Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
x       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2011
 
OR
 
o          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                  to                  
 
Commission file number 000-51442

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

Republic of the Marshall Islands	 	98-043-9758	
(State or other jurisdiction of
incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
 
299 Park Avenue, 20 th  Floor, New York, New York 10171
(Address of principal executive offices) (Zip Code)
 
(646) 443-8550
(Registrant’s telephone number, including area code)

 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x   No  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x   No  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	 	Accelerated filer  x	
 	 	 	
Non-accelerated filer  o	 	Smaller reporting company  o	
(Do not check if a smaller reporting company)	 	 	
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o   No  x
 
The number of shares outstanding of each of the issuer’s classes of common stock, as of July 26, 2011: Common stock, $0.01 per share — 35,966,198 shares.

 

Table of Contents
 
Genco Shipping & T  rading Limited

 	 	Page	
 	 	 	
PART I — FINANCIAL INFORMATION	 	
 	 	 	
Item 1.	Financial Statements (unaudited)	 	
 	 	 	
 	a)	Condensed Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010	3	
 	 	 	
 	b)	Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2011 and 2010	4	
 	 	 	
 	c)	Condensed Consolidated Statements of Equity for the Six Months ended June 30, 2011 and 2010	5	
 	 	 	
 	d)	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months ended June 30, 2011 and 2010	6	
 	 	 	
 	e)	Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2011 and 2010	7	
 	 	 	
 	f)	Notes to Condensed Consolidated Financial Statements	8	
 	 	 	
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23	
 	 	 	
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45	
 	 	 	
Item 4.	Controls and Procedures	46	
 	 	 	
PART II —OTHER INFORMATION	 	
 	 	 	
Item 1.	Legal Proceedings	47	
 	 	 	
Item 6.	Exhibits	48	
 
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PART I. FINANCIAL INFORMATION 
 
ITEM 1. FINANCIAL STATEMENTS 
 
Genco Shipping & Trading Limited
Condensed Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010 
(U.S. Dollars in thousands, except for share and per share data)
(Unaudited)

 	 	June 30, 2011	 	December 31,
2010	 	
Assets	 	 	 	 	 	
Current assets:	 	 	 	 	 	
Cash and cash equivalents	 	$	286,230	 	$	270,877	 	
Due from charterers, net of a reserve of $996 and $592, respectively	 	8,860	 	8,794	 	
Prepaid expenses and other current assets	 	16,179	 	14,010	 	
Total current assets	 	311,269	 	293,681	 	
 	 	 	 	 	 	
Noncurrent assets:	 	 	 	 	 	
Vessels, net of accumulated depreciation of $398,190 and $334,502, respectively	 	2,792,033	 	2,783,810	 	
Deposits on vessels	 	6,885	 	13,718	 	
Deferred drydock, net of accumulated amortization of $9,850 and $9,044, respectively	 	7,199	 	8,538	 	
Other assets, net of accumulated amortization of $6,133 and $4,561, respectively	 	15,490	 	16,937	 	
Fixed assets, net of accumulated depreciation and amortization of $2,163 and $2,041, respectively	 	2,330	 	2,310	 	
Other noncurrent assets	 	514	 	—	 	
Restricted cash	 	9,750	 	9,000	 	
Investments	 	42,450	 	54,714	 	
Total noncurrent assets	 	2,876,651	 	2,889,027	 	
 	 	 	 	 	 	
Total assets	 	$	3,187,920	 	$	3,182,708	 	
Liabilities and Equity	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	
Accounts payable and accrued expenses	 	$	26,152	 	$	31,790	 	
Current portion of long-term debt	 	110,610	 	71,841	 	
Deferred revenue	 	3,959	 	9,974	 	
Fair value of derivative instruments	 	9,770	 	4,417	 	
Total current liabilities	 	150,491	 	118,022	 	
Noncurrent liabilities:	 	 	 	 	 	
Deferred revenue	 	—	 	392	 	
Deferred rent credit	 	1,233	 	657	 	
Time charters acquired	 	1,601	 	2,197	 	
Fair value of derivative instruments	 	25,592	 	38,880	 	
Convertible senior note payable	 	104,262	 	102,309	 	
Long-term debt	 	1,538,300	 	1,572,098	 	
Total noncurrent liabilities	 	1,670,988	 	1,716,533	 	
 	 	 	 	 	 	
