	 	
Insurance receivable	 	 	6,172	 	 	1,030	 	
Other	 	 	4,132	 	 	2,534	 	
Total prepaid expenses and other current assets	 	$	22,433	 	$	15,750	 	
 
Other noncurrent assets in the amount of $514 at June 30, 2017 and December 31, 2016 represents the security deposit related to the operating lease entered into effective April 4, 2011. Refer to Note 16 — Commitments and Contingencies for further information related to the lease agreement.
 
12 - FIXED ASSETS
 
Fixed assets, net consists of the following:

 	    	June 30, 	    	December 31, 	 	
 	    	2017	    	2016	 	
Fixed assets, at cost:	 	 	 	 	 	 	 	
Vessel equipment	 	$	1,225	 	$	1,173	 	
Furniture and fixtures	 	 	462	 	 	462	 	
Computer equipment	 	 	142	 	 	142	 	
Total costs	 	 	1,829	 	 	1,777	 	
Less: accumulated depreciation and amortization	 	 	(878)	 	 	(759)	 	
Total fixed assets, net	 	$	951	 	$	1,018	 	
 
Depreciation and amortization expense for fixed assets for the three months ended June 30, 2017 and 2016 was $68 and $96, respectively.  Depreciation and amortization expense for fixed assets for the six months ended June 30, 2017 and 2016 was $136 and $192, respectively.
 
13 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 
Accounts payable and accrued expenses consist of the following:

 	    	June 30, 	    	December 31, 	 	
 	    	2017	    	2016	 	
Accounts payable	 	$	7,378	 	$	6,703	 	
Accrued general and administrative expenses	 	 	588	 	 	5,618	 	
Accrued vessel operating expenses	 	 	12,389	 	 	10,564	 	
Total accounts payable and accrued expenses	 	$	20,355	 	$	22,885	 	

14 - REVENUE FROM TIME CHARTERS
 
Total voyage revenue includes revenue earned on time charters, including revenue earned in vessel pools, spot market voyage charters 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, 2017 and 2016, the Company earned $45,370 and $31,460 of voyage revenue, respectively, and for the six months ended June 30, 2017 and 2016, the Company earned $83,619 and $51,590 of voyage revenue, respectively. Included in voyage revenue for the three months ended June 30, 2017 and 2016 was

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$942 and $602 of net profit sharing revenue, respectively.  Included in voyage revenue for the six months ended June 30, 2017 and 2016 was $2,324 and $606 of net profit sharing revenue, respectively. 
 
15 - REORGANIZATION ITEMS, NET
 
On April 21, 2014 (the “Petition Date”), GS&T and its subsidiaries, other than Baltic Trading 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 Company subsequently emerged from bankruptcy on July 9, 2014, the Effective Date.  Refer to the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2016 for further detail regarding the bankruptcy filing.
 
Reorganization items, net represents 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 Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	    	2017	    	2016	    	2017	    	2016	 	
Professional fees incurred	 	$	 —	 	$	52	 	$	 —	 	$	122	 	
Trustee fees incurred	 	 	 —	 	 	13	 	 	 —	 	 	38	 	
Total reorganization fees	 	$	 —	 	$	65	 	$	 —	 	$	160	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total reorganization items, net	 	$	 —	 	$	65	 	$	 —	 	$	160	 	

16 - COMMITMENTS AND CONTINGENCIES
 
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 were $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 from the Effective Date to September 30, 2025 is $150.  The Company had a long-term lease obligation at June 30, 2017 and December 31, 2016 of $2,228 and $1,868, respectively.  Rent expense pertaining to this lease for the three months ended June 30, 2017 and 2016 was $452 during both periods and $904 during the six months ended June 30, 2017 and 2016.  
 
Future minimum rental payments on the above lease for the next five years and thereafter are as follows: $538 for the remainder of 2017, $916 for 2018, $2,230 annually for 2019, 2020 and 2021, and a total of $8,900 for the remaining term of the lease.
 
During the beginning of 2009, the Genco Cavalier, a 2007-built Supramax vessel, was on charter to Samsun when Samsun filed for the equivalent of bankruptcy protection in South Korea, otherwise referred to as a rehabilitation application.  On July 3, 2015, Samsun filed for rehabilitation proceedings for the second time with the South Korean courts due to financial distress.  On April 8, 2016, the revised rehabilitation plan was approved by the South Korean court whereby 26% of the remainder of the $3,979 unpaid cash claim settlement from the prior rehabilitation plan, or $1,035, will be settled pursuant to a payment plan over the next ten-year period.  The remaining 74% of the claim will be converted to Samsun Shares.  Refer to Note 2 — Summary of Significant Accounting Policies for Other Operating

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Income recorded during the three and six months ended June 30, 2016.  The final claim with Samsun was settled during the fourth quarter of 2016.
 
17 - STOCK-BASED COMPENSATION
 
On July 7, 2016, the Company completed a one-for-ten reverse stock split of its common stock.  As a result, all share and per share information included for all periods presented in these condensed consolidated financial statements reflect the reverse stock split. 
 
On October 13, 2016, Peter C. Georgiopoulos resigned as Chairman of the Board and a director of the Company.  In connection with his departure, Mr. Georgiopoulos entered into a Separation Agreement and a Release Agreement with the Company on October 13, 2016.  Under the terms of these agreements, subject to customary conditions, Mr. Georgiopoulos received an amount equal to the annual Chairman’s fee awarded to him in recent years of $500 as a severance payment and full vesting of his unvested equity awards, which consisted of grants of 68,581 restricted shares of the Company’s common stock and warrants exercisable for approximately 213,937 shares of the Company’s common stock with an exercise price per share ranging $259.10 to $341.90. The acceleration of the vesting of Mr. Georgiopoulos’ restricted shares and warrants resulted in $5,317 of nonvested stock amortization expense during the three months ended December 31, 2016.
 
2014 Management Incentive Plan
 
On the Effective Date, pursuant to the Chapter 11 Plan, the Company adopted the Genco Shipping & Trading Limited 2014 Management Incentive Plan (the “MIP”). An aggregate of 9,668,061 shares of Common Stock were available for award under the MIP prior to the Company’s reverse stock split, which is equivalent to approximately 966,806 shares on a post-split basis.  Awards under the MIP took the form of restricted stock grants and three tiers of MIP Warrants with staggered strike prices based on increasing equity values.  The number of shares of common stock available under the Plan represented approximately 1.8% of the shares of post-emergence Common Stock outstanding as of the Effective Date on a fully-diluted basis. Awards under the MIP were available to eligible employees, non-employee directors and/or officers of the Company and its subsidiaries (collectively, “Eligible Individuals”). Under the MIP, a committee appointed by the Board from time to time (or, in the absence of such a committee, the Board) (in either case, the “Plan Committee”) may grant a variety of stock-based incentive awards, as the Plan Committee deems appropriate, to Eligible Individuals. The MIP Warrants are exercisable on a cashless basis and contain customary anti-dilution protection 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. 
 
On August 7, 2014, pursuant to the MIP, certain individuals were granted MIP Warrants whereby each warrant can be converted on a cashless basis for the amount in excess of the respective strike price. The MIP Warrants were issued in three tranches for 2,380,664,  2,467,009 and 3,709,788 shares.  Following the Company’s reverse stock split, these MIP warrants are exercisable for approximately 238,066,  246,701, and 370,979 shares and have exercise prices of $259.10 (the “$259.10 Warrants”), $287.30 (the “$287.30 Warrants”) and $341.90 (the “$341.90 Warrants”) per whole share, respectively. The fair value of each warrant upon emergence from bankruptcy was $7.22 for the $259.10 Warrants, $6.63 for the $287.30 Warrants and $5.63 for the $341.90 Warrants. The warrant values were based upon a calculation using the Black-Scholes-Merton option pricing formula. This model uses inputs such as the underlying price of the shares issued when the warrant is exercised, volatility, cost of capital interest rate and expected life of the instrument. The Company has determined that the warrants should be classified within Level 3 of the fair value hierarchy by evaluating each input for the Black-Scholes-Merton option pricing formula against the fair value hierarchy criteria and using the lowest level of input as the basis for the fair value classification. The Black-Scholes-Merton option pricing formula used a volatility of 43.91% (representing the six-year volatility of a peer group), a risk-free interest rate of 1.85% and a dividend rate of 0%.  The aggregate fair value of these awards upon emergence from bankruptcy was $54,436. The warrants vest 33.33% on each of the first three anniversaries of the grant date, with accelerated vesting upon a change in control of the Company.

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For the three and six months ended June 30, 2017 and 2016, the Company recognized amortization expense of the fair value of these warrants, which is included in General and administrative expenses, as follows:

 	 	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	    	2017	    	2016	    	2017	    	2016	 	
General and administrative expenses	 	$	377	 	$	3,765	 	$	749	 	$	7,531	 	
 
Amortization of the unamortized stock-based compensation balance of $153 as of June 30, 2017 is expected to be expensed during the remainder of 2017.  The following table summarizes the unvested warrant activity for the six months ended June 30, 2017:

 	 	 	 	Weighted	 	Weighted	 	
 	 	Number of	 	Average Exercise	 	Average Fair	 	
 	    	Warrants	    	Price	 	Value	 	
Outstanding at January 1, 2017 - Unvested	 	713,122	 	$	303.12	 	$	6.36	 	
Granted	 	 —	 	 	 —	 	 	 —	 	
Exercisable	 	 —	 	 	 —	 	 	 —	 	
Exercised	 	 —	 	 	 —	 	 	 —	 	
Forfeited	 	 —	 	 	 —	 	 	 —	 	
 	 	 	 	 	 	 	 	 	 	
Outstanding at June 30, 2017 - Unvested	 	713,122	 	$	303.12	 	$	6.36	 	
 
The following table summarizes certain information about the warrants outstanding as of June 30, 2017:

 	 	 	Warrants Outstanding and Unvested,	 	Warrants Outstanding and Exercisable,	 	
 	 	 	June 30, 2017	 	June 30, 2017	 	
Weighted	 	 	 	 	 	Weighted	 	 	 	 	 	Weighted	 	
Average	 	 	 	Weighted	 	Average	 	 	 	Weighted	 	Average	 	
Exercise Price of	 	 	 	Average	 	Remaining	 	 	 	Average	 	Remaining	 	
Outstanding	 	Number of	 	Exercise	 	Contractual	 	Number of	 	Exercise	 	Contractual	 	
Warrants	    	Warrants	    	Price	    	Life	    	Warrants	    	Price	    	Life	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
$	303.12	 	713,122	 	$	303.12	 	3.11	 	7,844,339	 	$	303.12	 	3.11	 	
 
As of June 30, 2017 and December 31, 2016, a total of 8,557,461 of warrants were outstanding. 
The nonvested stock awards granted under the MIP will vest ratably on each of the three anniversaries of August 7, 2014. The table below summarizes the Company’s nonvested stock awards for the six months ended June 30, 2017 which were issued under the MIP:

 	 	 	 	Weighted	 	
 	 	Number of	 	Average Grant	 	
 	    	Shares	    	Date Price	 	
Outstanding at January 1, 2017	 	9,255	 	$	
200.00	 	
Granted	 	 —	 	 	 —	 	
Vested	 	 —	 	 	 —	 	
Forfeited	 	 —	 	 	 —	 	
 	 	 	 	 	 	 	
Outstanding at June 30, 2017	 	9,255	 	$	200.00	 	

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There were no shares that vested under the MIP during the six months ended June 30, 2017 and 2016. 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, 2017 and 2016, the Company recognized nonvested stock amortization expense for the MIP restricted shares, which is included in General and administrative expenses, as follows:

 	 	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	 	2017	 	2016	    	2017	    	2016	 	
General and administrative expenses	 	$	154	 	$	1,537	 	$	306	 	$	3,073	 	
 
The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures.  As of June 30, 2017, unrecognized compensation cost of $62 related to nonvested stock will be recognized over a weighted-average period of 0.10 years.
 
2015 Equity Incentive Plan
 
On June 26, 2015, the Company’s Board of Directors approved the 2015 Equity Incentive Plan for awards with respect to an aggregate of 4,000,000 shares of common stock, or 400,000 shares following the Company’s reverse stock split (the “2015 Plan”).  Under the 2015 Plan, the Company’s Board of Directors, the compensation committee, or another designated committee of the Board of Directors may grant a variety of stock-based incentive awards to the Company’s officers, directors, employees, and consultants.  Awards may consist of stock options, stock appreciation rights, dividend equivalent rights, restricted (nonvested) stock, restricted stock units, and unrestricted stock.  As of June 30, 2017, the Company has awarded restricted stock units, restricted stock and stock options under the 2015 Plan.
 
On March 23, 2017, the Board of Directors approved an amendment and restatement of the 2015 Plan.  This amendment and restatement increases the number of shares available for awards under the plan from 400,000 to 2,750,000, subject to shareholder approval; sets the annual limit for awards to non-employee directors and other individuals as 500,000 and 1,000,000 shares, respectively; and modifies the change in control definition.  The Company’s shareholder’s approved the increase in the number of shares at the Company’s 2017 Annual Meeting of Shareholders on May 17, 2017.
Stock Options
 
On March 23, 2017, the Company issued options to purchase 133,000 of the Company’s shares of common stock to John C. Wobensmith, Chief Executive Officer and President, with an exercise price of $11.13 per share.  One-third of the options become exercisable on each of the first three anniversaries of October 15, 2016, with accelerated vesting upon a change in control of the Company, and all unexercised options expire on the sixth anniversary of the grant date.  The fair value of each option was estimated on the date of the grant using the Black-Scholes-Merton pricing formula, resulting in a value of $6.41 per share, or $853 in the aggregate.  The assumptions used in the Black-Scholes-Merton option pricing formula are as follows: volatility of 79.80% (representing a blend of the Company’s historical volatility and a peer-based volatility estimate), a risk-free interest rate of 1.68%, a dividend yield of 0%, and expected life of 3.78 years (determined using the simplified method as outlined in Staff Accounting Bulletin 14 – Share-Based Payment (“SAB Topic 14”) due to lack of historical exercise data). 
 
For the three and six months ended June 30, 2017 and 2016, the Company recognized amortization expense of the fair value of these options, which is included in General and administrative expenses, as follows:

 	 	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	 	2017	 	2016	 	2017	    	2016	 	
General and administrative expenses	 	$	198	 	$	 —	 	$	218	 	$	 —	 	

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Amortization of the unamortized stock-based compensation balance of $635 as of June 30, 2017 is expected to be expensed $294,  $254 and $87 during the remainder of 2017 and during the years ended December 31, 2018 and 2019, respectively.  The following table summarizes the unvested option activity for the six months ended June 30, 2017:

 	 	 	 	Weighted	 	Weighted	 	
 	 	Number of	 	Average Exercise	 	Average Fair	 	
 	    	Options	    	Price	 	Value	 	
Outstanding at January 1, 2017 - Unvested	 	 —	 	$	 —	 	$	 —	 	
Granted	 	133,000	 	 	11.13	 	 	6.41	 	
Exercisable	 	 —	 	 	 —	 	 	 —	 	
Exercised	 	 —	 	 	 —	 	 	 —	 	
Forfeited	 	 —	 	 	 —	 	 	 —	 	
 	 	 	 	 	 	 	 	 	 	
Outstanding at June 30, 2017 - Unvested	 	133,000	 	$	11.13	 	$	6.41	 	
 
The following table summarizes certain information about the options outstanding as of June 30, 2017:

 	 	 	Options Outstanding and Unvested,	 	Options Outstanding and Exercisable,	 	
 	 	 	June 30, 2017	 	June 30, 2017	 	
Weighted	 	 	 	 	 	 	Weighted	 	 	 	 	 	 	Weighted	 	
Average	 	 	 	Weighted	 	Average	 	 	 	Weighted	 	Average	 	
Exercise Price of	 	 	 	Average	 	Remaining	 	 	 	Average	 	Remaining	 	
Outstanding	 	Number of	 	Exercise	 	Contractual	 	Number of	 	Exercise	 	Contractual	 	
Options	    	Options	    	Price	    	Life	    	Warrants	    	Price	    	Life	 	
$	11.13	 	133,000	 	$	11.13	 	5.73	 	 —	 	$	 —	 	 —	 	
 
As of June 30, 2017, there were no vested stock options.
 
Restricted Stock Units
 
The Company has issued restricted stock units (“RSUs”) under the 2015 Plan to certain members of the Board of Directors and John C. Wobensmith, Chief Executive Officer and President, which represent the right to receive a share of common stock, or in the sole discretion of the Company’s Compensation Committee, the value of a share of common stock on the date that the RSU vests.  As of June 30, 2017 and December 31, 2016, 21,372 and 3,138 shares of the Company’s common stock were outstanding in respect of the RSUs, respectively.  Such shares of common stock will only be issued in respect of vested RSUs issued to directors when the director’s service with the Company as a director terminates.  Such shares of common stock will only be issued to Mr. Wobensmith when his RSUs vest under the terms of his contract and the amended 2015 Plan described above.  On May 17, 2017, 18,234 shares of common stock were issued to Eugene Davis, the former Chairman of the Audit Committee, in respect of vested RSUs following his departure from the Board.
 
The RSUs that have been issued to certain members of the Board of Directors generally vest on the date of the annual shareholders meeting of the Company following the date of the grant.  The RSUs that have been issued to John C.

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Wobensmith vest ratably on each of the three anniversaries of October 15, 2016.  The table below summarizes the Company’s unvested RSUs for the six months ended June 30, 2017:

 	 	 	 	Weighted	 	
 	 	Number of	 	Average Grant	 	
 	    	RSUs	 	Date Price	 	
Outstanding at January 1, 2017	 	66,666	 	$	5.10	 	
Granted	 	317,595	 	 	11.05	 	
Vested	 	(66,666)	 	 	5.10	 	
Forfeited	 	 —	 	 	 —	 	
 	 	 	 	 	 	 	
Outstanding at June 30, 2017	 	317,595	 	$	11.05	 	
 
The total fair value of the RSUs that vested during the six months ended June 30, 2017 and 2016 was $675 and $30, 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.    On February 17, 2016, the vesting of 23,286 outstanding RSUs, or 2,328 outstanding RSUs on a post-reverse stock split basis, was accelerated upon the resignation of two members on the Company’s Board of Directors. 
 
The following table summarizes certain information of the RSUs unvested and vested as of June 30, 2017:

Unvested RSUs	 	Vested RSUs	 	
June 30, 2017	 	June 30, 2017	 	
 	 	 	 	Weighted	 	 	 	 	 	
 	 	Weighted	 	Average	 	 	 	Weighted	 	
 	 	Average	 	Remaining	 	 	 	Average	 	
Number of	 	Grant Date	 	Contractual	 	Number of	 	Grant Date	 	
RSUs	    	Price	    	Life	    	RSUs	    	Price	 	
317,595	 	$	11.05	 	2.18	 	74,106	 	$	11.73	 	
 
The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures.  As of June 30, 2017, unrecognized compensation cost of $2,645 related to RSUs will be recognized over a weighted-average period of 2.18 years.
 