Total liabilities	 	1,821,479	 	1,834,555	 	
 	 	 	 	 	 	
Commitments and contingencies	 	 	 	 	 	
 	 	 	 	 	 	
Equity:	 	 	 	 	 	
Genco Shipping & Trading Limited shareholders’ equity:	 	 	 	 	 	
Common stock, par value $0.01; 100,000,000 shares authorized; issued and outstanding 35,966,198 and 35,951,198 shares at June 30, 2011 and December 31, 2010, respectively	 	359	 	359	 	
Additional paid-in capital	 	806,787	 	803,778	 	
Accumulated other comprehensive loss	 	(9,558	)	(5,210	)	
Retained earnings	 	357,505	 	334,022	 	
Total Genco Shipping & Trading Limited shareholders’ equity	 	1,155,093	 	1,132,949	 	
Noncontrolling interest	 	211,348	 	215,204	 	
Total equity	 	1,366,441	 	1,348,153	 	
 	 	 	 	 	 	
Total liabilities and equity	 	$	3,187,920	 	$	3,182,708	 	
 
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, 2011 and 2010 
(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)
(Unaudited)

 	 	For the Three Months
Ended June 30,	 	For the Six Months
Ended June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
Revenues:	 	 	 	 	 	 	 	 	 	
Voyage revenues	 	$	98,511	 	$	105,337	 	199,130	 	$	200,018	 	
Service revenues	 	819	 	—	 	1,629	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Total revenues	 	99,330	 	105,337	 	$	200,759	 	$	200,018	 	
 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	
Voyage expenses	 	(74	)	1,018	 	894	 	1,755	 	
Vessel operating expenses	 	25,465	 	16,160	 	50,260	 	31,047	 	
General, administrative, and management fees	 	8,298	 	7,164	 	17,149	 	12,960	 	
Depreciation and amortization	 	34,025	 	26,259	 	67,106	 	51,094	 	
Other operating income	 	—	 	(206	)	—	 	(206	)	
 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	67,714	 	50,395	 	135,409	 	96,650	 	
 	 	 	 	 	 	 	 	 	 	
Operating income	 	31,616	 	54,942	 	65,350	 	103,368	 	
 	 	 	 	 	 	 	 	 	 	
Other (expense) income:	 	 	 	 	 	 	 	 	 	
Other (expense) income	 	(56	)	(3	)	(111	)	25	 	
Interest income	 	163	 	248	 	335	 	324	 	
Interest expense	 	(21,540	)	(15,810	)	(42,861	)	(31,241	)	
 	 	 	 	 	 	 	 	 	 	
Other expense	 	(21,433	)	(15,565	)	(42,637	)	(30,892	)	
 	 	 	 	 	 	 	 	 	 	
Income before income taxes	 	10,183	 	39,377	 	22,713	 	72,476	 	
Income tax expense	 	(355	)	(719	)	(714	)	(719	)	
 	 	 	 	 	 	 	 	 	 	
Net income	 	9,828	 	38,658	 	21,999	 	71,757	 	
Less: Net (loss) income attributable to noncontrolling interest	 	(262	)	1,899	 	(1,517	)	1,550	 	
Net income attributable to Genco Shipping & Trading Limited	 	$	10,090	 	$	36,759	 	$	23,516	 	$	70,207	 	
 	 	 	 	 	 	 	 	 	 	
Earnings per share-basic	 	$	0.29	 	$	1.17	 	$	0.67	 	$	2.24	 	
Earnings per share-diluted	 	$	0.29	 	$	1.16	 	$	0.67	 	$	2.23	 	
Weighted average common shares outstanding-basic	 	35,150,352	 	31,413,874	 	35,146,254	 	31,409,858	 	
Weighted average common shares outstanding-diluted	 	35,204,649	 	31,562,879	 	35,211,636	 	31,553,226	 	
Dividends declared per share	 	$	—	 	$	—	 	$	—	 	$	—	 	
 