For the three and six months ended June 30, 2017 and 2016, the Company recognized nonvested stock amortization expense for the RSUs, which is included in General and administrative expenses as follows:

 	    	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	 	2017	 	2016	    	2017	    	2016	 	
General and administrative expenses	 	$	833	 	$	79	 	$	992	 	$	234	 	
 
Restricted Stock
 
Under the 2015 Plan, grants of restricted common stock issued to executives and Peter C. Georgiopoulos, the Company’s former Chairman of the Board, ordinarily vest ratably on each of the three anniversaries of the determined

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vesting date.  The table below summarizes the Company’s nonvested stock awards for the six months ended June 30, 2017 which were issued under the 2015 Plan:

 	 	 	 	Weighted	 	
 	 	Number of	 	Average Grant	 	
 	    	Shares	    	Date Price	 	
Outstanding at January 1, 2017	 	13,605	 	$	5.20	 	
Granted 	 	 —	 	 	 —	 	
Vested 	 	 —	 	 	 —	 	
Forfeited 	 	 —	 	 	 —	 	
 	 	 	 	 	 	 	
Outstanding at June 30, 2017	 	13,605	 	$	5.20	 	
 
There were no shares that vested under the 2015 Plan during the six months ended June 30, 2017 and 2016.  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, 2017 and 2016, the Company recognized nonvested stock amortization expense for the 2015 Plan restricted shares, which is included in General and administrative expenses, as follows:

 	 	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	    	2017	 	2016	 	2017	 	2016	 	
General and administrative expenses	 	$	
8	 	$	
60	 	$	16	 	$	90	 	
 
The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures.  As of June 30, 2017, unrecognized compensation cost of $25 related to nonvested stock will be recognized over a weighted-average period of 1.38 years.
18 - LEGAL PROCEEDINGS
In April 2015, six class action complaints were filed in the Supreme Court of the State of New York, County of New York.  On May 26, 2015, the six actions were consolidated under the caption In Re Baltic Trading Ltd. Stockholder Litigation, Index No. 651241/2015, and a consolidated class action complaint was filed on June 10, 2015 (the “Consolidated Complaint”).  The Consolidated Complaint is purported to be brought by and on behalf of Baltic Trading’s shareholders and alleges that the then-proposed July 2015 merger did not fairly compensate Baltic Trading’s shareholders and undervalued Baltic Trading.  The Consolidated Complaint names as defendants the Company, Baltic Trading, the individual members of Baltic Trading’s board, and the Company’s merger subsidiary. The claims generally allege (i) breaches of fiduciary duties of good faith, due care, disclosure to shareholders, and loyalty, including for failing to maximize shareholder value, and (ii) aiding and abetting those breaches. Among other relief, the complaints seek an injunction against the merger, declaratory judgments that the individual defendants breached fiduciary duties, rescission of the merger agreement, and unspecified damages.
On July 9, 2015, plaintiffs in that action moved to enjoin the merger vote, scheduled to take place on July 17, 2015.  The motion was thereafter fully briefed and argued on July 15, 2015.  The motion to enjoin the vote was denied on July 15, 2015 (the “Preliminary Injunction Denial”).  Plaintiffs sought an emergency injunction and temporary restraining order from the New York State Appellate Division, First Department the following day, on July 16, 2015.  The Appellate Division denied the request, and the vote, and subsequent merger, proceeded as scheduled on July 17, 2015.  Plaintiffs thereafter withdrew that appeal.
On June 30, 2015, Defendants had moved to dismiss the Consolidated Complaint in its entirety.  Plaintiffs subsequently served an Amended Consolidated Complaint, and Defendants directed their motion to dismiss to that amended complaint.  The motion to dismiss was granted and the Amended Consolidated Complaint was dismissed with prejudice on August 29, 2016 (the “Dismissal Decision”).

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On September 29, 2016, plaintiffs filed a Notice of Appeal with the Supreme Court of the State of New York, County of New York, which recites their appeal of the Dismissal Decision, “including ... and as referenced in” the Dismissal Decision, the Preliminary Injunction Denial.
On June 28, 2017, plaintiffs moved the Appellate Division to extend the time to perfect the appeal to October 2, 2017.
Based on currently available information, the Company cannot reasonably estimate the loss, if any, in the event of an unfavorable outcome in any of these matters. However, the Company does not believe that it is probable that the resolution of these matters will have a material effect on the Company, its financial condition, results of operations or cash flows.
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.
 
19 – SUBSEQUENT EVENTS
On August 4, 2017, the Board of Directors determined to dispose of the Company’s vessels built in 1999, namely the Genco Beauty, the Genco Explorer, the Genco Knight, the Genco Progress and the Genco Vigour, at times and on terms to be determined in the future.  Given this decision,  and that the estimated future undiscounted cash flows for each of these older vessels did not exceed the net book value for each vessel, we have adjusted the values of these older vessels to their respective fair market values during the third quarter of 2017.  This is expected to result in an impairment loss of approximately $19,000 in the third quarter of 2017. 
The Company has evaluated all subsequent events through the date these condensed consolidated financial statements were issued and determined that there are no additional subsequent events to record or disclose.

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ITEM 2 .        MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS  OF OPERATIONS
 
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
This report contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance.  These forward-looking statements are based on management’s current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) further declines or sustained weakness in demand in the drybulk shipping industry; (ii) continuation of weakness or further declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube, oil, bunkers, repairs, maintenance and general and administrative expenses, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results continue to be affected by weakness in market conditions and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; and other factors listed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2016 and subsequent reports on Form 8-K and Form 10-Q.
 
The following management’s discussion and analysis should be read in conjunction with our historical consolidated financial statements and the related notes included in this Form 10-Q.
 
General
 
We are a Marshall Islands company that transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes through the ownership and operation of drybulk carrier vessels.  Our fleet currently consists of 60 drybulk vessels, including 13 Capesize, six Panamax, four Ultramax, 21 Supramax, one Handymax and 15 Handysize drybulk carriers, with an aggregate carrying capacity of approximately 4,688,000 dwt, and the average age of our fleet is currently approximately 9.4 years.  We seek to deploy our vessels on time charters, spot market-related time charters, spot market voyage charters or in vessel pools trading in the spot market, to reputable charterers, including Cargill International S.A., Swissmarine Services S.A. and the Clipper Logger Pool and Clipper Sapphire Pool, in which Clipper Group acts as the pool manager.  During the first quarter of 2017, we gave notice to withdraw our Supramax vessels from the Clipper Sapphire Pool.  We also gave notice to withdraw our Handysize vessels from the Clipper Logger Pool during May 2017. Lastly, during August 2017, we gave notice to withdraw our Supramax vessels from the Bulkhandling Handymax A/S pool with Klaveness.  The majority of the vessels in our current fleet are presently engaged under time charter, spot market-related time charter, spot market voyage charters and vessel pool contracts that expire (assuming the option periods in the time charters are not exercised) between August 2017 and July 2018.
 
See pages 50-54 for a table of all vessels in our fleet.

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The Genco Tiger and Baltic Lion were offhire for a total of approximately 84 days and 34 days, respectively, during the six months ended June 30, 2017 to complete repairs to their main engines.  The Genco Tiger’s main engine experienced a breakdown associated with the vessel’s lube filtration system during the first quarter of 2017 and underwent repairs to rectify the issue.  The Baltic Lion, which is a sister vessel to the Genco Tiger, also underwent main engine repairs associated with the lube filtration system.  We received approval from the insurance underwriters during June 2017 for payment on account under our loss of hire insurance in the amount of $1.4 million and $0.3 million for the Genco Tiger and Baltic Lion, respectively, which has been recorded as voyage revenue during the second quarter of 2017.  Our loss of hire insurance covers the revenue days lost for the two vessels at a rate of twenty thousand dollars per day up to 90 days after a deductible of fourteen days.  The Genco Tiger is expected to have additional offhire time during the third quarter of 2017 of approximately 30 days.  Approximately 10 days of this offhire will exceed the 90 day loss of hire and fourteen day deductible period and will not be covered by insurance.
 
On June 8, 2016, we entered into a Commitment Letter for a senior secured loan facility (the “$400 Million Credit Facility”) for an aggregate principal amount of up to $400 million, which was subject to completion of an equity financing of at least $125 million.  We entered into subsequent amendments to the Commitment Letters which extended existing waivers through November 15, 2016 and the $400 Million Credit Facility was finalized on November 10, 2016.  The $400 Million Credit Facility was utilized to refinance the outstanding debt under the $100 Million Term Loan Facility, $253 Million Term Loan Facility, $148 Million Credit Facility, $22 Million Term Loan Facility, $44 Million Term Loan Facility and 2015 Revolving Credit Facility, each as defined in Note 8 — Debt of the Condensed Consolidated Financial Statements (collectively, the “Prior Facilities”).  Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for further information about the $400 Million Credit Facility.
 
As a condition to the effectiveness of the amended Commitment Letter, we entered into stock purchase agreements (the “Purchase Agreements”) effective as of October 4, 2016 with funds or related entities managed by Centerbridge Partners, L.P. or its affiliates (“Centerbridge”), Strategic Value Partners, LLC (“SVP”) and Apollo Global Management, LLC (“Apollo” and, together with Centerbridge and SVP, the “Investors”) for the purchase of our Series A Convertible Preferred Stock for an aggregate of up to $125 million in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended.  The purchase price of the Series A Preferred Stock under each of the Purchase Agreements was $4.85 per share.  An additional 1,288,660 shares of Series A Preferred Stock were issued to Centerbridge, SVP and Apollo as a commitment fee on a pro rata basis.  The purchase price and the other terms and conditions of the transaction were established in arm’s length negotiations between an independent special committee of the Board of the Directors of the Company (the “ Special Committee”).  The Special Committee unanimously approved the transaction.
 
Subsequently , on October 27, 2016, the Company entered into a stock purchase agreement (the “Additional Purchase Agreement”) with certain of the Investors; John C. Wobensmith, the Company’s Chief Executive Officer and President; and other investors for the sale of shares of Series A Preferred Stock for an aggregate purchase price of $38.6 million at a purchase price of $4.85 per share.  The purchase price and the other terms and conditions of these transactions were established in arm’s length negotiations between an independent special committee of our board of directors (the “Special Committee”) and the investors.  The Special Committee unanimously approved the transactions.
 
On November 15, 2016, pursuant to the Purchase Agreements, we completed the private placement of 27,061,856 shares of Series A Preferred Stock which included 25,773,196 shares at a price per share of $4.85 and an additional 1,288,660 shares issued as a commitment fee on a pro rata basis as noted above.  On January 4, 2017, our shareholders approved at a Special Meeting of Shareholders the issuance of up to 27,061,856 shares of common stock of the Company upon the conversion of shares of the Series A Preferred Stock, par value $0.01 per share, which were purchased by certain investors in a private placement.  As a result of such shareholder approval, all outstanding 27,061,856 shares of Series A Preferred Stock were automatically and mandatorily converted into 27,061,856 shares of common stock of the Company on January 4, 2017.  Refer to Note 1 — General Information and Note 8 — Debt in our Condensed Consolidated Financial Statements. 
 
Pursuant to the Commitment Letter entered into on June 8, 2016 and the final executed $400 Million Credit Facility, we were required to sell or scrap ten of our vessels.  On April 5, 2016, the Board of Directors unanimously approved scrapping the Genco Marine.  We reached an agreement on May 6, 2016 to sell the Genco Marine, a 1996-built

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Handymax vessel, to be scrapped with Ace Exim Pte Ltd., a demolition yard, which was completed on May 17, 2016.    During October 2016, we reached agreements with third-parties to sell three of our vessels, the Genco Pioneer (a 1999-built Handysize vessel), the Genco Sugar (a 1998-built Handysize vessel) and the Genco Leader (a 1999-built Panamax vessel).   These sales were completed during October and November 2016. Additionally, during November 2016 we reached an agreement with a third-party to sell the Genco Acheron (a 1999-built Panamax vessel) for which the sale was completed during December 2016.  Also, during December 2016 the Board of Directors unanimously approved the sale of the Genco Success (a 1997-built Handymax vessel), the Genco Prosperity (a 1997-built Handymax vessel) and the Genco Wisdom (a 1997-built Handymax vessel).  The sale of the Genco Wisdom and Genco Success were completed during January and March 2017, respectively, and the sale of the Genco Prosperity was completed during May 2017.  Lastly, during January 2017, the Board of Directors unanimously approved the sale of the Genco Carrier (a 1998-built Handymax vessel) and the Genco Reliance (a 1999-built Handysize vessel).  The sales of these vessels were completed during February 2017.  Refer to Note 4 — Vessel Acquisitions and Dispositions in our Condensed Consolidated Financial Statements for further details.
 
We report financial information and evaluate our operations by charter revenues and not by the length of ship employment for our customers, i.e., spot or time charters.  Each of our vessels serve the same type of customer, have similar operations and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, we have determined that we operate in one reportable segment in which we are engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. 
 
Our management team and our other employees are responsible for the commercial and strategic management of our fleet. Commercial management includes the negotiation of charters for vessels, managing the mix of various types of charters, such as time charters, voyage charters and spot market-related time charters, and monitoring the performance of our vessels under their charters. Strategic management includes locating, purchasing, financing and selling vessels. We currently contract with three independent technical managers to provide technical management of our fleet at a lower cost than we believe would be possible in-house. Technical management involves the day-to-day management of vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies. Members of our New York City-based management team oversee the activities of our independent technical managers.
 
On October 13, 2016, Peter C. Georgiopoulos resigned as our Chairman of the Board and a director of the Company.  The Board of Directors appointed Arthur L. Regan, a current director of the Company, as Interim Executive Chairman of the Board.  In connection with his departure, Mr. Georgiopoulos entered into a Separation Agreement and a Release Agreement with the Company on October 13, 2016.  Under the terms of these agreements, subject to customary conditions, Mr. Georgiopoulos received an amount equal to the annual Chairman’s fee awarded to him in recent years of $0.5 million as a severance payment and full vesting of his unvested equity awards, which consist of grants of 68,581 restricted shares of the Company’s common stock and warrants exercisable for approximately 213,937 shares of the Company’s common stock with an exercise per share ranging $259.10 to $341.90.  Refer to Note 17 — Stock-Based Compensation of our Condensed Consolidated Financial Statements.  The agreements also contain customary provisions pertaining to confidential information, releases of claims by Mr. Georgiopoulos, and other restrictive covenants.
 
Prior to December 31, 2016, we held 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.
 
We formerly provided technical services for drybulk vessels purchased by Maritime Equity Partners LLC (“MEP”) under an agency agreement between us and MEP.  These services included oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but did not include chartering services.  The services were initially 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.  This arrangement was approved by an independent committee of our Board of Directors.  On September 30, 2015, under the oversight of an independent committee of our Board of Directors, Genco Management (USA) LLC (“Genco (USA)”) and MEP entered into certain agreements under which MEP paid $2.2 million of the amount of service fees in arrears (of which $0.3 million was paid in 2016 by the new owners of five of the

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MEP vessels sold in January 2016 as described below) and the daily service fee was reduced from $750 to $650 per day effective on October 1, 2015.  During January 2016 and the three months ended September 30, 2016, five and seven of MEP’s vessels, respectively, were sold to third parties, upon which these vessels were no longer subject to the agency agreement.  Based upon the September 30, 2015 agreement, termination fees were due in the amount $0.3 million and $0.8 million, respectively, which was assumed by the new owners of the MEP vessels that were sold.  The amount of these termination fees has been paid in full.  The daily service fees earned for the year ended December 31, 2016 have been paid in full.  At December 31, 2016, all MEP vessels have been sold and the Companies have been dissolved.
 
See Note 8 — Debt of our Condensed Consolidated Financial Statements included in this report for the defined terms we use for each of our credit facilities and a description of each facility.
 
Factors Affecting Our Results of Operations
 
We believe that the following table reflects important measures for analyzing trends in our results of operations. The table reflects our ownership days, available days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the three and six months ended June 30, 2017 and 2016 on a consolidated basis.  On July 7, 2016, the Company completed a one-for-ten reverse stock split of its common stock.  As a result, all share and per share 

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information included for all periods presented reflect the reverse stock split.  Refer to Note 6 — Net Loss per Common Share and Note 17 — Stock-Based Compensation in our Condensed Consolidated Financial Statements. 

 	 	For the Three Months Ended	 	 	 	 	 	 	
 	 	June 30, 	 	Increase	 	 	 	
 	    	2017	    	2016	    	(Decrease)	    	% Change	 	
Fleet Data:	 	 	 	 	 	 	 	 	 	 	 	 	
Ownership days (1)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	 	1,183.0	 	 	1,183.0	 	 	 —	 	 —	%	
Panamax	 	 	546.0	 	 	728.0	 	 	(182.0)	 	(25.0)	%	
Ultramax	 	 	364.0	 	 	364.0	 	 	 —	 	 —	%	
Supramax	 	 	1,911.0	 	 	1,911.0	 	 	 —	 	 —	%	
Handymax	 	 	136.2	 	 	501.7	 	 	(365.5)	 	(72.9)	%	
Handysize	 	 	1,365.0	 	 	1,638.0	 	 	(273.0)	 	(16.7)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	5,505.2	 	 	6,325.7	 	 	(820.5)	 	(13.0)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Available days (2)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	 	1,163.8	 	 	1,169.0	 	 	(5.2)	 	(0.4)	%	
Panamax	 	 	398.1	 	 	707.6	 	 	(309.5)	 	(43.7)	%	
Ultramax	 	 	364.0	 	 	364.0	 	 	 —	 	 —	%	
Supramax	 	 	1,865.4	 	 	1,849.4	 	 	16.0	 	0.9	%	
Handymax	 	 	136.2	 	 	449.6	 	 	(313.4)	 	(69.7)	%	
Handysize	 	 	1,336.1	 	 	1,606.7	 	 	(270.6)	 	(16.8)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	5,263.6	 	 	6,146.3	 	 	(882.7)	 	(14.4)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating days (3)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	 	1,044.0	 	 	1,169.0	 	 	(125.0)	 	(10.7)	%	
Panamax	 	 	386.1	 	 	706.9	 	 	(320.8)	 	(45.4)	%	
Ultramax	 	 	359.4	 	 	363.0	 	 	(3.6)	 	(1.0)	%	
Supramax	 	 	1,852.9	 	 	1,839.4	 	 	13.5	 	0.7	%	
Handymax	 	 	110.0	 	 	423.7	 	 	(313.7)	 	(74.0)	%	
Handysize	 	 	1,334.0	 	 	1,605.4	 	 	(271.4)	 	(16.9)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	5,086.4	 	 	6,107.4	 	 	(1,021.0)	 	(16.7)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet utilization (4)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	 	89.7	%  	 	100.0	%  	 	(10.3)	%  	(10.3)	%	
Panamax	 	 	97.0	%  	 	99.9	%  	 	(2.9)	%  	(2.9)	%  	
Ultramax	 	 	98.7	%  	 	99.7	%  	 	(1.0)	%  	(1.0)	%	
Supramax	 	 	99.3	%  	 	99.5	%  	 	(0.2)	%  	(0.2)	%	
Handymax	 	 	80.8	%  	 	94.2	%  	 	(13.4)	%  	(14.2)	%	
Handysize	 	 	99.8	%  	 	99.9	%  	 	(0.1)	%  	(0.1)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet average	 	 	96.6	%  	 	99.4	%  	 	(2.8)	%  	(2.8)	%	

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 	 	For the Three Months Ended	 	 	 	 	 	 	
 	 	June 30, 	 	Increase	 	 	 	
 	    	2017	    	2016	    	(Decrease)	    	% Change	 	
Average Daily Results:	 	 	 	 	 	 	 	 	 	 	 	 	
Time Charter Equivalent (5)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	$	11,525	 	$	4,439	 	$	7,086	 	159.6	%	
Panamax	 	 	5,929	 	 	4,490	 	 	1,439	 	32.0	%	
Ultramax	 	 	8,356	 	 	5,882	 	 	2,474	 	42.1	%	
Supramax	 	 	7,815	 	 	4,765	 	 	3,050	 	64.0	%	
Handymax	 	 	8,220	 	 	3,625	 	 	4,595	 	126.8	%	
Handysize	 	 	7,415	 	 	4,628	 	 	2,787	 	60.2	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet average	 	 	8,439	 	 	4,618	 	 	3,821	 	82.7	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Daily vessel operating expenses (6)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	$	4,725	 	$	4,774	 	$	(49)	 	(1.0)	%	
Panamax	 	 	4,460	 	 	4,732	 	 	(272)	 	(5.7)	%	
Ultramax	 	 	4,457	 	 	4,229	 	 	228	 	5.4	%	
Supramax	 	 	4,330	 	 	4,680	 	 	(350)	 	(7.5)	%	
Handymax	 	 	4,172	 	 	4,263	 	 	(91)	 	(2.1)	%	
Handysize	 	 	3,928	 	 	4,165	 	 	(237)	 	(5.7)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet average	 	 	4,333	 	 	4,511	 	 	(178)	 	(3.9)	%	

 	 	For the Six Months Ended	 	 	 	 	 	 	
 	 	June 30, 	 	Increase	 	 	 	
 	    	2017	    	2016	    	(Decrease)	    	% Change	 	
Fleet Data:	 	 	 	 	 	 	 	 	 	 	 	 	
Ownership days (1)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	 	2,353.0	 	 	2,366.0	 	 	(13.0)	 	(0.5)	%	
Panamax	 	 	1,086.0	 	 	1,456.0	 	 	(370.0)	 	(25.4)	%	
Ultramax	 	 	724.0	 	 	728.0	 	 	(4.0)	 	(0.5)	%	
Supramax	 	 	3,801.0	 	 	3,822.0	 	 	(21.0)	 	(0.5)	%	
Handymax	 	 	448.8	 	 	1,047.7	 	 	(598.9)	 	(57.2)	%	
Handysize	 	 	2,754.6	 	 	3,276.0	 	 	(521.4)	 	(15.9)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	11,167.4	 	 	12,695.7	 	 	(1,528.3)	 	(12.0)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Available days (2)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	 	2,296.9	 	 	2,352.0	 	 	(55.1)	 	(2.3)	%	
Panamax	 	 	890.9	 	 	1,416.2	 	 	(525.3)	 	(37.1)	%	
Ultramax	 	 	724.0	 	 	728.0	 	 	(4.0)	 	(0.5)	%	
Supramax	 	 	3,610.6	 	 	3,676.2	 	 	(65.6)	 	(1.8)	%	
Handymax	 	 	447.3	 	 	903.7	 	 	(456.4)	 	(50.5)	%	
Handysize	 	 	2,680.6	 	 	3,244.7	 	 	(564.1)	 	(17.4)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	10,650.3	 	 	12,320.8	 	 	(1,670.5)	 	(13.6)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating days (3)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	 	2,164.9	 	 	2,351.5	 	 	(186.6)	 	(7.9)	%	
Panamax	 	 	869.1	 	 	1,411.3	 	 	(542.2)	 	(38.4)	%	
Ultramax	 	 	719.4	 	 	722.8	 	 	(3.4)	 	(0.5)	%	
Supramax	 	 	3,584.7	 	 	3,622.0	 	 	(37.3)	 	(1.0)	%	
Handymax	 	 	406.2	 	 	841.2	 	 	(435.0)	 	(51.7)	%	
Handysize	 	 	2,671.0	 	 	3,228.4	 	 	(557.4)	 	(17.3)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	10,415.3	 	 	12,177.2	 	 	(1,761.9)	 	(14.5)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet utilization (4)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	 	94.3	%  	 	100.0	%  	 	(5.7)	%	(5.7)	%	
Panamax	 	 	97.6	%  	 	99.7	%  	 	(2.1)	%  	(2.1)	%	

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 	 	For the Six Months Ended	 	 	 	 	 	 	
 	 	June 30, 	 	Increase	 	 	 	
 	    	2017	    	2016	    	(Decrease)	    	% Change	 	

Ultramax	 	 	99.4	%  	 	99.3	%  	 	0.1	%  	0.1	%	
Supramax	 	 	99.3	%  	 	98.5	%  	 	0.8	%	0.8	%	
Handymax	 	 	90.8	%  	 	93.1	%  	 	(2.3)	%	(2.5)	%	
Handysize	 	 	99.6	%  	 	99.5	%  	 	0.1	%	0.1	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet average	 	 	97.8	%  	 	98.8	%  	 	(1.0)	%	(1.0)	%	

 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	For the Six Months Ended	 	 	 	 	 	 	
 	 	June 30, 	 	Increase	 	 	 	
 	    	2017	    	2016	    	(Decrease)	    	% Change	 	
Average Daily Results:	 	 	 	 	 	 	 	 	 	 	 	 	
Time Charter Equivalent (5)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	$	9,280	 	$	2,333	 	$	6,947	 	297.8	%	
Panamax	 	 	6,959	 	 	3,624	 	 	3,335	 	92.0	%	
Ultramax	 	 	7,977	 	 	4,971	 	 	3,006	 	60.5	%	
Supramax	 	 	6,951	 	 	3,901	 	 	3,050	 	78.2	%	
Handymax	 	 	6,906	 	 	2,746	 	 	4,160	 	151.5	%	
Handysize	 	 	6,696	 	 	4,179	 	 	2,517	 	60.2	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet average	 	 	7,458	 	 	3,622	 	 	3,836	 	105.9	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Daily vessel operating expenses (6)	 	 	 	 	 	 	 	 	 	 	 	 	
Capesize	 	$	4,672	 	$	4,799	 	$	(127)	 	(2.6)	%	
Panamax	 	 	4,545	 	 	4,496	 	 	49	 	1.1	%	
Ultramax	 	 	4,395	 	 	4,555	 	 	(160)	 	(3.5)	%	
Supramax	 	 	4,415	 	 	4,715	 	 	(300)	 	(6.4)	%	
Handymax	 	 	4,269	 	 	4,399	 	 	(130)	 	(3.0)	%	
Handysize	 	 	3,967	 	 	4,219	 	 	(252)	 	(6.0)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet average	 	 	4,364	 	 	4,542	 	 	(178)	 	(3.9)	%	

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Definitions
 
In order to understand our discussion of our results of operations, it is important to understand the meaning of the following terms used in our analysis and the factors that influence our results of operations.
 
(1) Ownership days .  We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
 
(2) Available days .  We define available days as the number of our ownership days in a period less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels between time charters. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.
 
(3) Operating days .  We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
 
(4) Fleet utilization .  We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.
 
(5) TCE rates .  We define TCE rates as net voyage revenue (voyage revenues less voyage expenses) divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts.

 	 	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	    	2017	    	2016	    	2017	    	2016	 	
Voyage revenues (in thousands)	 	$	45,370	 	$	31,460	 	$	83,619	 	$	51,590	 	
Voyage expenses (in thousands)	 	 	951	 	 	3,074	 	 	4,192	 	 	6,970	 	
 	 	 	44,419	 	 	28,386	 	 	79,427	 	 	44,620	 	
Total available days	 	 	5,263.6	 	 	6,146.3	 	 	10,650.3	 	 	12,320.8	 	
Total TCE rate	 	$	8,439	 	$	4,618	 	$	7,458	 	$	3,622	 	
 
(6) Daily vessel operating expenses .  We define daily vessel operating expenses as vessel operating expenses divided by ownership days for the period.  Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses.

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Operating Data
 
The following tables represent the operating data for the three and six months ended June 30, 2017 and 2016 on a consolidated basis.

 	 	For the Three Months Ended	 	 	 	 	 	 	
 	 	June 30, 	 	 	 	 	 	 	
 	    	2017	    	2016	    	Change	    	% Change	 	
 	 	(U.S. dollars in thousands, except for per share   amounts)	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	
Voyage revenues 	 	$	45,370	 	$	31,460	 	$	13,910	 	44.2	%	
Service revenues 	 	 	 —	 	 	414	 	 	(414)	 	(100.0)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues 	 	 	45,370	 	 	31,874	 	 	13,496	 	42.3	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Voyage expenses 	 	 	951	 	 	3,074	 	 	(2,123)	 	(69.1)	%	
Vessel operating expenses 	 	 	23,852	 	 	28,538	 	 	(4,686)	 	(16.4)	%	
General and administrative expenses (inclusive of nonvested stock amortization expense of $1,570 and $5,442, respectively)	 	 	5,752	 	 	11,589	 	 	(5,837)	 	(50.4)	%	
Technical management fees	 	 	1,871	 	 	2,264	 	 	(393)	 	(17.4)	%	
Depreciation and amortization 	 	 	18,185	 	 	19,686	 	 	(1,501)	 	(7.6)	%	
Other operating income	 	 	 —	 	 	(182)	 	 	182	 	(100)	%	
Impairment of vessel assets 	 	 	3,339	 	 	67,594	 	 	(64,255)	 	(95.1)	%	
(Gain) loss on sale of vessels	 	 	(1,343)	 	 	77	 	 	(1,420)	 	100.0	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses 	 	 	52,607	 	 	132,640	 	 	(80,033)	 	(60.3)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating loss 	 	 	(7,237)	 	 	(100,766)	 	 	93,529	 	(92.8)	%	
Other expense 	 	 	(7,276)	 	 	(9,726)	 	 	2,450	 	(25.2)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before reorganization items, net 	 	 	(14,513)	 	 	(110,492)	 	 	95,979	 	(86.9)	%	
Reorganization items, net 	 	 	 —	 	 	(65)	 	 	65	 	(100.0)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before income taxes 	 	 	(14,513)	 	 	(110,557)	 	 	96,044	 	(86.9)	%	
Income tax expense 	 	 	 —	 	 	(96)	 	 	96	 	(100.0)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss 	 	$	(14,513)	 	$	(110,653)	 	$	96,140	 	(86.9)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per share - basic 	 	$	(0.42)	 	$	(15.32)	 	$	14.90	 	(97.3)	%	
Net loss per share - diluted 	 	$	(0.42)	 	$	(15.32)	 	$	14.90	 	(97.3)	%	
Weighted average common shares outstanding - basic 	 	 	34,430,766	 	 	7,221,735	 	 	27,209,031	 	376.8	%	
Weighted average common shares outstanding - diluted 	 	 	34,430,766	 	 	7,221,735	 	 	27,209,031	 	376.8	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (1) 	 	$	10,898	 	$	(83,891)	 	$	94,789	 	(113.0)	%	

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 	 	For the Six Months Ended	 	 	 	 	 	 	
 	 	June 30, 	 	 	 	 	 	 	
 	    	2017	    	2016	    	Change	    	% Change	 	
 	 	(U.S. dollars in thousands, except for per share   amounts)	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	
Voyage revenues 	 	$	83,619	 	$	51,590	 	$	32,029	 	62.1	%	
Service revenues 	 	 	 —	 	 	1,225	 	 	(1,225)	 	(100.0)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues 	 	 	83,619	 	 	52,815	 	 	30,804	 	58.3	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Voyage expenses 	 	 	4,192	 	 	6,970	 	 	(2,778)	 	(39.9)	%	
Vessel operating expenses 	 	 	48,736	 	 	57,665	 	 	(8,929)	 	(15.5)	%	
General and administrative expenses (inclusive of nonvested stock amortization expense of $2,281 and $10,928, respectively)	 	 	10,661	 	 	22,158	 	 	(11,497)	 	(51.9)	%	
Technical management fees	 	 	3,852	 	 	4,550	 	 	(698)	 	(15.3)	%	
Depreciation and amortization 	 	 	36,358	 	 	40,025	 	 	(3,667)	 	(9.2)	%	
Other operating income	 	 	 —	 	 	(182)	 	 	182	 	100.0	%	
Impairment of vessel assets 	 	 	3,339	 	 	69,278	 	 	(65,939)	 	(95.2)	%	
(Gain) loss on sale of vessels	 	 	(7,712)	 	 	77	 	 	(7,789)	 	(10,115.6)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses 	 	 	99,426	 	 	200,541	 	 	(101,115)	 	(50.4)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating loss 	 	 	(15,807)	 	 	(147,726)	 	 	131,919	 	(89.3)	%	
Other expense 	 	 	(14,305)	 	 	(16,902)	 	 	2,597	 	(15.4)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before reorganization items, net 	 	 	(30,112)	 	 	(164,628)	 	 	134,516	 	(81.7)	%	
Reorganization items, net 	 	 	 —	 	 	(160)	 	 	160	 	(100.0)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before income taxes 	 	 	(30,112)	 	 	(164,788)	 	 	134,676	 	(81.7)	%	
Income tax expense 	 	 	 —	 	 	(350)	 	 	350	 	(100.0)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss 	 	$	(30,112)	 	$	(165,138)	 	$	135,026	 	(81.8)	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per share - basic 	 	$	(0.89)	 	$	(22.87)	 	 	21.98	 	(96.1)	%	
Net loss per share - diluted 	 	$	(0.89)	 	$	(22.87)	 	 	21.98	 	(96.1)	%	
Weighted average common shares outstanding - basic 	 	 	33,965,835	 	 	7,220,265	 	 	26,745,570	 	370.4	%	
Weighted average common shares outstanding - diluted 	 	 	33,965,835	 	 	7,220,265	 	 	26,745,570	 	370.4	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (1) 	 	$	20,436	 	$	(110,731)	 	$	131,167	 	(118.5)	%	

	(1)		EBITDA represents net (loss) income plus net interest expense, taxes and depreciation and amortization.  EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers.  Our management uses EBITDA as a performance measure in our consolidated internal financial statements, and it is presented for review at our board meetings.  We believe that EBITDA is useful to investors as the shipping industry is capital intensive which often results in significant depreciation and cost of financing.  EBITDA presents investors	

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with a measure in addition to net income to evaluate our performance prior to these costs.  EBITDA is not an item recognized by U.S. GAAP (i.e. non-GAAP measure) and should not be considered as an alternative to net income, operating income or any other indicator of a company’s operating performance required by U.S. GAAP.  EBITDA is not a measure of liquidity or cash flows as shown in our Condensed Consolidated Statements of Cash Flows.  The definition of EBITDA used here may not be comparable to that used by other companies.  The following table demonstrates our calculation of EBITDA and provides a reconciliation of EBITDA to net (loss) income for each of the periods presented above:	

 	 	For the Three Months Ended	 	For the Six Months Ended	 	
 	 	June 30, 	 	June 30, 	 	
 	 	2017	 	2016	    	2017	    	2016	 	
Net loss	 	$	(14,513)	 	$	(110,653)	 	$	(30,112)	 	$	(165,138)	 	
Net interest expense	 	 	7,226	 	 	6,980	 	 	14,190	 	 	14,032	 	
Income tax expense	 	 	 —	 	 	96	 	 	 —	 	 	350	 	
Depreciation and amortization	 	 	18,185	 	 	19,686	 	 	36,358	 	 	40,025	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (1)	 	$	10,898	 	$	(83,891)	 	$	20,436	 	$	(110,731)	 	
 
Results of Operations
 
The following tables set forth information about the current employment of the vessels in our fleet as of August 9, 2017:

 	  	Year	  	 	  	Charter	  	 	 	
Vessel	    	Built	    	Charterer	    	Expiration(1)	    	Cash Daily Rate(2)	 	
 	 	 	 	 	 	 	 	 	 	 	
Capesize Vessels	 	 	 	 	 	 	 	 	 	 	
Genco Augustus	 	2007	 	Swissmarine Services S.A.	 	February 2018	 	 	106% of BCI	 	
Genco Tiberius	 	2007	 	Cargill International S.A.	 	September 2017	 	 	$10,500	 	
Genco London	 	2007	 	Swissmarine Services S.A.	 	May 2018	 	 	98% of BCI	(3)	
Genco Titus	 	2007	 	Louis Dreyfus Company Freight Asia Pte. Ltd.	 	September 2017	 	 	$12,000	 	
Genco Constantine	 	2008	 	Cargill Ocean Transportation Pte. Ltd./Oldendorff GMBH & Co.	 	Aug./Sep. 2017	 	 	$8,750/$14,500	(4)	
Genco Hadrian	 	2008	 	Swissmarine Services S.A.	 	August 2017	 	 	98.5% of BCI	 	
Genco Commodus	 	2009	 	Swissmarine Asia Pte. Ltd.	 	January 2018	 	 	88% of BCI	(5)	
Genco Maximus	 	2009	 	Trafigura Maritime Logistics Pte. Ltd.	 	August 2017	 	 	$11,000	 	
Genco Claudius	 	2010	 	Louis Dreyfus Company Freight Asia Pte. Ltd.	 	September 2017	 	 	$13,000	 	
Genco Tiger	 	2011	 	Uniper Global Commodities SE.	 	October 2017	 	 	$10,750	 	
Baltic Lion	 	2012	 	Koch Shipping Pte. Ltd.	 	October 2017	 	 	$15,300	(6)	
Baltic Bear	 	2010	 	Classic Maritime Inc./Trafigura Maritime Logistics Pte. Ltd.	 	Jul./Oct. 2017	 	 	$10,500/$10,750	(7)	
Baltic Wolf	 	2010	 	Cargill International S.A.	 	February 2018	 	 	$15,350	 	
 	 	 	 	 	 	 	 	 	 	 	
Panamax Vessels	 	 	 	 	 	 	 	 	 	 	
Genco Beauty	 	1999	 	Swissmarine Asia Pte. Ltd.	 	November 2017	 	 	$9,000	(8)	
Genco Knight	 	1999	 	Cargill International S.A.	 	August 2017	 	 	$9,000	(9)	
Genco Vigour	 	1999	 	Raffles Shipping International Pte. Ltd.	 	September 2017	 	 	$10,500	(10)	
Genco Surprise	 	1998	 	Swissmarine Asia Pte. Ltd.	 	October 2017	 	 	$8,000	(11)	
Genco Raptor	 	2007	 	Cofco Agri Freight Geneva, S.A./Golden Ocean Trading Ltd. Bermuda	 	Jul./Oct. 2017	 	 	$8,500/$9,650	(12)	
Genco Thunder	 	2007	 	Swissmarine Services S.A.	 	August 2017	 	 	100% of BPI	 	
 	 	 	 	 	 	 	 	 	 	 	
Ultramax Vessels	 	 	 	 	 	 	 	 	 	 	
Baltic Hornet	 	2014	 	Swissmarine Asia Pte. Ltd.	 	June 2018	 	 	113.5% of BSI	 	
Baltic Wasp	 	2015	 	Pioneer Navigation Ltd.	 	July 2018	 	 	$11,000	 	
Baltic Scorpion	 	2015	 	SK Shipping Co., Ltd.	 	September 2017	 	 	$2,700	(13)	

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Baltic Mantis	 	2015	 	Pioneer Navigation Ltd.	 	August 2017	 	 	115% of BSI	 	
 	 	 	 	 	 	 	 	 	 	 	