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, 2011 and 2010
(U.S. Dollars in Thousands)
(Unaudited)

 	 	Common
Stock	 	Additional
Paid-in
Capital	 	Accumulated
Other
Comprehensive
(Loss)
Income	 	Retained
Earnings	 	Genco
Shipping &
Trading
Limited
Shareholders’
Equity	 	Noncontrolling
Interest	 	Total Equity	 	
Balance — January 1, 2011	 	$	359	 	$	803,778	 	$	(5,210	)	$	334,022	 	$	1,132,949	 	$	215,204	 	$	1,348,153	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	 	 	 	 	 	 	23,516	 	23,516	 	(1,517	)	21,999	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Change in unrealized gain on investments	 	 	 	 	 	(12,264	)	 	 	(12,264	)	—	 	(12,264	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized gain on cash flow hedges, net	 	 	 	 	 	7,916	 	 	 	7,916	 	—	 	7,916	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of 15,000 shares of nonvested stock, less forfeitures of 1,100 shares	 	—	 	—	 	 	 	 	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock amortization	 	 	 	2,972	 	 	 	 	 	2,972	 	1,551	 	4,523	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash dividends paid by Baltic Trading Limited	 	 	 	 	 	 	 	(33	)	(33	)	(3,853	)	(3,886	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Vesting of restricted shares issued by Baltic Trading Limited	 	 	 	37	 	 	 	 	 	37	 	(37	)	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance —June 30, 2011	 	$	359	 	$	806,787	 	$	(9,558	)	$	357,505	 	$	1,155,093	 	$	211,348	 	$	1,366,441	 	

 	 	Common
Stock	 	Additional
Paid-in
Capital	 	Accumulated
Other
Comprehensive
(Loss)
Income	 	Retained
Earnings	 	Genco
Shipping &
Trading
Limited
Shareholders’
Equity	 	Noncontrolling
Interest	 	Total Equity	 	
Balance — January 1, 2010	 	$	318	 	$	722,198	 	$	13,589	 	$	192,820	 	$	928,925	 	$	—	 	$	928,925	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	 	 	 	 	 	70,207	 	70,207	 	1,550	 	71,757	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Change in unrealized gain on investments	 	 	 	 	 	(18,901	)	 	 	(18,901	)	—	 	(18,901	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized loss on cash flow hedges, net	 	 	 	 	 	(8,789	)	 	 	(8,789	)	—	 	(8,789	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of 90,000 shares of nonvested stock	 	1	 	(1	)	 	 	 	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock amortization	 	 	 	2,190	 	 	 	 	 	2,190	 	1,093	 	3,283	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of common stock of Baltic Trading Limited	 	 	 	(1,054	)	 	 	 	 	(1,054	)	211,449	 	210,395	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance — June 30, 2010	 	$	319	 	$	723,333	 	$	(14,101	)	$	263,027	 	$	972,578	 	$	214,092	 	$	1,186,670	 	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Comprehensive Income (Loss) 
For the Three and Six Months Ended June 30, 2011 and 2010
(U.S. Dollars in Thousands)
(Unaudited)

 	 	For the Three Months Ended
June 30,	 	For the Six Months
Ended June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
 	 	 	 	 	 	 	 	 	 	
Net income	 	$	9,828	 	$	38,658	 	$	21,999	 	$	71,757	 	
Change in unrealized gain on investments	 	(12,694	)	(23,144	)	(12,264	)	(18,901	)	
Unrealized gain (loss) on cash flow hedges, net	 	712	 	(5,088	)	7,916	 	(8,789	)	
Comprehensive (loss) income	 	(2,154	)	10,426	 	17,651	 	44,067	 	
Less: Comprehensive (loss) income attributable to noncontrolling interest	 	(262	)	1,899	 	(1,517	)	1,550	 	
Comprehensive (loss) income attributable to Genco Shipping & Trading Limited	 	$	(1,892	)	$	8,527	 	$	19,168	 	$	42,517	 	
 
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, 2011 and 2010 
(U.S. Dollars in Thousands)
(Unaudited)