Supramax Vessels	 	 	 	 	 	 	 	 	 	 	
Genco Predator	 	2005	 	Western Bulk Carriers A/S/Cargill International S.A.	 	Aug./Sep. 2017	 	 	$14,250/$13,000	(14)	
Genco Warrior	 	2005	 	Centurion Bulk Pte. Ltd., Singapore/Western Bulk Carriers A/S	 	Aug./Sep. 2017	 	 	98.5% of BSI/$8,250	(15)	
Genco Hunter	 	2007	 	Pioneer Navigation Ltd.	 	August 2017	 	 	104% of BSI	 	
Genco Cavalier	 	2007	 	Bulkhandling Handymax A/S	 	November 2017	 	 	Spot Pool	(16)	
Genco Lorraine	 	2009	 	Bulkhandling Handymax A/S	 	November 2017	 	 	Spot Pool	(16)	
Genco Loire	 	2009	 	Bulkhandling Handymax A/S	 	November 2017	 	 	Spot Pool	(16)	
Genco Aquitaine	 	2009	 	Gearbulk Pool Ltd., Norway	 	August 2017	 	 	$16,000	(17)	
Genco Ardennes	 	2009	 	Norvic Shipping International Ltd./ED&F Man Shipping Ltd.	 	Aug./Sep. 2017	 	 	Backhaul/$9,000	(18)	
Genco Auvergne	 	2009	 	Western Bulk Pte. Ltd., Singapore	 	August 2017	 	 	$9,350	(19)	
Genco Bourgogne	 	2010	 	Clipper Sapphire Pool	 	August 2017	 	 	Spot Pool	 	
Genco Brittany	 	2010	 	Clipper Bulk Shipping NV	 	August 2017	 	 	$3,500	(20)	
Genco Languedoc	 	2010	 	Oldendorff Carriers GMBH & Co.	 	September 2017	 	 	$7,900	(21)	
Genco Normandy	 	2007	 	Bulkhandling Handymax A/S	 	November 2017	 	 	Spot Pool	(16)	
Genco Picardy	 	2005	 	Centurion Bulk Pte. Ltd., Singapore	 	October 2017	 	 	$9,000	(22)	
Genco Provence	 	2004	 	Eastern Bulk A/S/Cam Negoce Paris	 	Jul./Oct. 2017	 	 	$11,600/Voyage	(23)	
Genco Pyrenees	 	2010	 	Clipper Sapphire Pool/Ultrabulk A/S	 	Aug./Sep. 2017	 	 	Spot Pool/$6,000	(24)	
Genco Rhone	 	2011	 	Sims Group Global Trade Corp./Marubeni Grain and Oilseeds Trading Asia Pte. Ltd.	 	Jul./Aug. 2017	 	 	Voyage	(25)	
Baltic Leopard	 	2009	 	Bulkhandling Handymax A/S	 	November 2017	 	 	Spot Pool	(16)	
Baltic Panther	 	2009	 	Bulkhandling Handymax A/S	 	November 2017	 	 	Spot Pool	(16)	
Baltic Jaguar	 	2009	 	Oldendorff GMBH & Co./Cargill Americas Inc.	 	Aug./Sep. 2017	 	 	$3,350/Voyage	(26)	
Baltic Cougar	 	2009	 	Bulkhandling Handymax A/S	 	November 2017	 	 	Spot Pool	(16)	
 	 	 	 	 	 	 	 	 	 	 	
Handymax Vessels	 	 	 	 	 	 	 	 	 	 	
Genco Muse	 	2001	 	Centurion Bulk Pte. Ltd., Singapore	 	Jul./Sep. 2017	 	 	$10,250/$8,500	(27)	
 	 	 	 	 	 	 	 	 	 	 	
Handysize Vessels	 	 	 	 	 	 	 	 	 	 	
Genco Progress	 	1999	 	Clipper Logger Pool	 	August 2017	 	 	Spot Pool	 	
Genco Explorer	 	1999	 	Clipper Logger Pool/Xianglong Shipping Co., Ltd./Daiichi Chuo Kisen Kaisha	 	Jul./Aug./Oct. 2017	 	 	Spot Pool/$8,000/$4,000	(28)	
Baltic Hare	 	2009	 	Clipper Logger Pool	 	August 2017	 	 	Spot Pool	 	
Baltic Fox	 	2010	 	Clipper Logger Pool	 	November 2017	 	 	Spot Pool	 	
Genco Charger	 	2005	 	Clipper Logger Pool/Agriculture & Energy Carriers Ltd.	 	Aug./Nov. 2017	 	 	Spot Pool/$4,000	(29)	
Genco Challenger	 	2003	 	Clipper Logger Pool/Clipper Bulk Shipping Pte. Ltd./Sun United Maritime Ltd.	 	Jul./Aug./Oct. 2017	 	 	Spot Pool/$5,000/$6,000	(30)	
Genco Champion	 	2006	 	Clipper Logger Pool	 	November 2017	 	 	Spot Pool	 	
Baltic Wind	 	2009	 	Ultrabulk A/S	 	September 2017	 	 	$9,000	(31)	
Baltic Cove	 	2010	 	Clipper Bulk Shipping Ltd.	 	September 2017	 	 	$5,750	 	
Baltic Breeze	 	2010	 	Clipper Bulk Shipping	 	August 2017	 	 	$8,000	(32)	
Genco Ocean	 	2010	 	Thorco Bulk A/S	 	August 2017	 	 	$13,500	(33)	
Genco Bay	 	2010	 	Clipper Bulk Shipping	 	September 2017	 	 	$8,000	(34)	
Genco Avra	 	2011	 	Ultrabulk S.A.	 	August 2017	 	 	104% of BHSI	 	
Genco Mare	 	2011	 	Pioneer Navigation Ltd.	 	September 2017	 	 	103.5% of BHSI	 	
Genco Spirit	 	2011	 	Ultrabulk S.A.	 	September 2017	 	 	$8,500	(35)	

	(1)		The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Under the terms of certain contracts, the charterer is entitled to extend the time charter from two to four months in order to complete the vessel's final voyage plus any time the vessel has been off-hire.	
 
	(2)		Time charter rates presented are the gross daily charterhire rates before third-party brokerage commission generally ranging from 1.25% to 6.25%. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents’ fees and canal dues.	

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	(3)		We have reached an agreement with Swissmarine Services S.A. on a time charter for 11 to 14.5 months at a rate based on 98% of the Baltic Capesize Index 5TC (BCI), as published by the Baltic Exchange, reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The vessel delivered to charterers on June 19, 2017 after completion of drydocking for scheduled maintenance.	
 
	(4)		We have reached an agreement with Oldendorff GMBH & Co. on a time charter for approximately 45 days at a rate of $14,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about August 13, 2017.	
 
	(5)		We have agreed to an extension with Swissmarine Asia Pte. Ltd. on a time charter for 6.5 to 9.5 months at a rate on 88% of the BCI, as published in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The extension began on June 26, 2017.	
 
	(6)		We have reached an agreement with Koch Shipping Pte. Ltd. on a time charter for 5 to 8.5 months at a rate of $15,300 per day except for the first 50 days in which the hire rate is $10,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on May 18, 2017.	
 
	(7)		We have reached an agreement with Trafigura Maritime Logistics Pte. Ltd. on a time charter for 3.5 to 7.5 months at a rate of $10,750 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on July 12, 2017.	
 
	(8)		We have reached an agreement with Swissmarine Asia Pte. Ltd. on a time charter for 3.5 to 6.5 months at a rate of $9,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on August 4, 2017 after completion of drydocking for scheduled maintenance.   The vessel had redelivered to Genco on June 29, 2017.	
 
	(9)		We have reached an agreement with Cargill International S.A. on a time charter trip at a rate of $9,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on July 2, 2017 after repositioning. A ballast bonus was awarded after the repositioning period. The vessel redelivered to Genco on April 17, 2017 and then completed drydocking for scheduled maintenance.	
 
	(10)		We have reached an agreement with Raffles Shipping International Pte. Ltd. on a time charter for approximately 55 days at a rate of $10,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on July 10, 2017 after repositioning. A ballast bonus was awarded after the repositioning period. The vessel redelivered to Genco on May 26, 2017.	
 
	(11)		We have reached an agreement with Swissmarine Asia Pte., Ltd. on a time charter for 3.5 to 8.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on June 18, 2017.	
 
	(12)		We have reached an agreement with Golden Ocean Trading Ltd. Bermuda on a time charter for approximately 60 days at a rate of $9,650 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on August 4, 2017 after repositioning. The vessel had redelivered to Genco on July 29, 2017.	
 
	(13)		We have reached an agreement with SK Shipping Co., Ltd. on a time charter for approximately 75 days at a rate of $2,700 per day. If the time charter exceeds 66 days then the hire rate will be $8,500 per day. Hire is paid every 15 days in advance less a 6.25% third-party brokerage commission. The vessel delivered to charterers on June 23, 2017.	
 
	(14)		We have reached an agreement with Cargill International S.A. on a time charter for approximately 40 days at a rate of $13,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about August 14, 2017 after repositioning. The vessel redelivered to Genco on August 1, 2017.	

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	(15)		We have reached an agreement with Western Bulk Carriers A/S on a time charter for approximately 35 days at a rate of $8,250 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on August 1, 2017.	
 
	(16)		We have reached an agreement to enter these vessels into the Bulkhandling Handymax A/S Pool, a vessel pool trading in the spot market of which Torvald Klaveness acts as the pool manager. Genco can withdraw a vessel with three months’ notice. 	
	(17)		We have reached an agreement with Gearbulk Pool Ltd., Norway on a time charter for approximately 40 days at a rate of $16,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 29, 2017 after repositioning. The vessel had redelivered to Genco on April 10, 2017.	
 
	(18)		We have reached an agreement with ED&F Man Shipping Ltd. on a time charter for approximately 25 days at a rate of $9,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about August 11, 2017.	
 
	(19)		We have reached an agreement with Western Bulk Pte. Ltd., Singapore on a time charter for 3 to 5.5 months at a rate of $9,350 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 19, 2017 after repositioning. The vessel had redelivered to Genco on March 16, 2017.	
 
	(20)		We have reached an agreement with Clipper Bulk Shipping NV on a time charter for approximately 50 days at a rate of $3,500. If the time charter exceeds 50 days then the hire rate will be $7,000 per day. Hire is paid every 15 days in advance less a 3.75% third-party broker commission. The vessel delivered to charterers on June 19, 2017.	
 
	(21)		We have reached an agreement with Oldendorff Carriers GMBH & Co. on a time charter for 3 to 5.5 months at a rate of $7,900 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on June 21, 2017.	
 
	(22)		We have agreed to an extension with Centurion Bulk Pte. Ltd., Singapore on a time charter at a rate of $9,000 per day. The minimum and maximum expiration dates of the time charter are October 1, 2017 and December 1, 2017, respectively. Hire is paid every 15 days in advance less a 5.00% third-party broker age commission.	
 
	(23)		We have reached an agreement with Cam Negoce Paris for one voyage for approximately 61 days.	
 
	(24)		We have reached an agreement with Ultrabulk A/S on a time charter for approximately 25 days at a rate of $6,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about August 10, 2017.	
 
	(25)		We have reached an agreement with Marubeni Grain and Oilseeds Trading Asia Pte. Ltd. for one voyage for approximately 35 days.	
 
	(26)		We have reached an agreement with Cargill Americas Inc. for one voyage for approximately 30 days.	
 
	(27)		We have agreed to an extension with Centurion Bulk Pte. Ltd. Singapore on a time charter for 2.5 to 5.5 months at a rate of $8,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The extension began on July 4, 2017.	
 
	(28)		We have reached an agreement with Daiichi Chuo Kisen Kaisha on a time charter for approximately 65 days at a rate of $4,000 per day. If the time charter exceeds 65 days then the hire rate will be $7,000 per day.   Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about August 10, 2017 after repositioning.  The vessel had previously redelivered to Genco on August 6, 2017.	
 
	(29)		We have reached an agreement with Agriculture & Energy Carriers Ltd. on a time charter for approximately 65 days at a rate of $4,000 per day. If the time charter exceeds 67 days then the hire rate will be $7,000 per day. Hire is paid every 15	

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days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about August 27, 2017.	
 
	(30)		We have reached an agreement with Sun United Maritime Ltd. on a time charter for approximately 65 days at a rate of $6,000 per day. If the time charter extends beyond 65 days, the hire rate will be $7,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about August 17, 2017.	
 
	(31)		We have reached an agreement with Ultrabulk A/S on a time charter for 2.5 to 5.5 months at a rate of $9,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 23, 2017.	
 
	(32)		We have reached an agreement with Clipper Bulk Shipping on a time charter for 3 to 5.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 15, 2017 after repositioning. The vessel had redelivered to Genco on February 21, 2017.	
 
	(33)		We have reached an agreement with Thorco Bulk A/S on a time charter for approximately 30 days at a rate of $13,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on July 2, 2017 after repositioning. The vessel had redelivered to Genco on June 19, 2017.	
 
	(34)		We have reached an agreement with Clipper Bulk Shipping on a time charter for 3 to 5.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 28, 2017.	
 
	(35)		We have reached an agreement with Ultrabulk S.A. on a time charter for 2.5 to 5.5 months at a rate of $8,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on May 24, 2017.	
 
Three months ended June 30, 2017 compared to the three months ended June 30 2016
 
VOYAGE REVENUES-
 
For the three months ended June 30 2017, voyage revenues increased by $13.9 million, or 44.2%, to $45.4 million as compared to $31.5 million for the three months ended June 30, 2016.  The increase in voyage revenues was primarily due to higher spot market rates achieved by the majority of our vessels partially offset by the operation of fewer vessels during the second quarter of 2017 as compared to the same period during 2016.
 
The average Time Charter Equivalent (“TCE”) rate of our fleet increased 82.7% to $8,439 a day for the three months ended June 30, 2017 from $4,618 a day for the three months ended June 30, 2016.  The increase in TCE rates was primarily due to higher spot rates achieved by the majority of the vessels in our fleet during the second quarter of 2017 as compared to the same period last year.  The freight market strength that materialized at the end of the first quarter of 2017 carried into the beginning of the second quarter as a result of record Chinese steel output, which led to heightened demand for seaborne iron ore and coal cargoes. Additionally, the South American grain season aided in supporting smaller class vessels. Towards the end of the quarter, the freight market came under pressure as the drybulk fleet expanded at a higher pace due to a significant year-over-year decline in demolition activity.
 
For the three months ended June 30, 2017 and 2016, we had 5,505.2 and 6,325.7 ownership days, respectively. The decrease in ownership days is a result of the sale of nine of our vessels during the fourth quarter of 2016 and the first half of 2017, in addition to the scrapping of one vessel during the second quarter of 2016.  Fleet utilization decreased to 96.6%  during the three months ended June 30, 2017 from 99.4% during the three months ended June 30, 2016 primarily as a result of 81.2 offhire days and 34.0 offhire days for the Genco Tiger and Baltic Lion, respectively, related to repairs completed to their main engine.
 
Refer to the “General” section above for further discussion of the repairs made to the Genco Tiger and Baltic Lion.

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SERVICE REVENUES-
 
Service revenues consisted of revenues earned from providing technical services to MEP pursuant to the agency agreement between us and MEP.  These services included oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but did not include chartering services.  The services were provided for a fee of $650 per ship per day effective October 1, 2015 pursuant to the agency agreement entered into between Genco (USA).  There was no service revenue earned during the three months ended June 30, 2017 as MEP was dissolved effective December 31, 2016 and the remaining MEP vessels were sold during 2016.  The service revenue recorded during the three months ended June 30, 2016 consisted of $0.4 million of management fees. 
 
VOYAGE EXPENSES-
 
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. These expenses are borne by the Company during spot market voyage charterers.  There are certain other non-specified voyage expenses such as commissions which are typically borne by us. Voyage expenses include port and canal charges, fuel (bunker) expenses and brokerage commissions payable to unaffiliated third parties. Port and canal charges and bunker expenses primarily increase in periods during which vessels are employed on voyage charters because these expenses are for the account of the vessel owner. At the inception of a time charter, we record 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 and the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.  Additionally, we record the lower of cost or market adjustments to re-value the bunker fuel on a quarterly basis.
 
Voyage expenses decreased by $2.1 million from $3.1 million during the three months ended June 30, 2016 as compared to $1.0 million during the three months ended  June 30, 2017.  The decrease was primarily due to a difference of  $3.1 million between current year net bunker gains and prior year net bunker losses.  During the second quarter of 2017 the Company recorded $1.6 million of net bunker gains as compared to $1.5 million of net bunker losses during the second quarter of 2016 based on the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer.  This was a result of the overall increase in bunker prices.  This decrease was partially offset by a $1.0 million increase in bunker consumption during repositioning of our vessels during the second quarter of 2017.
 
VESSEL OPERATING EXPENSES-
 
Vessel operating expenses decreased by $4.7 million from $28.5 million during the second quarter of 2016 to $23.9 million during the second quarter of 2017.  This decrease was primarily due to the operation of a smaller fleet as a result of the sale of nine vessels during the fourth quarter of 2016 and first half of 2017, in addition to the scrapping of one vessel during the second quarter of 2016.  Additionally, the decrease was due to lower expenses related to crewing and insurance, as well as the timing of purchases of stores partially offset by higher drydocking related expenses.
 
Daily vessel operating expenses decreased to $4,333 per vessel per day for the three months ended June 30, 2017 from $4,511 per day for the three months ended June 30, 2016.  The decrease in daily vessel operating expenses was predominantly due to lower expenses related to crewing and insurance, as well as the timing of purchases of stores, partially offset by higher drydocking related expenses.  We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation.  Our actual daily vessel operating expenses per vessel for the three months ended June 30, 2017 were $107 below the weighted-average budgeted rate of $4,440 per vessel per day for the entire year for the core fleet of 60 vessels.
 
Our vessel operating expenses, which generally represent fixed costs for each vessel, increase to the extent our fleet expands. Other factors beyond our control, some of which may affect the shipping industry in general, including,

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for instance, developments relating to market prices for crewing, lubes, and insurance, may also cause these expenses to increase.
 
GENERAL AND ADMINISTRATIVE EXPENSES-
 
We incur general and administrative expenses which relate to our onshore non-vessel-related activities. Our general and administrative expenses include our payroll expenses, including those relating to our executive officers, rent, legal, auditing and other professional expenses.  General and administrative expenses include nonvested stock amortization expense which represent the amortization of stock-based compensation that has been issued to our Directors and employees pursuant to Management Incentive Program (the “MIP”) and the 2015 Equity Incentive Plan, refer to Note 17 — Stock-Based Compensation in our Condensed Consolidated Financial Statements.  General and administrative expenses also include legal and professional fees associated with our credit facilities which are not capitalizable to deferred financing costs.
 
For the three months ended June 30, 2017 and 2016, general and administrative expenses were $5.8 million and $11.6 million, respectively.  The $5.8 million decrease was primarily due to a $3.9 million decrease in nonvested stock amortization expense.   Refer to Note 17 — Stock-Based Compensation in our Condensed Consolidated Financial Statements for further information.    The decrease in general and administrative expenses was also due to a $1.8 million decrease in financing related advisory and legal fees.
 
TECHNICAL MANAGEMENT FEES-
 
We incur management fees to third-party technical management companies for the day-to-day management of our vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies.
 
For the three months ended June 30, 2017 and 2016, technical management fees were $1.9 million and $2.3 million, respectively.  The $0.4 million decrease was due to the sale of nine vessels during the fourth quarter of 2016 and first half of 2017, in addition to the scrapping of one vessel during the second quarter of 2016.
 
DEPRECIATION AND AMORTIZATION-
 
We depreciate the cost of our vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years and we estimate the residual value by taking the estimated scrap value of $310 per lightweight ton times the weight of the ship in lightweight tons.
 