 	 	For the Six Months
Ended June 30,	 	
 	 	2011	 	2010	 	
Cash flows from operating activities:	 	 	 	 	 	
Net income	 	$	21,999	 	$	71,757	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	
Depreciation and amortization	 	67,106	 	51,094	 	
Amortization of deferred financing costs	 	1,572	 	602	 	
Amortization of time charters acquired	 	(969	)	(2,435	)	
Amortization of discount on Convertible Senior Notes	 	1,952	 	—	 	
Unrealized gain on derivative instruments	 	(19	)	(35	)	
Amortization of nonvested stock compensation expense	 	4,523	 	3,283	 	
Change in assets and liabilities:	 	 	 	 	 	
Increase in due from charterers	 	(66	)	(959	)	
Increase in prepaid expenses and other current assets	 	(2,169	)	(1,902	)	
Increase in other noncurrent assets	 	(514	)	—	 	
(Decrease) increase in accounts payable and accrued expenses	 	(2,818	)	2,113	 	
Decrease in deferred revenue	 	(6,407	)	(2,903	)	
Increase (decrease) in deferred rent credit	 	576	 	(10	)	
Deferred drydock costs incurred	 	(1,801	)	(2,590	)	
 	 	 	 	 	 	
Net cash provided by operating activities	 	82,965	 	118,015	 	
 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	
Purchase of vessels	 	(67,174	)	(214,389	)	
Deposits on vessels	 	(117	)	(84,899	)	
Deposits on vessels to be sold	 	—	 	(10,550	)	
Purchase of other fixed assets	 	(277	)	(251	)	
Changes in deposits of restricted cash	 	(750	)	5,500	 	
 	 	 	 	 	 	
Net cash used in investing activities	 	(68,318	)	(304,589	)	
 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	
Repayments on the 2007 Credit Facility	 	(25,000	)	(25,000	)	
Proceeds from the $100 Million Term Loan Facility	 	20,000	 	 	 	
Repayments on the $100 Million Term Loan Facility	 	(1,763	)	—	 	
Proceeds from the $253 Million Term Loan Facility	 	21,500	 	—	 	
Repayments on the $253 Million Term Loan Facility	 	(9,766	)	—	 	
Proceeds from the Baltic Trading 2010 Credit Facility	 	—	 	9,975	 	
Proceeds from issuance of common stock by subsidiary	 	—	 	214,508	 	
Payments of subsidiary common stock issuance costs	 	—	 	(3,721	)	
Payment of Convertible Senior Notes issuance costs	 	(51	)	—	 	
Payment of dividend by subsidiary	 	(3,886	)	—	 	
Payment of deferred financing costs	 	(328	)	(1,316	)	
 	 	 	 	 	 	
Net cash provided by financing activities	 	706	 	194,446	 	
 	 	 	 	 	 	
Net increase in cash and cash equivalents	 	15,353	 	7,872	 	
 	 	 	 	 	 	
Cash and cash equivalents at beginning of period	 	270,877	 	188,267	 	
 	 	 	 	 	 	
Cash and cash equivalents at end of period	 	$	286,230	 	$	196,139	 	
 
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”), its wholly owned subsidiaries, and its subsidiary, Baltic Trading Limited (collectively, the “Company”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. GS&T is incorporated under the laws of the Marshall Islands and as of June 30, 2011 is the sole owner of all of the outstanding shares of the following subsidiaries: Genco Ship Management LLC; Genco Investments LLC; Genco Management (USA) Limited; and the ship-owning subsidiaries as set forth below.
 
Below is the list of GS&T’s wholly owned ship-owning subsidiaries as of June 30, 2011:

Wholly Owned Subsidiaries	 	Vessels Acquired	 	Dwt	 	Delivery Date	 	Year Built	
 	 	 	 	 	 	 	 	 	
Genco Reliance Limited	 	Genco Reliance	 	29,952	 	12/6/04	 	1999	
Genco Vigour Limited	 	Genco Vigour	 	73,941	 	12/15/04	 	1999	
Genco Explorer Limited	 	Genco Explorer	 	29,952	 	12/17/04	 	1999	
Genco Carrier Limited	 	Genco Carrier	 	47,180	 	12/28/04	 	1998	
Genco Sugar Limited	 	Genco Sugar	 	29,952	 	12/30/04	 	1998	
Genco Pioneer Limited	 	Genco Pioneer	 	29,952	 	1/4/05	 	1999	
Genco Progress Limited	 	Genco Progress	 	29,952	 	1/12/05	 	1999	
Genco Wisdom Limited	 	Genco Wisdom	 	47,180	 	1/13/05	 	1997	
Genco Success Limited	 	Genco Success	 	47,186	 	1/31/05	 	1997	
Genco Beauty Limited	 	Genco Beauty	 	73,941	 	2/7/05	 	1999	
Genco Knight Limited	 	Genco Knight	 	73,941	 	2/16/05	 	1999	
Genco Leader Limited	 	Genco Leader	 	73,941	 	2/16/05	 	1999	
Genco Marine Limited	 	Genco Marine	 	45,222	 	3/29/05	 	1996	
Genco Prosperity Limited	 	Genco Prosperity	 	47,180	 	4/4/05	 	1997	
Genco Muse Limited	 	Genco Muse	 	48,913	 	10/14/05	 	2001	
Genco Acheron Limited	 	Genco Acheron	 	72,495	 	11/7/06	 	1999	
Genco Surprise Limited	 	Genco Surprise	 	72,495	 	11/17/06	 	1998	
Genco Augustus Limited	 	Genco Augustus	 	180,151	 	8/17/07	 	2007	
Genco Tiberius Limited	 	Genco Tiberius	 	175,874	 	8/28/07	 	2007	
Genco London Limited	 	Genco London	 	177,833	 	9/28/07	 	2007	
Genco Titus Limited	 	Genco Titus	 	177,729	 	11/15/07	 	2007	
Genco Challenger Limited	 	Genco Challenger	 	28,428	 	12/14/07	 	2003	
Genco Charger Limited	 	Genco Charger	 	28,398	 	12/14/07	 	2005	
Genco Warrior Limited	 	Genco Warrior	 	55,435	 	12/17/07	 	2005	
Genco Predator Limited	 	Genco Predator	 	55,407	 	12/20/07	 	2005	
Genco Hunter Limited	 	Genco Hunter	 	58,729	 	12/20/07	 	2007	
Genco Champion Limited	 	Genco Champion	 	28,445	 	1/2/08	 	2006	
Genco Constantine Limited	 	Genco Constantine	 	180,183	 	2/21/08	 	2008	
Genco Raptor LLC	 	Genco Raptor	 	76,499	 	6/23/08	 	2007	
Genco Cavalier LLC	 	Genco Cavalier	 	53,617	 	7/17/08	 	2007	
Genco Thunder LLC	 	Genco Thunder	 	76,588	 	9/25/08	 	2007	
Genco Hadrian Limited	 	Genco Hadrian	 	169,694	 	12/29/08	 	2008	
Genco Commodus Limited	 	Genco Commodus	 	169,025	 	7/22/09	 	2009	
Genco Maximus Limited	 	Genco Maximus	 	169,025	 	9/18/09	 	2009	
Genco Claudius Limited	 	Genco Claudius	 	169,025	 	12/30/09	 	2010	
Genco Bay Limited	 	Genco Bay	 	34,296	 	8/24/10	 	2010	
Genco Ocean Limited	 	Genco Ocean	 	34,409	 	7/26/10	 	2010	
Genco Avra Limited	 	Genco Avra	 	34,391	 	5/12/2011	 	2011	
Genco Mare Limited	 	Genco Mare	 	34,428	 	7/20/2011	 	2011	
Genco Spirit Limited	 	Genco Spirit	 	35,000	 	Q4 2011 (1)	 	2011 (1)	
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	 	3/29/2011	 	2011	
 
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(1) Delivery and built date for vessel being delivered in the future is an estimate based on guidance received from the seller and the shipyard.
 