Depreciation and amortization expense decreased by $1.5 million to $18.2 million during the three months ended June 30, 2017 as compared to $19.7 million during the three months ended June 30, 2016.  This decrease was primarily due to a decrease in depreciation expense for the nine vessels which were deemed impaired at June 30, 2016 and were written down to their net realizable value at June 30, 2016.  These vessels were subsequently sold during the fourth quarter of 2016 and the first half of 2017.  Additionally, there was a decrease in depreciation for the Genco Marine which was scrapped on May 17, 2016. 
 
OTHER OPERATING INCOME-
 
For the three months ended June 30, 2017 and 2016, other operating income was $0 and $0.2 million, respectively.  The decrease is primarily due to a payment of $0.2 million received from Samsun Logix Corporation as part of the cash settlement of the revised rehabilitation plan approved by the South Korean courts on April 8, 2016.  Refer to Note 16 — Commitments and Contingencies in our Condensed Consolidated Financial Statements for further information regarding the settlement.

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IMPAIRMENT OF VESSEL ASSETS-
 
During the three months ended June 30, 2017 and 2016, we recorded $3.3 million and $67.6 million of impairment of vessel assets, respectively.  At June 30, 2017, we determined that the sum of the estimated undiscounted future cash flows attributable to the Genco Surprise did not exceed the carrying value of the vessel at June 30, 2017.  As such, we reduced the carrying value of the Genco Surprise to its fair market value as of June 30, 2017, which resulted in an impairment loss of $3.3 million during the three months ended June 30, 2017. 
 
During the three months ended June 30, 2016, we recorded $67.6 million of impairment for nine of our vessels, the Genco Acheron, Genco Carrier, Genco Leader, Genco Pioneer, Genco Prosperity, Genco Reliance, Genco Success, Genco Sugar and Genco Wisdom, for which we had deemed that it was more likely than not would be scrapped.  These vessels were subsequently sold during the fourth quarter of 2016 and the first half of 2017. 
 
Refer to Note 2 — Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statement for further information. 
 
(GAIN) LOSS ON SALE OF VESSELS-
During the second quarter of 2017, we recorded a net gain on sale of vessels of $1.3 million related primarily to the sale of the Genco Prosperity on May 16, 2017.  During the second quarter of 2016, we recorded a net loss on sale of vessels of $0.1 million related to the scrapping of the Genco Marine on May 17, 2016.
 
OTHER (EXPENSE) INCOME-
 
IMPAIRMENT OF INVESTMENT –
 
During the three months ended June 30, 2016, we recorded Impairment of investment of $2.7 million.  Prior to selling our remaining investment in Jinhui during the fourth quarter of 2016, we reviewed our investment in Jinhui for indicators of other-than-temporary impairment on a quarterly basis.  Based on our review, we deemed the investment in Jinhui to be other-than-temporarily impaired as of June 30, 2016. Refer to Note 5 — Investments in our Condensed Consolidated Financial Statements for further details.  
 
NET INTEREST EXPENSE –
 
Net interest expense increased marginally by $0.2 million from $7.0 million during the three months ended June 30, 2016 to $7.2 million during the three months ended June 30, 2017.  Net interest expense during the three months ended June 30, 2017 and 2016 consisted of interest expense under our credit facilities and amortization of deferred financing costs for those facilities. The increase in net interest expense is primarily due to a $0.6 million increase in interest expense as a result of higher interest rates during the second quarter of 2017 as compared to the same period during 2016.  These increases were partially offset by a $0.3 million increase in interest income earned during the second quarter of 2017 as compared to the same period during 2016 primarily as a result of a higher cash balance due to proceeds from the equity issuance during the fourth quarter of 2016 and proceeds from the sale of vessels.    Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for information regarding our credit facilities and the equity issuance.
 
REORGANIZATION ITEMS, NET–
 
Reorganization items, net decreased to $0 during the three months ended June 30, 2017 from $0.1 million during the three months ended June 30, 2016.  These reorganization items include trustee fees and professional fees incurred after we emerged from bankruptcy on July 9, 2014 in relation to the Chapter 11 Cases.  The decrease is due to the winding down of settlement payments related to the Chapter 11 Cases.  As of December 31, 2016, all outstanding claims arising from the Chapter 11 Cases were settled.  Refer to Note 15 — Reorganization items, net in our Condensed Consolidated Financial Statements for further detail.

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INCOME TAX EXPENSE-
 
Income tax expense decreased to $0 during the three months ended June 30, 2017 from $0.1 million during the three months ended June 30, 2016.  Income tax expense during the three months ended June 30, 2016 consisted of federal, state and local income taxes on net income earned by Genco (USA), one of our wholly-owned subsidiaries.  Pursuant to certain agreements, we provided technical management of vessels for MEP in exchange for specified fees for these services provided.  These services were provided by Genco (USA), which has elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) was subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services. 
 
The decrease in income tax expense during the three months ended June 30, 2017 as compared to the same period during the prior year is primarily due to a decrease in service revenue recorded by Genco (USA) which was earned from MEP as a result of the sale of MEP’s twelve vessels during 2016.  MEP was subsequently dissolved by December 31, 2016.  As such, there was no income tax recorded during the second quarter of 2017. 
 
Six months ended June 30, 2017 compared to the six months ended June 30, 2016
 
VOYAGE REVENUES-
 
For the six months ended June 30, 2017, voyage revenues increased by $32.0 million, or 62.1%, to $83.6 million as compared to $51.6 million for the six months ended June 30, 2016.  The increase in voyage revenues was primarily due to higher spot market rates achieved by the majority of our vessels partially offset by the operation of fewer vessels during the six months ended June 30, 2017 as compared to the same period during 2016.
 
The average Time Charter Equivalent (“TCE”) rate of our fleet increased 105.9% to $7,458 a day for the six months ended June 30, 2017 from $3,622 a day for the six months ended June 30, 2016.  The increase in TCE rates was primarily due to higher rates achieved by our vessels during the six months ended June 30, 2017 as compared to the same period last year.    
 
For the six months ended June 30, 2017 and 2016, we had 11,167.4 and 12,695.7 ownership days, respectively. The decrease in ownership days is a result of the sale of nine of our vessels during the fourth quarter of 2016 and the first half of 2017, in addition to the scrapping of one vessel during the second quarter of 2016.  Fleet utilization decreased to 97.8% during the six months ended June 30, 2017 from 98.8% during the six months ended June 30, 2016 primarily as a result of 83.5 offhire days and 34.0 offhire days for the Genco Tiger and Baltic Lion, respectively, related to repairs completed to their main engines.
 
Refer to the “General” section above for further discussion of the repairs made to the Genco Tiger and Baltic Lion.
 
SERVICE REVENUES-
 
Service revenues consist of revenues earned from providing technical services to MEP pursuant to the agency agreement between us and MEP.  These services included oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but did not include chartering services.  The services were provided for a fee of $650 per ship per day effective October 1, 2015 pursuant to an agreement entered into between Genco (USA) and MEP.  There was no service revenue earned during the six months ended June 30, 2017 as MEP was dissolved effective December 31, 2016 and the remaining MEP vessels were sold during 2016.  The $1.2 million of service revenue recorded during the six months ended June 30, 2016 consisted of $0.9 million of management fees and $0.3 million of termination fees related to the sale of five MEP vessels. 
 
VOYAGE EXPENSES-
 
Voyage expenses decreased by $2.8 million from $7.0 million during the six months ended June 30, 2016 as compared to $4.2 million during the six months ended June 30, 2017.  The decrease was primarily due to a difference of

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$4.8 million between current year net bunker gains and prior year net bunker losses.  During the six months ended June 30, 2017 the Company recorded $1.1 million of net bunker gains as compared to $3.6 million of net bunker losses during the six months ended June 30, 2016 based on the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer.  This was a result of the overall increase in bunker prices.  This decrease was partially offset by a $1.8 million increase in bunker consumption during repositioning of our vessels during the six months ended June 30, 2017.
 
VESSEL OPERATING EXPENSES-
 
Vessel operating expenses decreased by $9.0 million from $57.7 million during the six months ended June 30, 2016 to $48.7 million during the six months ended June 30, 2017.  This decrease was primarily due to the operation of a smaller fleet as a result of the sale of nine vessels during the fourth quarter of 2016 and first half of 2017, in addition to the scrapping of one vessel during the second quarter of 2016.  Additionally, the decrease was due to lower expenses related to crewing, insurance, as well as the timing of purchases of stores, partially offset by higher drydocking related expenses.
 
Daily vessel operating expenses decreased to $4,364 per vessel per day for the six months ended June 30, 2017 from $4,542 per day for the six months ended June 30, 2016.  The decrease in daily vessel operating expenses was predominantly due to lower expenses related to crewing and insurance, as well as the timing of purchases of stores and spares, partially offset by higher drydocking related expenses.    We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation.  Our actual daily vessel operating expenses per vessel for the six months ended June 30, 2017 were $76 below the weighted-average budgeted rate of $4,440 per vessel per day for the entire year for the core fleet of 60 vessels.
 
GENERAL AND ADMINISTRATIVE EXPENSES-
 
For the six months ended June 30, 2017 and 2016, general and administrative expenses were $10.7 million and $22.2 million, respectively.  The $11.5 million decrease was primarily due to an $8.6 million decrease in nonvested stock amortization expense.  Refer to Note 17 — Stock-Based Compensation in our Condensed Consolidated Financial Statements for further information.  The decrease in general and administrative expenses was also due to a $2.7 million decrease in financing related advisory and legal fees.
 
TECHNICAL MANAGEMENT FEES-
 
For the six months ended June 30, 2017 and 2016, technical management fees were $3.9 million and $4.6 million, respectively.  The $0.7 million decrease was due to the sale of nine vessels during the fourth quarter of 2016 and first half of 2017, in addition to the scrapping of one vessel during the second quarter of 2016.
 
DEPRECIATION AND AMORTIZATION-
 
We depreciate the cost of our vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years and we estimate the residual value by taking the estimated scrap value of $310 per lightweight ton times the weight of the ship in lightweight tons.
 
Depreciation and amortization expense decreased by $3.6 million to $36.4 million during the six months ended June 30, 2017 as compared to $40.0 million during the six months ended June 30, 2016.  This decrease was primarily due to a decrease in depreciation expense for the nine vessels which were deemed impaired at June 30, 2016 and were written down to their net realizable value at June 30, 2016.  These vessels were subsequently sold during the fourth quarter of 2016 and the first half of 2017.  Additionally, there was a decrease in depreciation for the Genco Marine which was scrapped on May 17, 2016.  These decreases were partially offset by an increase in drydocking amortization expense as a result of additional vessel drydocking during the six months ended June 30, 2017 as compared to the same period last year.

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OTHER OPERATING INCOME –
 
For the six months ended June 30, 2017 and 2016, other operating income was $0 and $0.2 million, respectively.  The decrease is primarily due to a payment of $0.2 million received from Samsun Logix Corporation as part of the cash settlement of the revised rehabilitation plan approved by the South Korean courts on April 8, 2016.  Refer to Note 16 — Commitments and Contingencies in our Condensed Consolidated Financial Statements for further information regarding the settlement. 
 
IMPAIRMENT OF VESSEL ASSETS -
 
During the six months ended June 30, 2017 and 2016, we recorded $3.3 million and $69.3 million of impairment of vessel assets, respectively.  At June 30, 2017, we determined that the sum of the estimated undiscounted future cash flows attributable to the Genco Surprise did not exceed the carrying value of the vessel at June 30, 2017.  As such, we reduced the carrying value of the Genco Surprise to its fair market value as of June 30, 2017, which resulted in an impairment loss of $3.3 million during the six months ended June 30, 2017. 
 
During the six months ended June 30, 2016, we recorded $67.6 million of impairment for nine of our vessels, the Genco Acheron, Genco Carrier, Genco Leader, Genco Pioneer, Genco Prosperity, Genco Reliance, Genco Success, Genco Sugar, and Genco Wisdom, for which we had deemed that it was more likely than not would be scrapped.  These vessels were subsequently sold during the fourth quarter of 2016 and the first half of 2017.  Additionally, we recorded $1.7 million of impairment of vessel assets to adjust the net realizable value of the Genco Marine which was scrapped on May 17, 2016. 
 
Refer to Note 2 — Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statements for further information. 
 
(GAIN) LOSS ON SALE OF VESSELS –
 
During the six months ended June 30, 2017, we recorded a net gain on sale of $7.7 million related primarily to the sale of the Genco Prosperity, Genco Success, Genco Carrier, Genco Reliance and Genco Wisdom for which the sales were completed during the first half of 2017.  During the six months ended June 30, 2016, we recorded a net loss on sale of vessels of $0.1 million related to the scrapping of the Genco Marine on May 17, 2016.
 
OTHER (EXPENSE) INCOME-
 
IMPAIRMENT OF INVESTMENT –
 
During the six months ended June 30, 2016, we recorded Impairment of investment of $2.7 million.  Prior to selling our remaining investment in Jinhui during the fourth quarter of 2016, we reviewed our investment in Jinhui for indicators of other-than-temporary impairment on a quarterly basis.  Based on our review, we deemed the investment in Jinhui to be other-than-temporarily impaired as of June 30, 2016. Refer to Note 5 — Investments in our Condensed Consolidated Financial Statements for further details.  
 
NET INTEREST EXPENSE –
 
Net interest expense increased marginally by $0.2 million from $14.0 million during the six months ended June 30, 2016 to $14.2 million during the six months ended June 30, 2017.  Net interest expense during the six months ended June 30, 2017 and 2016 consisted of interest expense under our credit facilities and amortization of deferred financing costs for those facilities. The increase in net interest expense is primarily due to a $0.6 million increase in interest expense as a result of higher interest rates during the first half of 2017 as compared to the same period during 2016.  These increases were partially offset by a $0.4 million increase in interest income earned during the six months ended June 30, 2017 as compared to the same period during 2016 primarily as a result of a higher cash balance due to proceeds from the equity issuance during the fourth quarter of 2016 and proceeds from the sale of vessels.  Refer to Note 8 —

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Debt in our Condensed Consolidated Financial Statements for information regarding our credit facilities and the equity issuance. 
 
REORGANIZATION ITEMS, NET
 
Reorganization items, net decreased to $0 during the six months ended June 30, 2017 from $0.2 million during the six months ended June 30, 2016.  These reorganization items include trustee fees and professional fees incurred after we emerged from bankruptcy on July 9, 2014 in relation to the Chapter 11 Cases.  The decrease is due to the winding down of settlement payments related to the Chapter 11 Cases.  As of December 31, 2016, all outstanding claims arising from the Chapter 11 Cases were settled.  Refer to Note 15 — Reorganization items, net in our Condensed Consolidated Financial Statements for further detail.
 
INCOME TAX EXPENSE-
 
Income tax expense decreased to $0 during the six months ended June 30, 2017 from $0.4 million during the six months ended June 30, 2016.  Income tax expense during the six months ended June 30, 2016 consisted of federal, state and local income taxes on net income earned by Genco (USA), one of our wholly-owned subsidiaries.  Pursuant to an agency agreement, we provided technical management of vessels for MEP in exchange for specified fees for these services provided.  These services were provided by Genco (USA), which has elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) was subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services. 
 
The decrease in income tax expense during the six months ended June 30, 2017 as compared to the same period during the prior year is primarily due to a decrease in service revenue recorded by Genco (USA) which was earned from MEP as a result of the sale of MEP’s twelve vessels during 2016.  MEP was subsequently dissolved by December 31, 2016.  As such, there was no income tax recorded during the six months ended June 30, 2017. 
 
LIQUIDITY AND CAPITAL RESOURCES
 
Our liquidity needs arise primarily from drydocking for our vessels and working capital requirements as may be needed to support our business and payments required under our indebtedness. Our primary sources of liquidity are cash flow from operations, cash on hand, equity offerings and credit facility borrowings. Our ability to continue to meet our liquidity needs is subject to and will be affected by cash utilized in operations, the economic or business environment in which we operate, weakness in shipping industry conditions, the financial condition of our customers, vendors and service providers, our ability to comply with the financial and other covenants of our indebtedness, and other factors.
 
Persistent , historically low rates in the drybulk shipping market have led to decreases in our overall revenues and operating losses on some of the charters we enter into.  As a result, we have experienced negative cash flows, and in turn, our liquidity has been negatively impacted.  To address our liquidity and covenant compliance issues, in November 2016 we refinanced or amended our credit facilities and completed a $125 million capital raise as described below.  Based on current market conditions, we believe these measures are sufficient to address such issues for at least the next twelve months.  However, if the current market environment persists, declines further, or does not recover sufficiently over a prolonged period of time, we may have insufficient liquidity to fund ongoing operations or satisfy our obligations under our credit facilities, which may lead to a default under one or more of our credit facilities.
 
On November 10, 2016, we entered into a senior secured loan facility for an aggregate principal amount of $400 million (the “$400 Million Credit Facility”) which was utilized to refinance our $100 Million Term Loan Facility, $253 Million Term Loan Facility, $148 Million Credit Facility, $22 Million Term Loan Facility, $44 Million Term Loan Facility and 2015 Revolving Credit Facility, as defined in Note 8 — Debt in our Condensed Consolidated Financial Statements.  The $400 Million Credit Facility was subject to the completion of an equity financing satisfactory to the lenders with gross proceeds to us including the equity commitments as described in Note 8 — Debt in our Condensed Consolidated Financial Statements of at least $125 million and amendments of our other credit facilities on terms satisfactory to the lenders and other customary conditions. 

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As a condition to the effectiveness of the Second Amended Commitment Letter entered into on October 6, 2016 related to the aforementioned $400 Million Credit Facility, we entered into stock purchase agreements effective as of October 4, 2016 (the “Initial Purchase Agreements”) with funds or related entities managed by Centerbridge, SVP and Apollo (the “Investors”) for an aggregate of up to $125 million in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended.  The Investors made a firm commitment to purchase shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) for an aggregate of $86.4 million and a backstop commitment to purchase additional shares of common stock for up to $38.6 million, in each case at a purchase price of $4.85 per share. The Series A Preferred Stock was automatically and mandatorily converted into our common stock, par value $0.01 per share, upon approval by our shareholders of such conversion.  An additional 1,288,660 shares of Series A Preferred Stock were issued to the Investors as a commitment fee on a pro rata basis.   Subsequently, on October 27, 2016, we entered into a stock purchase agreement (the “Additional Purchase Agreement”) with certain of the Investors; John C. Wobensmith, our Chief Executive Officer and President; and other investors for the sale of shares of Series A Preferred Stock for an aggregate purchase price of $38.6 million at a purchase price of $4.85 per share.  The purchase price and the other terms and conditions of these transactions were established in arm’s length negotiations between an independent special committee of our board of directors (the “Special Committee”) and the investors.  The Special Committee unanimously approved the transactions. Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for further details.  On November 15, 2016, pursuant to the Initial Purchase Agreements and Additional Purchase Agreement, we completed the private placement of 27,061,856 shares of Series A Preferred Stock which included 25,773,196 shares at a price per share of $4.85 and an additional 1,288,660 shares issued as a commitment fee on a pro rata basis as noted above.  Refer to Note 1 — General Information. 
 
Additionally, on November 15, 2016, we entered into Supplemental Agreements with lenders under our 2014 Term Loan Facilities (as defined in Note 8 — Debt in our Condensed Consolidated Financial Statements) which, among other things, amended the Company’s collateral maintenance covenants under the 2014 Term Loan Facilities to provide that such covenants will not be tested through December 30, 2017 and the minimum collateral value to loan ratio will be 100% from December 31, 2017, 105% from June 30, 2018, 115% from December 31, 2018 and 135% from December 31, 2019.  These Supplemental Agreements also provided for certain other amendments to the 2014 Term Loan Facilities, which included reductions in the minimum liquidity requirements consistent with the $400 Million Credit Facility and restrictions on incurring indebtedness, making investments (other than through non-recourse subsidiaries) or paying dividends, similar to the $400 Million Credit Facility. 
 
Lastly, on November 15, 2016, we also entered into an Amending and Restating Agreement which amended and restated the credit agreements and the guarantee for the $98 Million Credit Facility (as defined in Note 8 — Debt in our Condensed Consolidated Financial Statements) (the “Restated $98 Million Credit Facility”).  The Restated $98 Million Credit Facility provides for the following: reductions in the minimum liquidity requirements consistent with the $400 Million Credit Facility; netting of certain amounts against the measurements of the collateral maintenance covenant, which remains in place with a 140% value to loan threshold; a portion of amounts required to be maintained under the minimum liquidity covenant for this facility may, under certain circumstances, be used to prepay the facility to maintain compliance with the collateral maintenance covenant; elimination of the original maximum leverage ratio and minimum net worth covenants; and restrictions on incurring indebtedness, making investments (other than through non-recourse subsidiaries) or paying dividends, similar to those provided for in the $400 Million Credit Facility.
 
At June 30, 2017, we believe we were in compliance with all financial covenants under the $400 Million Credit Facility, the 2014 Term Loan Facilities and the Restated $98 Million Credit Facility. 
 
Excess cash from the collateralized vessels under our $400 Million Credit Facility are subject to a cash sweep.  The cash sweep will be 100% of excess cash flow through December 31, 2018, 75% through December 31, 2020 and the lesser of 50% of excess cash flow or an amount that would reflect a 15-year average vessel age repayment profile thereafter; provided no prepayment under the cash sweep is required from the first $10 million in aggregate of the prepayments otherwise required under the cash sweep. As of June 30, 2017, the amount of our aggregate excess cash flow was approximately $5.2 million.  If our revenues and expenses for the second quarter were to remain at such levels, we anticipate that our aggregate excess cash flow would exceed $10 million as early as the third quarter of 2017 and excess cash would be payable under the cash sweep during the fourth quarter of 2017.

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In the future, we may require capital to fund ongoing operations, debt service, and growth and to maintain compliance with our credit facility covenants.  We may also seek to refinance our indebtedness, obtain waivers or modifications to our credit agreements from our lenders (which may be unavailable or subject to conditions) or raise additional capital through selling assets (including vessels), reduce or delay capital expenditures, or pursue strategic opportunities and equity or debt offerings.  However, if market conditions are unfavorable, we may be unable to accomplish any of the foregoing on acceptable terms or at all.
 
Dividends
 
We are currently prohibited from paying dividends under certain of our facilities other than limited dividend amounts attributable to wholly-owned, non-recourse subsidiaries that meet certain criteria under our credit facilities.  The longest such restriction is in effect until December 31, 2020.  Following December 31, 2020, the amount of dividends we may pay is generally limited based on the amount of our unrestricted cash and cash equivalents as compared to the minimum liquidity amount in effect from time to time under the $400 Million Facility and the 2014 Term Loan Facilities, the repayment of at least $25 million of the loan under the $98 Million Credit Facility, and the ratio of the value of vessels and certain other collateral pledged under the each of our credit facilities to the amount of the loan outstanding under such facility.  In addition, under the $98 Million Credit Facility, dividends may only be paid out of excess cash flow of Genco and its subsidiaries (as defined such facility).    Moreover, we would make dividend payments to our shareholders only if our Board of Directors, acting in its sole discretion, determines that such payments would be in our best interest and in compliance with relevant legal and contractual requirements. The principal business factors that our Board of Directors would consider when determining the timing and amount of dividend payments would be our earnings, financial condition and cash requirements at the time. Marshall Islands law generally prohibits the declaration and payment of dividends other than from surplus. Marshall Islands law also prohibits the declaration and payment of dividends while a company is insolvent or would be rendered insolvent by the payment of such a dividend.
 
Cash Flow
 
Net cash used in operating activities for the six months ended June 30, 2017 and 2016 was $0.6 million and $41.2 million, respectively.  Included in the net loss during the six months ended June 30, 2017 and 2016 are $3.3 million and $72.0 million of non-cash impairment charges, respectively. Also included in the net loss during the six months ended June 30, 2017 and 2016 are $2.3 million and $10.9 million, respectively, of non-cash amortization of nonvested stock compensation related to the Company’s equity incentive plans. There was also a gain on sale of vessels in the amount of $7.7 million due to the sale of five vessels and paid in kind interest of $3.0 million related to the $400 Million Credit Facility during the six months ended June 30, 2017. Depreciation and amortization expense for the six months ended June 30, 2017 decreased by $3.7 million primarily due to the operation of fewer vessels during the first half of 2017 as well as the revaluation of ten of our vessels to their estimated net realizable value during the first half of 2016. Additionally, the fluctuation in prepaid expense and other current assets decreased by $8.8 million due to the timing of prepaid payments made and the hull and machinery insurance claims for repairs of the Genco Tiger and Baltic Lion.  Lastly, there was a $4.2 million increase in deferred drydocking costs incurred because there were more vessels that completed drydocking during the six months ended June 30, 2017 as compared to the same period during 2016.  This was offset by an increase in the fluctuation in accounts payable and accrued expenses of $2.9 million due to the timing payments.
 
Net cash provided by investing activities was $17.0 million during the six months ended June 30, 2017 as compared to $3.7 million during the six months ended June 30, 2016.  The increase is primarily due to $13.6 million increase in the proceeds from the sale of five vessels during the six months ended June 30, 2017 as compared to the scrapping of one vessel during the six months ended June 30, 2016. Additionally, there was a $1.8 million decrease in deposits of restricted cash during the six months ended June 30, 2017 primarily as a result of the release of restricted cash for required capital expenditures for our vessels.  These increases were partially offset by a decrease of $2.4 million for the proceeds from the sale of available-for-sale securities for the six months ended June 30, 2016. 
 
Net cash used in financing activities was $2.7 million and $26.9 million during the six months ended June 30, 2017 and 2016, respectively.  Net cash used in financing activities of $2.7 million for the six months ended June 30, 2017 consisted primarily of the following:  $1.1 million payment of Series A Preferred Stock issuance costs; $1.4 million

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repayment of debt under the 2014 Term Loan Facilities; and $0.2 million repayment of debt under the $400 Million Credit Facility.  Net cash used in financing activities of $26.9 million for the six months ended June 30, 2016 consisted primarily of the following: $10.2 million repayment of debt under the $253 Million Term Loan Facility, $6.0 million repayment of debt under the $148 Million Credit Facility, $3.8 million repayment of debt under the $100 Million Term Loan Facility, $3.3 million repayment of debt under the 2015 Revolving Credit Facility, $1.4 million repayment of debt under $44 Million Term Loan Facility, $1.4 million repayment of debt under the 2014 Term Loan Facilities; and $0.8 million repayment of debt under the $22 Million Term Loan Facility.  On November 15, 2016, the $400 Million Credit Facility refinanced the following six credit facilities: the $253 Million Term Loan Facility, the $148 Million Credit Facility, the $100 Million Term Loan Facility, the 2015 Revolving Credit Facility, the $44 Million Term Loan Facility and the $22 Million Term Loan Facility.
 
Credit Facilities
 
Refer to the 2016 10-K for a summary and description of our outstanding credit facilities, including the underlying financial and non-financial covenants, which are incorporated herein by reference.  On November 10, 2016, we entered into the $400 Million Credit Facility which refinanced the following six of our credit facilities on November 15, 2016: the $100 Million Term Loan Facility, the $253 Million Term Loan Facility, the 2015 Revolving Credit Facility, the $44 Million Term Loan Facility, the $148 Million Credit Facility and the $22 Million Term Loan Facility.
 
Refer to Note 8 —Debt in our Condensed Consolidated Financial Statements for information regarding agreements and waivers that were entered into, in addition to the terms and fees associated with those agreements.
 
At June 30, 2017, we believed we were in compliance with all of the financial covenants under the $400 Million Credit Facility, the Restated $98 Million Credit Facility and the 2014 Term Loan Facilities.
 
Interest Rate Swap Agreements, Forward Freight Agreements and Currency Swap Agreements
 
At June 30, 2017 and December 31, 2016, we did not have any interest rate swap agreements.  As part of our business strategy, we may enter into interest rate swap agreements to manage interest costs and the risk associated with changing interest rates.  In determining the fair value of interest rate derivatives, we would consider the creditworthiness of both the counterparty and ourselves immaterial. Valuations prior to any adjustments for credit risk would be validated by comparison with counterparty valuations.  Amounts would not and should not be identical due to the different modeling assumptions.  Any material differences would be investigated.
 
As part of our business strategy, we may enter into arrangements commonly known as forward freight agreements, or FFAs, to hedge and manage market risks relating to the deployment of our existing fleet of vessels.  These arrangements may include future contracts, or commitments to perform in the future a shipping service between ship owners, charterers and traders.  Generally, these arrangements would bind us and each counterparty in the arrangement to buy or sell a specified tonnage freighting commitment “forward” at an agreed time and price and for a particular route.  Although FFAs can be entered into for a variety of purposes, including for hedging, as an option, for trading or for arbitrage, if we decided to enter into FFAs, our objective would be to hedge and manage market risks as part of our commercial management. It is not currently our intention to enter into FFAs to generate a stream of income independent of the revenues we derive from the operation of our fleet of vessels.  If we determine to enter into FFAs, we may reduce our exposure to any declines in our results from operations due to weak market conditions or downturns, but may also limit our ability to benefit economically during periods of strong demand in the market.  We have not entered into any FFAs as of June 30, 2017 and December 31, 2016.
 
Contractual Obligations
 
The following table sets forth our contractual obligations and their scheduled maturity dates as of June 30, 2017.  The table incorporates the employment agreement entered into in September 2007 with our Chief Executive Officer and President, John C. Wobensmith, which was amended on March 23, 2017.  The interest and borrowing fees and scheduled credit agreement payments below reflect the $400 Million Credit Facility, the $98 Million Credit Facility and the 2014 Term Loan Facilities, as well as other fees associated with the facilities.  For the interest and scheduled

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credit agreement payments for the $400 Million Credit Facility, we have assumed that we will elect that 1.50% of the interest expense will be paid in-kind (“PIK interest”) through December 31, 2018, of which will be payable on the maturity date of the facility, November 15, 2021. Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for further information regarding the terms of the aforementioned credit facilities.  The following table also incorporates the future lease payments associated with the lease for our current space.  Refer to Note 16 — Commitments and Contingencies in our Condensed Consolidated Financial Statements for further information regarding the terms of our current lease agreement.

 	    	 	 	    	Less Than	    	One to	    	Three to	    	 	 	 	
 	 	 	 	 	One	 	Three	 	Five	 	More than	 	
 	 	Total	 	Year (1)	 	Years	 	Years	 	Five Years	 	
 	 	(U.S. dollars in thousands)	 	
Credit Agreements	    	$	535,122	    	$	2,994	    	$	56,365	    	$	461,269	    	$	14,494	 	
Interest and borrowing fees	 	 	101,910	 	 	11,480	 	 	50,099	 	 	39,179	 	 	1,152	 	
Executive employment agreement	 	 	149	 	 	149	 	 	 —	 	 	 —	 	 	 —	 	
Office leases	 	 	17,044	 	 	538	 	 	3,146	 	 	4,460	 	 	8,900	 	
Totals	 	$	654,225	 	$	15,161	 	$	109,610	 	$	504,908	 	$	24,546	 	

	(1)		Represents the six-month period ending December 31, 2017.	
 
Interest expense has been estimated using 1.30% plus the applicable margin of 3.75% for the $400 Million Credit Facility, 6.125% for the $98 Million Credit Facility and 2.50% for the 2014 Term Loan Facilities.
Capital Expenditures
 
We make capital expenditures from time to time in connection with our vessel acquisitions.  Our fleet currently consists of 60 drybulk vessels, including 13 Capesize drybulk carriers, six Panamax drybulk carriers, four Ultramax drybulk carriers, 21 Supramax drybulk carriers, one Handymax drybulk carriers and 15 Handysize drybulk carriers.
 
As previously announced, we have initiated a fuel efficiency upgrade program for certain of our vessels. We believe this program will generate considerable fuel savings going forward and increase the future earnings potential for these vessels. The upgrades have been successfully installed on 16 of our vessels, which completed their respective planned drydockings during 2014 and 2015.  We did not install fuel efficiency upgrades on any vessels during 2016.  During the second quarter of 2017 we installed the fuel efficiency upgrade on the Genco London for approximately $0.2 million during its planned drydocking. 
 
Under U.S. Federal law and 33 CFR, Part 151, Subpart D, U.S. approved ballast water treatment systems will be required to be installed in all vessels at the first out of water drydocking after January 1, 2016 if these vessels are to discharge ballast water inside 12 nautical miles of the coast of the U.S. U.S. authorities did not approve ballast water treatment systems until December 2016. Therefore, the USCG has granted us extensions for our vessels with 2016 drydocking deadlines until January 1, 2018; however, an alternative management system (“AMS”) may be installed in lieu. For example, in February 2015, the USCG added Bawat to the list of ballast water treatment systems that received AMS acceptance. An AMS is valid for five years from the date of required compliance with ballast water discharge standards, by which time it must be replaced by an approved system unless the AMS itself achieves approval. We had applied for a supplement to this application for vessels drydocking in 2016 in order get a further extension to the vessels’ next scheduled drydockings in year 2021.  We have received extensions on most of the applications and we are awaiting the USCG’s formal notice of approval for certain vessels.  The cost of these systems will vary based on the size of the vessel, and the Company estimates the cost of the systems to be $1.0 million for Capesize, $0.8 million for Panamax, $0.8 million for Supramax, $0.7 million for Handymax and $0.7 million for Handysize vessels. Any newbuilding vessels that we acquire will have at least an AMS installed when the vessel is being built. Additionally, for our vessels scheduled to drydock in 2017 and 2018, the USCG has granted an extension that enables us to defer installation to the next scheduled out of water drydocking.  In addition, on September 8, 2016, the BWM Convention was ratified and had an original effective date of September 8, 2017.  On July 7, 2017, the effective date of the BWM Convention was extended two years to September 8, 2019.  This will require vessels to have ballast water treatment systems installed to coincide with the vessels’ next IOPP renewal survey after September 8, 2019.   In order for a vessel to trade in U.S. waters, it must

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be compliant with the installation date as required by the USCG as outlined above. The costs of ballast water treatment systems will be capitalized and depreciated over the remainder of the life of the vessel, assuming the system the Company installs becomes approved by both the IMO and the USCG. These amounts would be in addition to the amounts budgeted for drydocking below .   
 
In addition to acquisitions that we may undertake in future periods, we will incur additional expenditures due to special surveys and drydockings for our fleet. We estimate our drydocking costs, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, and scheduled off-hire days for our fleet through 2018 to be:

Year	    	Estimated Drydocking Cost	    	Estimated Off-hire Days	 	
 	 	(U.S. dollars in millions)	 	
 	 	 	 	 	 	 	
2017 (July 1 - December 31, 2017)	 	$	4.1	 	100	 	
2018	 	$	3.4	 	80	 	
 
The costs reflected are estimates based on drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed.  We expect to fund these costs with cash from operations.  These costs do not include drydock expense items that are reflected in vessel operating expenses or potential costs associated with the installation of ballast water treatment systems and fuel efficiency upgrades as noted above.
 
Actual length of drydocking will vary based on the condition of the vessel, yard schedules and other factors.  Higher repairs and maintenance expense during drydocking for vessels which are over 15 years old typically result in a higher number of off-hire days depending on the condition of the vessel.
 
During the six months ended June 30, 2017 and 2016, we incurred a total of $5.3 million and $1.1 million of drydocking costs, respectively, excluding costs incurred during drydocking that were capitalized to vessel assets or vessel equipment. 
 
Ten of our vessels completed drydockings during the six months ended June 30, 2017. Additionally, there was one drydocking that began in June 2017 and crossed over into July 2017.  We estimate that a total of five of our vessels, including the aforementioned vessel for which the drydocking was in progress at June 30, 2017, will be drydocked during the remainder of 2017 and four of our vessels will be drydocked during 2018.
 
Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
 
Inflation
 
Inflation has only a moderate effect on our expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase our operating, voyage, general and administrative, and financing costs.
 
CRITICAL ACCOUNTING POLICIES
 
There have been no changes or updates to the critical accounting policies as disclosed in the 2016 10-K.
 
Vessels and Depreciation
 
We record the value of our vessels at their cost (which includes acquisition costs directly attributable to the vessel and expenditures made to prepare the vessel for its initial voyage) less accumulated depreciation.  We depreciate

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our drybulk vessels on a straight-line basis over their estimated useful lives, estimated to be 25 years from the date of initial delivery from the shipyard.  Depreciation is based on cost less the estimated residual scrap value of $310/lwt based on the 15-year average scrap value of steel.  An increase in the residual value of the vessels will decrease the annual depreciation charge over the remaining useful life of the vessels.  Similarly, an increase in the useful life of a drybulk vessel would also decrease the annual depreciation charge.  Comparatively, a decrease in the useful life of a drybulk vessel or in its residual value would have the effect of increasing the annual depreciation charge.  However, when regulations place limitations over the ability of a vessel to trade on a worldwide basis, we will adjust the vessel’s useful life to end at the date such regulations preclude such vessel’s further commercial use.
 
The carrying value of each of our vessels does not represent the fair market value of such vessel or the amount we could obtain if we were to sell any of our vessels, which could be more or less.  Under U.S. GAAP, we would not record a loss if the fair market value of a vessel (excluding its charter) is below our carrying value unless and until we determine to sell that vessel or the vessel is impaired as discussed in the 2016 10-K.  Excluding the three Bourbon vessels we resold immediately upon delivery to MEP at our cost, we have sold thirteen of our vessels since our inception and realized a profit in each instance, with the exception of the Genco Marine which was scrapped on May 17, 2016.  Additionally, we incurred a $53.8 million loss from the forfeiture of our deposit and related interest when we determined to cancel an acquisition of six drybulk newbuildings in November 2008.
 
During the three and six months ended June 30, 2017, we recorded a loss of $3.3 million related to the impairment of vessel assets for the Genco Surprise.  At June 30, 2017, we determined that the future undiscounted cash flows did not exceed the net book value for the Genco Surprise; therefore we adjusted the value of the Genco Surprise to its fair market value which resulted in an impairment loss of $3.3 million.  Refer to Note 2 — Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statements for further information.
 
During the three and six months ended June 30, 2016, we recorded losses of $67.6 million and $69.3 million, respectively, related to the impairment of vessel assets.  There was $67.6 million of impairment expense recorded during the three and six months ended June 30, 2016 for nine of our vessels, the Genco Acheron, Genco Carrier, Genco Leader, Genco Pioneer, Genco Prosperity, Genco Reliance, Genco Success, Genco Sugar, and Genco Wisdom, for which we had determined it was more likely than not would be scrapped pursuant to the terms of the Commitment Letter that we entered into on June 8, 2016.  These vessels have been subsequently sold during the fourth quarter of 2016 and the first half of 2017.  Additionally, during the six months ended June 30, 2016, a $1.7 million impairment loss was recorded for the Genco Marine when we had determined that it was more likely than not that the vessel would be scrapped.  On April 5, 2016, the Board of Directors unanimously approved scrapping the Genco Marine and it was sold to a demolition yard and scrapped on May 17, 2016.  Refer to Note 2 — Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statements for further information which describes how we determined that these vessel assets were impaired . 
 