Baltic Trading Limited (“Baltic Trading”) was a wholly-owned indirect subsidiary of GS&T until Baltic Trading completed its initial public offering, or IPO, on March 15, 2010.  As of June 30, 2011, GS&T’s wholly-owned subsidiary Genco Investments LLC owned 5,699,088 shares of Baltic Trading’s Class B Stock, which represented a 25.22% ownership interest in Baltic Trading and 83.50% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock.  Additionally, pursuant to the subscription agreement between Genco Investments LLC and Baltic Trading, for so long as GS&T directly or indirectly holds at least 10% of the aggregate number of outstanding shares of Baltic Trading’s common stock and Class B stock, Genco Investments LLC will be entitled to receive an additional number of shares of Baltic Trading’s Class B stock equal to 2% of the number of common shares issued in the future, other than shares issued under Baltic Trading’s 2010 Equity Incentive Plan.
 
Below is the list of Baltic Trading’s wholly owned ship-owning subsidiaries as of June 30, 2011:

Baltic Trading’s Wholly Owned
Subsidiaries	 	Vessel	 	Dwt	 	Delivery Date	 	Year
Built	
 	 	 	 	 	 	 	 	 	
Baltic Leopard Limited	 	Baltic Leopard	 	53,447	 	4/8/10	 	2009	
Baltic Panther Limited	 	Baltic Panther	 	53,351	 	4/29/10	 	2009	
Baltic Cougar Limited	 	Baltic Cougar	 	53,432	 	5/28/10	 	2009	
Baltic Jaguar Limited	 	Baltic Jaguar	 	53,474	 	5/14/10	 	2009	
Baltic Bear Limited	 	Baltic Bear	 	177,717	 	5/14/10	 	2010	
Baltic Wolf Limited	 	Baltic Wolf	 	177,752	 	10/14/10	 	2010	
Baltic Wind Limited	 	Baltic Wind	 	34,409	 	8/4/10	 	2009	
Baltic Cove Limited	 	Baltic Cove	 	34,403	 	8/23/10	 	2010	
Baltic Breeze Limited	 	Baltic Breeze	 	34,386	 	10/12/10	 	2010	
 
The Company provides technical services for drybulk vessels purchased by Maritime Equity Partners (“MEP”), which is managed by a company owned by Peter C. Georgiopoulos, Chairman of the Board of Directors of GS&T.  These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services are provided for a fee of $750 per ship per day plus reimbursement of out-of-pocket costs and will be provided for an initial term of one year.  MEP has the right to cancel provision of services on 60 days’ notice with payment of a one-year termination fee upon a change in control of the Company.  The Company may terminate provision of the services at any time on 60 days’ notice.  Peter C. Georgiopoulos, the Company’s Chairman of the Board, is a minority investor in MEP, and affiliates of Oaktree Capital Management, L.P., of which Stephen A. Kaplan, a director of the Company, is a principal, are majority investors in MEP.
 
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Principles of consolidation
 
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which include the accounts of Genco Shipping & Trading Limited, its wholly owned subsidiaries and Baltic Trading, a subsidiary in which the Company owns a majority of the voting interests and exercises control.  All intercompany accounts and transactions have been eliminated in consolidation.
 
Basis of presentation
 
The accompanying unaudited 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, 2010 (the “2010 10-K”).  The results of operations for the periods ended June 30, 2011 are not necessarily indicative of the operating results for the full year.
 
Vessels, net
 
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
 
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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 cost of steel times the weight of the ship noted in lightweight tons (lwt).  Effective January 1, 2011, the Company increased the estimated scrap value of the vessels from $175/lwt to $245/lwt prospectively based on the 15-year average scrap value of steel.  The change in the estimated scrap value will result in a decrease in depreciation expense over the remaining life of the vessel assets.  During the three and six months ended June 30, 2011, the increase in the estimated scrap value resulted in a decrease in depreciation expense of $618 and $1,229, respectively.
 
Noncontrolling interest
 
Net loss (income) attributable to noncontrolling interest during the three and six months ended June 30, 2011 and 2010 reflects the noncontrolling interest’s share of the net loss of Baltic Trading, a subsidiary of the Company, which owns and employs drybulk vessels in the spot market or on spot market-related time charters.  The spot market represents immediate chartering of a vessel, usually for single voyages.  At June 30, 2011, the noncontrolling interest held a 74.78% economic interest in Baltic Trading while only holding 16.50% of voting power.
 