Pursuant to our credit facilities, we regularly submit to the lenders valuations of our vessels on an individual charter free basis in order to evidence our compliance with the collateral maintenance covenants under our credit facilities.  Such a valuation is not necessarily the same as the amount any vessel may bring upon sale, which may be more or less, and should not be relied upon as such.  We were in compliance with the collateral maintenance covenants under our $400 Million Credit Facility, $98 Million Credit Facility and the 2014 Term Loan Facilities as of June 30 2017.  Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for further details. We obtained valuations for all of the vessels in our fleet pursuant to the terms of the credit facilities.  For unencumbered vessels, we utilized the June 30, 2016 vessel valuations at December 31, 2016 as these vessels were impaired as of June 30, 2016 and vessels valuations were not obtained since.  In the chart below, we list each of our vessels, the year it was built, the year we acquired it, and its carrying value at June 30, 2017 and December 31, 2016.  Vessels have been grouped according to their collateralized status as of June 30, 2017.  The carrying value of the Genco Surprise at June 30, 2017 and the carrying value of the Genco Carrier, Genco Prosperity, Genco Reliance, Genco Success and Genco Wisdom at December 31, 2016 reflect the impairment loss recorded for these vessels.
 
At June 30, 2017, the vessel valuations of all of our vessels for covenant compliance purposes under our credit facilities as of the most recent compliance testing date were lower than their carrying values at June 30, 2017, with the exception of the Baltic Lion, Genco Tiger and the Genco Surprise (which was written down to its fair market value as

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noted above).  At December 31, 2016, the vessel valuations of all of our vessels for covenant compliance purposes under our credit facilities as of the most recent compliance testing date were lower than their carrying values at December 31, 2016, with the exception of the five aforementioned vessels (Genco Carrier, Genco Prosperity, Genco Reliance, Genco Success and Genco Wisdom) which were unencumbered at December 31, 2016 and were written down to their estimated net realizable value as of June 30, 2016 it was determined the vessel assets were impaired. 
 
The amount by which the carrying value at June 30, 2017 of all of the vessels in our fleet, with the exception of the three aforementioned vessels, exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $3.4 million to $14.4 million per vessel, and $451.4 million on an aggregate fleet basis.  The amount by which the carrying value at December 31, 2016 of all of the vessels in our fleet, with the exception of the five aforementioned vessels, exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $4.3 million to $23.2 million per vessel, and $678.9 million on an aggregate fleet basis.  The average amount by which the carrying value of our vessels exceeded the valuation of such vessels for covenant compliance purposes was $7.9 million at June 30, 2017 and $11.3 million as of December 31, 2016.  However, neither such valuation nor the carrying value in the table below reflects the value of long-term time charters related to some of our vessels.
 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Carrying Value (U.S.	 	
 	 	 	 	 	 	dollars in	 	
 	 	 	 	 	 	thousands) as of	 	
 	    	 	    	Year	    	June 30, 	    	December 31, 	 	
Vessels	    	Year Built	    	Acquired	    	2017	    	2016	 	
Unencumbered	 	 	 	 	 	 	 	 	 	 	 	
Genco Carrier	 	
1998	 	
2004	 	$	 —	 	 	1,614	 	
Genco Prosperity	 	
1997	 	
2005	 	 	 —	 	 	1,614	 	
Genco Reliance	 	
1999	 	
2004	 	 	 —	 	 	1,373	 	
Genco Success	 	
1997	 	
2005	 	 	 —	 	 	1,612	 	
Genco Wisdom	 	
1997	 	
2005	 	 	 —	 	 	1,614	 	
TOTAL	 	 	 	 	 	$	 —	 	$	7,827	 	
 	 	 	 	 	 	 	 	 	 	 	 	
$400 Million Credit Facility	 	 	 	 	 	 	 	 	 	 	 	
Baltic Bear	 	
2010	 	
2010	 	 	42,628	 	 	43,595	 	
Baltic Lion	 	
2009	 	
2013	 	 	32,697	 	 	33,320	 	
Baltic Wolf	 	
2010	 	
2010	 	 	42,745	 	 	43,694	 	
Genco Claudius	 	
2010	 	
2009	 	 	43,230	 	 	44,233	 	
Genco Commodus	 	
2009	 	
2009	 	 	41,177	 	 	42,146	 	
Genco Maximus	 	
2009	 	
2009	 	 	41,219	 	 	42,181	 	
Genco Tiger	 	
2010	 	
2013	 	 	30,452	 	 	31,024	 	
Genco Raptor	 	
2007	 	
2008	 	 	17,487	 	 	17,948	 	
Genco Surprise	 	
1998	 	
2006	 	 	5,750	 	 	9,273	 	
Genco Thunder	 	
2007	 	
2008	 	 	17,540	 	 	17,993	 	
Baltic Mantis	 	
2015	 	
2015	 	 	28,503	 	 	29,032	 	
Baltic Scorpion	 	
2015	 	
2015	 	 	28,245	 	 	28,773	 	
Baltic Cougar	 	
2009	 	
2010	 	 	18,145	 	 	18,579	 	
Baltic Jaguar	 	
2009	 	
2010	 	 	18,155	 	 	18,587	 	
Baltic Leopard	 	
2009	 	
2009	 	 	18,124	 	 	18,561	 	
Baltic Panther	 	
2009	 	
2010	 	 	18,133	 	 	18,568	 	
Genco Aquitaine	 	
2009	 	
2010	 	 	18,719	 	 	19,165	 	
Genco Ardennes	 	
2009	 	
2010	 	 	18,735	 	 	19,178	 	
Genco Auvergne	 	
2009	 	
2010	 	 	18,925	 	 	19,368	 	
Genco Bourgogne	 	
2010	 	
2010	 	 	19,816	 	 	20,279	 	

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 	 	 	 	 	 	Carrying Value (U.S.	 	
 	 	 	 	 	 	dollars in	 	
 	 	 	 	 	 	thousands) as of	 	
 	    	 	    	Year	    	June 30, 	    	December 31, 	 	
Vessels	    	Year Built	    	Acquired	    	2017	    	2016	 	
Genco Brittany	 	
2010	 	
2010	 	 	19,832	 	 	20,292	 	
Genco Hunter	 	
2007	 	
2007	 	 	19,909	 	 	20,465	 	
Genco Languedoc	 	
2010	 	
2010	 	 	19,843	 	 	20,302	 	
Genco Loire	 	
2009	 	
2010	 	 	18,095	 	 	18,537	 	
Genco Lorraine	 	
2009	 	
2010	 	 	18,073	 	 	18,519	 	
Genco Normandy	 	
2007	 	
2010	 	 	16,510	 	 	16,945	 	
Genco Picardy	 	
2005	 	
2010	 	 	17,466	 	 	18,036	 	
Genco Provence	 	
2004	 	
2010	 	 	16,419	 	 	16,973	 	
Genco Pyrenees	 	
2010	 	
2010	 	 	19,809	 	 	20,278	 	
Genco Rhone	 	
2011	 	
2011	 	 	20,931	 	 	21,395	 	
Genco Warrior	 	
2005	 	
2007	 	 	17,431	 	 	18,010	 	
Genco Muse	 	
2001	 	
2005	 	 	11,990	 	 	12,512	 	
Baltic Breeze	 	
2010	 	
2010	 	 	18,683	 	 	19,112	 	
Baltic Cove	 	
2010	 	
2010	 	 	18,621	 	 	19,059	 	
Baltic Fox	 	
2010	 	
2013	 	 	18,217	 	 	18,661	 	
Baltic Hare	 	
2009	 	
2013	 	 	17,160	 	 	17,591	 	
Baltic Wind	 	
2009	 	
2010	 	 	17,662	 	 	18,092	 	
Genco Avra	 	
2011	 	
2011	 	 	19,721	 	 	20,164	 	
Genco Bay	 	
2010	 	
2010	 	 	18,620	 	 	19,061	 	
Genco Challenger	 	
2003	 	
2007	 	 	10,782	 	 	11,193	 	
Genco Explorer	 	
1999	 	
2004	 	 	7,384	 	 	7,778	 	
Genco Mare	 	
2011	 	
2011	 	 	19,747	 	 	20,187	 	
Genco Ocean	 	
2010	 	
2010	 	 	18,667	 	 	19,100	 	
Genco Progress	 	
1999	 	
2005	 	 	7,364	 	 	7,761	 	
Genco Spirit	 	
2011	 	
2011	 	 	19,783	 	 	20,216	 	
TOTAL	 	 	 	 	 	$	949,144	 	$	975,736	 	
 	 	 	 	 	 	 	 	 	 	 	 	
$98 Million Credit Facility	 	 	 	 	 	 	 	 	 	 	 	
Genco Constantine	 	
2008	 	
2008	 	 	39,000	 	 	40,020	 	
Genco Augustus	 	
2007	 	
2007	 	 	36,721	 	 	37,741	 	
Genco London	 	
2007	 	
2007	 	 	35,889	 	 	36,572	 	
Genco Titus	 	
2007	 	
2007	 	 	36,004	 	 	36,917	 	
Genco Tiberius	 	
2007	 	
2007	 	 	36,648	 	 	37,663	 	
Genco Hadrian	 	
2008	 	
2008	 	 	38,855	 	 	39,794	 	
Genco Knight	 	
1999	 	
2005	 	 	9,674	 	 	10,144	 	

 

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 	 	 	 	 	 	Carrying Value (U.S.	 	
 	 	 	 	 	 	dollars in	 	
 	 	 	 	 	 	thousands) as of	 	
 	    	 	    	Year	    	June 30, 	    	December 31, 	 	
Vessels	    	Year Built	    	Acquired	    	2017	    	2016	 	
Genco Beauty	 	
1999	 	
2005	 	 	9,782	 	 	10,234	 	
Genco Vigour	 	
1999	 	
2004	 	 	9,807	 	 	10,255	 	
Genco Predator	 	
2005	 	
2007	 	 	17,447	 	 	18,023	 	
Genco Cavalier	 	
2007	 	
2008	 	 	16,461	 	 	16,905	 	
Genco Champion	 	
2006	 	
2008	 	 	13,615	 	 	14,044	 	
Genco Charger	 	
2005	 	
2007	 	 	12,704	 	 	13,116	 	
TOTAL	 	 	 	 	 	$	312,607	 	$	321,428	 	
 	 	 	 	 	 	 	 	 	 	 	 	
2014 Term Loan Facilities	 	 	 	 	 	 	 	 	 	 	 	
Baltic Hornet	 	
2014	 	
2014	 	 	26,666	 	 	27,178	 	
Baltic Wasp	 	
2015	 	
2015	 	 	26,919	 	 	27,431	 	
TOTAL	 	 	 	 	 	$	53,585	 	$	54,609	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Consolidated Total	 	 	 	 	 	$	1,315,336	 	$	1,359,600	 	
 
If we were to sell a vessel or hold a vessel for sale, and the carrying value of the vessel were to exceed its fair market value, we would record a loss in the amount of the difference.  Refer to Note 2 — Summary of Significant Accounting Policies and Note 4 — Vessel Acquisitions and Dispositions in our Condensed Consolidated Financial Statements for information regarding the sale of vessel assets and the classification of the vessel assets held for sale as of December 31, 2016.
 
ITEM 3 .         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
 
Interest rate risk
 
We are exposed to the impact of interest rate changes.  Our objective is to manage the impact of interest rate changes on our earnings and cash flow in relation to our borrowings.  At June 30, 2017 and December 31, 2016, we did not have any interest rate swap agreements to manage interest costs and the risk associated with changing interest rates.
 
We are subject to market risks relating to changes in LIBOR rates because we have significant amounts of floating rate debt outstanding.  During the three and six months ended June 30, 2017 and 2016, we were subject to the following interest rates on the outstanding debt under our credit facilities:
 
	·		$400 Million Credit Facility — three-month LIBOR plus 3.75% effective November 14, 2016, when the draw down on this facility was made	
 
	·		$98 Million Credit Facility — three-month LIBOR plus 6.125%	
 
	·		2014 Term Loan Facilities — three-month or six-month LIBOR plus 2.50%	
 
	·		2015 Revolving Credit Facility — three-month LIBOR plus a range of 3.40% to 4.25% until November 15, 2016	
 
	·		$148 Million Credit Facility — LIBOR plus 3.00% until November 15, 2016	
 
	·		$44 Million Term Loan Facility — three-month LIBOR plus 3.35% until November 15, 2016	

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	·		$22 Million Term Loan Facility — three-month LIBOR plus 3.35% until November 15, 2016	
 
	·		$253 Million Term Loan Facility — three-month or six-month LIBOR plus 3.50% until November 15, 2016	
 
	·		$100 Million Term Loan Facility — LIBOR plus 3.50% until November 15, 2016	
 
A 1% increase in LIBOR would result in an increase of $2.6 million in interest expense for the six months ended June 30, 2017.
 
Derivative financial instruments
 
As part of our business strategy, we may enter into interest rate swap agreements to manage interest costs and the risk associated with changing interest rates.  As of June 30, 2017 and December 31, 2016, we did not have any derivative financial instruments.
 
Refer to “Interest rate risk” section above for further information regarding interest rate swap agreements.
 
Currency and exchange rates risk
 
The international shipping industry’s functional currency is the U.S. Dollar.  Virtually all of our revenues and most of our operating costs are in U.S. Dollars.  We incur certain operating expenses in currencies other than the U.S. dollar, and the foreign exchange risk associated with these operating expenses is immaterial.
 
Investments
 
We held investments in equity securities of Jinhui, which were classified as available for sale (“AFS”) under Accounting Standards Codification 320-10, “Investments — Debt and Equity Securities” (“ASC 320-10”).  Pursuant to guidance in ASC 320-10, changes between our cost basis in these securities and their market value were recognized as an adjustment to their carrying values with an offsetting adjustment to AOCI at each reporting date.  Prior to the sale of our remaining shares of Jinhui during the fourth quarter of 2016, we reviewed the carrying value of such investments on a quarterly basis to determine if there were any indicators of other-than-temporary impairment in accordance with ASC 320-10.  Based on our review as of June 30, 2016, we deemed our investment in Jinhui to be other-than-temporarily impaired due to the duration and severity of the decline in its market value versus its cost basis and the absence of the intent and ability to recover the initial carrying value of the investment.  During the three and six months ended June 30, 2016, a total loss of $2.7 million has been recorded as impairment of investment in our Condensed Consolidated Statement of Operations.  Refer to Note 5 — Investments in the Condensed Consolidated Financial Statements.
 
ITEM 4 .          CONTROLS AND PROCEDURES 
 
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
 
Under the supervision and with the participation of our management, including our Chief Executive Officer and President and our Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and President and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective.
 
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
 
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II:        OTHER INFORMATION   
 
ITEM 1 .  LEGAL PROCEEDINGS 
 
In April 2015, six class action complaints were filed in the Supreme Court of the State of New York, County of New York.  On May 26, 2015, the six actions were consolidated under the caption In Re Baltic Trading Ltd. Stockholder Litigation, Index No. 651241/2015, and a consolidated class action complaint was filed on June 10, 2015 (the “Consolidated Complaint”).  The Consolidated Complaint is purported to be brought by and on behalf of Baltic Trading’s shareholders and alleges that the then-proposed July 2015 merger did not fairly compensate Baltic Trading’s shareholders and undervalued Baltic Trading.  The Consolidated Complaint names as defendants the Company, Baltic Trading, the individual members of Baltic Trading’s board, and the Company’s merger subsidiary. The claims generally allege (i) breaches of fiduciary duties of good faith, due care, disclosure to shareholders, and loyalty, including for failing to maximize shareholder value, and (ii) aiding and abetting those breaches. Among other relief, the complaints seek an injunction against the merger, declaratory judgments that the individual defendants breached fiduciary duties, rescission of the merger agreement, and unspecified damages.
On July 9, 2015, plaintiffs in that action moved to enjoin the merger vote, scheduled to take place on July 17, 2015.  The motion was thereafter fully briefed and argued on July 15, 2015.  The motion to enjoin the vote was denied on July 15, 2015 (the “Preliminary Injunction Denial”).  Plaintiffs sought an emergency injunction and temporary restraining order from the New York State Appellate Division, First Department the following day, on July 16, 2015.  The Appellate Division denied the request, and the vote, and subsequent merger, proceeded as scheduled on July 17, 2015.  Plaintiffs thereafter withdrew that appeal.
On June 30, 2015, Defendants had moved to dismiss the Consolidated Complaint in its entirety.  Plaintiffs subsequently served an Amended Consolidated Complaint, and Defendants directed their motion to dismiss to that amended complaint.  The motion to dismiss was granted and the Amended Consolidated Complaint was dismissed with prejudice on August 29, 2016 (the “Dismissal Decision”).
On September 29, 2016, plaintiffs filed a Notice of Appeal with the Supreme Court of the State of New York, County of New York, which recites their appeal of the Dismissal Decision, “including ... and as referenced in” the Dismissal Decision, the Preliminary Injunction Denial.
On June 28, 2017, plaintiffs moved the Appellate Division to extend the time to perfect the appeal to October 2, 2017.
 
ITEM 6 .  EXHIBITS 
 
The list of exhibits on the accompanying Exhibit Index are incorporated into this Item 6 by reference.

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SIGNATURES 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 	 	GENCO SHIPPING & TRADING LIMITED	

 	DATE: August 10, 2017	By:	/s/ John C. Wobensmith	
 	 	John C. Wobensmith	
 	 	Chief Executive Officer and President	
 	 	(Principal Executive Officer)	

 	DATE: August 10, 2017	By:	/s/ Apostolos Zafolias	
 	 	Apostolos Zafolias	
 	 	Chief Financial Officer	
 	 	(Principal Financial Officer)	

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Exhibit Index

Exhibit	 	Document	
 	 	 	
3.1	 	Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited.(1)	
 	 	 	
3.2	 	Articles of Amendment to Genco Shipping & Trading Limited Second Amended and Restated Articles of Incorporation, dated July 17, 2015.(2)	
 	 	 	
3.3	 	Articles of Amendment to Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited, dated July 7, 2016.(3)	
 	 	 	
3.4	 	Articles of Amendment to Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited, dated January 4, 2017.(4)	
 	 	 	
3.5	 	Certificate of Designations of Rights, Preferences and Privileges of Series A Preferred Stock of Genco Shipping & Trading Limited, dated as of November 14, 2016.(5)	
 	 	 	
3.6	 	Amended and Restated By-Laws of Genco Shipping & Trading Limited, dated as of July 9, 2014.(1)	
 	 	 	
4.1	 	Form of Specimen Stock Certificate of Genco Shipping & Trading Limited.(1)	
 	 	 	
4.2	 	Form of Specimen Warrant Certificate of Genco Shipping & Trading Limited.(1)	
 	 	 	
10.1	 	Form of Director Restricted Stock Unit Agreement dated as of May 17, 2017.(*)	
 	 	 	
10.2	 	Consent Letter dated as of June 1, 2017 under the Credit Agreement, dated as of November 10, 2016, by and among Genco Shipping & Trading Limited, the Lenders party thereto from time to time,
and Nordea Bank AB (publ), New York Branch, as Administrative Agent and Security Agent.(*)	
 	 	 	
31.1	 	Certification of Chief Executive Officer and President pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.(*)	
 	 	 	
31.2	 	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.(*)	
 	 	 	
32.1	 	Certification of Chief Executive Officer and President pursuant to 18 U.S.C. Section 1350.(*)	
 	 	 	
32.2	 	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.(*)	
 	 	 	
101	 	The following materials from Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016 (Unaudited), (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017 and 2016 (Unaudited), (iii) Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2017 and 2016 (Unaudited), (iv) Condensed Consolidated Statements of Equity for the six months ended June 30, 2017 and 2016 (Unaudited), (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016 (Unaudited), and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited).(*)	

 	 	 	
(*)	Filed with this report.	
 	 	 	
(1)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2014.	
 	 	 	
(2)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 17, 2015	

74

Table of Contents

(3)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 7, 2016.	
 	 	 	
(4)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on January 4, 2017.	
 	 	
(5)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on November 15, 2016.	

 

75

E xhibit 10.1
RESTRICTED STOCK UNIT AGREEMENT
PURSUANT TO THE
GENCO SHIPPING & TRADING LIMITED 2015 EQUITY INCENTIVE PLAN
*  *  *  *  *
Participant:      _______________________
Grant Date:      May 17, 2017
Number of Restricted Stock Units granted:  8,399
*  *  *  *  *
WHEREAS, this Restricted Stock Unit Award Agreement (this “ Award Agreement ”), dated as of the Grant Date specified above, is entered into by and between Genco Shipping & Trading Limited, a Marshall Islands corporation (the “ Company ”), and the Participant specified above, pursuant to the Genco Shipping & Trading Limited 2015 Equity Incentive Plan (the “ Plan ”); and
WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units (“ RSUs ”) provided herein to the Participant.
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:
1. Incorporation By Reference; Plan Document Receipt.
This Award Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the grant of the RSUs hereunder), all of which terms and provisions are made a part of and incorporated in this Award Agreement as if they were each expressly set forth herein, provided that any subsequent amendment of the Plan shall not adversely affect Participant’s rights under this Award Agreement without the Participant’s written consent to such amendment.  The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content.  In the event of any conflict between the terms of this Award Agreement and the terms of the Plan, the terms of the Plan shall control.  The Participant hereby acknowledges that all decisions, determinations and interpretations of the Board of Directors in respect of the Plan, this Award Agreement and the RSUs shall be final and conclusive.  Any capitalized term not defined in this Award Agreement shall have the same meaning as is ascribed thereto in the Plan.
2. Grant of Restricted Stock Unit Award.
The Company hereby grants to the Participant, as of the Grant Date specified above, the number of RSUs specified above.  Except as otherwise provided by the Plan, the Participant

 

agrees and understands that nothing contained in this Award Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason.  The Participant shall not have the rights of a stockholder in respect of the shares of Common Stock underlying this Award until such shares of Common Stock are delivered to the Participant in accordance with Section 4.
3. Vesting.  
(a) General.  Except as otherwise provided in this Section 3 or in the Plan, RSUs subject to this Award shall vest at 12:01 a.m. on the earlier of the date of the first Annual Meeting of Shareholders of the Company following the date of grant and the date that is fourteen months after the date of grant, provided that the Participant is a Director as of such date.
(b) Termination of Service.  Upon a termination of service as a Director, other than due to death or Disability, all unvested RSUs shall immediately terminate and be forfeited.
(c) Termination Due to Death or Disability.  Upon a termination of Participant’s service as a Director due to the Participant’s death or Disability, then the Participant’s then outstanding and unvested RSUs shall immediately vest in full as of the date of such termination.
4. Delivery of Shares.
(a) Within 30 days of the Participant’s termination of service as a Director, the Participant shall be issued one share of Common Stock for each vested RSU, provided that the Participant may not determine when during such 30-day period the shares of Common Stock shall be issued.
(b) Blackout Periods.  Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section (a) hereof, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last day of the calendar year in which the Participant terminated service as a Director and (2) the end of the 30-day period set forth in Section 4(a).
5. Dividends and Other Distributions.
The Participant shall be entitled to receive payments equal to all dividends and other distributions paid with respect to the shares of Common Stock underlying the RSUs, and any such amounts will be paid in the same amount and form (cash or non-cash) as that paid directly to holders of shares of Common Stock, provided that such dividends or other distributions will be subject to the same vesting requirements as the underlying RSUs, and shall be paid at the same time the related shares of Common Stock are delivered pursuant to Section 4, and any such amounts with respect to unvested RSUs shall be placed into escrow until such time as the shares for the related RSUs are issued and delivered or the underlying RSUs are forfeited; provided, further, that if any such amounts are paid in shares of Common Stock with respect to unvested RSUs, the shares of Common Stock shall be deposited with the Company and shall be subject to the same restrictions on transferability and forfeitability as the RSUs with respect to which they were paid.

2

6. Non‑transferability.
The RSUs, and any rights or interests therein, (i) shall not be sold, exchanged, transferred, assigned or otherwise disposed of in any way at any time by the Participant (or any beneficiary of the Participant), other than by testamentary disposition by the Participant or by the laws of descent and distribution, (ii) shall not be pledged or encumbered in any way at any time by the Participant (or any beneficiary of the Participant) and (iii) shall not be subject to execution, attachment or similar legal process.  Any attempt to sell, exchange, pledge, transfer, assign, encumber or otherwise dispose of the RSUs, or the levy of any execution, attachment or similar legal process upon the RSUs, contrary to the terms of this Award Agreement and/or the Plan, shall be null and void and without legal force or effect.
7. Entire Agreement; Amendment.
This Award Agreement and the Plan the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter.  The Committee shall have the right, in its sole discretion, to modify or amend this Award Agreement from time to time in accordance with and as provided in the Plan, but not in any manner or to any extent that would be adverse to the Participant without the Participant’s written consent at the time.  This Award Agreement may also be modified or amended by a writing signed by both the Company and the Participant.  The Company shall give written notice to the Participant of any such mutually-agreed-on modification or amendment of this Award Agreement as soon as practicable after the adoption thereof by the Company.
8. Acknowledgment of Participant.
This award of RSUs does not entitle Participant to any benefit other than that granted under this Award Agreement.  Any benefits granted under this Award Agreement are not part of the Participant’s ordinary compensation, and shall not be considered as part of such compensation in the event of severance, redundancy or resignation.  Participant understands and accepts that the benefits granted under this Award Agreement are entirely at the discretion of the Company and that the Company retains the right to amend or terminate this Award Agreement and the Plan at any time, at its sole discretion and without notice, but not in any manner or to any extent that would be adverse to the Participant without the Participant’s written consent at the time.
9. Securities Matters.
The Company shall be under no obligation to effect the registration pursuant to the Securities Act of 1933, as amended   (the “1933 Act”) of any interests in the Plan or any shares of Common Stock to be issued thereunder or to effect similar compliance under any state laws.  The Company shall not be obligated to cause to be issued any shares, whether by means of stock certificates or appropriate book entries, unless and until the Company is advised by its counsel that the issuance of such shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded.  The Board of Directors may require, as a condition of the issuance of shares of Common Stock pursuant to the terms hereof, that the recipient of such shares make such covenants, agreements and representations, and that any

3

certificates bear such legends and any book entries be subject to such electronic coding, as the Board of Directors, in its sole discretion, deems necessary or desirable.  The Participant specifically understands and agrees that the shares of Common Stock, if and when issued, may be “restricted securities,” as that term is defined in Rule 144 under the Securities Act of 1933, as amended and, accordingly, the Participant may be required to hold the shares indefinitely unless they are registered under such Act or an exemption from such registration is available.
10. Delays or Omissions.
No delay or omission to exercise any right, power or remedy accruing to any party hereto upon any breach or default of any party under this Award Agreement, shall impair any such right, power or remedy of such party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Award Agreement, or any waiver on the part of any party or any provisions or conditions of this Award Agreement, must be in a writing signed by such party and shall be effective only to the extent specifically set forth in such writing.
11. Governing Law.
This Award Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to the principles of conflict of laws thereof.
12. No Right to Continued Service.
Nothing in this Award Agreement shall interfere with or limit in any way the right of the Company to terminate the Participant’s employment or service at any time, for any reason and with or without cause.
13. Notices.    Any notice which may be required or permitted under this Award Agreement shall be in writing, and shall be delivered in person or via facsimile transmission, overnight courier service or certified mail, return receipt requested, postage prepaid, properly addressed as follows:
(a) If such notice is to the Company, to the attention of the President of the Company or at such other address as the Company, by notice to the Participant, shall designate in writing from time to time.
(b) If such notice is to the Participant, at his/her address as shown on the Company’s records, or at such other address as the Participant, by notice to the Company, shall designate in writing from time to time.
14. Compliance with Laws.
This issuance of RSUs (and the shares of Common Stock underlying the RSUs) pursuant to this Award Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the 1933 Act, the Securities Exchange Act of 1934 and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto.  The Company shall not be obligated to issue these RSUs or any of

4

the shares of Common Stock pursuant to this Award Agreement if any such issuance would violate any such requirements.
15. Binding Agreement; Assignment.
This Award Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign (except as provided by Section 5 hereof) any part of this Award Agreement without the prior express written consent of the Company.  The Company may not assign any portion of this Award Agreement without the prior written consent of the Participant except as otherwise provided in the Plan.
16. Counterparts.
This Award Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.
17. Headings.
The titles and headings of the various sections of this Award Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Award Agreement.
18. Further Assurances.
Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Award Agreement and the Plan and the consummation of the transactions contemplated thereunder.
19. Severability.
The invalidity or unenforceability of any provisions of this Award Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Award Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Award Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
[Remainder of Page Intentionally Left Blank]

5

 

IN WITNESS WHEREOF , the parties hereto have executed this Award Agreement as of the date first written above.

 	GENCO SHIPPING & TRADING LIMITED	

 	By:	 	
 	 	 	
 	Name:  John C. Wobensmith	
 	 	 	
 	Title:  Chief Executive Officer and President	

 	PARTICIPANT	

 	Name:	 	

 

Exhibit 10.2
EXECUTION VERSION
GENCO SHIPPING & TRADING LIMITED
299 Park Avenue, 11th Floor
New York, NY 10171
June 1, 2017
Nordea Bank AB (publ), New York Branch,
as Administrative Agent
1211 Avenue of the Americas, 23rd Floor
New York, NY 10036
Re: Consent and Waiver
Ladies & Gentlemen:
Reference is made to that certain CREDIT AGREEMENT, dated as of November 10, 2016 (as in effect on the date hereof, the “ Credit Agreement ”), by and among GENCO SHIPPING & TRADING LIMITED, a company incorporated under the laws of the Republic of the Marshall Islands (the “ Borrower ”), the Lenders party thereto from time to time, and NORDEA BANK AB (PUBL), NEW YORK BRANCH (“ Nordea ”), as Administrative Agent (in such capacity, the “ Administrative Agent ”) and as Security Agent under the Security Documents (in such capacity, the “ Security Agent ”). Unless otherwise indicated, all capitalized terms used in this letter (this “ Consent Letter ”) and not otherwise defined shall have the respective meanings provided such terms in the Credit Agreement.
We hereby request that the Lenders consent and agree that, notwithstanding anything to the contrary set forth in Section 8.13 of the Credit Agreement, the Borrower may maintain (and open) deposit, savings, investment and other similar accounts in addition to the Minimum Liquidity Account and Side Account.
This Consent Letter shall become effective on the date when the following conditions have been satisfied (such date, the “ Effective Date ”):

	(a)		this Consent Letter shall have been executed and delivered by the Borrower and the Required Lenders; and	
	(b)		on the Effective Date, immediately after giving effect to this Consent Letter (i) all representations and warranties contained in the Credit Agreement or in any other Credit Document shall be true and correct in all material respects both after giving effect to this Consent Letter with the same effect as though such representations and warranties had been made on the Effective Date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as	

 

of such specified date) and (ii) no Default or Event of Default shall have occurred and be continuing.
In order to induce the Administrative Agent and the Lenders to enter into this Consent Letter, the Borrower makes the following representations and warranties, immediately after giving effect to this Consent Letter:

	(a)		The Borrower has the corporate power and authority to execute and deliver this Consent Letter and perform the terms and provisions of this Consent Letter and the Credit Agreement, as modified hereby, and has taken or will take in due course all necessary corporate or other applicable action to authorize the execution and delivery by it of this Consent Letter and the performance by it of the Consent Letter and the Credit Agreement, as modified hereby.	
	(b)		The Borrower has duly executed and delivered this Consent Letter, and each of this Consent Letter and the Credit Agreement, as modified hereby, constitutes the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).	
	(c)		Neither the execution or delivery by the Borrower of this Consent Letter or the performance by the Borrower of this Consent Letter or the Credit Agreement, as modified hereby, nor compliance by it with the terms and provisions hereof or thereof, will (i) contravene any material provision of any applicable law, statute, rule or regulation or any applicable order, judgment, writ, injunction or decree of any court or governmental instrumentality, (ii) violate, conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except Permitted Liens) upon any of the material properties or assets of the Borrower and its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, to which any of the Borrower and its Subsidiaries is a party or by which it or any of its material property or assets is bound or to which it may be subject, (iii) violate any provision of the Organizational Documents of any of the Borrower and its Subsidiaries or (iv) violate any provision of the Credit Documents, as modified hereby.	
	(d)		No order, consent, approval, license, authorization or validation of, or filing, recording or registration with or exemption by, any Governmental Authority or public body, or any subdivision thereof, is required to	

- 2  -

authorize, or is required in connection with, (i) the execution and delivery by the Borrower of this Consent Letter or the performance by the Borrower the Credit Agreement, as modified hereby, or (ii) the legality, validity, binding effect or enforceability of this Consent Letter or the Credit Agreement, as modified hereby, in each case, except as have been obtained or made.

	(e)		No Default or Event of Default has occurred and is continuing.	
Please confirm your agreement to this Consent Letter set forth herein by signing, accepting and agreeing to this Consent Letter below.
The consent provided pursuant to this letter is limited precisely as written and shall not be deemed to be a waiver of or a consent to the modification of or deviation from any other term or condition of the Credit Agreement and the other Credit Documents or any of the other instruments or agreements referred to therein except as set forth herein.
This Consent Letter may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.
THIS CONSENT LETTER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
EACH OF THE PARTIES TO THIS CONSENT LETTER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CONSENT LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY.
From and after the Effective Date, (i) all references in the Credit Agreement and each of the other Credit Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement, as modified hereby and (ii) this Consent Letter shall for all purposes constitute a Credit Document.
[Signature pages follow]

- 3  -

 	 	 	 	
 	Very truly yours,	
 	 	
 	GENCO SHIPPING & TRADING LIMITED	

 	By:	/s/ Apostolos Zafolias	
 	 	Name:	Apostolos Zafolias	
 	 	Title:	Chief Financial Officer	

[Signature Page – Consent Letter under Genco Shipping & Trading Limited Credit Agreement]

Accepted and agreed:	 	
 	 	
NORDEA BANK AB (PUBL), NEW YORK BRANCH,	 	
as Administrative Agent, Security Agent and a Lender	 	

By:	/s/ Erik Havnvik	 	
 	Name:	Erik Havnvik	 	
 	Title:	First Vice President	 	

By:	/s/ Martin Lunder	 	
 	Name:	Martin Lunder	 	
 	Title:	Senior Vice President	 	

[Signature Page – Consent Letter under Genco Shipping & Trading Limited Credit Agreement]

 	 	 	 	
SKANDINAVIKSA ENSKILDA BANKEN AB (PUBL), as a Lender	 	

By:	/s/ Arne Juell-Skielse	 	
 	Name:	Arne Juell-Skielse	 	
 	Title:	 	 	

By:	/s/ Magnus Rundgren	 	
 	Name:	Magnus Rundgren	 	
 	Title:	 	 	

[Signature Page – Consent Letter under Genco Shipping & Trading Limited Credit Agreement]

 	 	 	 	
DVB BANK SE, as a Lender	 	

By:	/s/ E.C. Gruner-Hegge	 	
 	Name:	E.C. Gruner-Hegge	 	
 	Title:	Senior Vice President	 	

By:	/s/ Andrea Strullato	 	
 	Name:	Andrea Stullato	 	
 	Title:	Senior Vice President	 	

[Signature Page – Consent Letter under Genco Shipping & Trading Limited Credit Agreement]

 	 	 	 	
ABN AMRO CAPITAL USA LLC, as a Lender	 	

By:	/s/ Francis Birkeland	 	
 	Name:	Francis Birkeland	 	
 	Title:	Managing Director	 	

By:	/s/ Urvashi Zutshi	 	
 	Name:	Urvashi Zutshi	 	
 	Title:	Managing Director	 	

[Signature Page – Consent Letter under Genco Shipping & Trading Limited Credit Agreement]

 	 	 	 	
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Lender	 	

By:	/s/ Yannick Le Gourieres	 	
 	Name:	Yannick LE GOURIERES	 	
 	Title:	Director	 	

By:	/s/ Irina Benimovich	 	
 	Name:	Irina Benimovich	 	
 	Title:	Senior Associate	 	

[Signature Page – Consent Letter under Genco Shipping & Trading Limited Credit Agreement]

DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT, as a Lender	 	

By:	/s/ Bastian Duehmert	 	
 	Name:	Bastian DUEHMERT	 	
 	Title:	Director	 	

By:	/s/ Andreas Twardzik	 	
 	Name:	Andreas TWARDZIK	 	
 	Title:	Vice President	 	

[Signature Page – Consent Letter under Genco Shipping & Trading Limited Credit Agreement]

CRÉDIT INDUSTRIEL ET COMMERCIAL, as a Lender	 	

By:	/s/ Andrew McKuln	 	
 	Name:	Andrew McKuln	 	
 	Title:	Managing Director	 	

By:	/s/ Adrienne Molloy	 	
 	Name:	Adrienne Molloy	 	
 	Title:	Managing Director	 	

[Signature Page – Consent Letter under Genco Shipping & Trading Limited Credit Agreement]

BNP PARIBAS., as a Lender	 	

By:	/s/ E. Dulcire	 	
 	Name:	E. Dulcire	 	
 	Title:	Director	 	

By:	/s/ Pierre Frachon	 	
 	Name:	Pierre FRACHON	 	
 	Title:	Director	 	

[Signature Page – Consent Letter under Genco Shipping & Trading Limited Credit Agreement]

Exhibit 31.1
 
CERTIFICATION
 
I, John C. Wobensmith, certify that:
 
1.    I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 of Genco Shipping & Trading Limited;
 
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 	/s/ John C. Wobensmith	
 	Name: John C. Wobensmith	
Date:  August 10, 2017	Title: Chief Executive Officer and President	

Exhibit 31.2
 
CERTIFICATION
 
I, Apostolos Zafolias, certify that:
 
1.    I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 of Genco Shipping & Trading Limited;
 
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
ugust	 	
 	/s/ Apostolos Zafolias	
 	Name: Apostolos Zafolias	
Date:  August 10, 2017	Title: Chief Financial Officer	

Exhibit 32.1
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with Genco Shipping & Trading Limited’s (the “Company”) quarterly report on Form 10-Q for the quarter ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and President of the Company, hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 10, 2017	/s/ John C. Wobensmith	
 	Name: John C. Wobensmith	
 	Title: Chief Executive Officer and President	
 
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.  A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 
Exhibit 32.2
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with Genco Shipping & Trading Limited’s (the “Company”) quarterly report on Form 10-Q for the quarter ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Financial Officer of the Company, hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 10, 2017	/s/ Apostolos Zafolias	
 	Name: Apostolos Zafolias	
 	Title: Chief Financial Officer	
 
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.  A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.