Income taxes
 
Pursuant to certain agreements, GS&T technically and commercially manages vessels for Baltic Trading, as well as provides technical management of vessels for MEP in exchange for specified fees for these services provided.  These services are performed by Genco Management (USA) Limited (“Genco (USA)”), which has elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) is subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services.  Genco (USA) has entered into a cost-sharing agreement with the Company and Genco Ship Management LLC, collectively Manco, pursuant to which Genco (USA) agrees to reimburse Manco for the costs incurred by Genco (USA) for the use of Manco’s personnel and services in connection with the provision of the services for both Baltic Trading and MEP’s vessels.
 
Total revenue earned for these services during the three months ended June 30, 2011 and 2010 was $1,562 and $2,429, respectively, of which $743 and $2,429, respectively, eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $749 associated with these activities for the three months ended June 30, 2011.  This resulted in estimated tax expense of $327 for the three months ended June 30, 2011.  After allocation of certain expenses, there was taxable income of $1,598 associated with these activities for the three months ended June 30, 2010.  This resulted in income tax expense of $719 for the three months ended June 30, 2010.
 
Total revenue earned for these services during the six months ended June 30, 2011 and 2010 was $3,101 and $2,429, respectively, of which $1,472 and $2,429, respectively, eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $1,446 associated with these activities for the six months ended June 30, 2011.  This resulted in estimated tax expense of $691 for the six months ended June 30, 2011.  After allocation of certain expenses, there was taxable income of $1,598 associated with these activities for the six months ended June 30, 2010.  This resulted in income tax expense of $719 for the six months ended June 30, 2010.
 
Baltic Trading is subject to income tax on its United States source income.  During the three months ended June 30, 2011 and 2010, Baltic Trading had United States operations which resulted in United States source income of $1,394 and $0, respectively.  Baltic Trading’s United States income tax expense for the three months ended June 30, 2011 and 2010 was $28 and $0, respectively.
 
During the six months ended June 30, 2011 and 2010, Baltic Trading had United States operations which resulted in United States source income of $2,457 and $0, respectively.  Baltic Trading’s United States income tax expense for the six months ended June 30, 2011 and 2010 was $23 and $0, respectively.
 
Voyage expense recognition
 
In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer.  There are certain other non-specified voyage expenses such as commissions which are typically borne by the Company.  At the inception of a time charter, the Company records the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses.  These differences in bunkers resulted in net gains of $1,294 and $459 during the three months ended June 30, 2011 and 2010, respectively, and $1,653 and $1,016 during the six months ended June 30, 2011 and 2010, respectively.
 
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3 - SEGMENT INFORMATION
 
The Company determines its operating segments based on the information utilized by the chief operating decision maker to assess performance.  Based on this information, the Company has two operating segments, GS&T and Baltic Trading.  Both GS&T and Baltic Trading are engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels.  GS&T seeks to deploy its vessels on time charters, spot market-related time charters or in vessel pools trading in the spot market and Baltic Trading seeks to deploy its vessel charters in the spot market, which represents immediate chartering of a vessel, usually for single voyages, or employing vessels on spot market-related time charters.  Segment results are evaluated based on net income.  The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company’s condensed consolidated financial statements.
 
The following table presents a reconciliation of total revenue from external (third party) customers for the Company’s two operating segments to total consolidated revenue from external customers for the Company for the three and six months ended June 30, 2011 and 2010.

 	 	For the three months ended
June 30,	 	For the six months ended
June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
Revenue from External Customers	 	 	 	 	 	 	 	 	 	
GS&T	 	$	88,597	 	$	98,346	 	$	179,672	 	$	193,027	 	
Baltic Trading	 	9,914	 	6,991	 	19,458	 	6,991	 	
Total operating segments	 	98,511	 	105,337	 	199,130	 	200,018	 	
Eliminating revenue	 	—	 	—	 	—	 	—	 	
Total consolidated revenue from external customers	 	$	98,511	 	$	105,337	 	$	199,130	 	$	200,018	 	
 
The following table presents a reconciliation of total intersegment revenue, which eliminates upon consolidation, for the Company’s two operating segments for the three and six months ended June 30, 2011 and 2010.  The intersegment revenue noted in the following table represents revenue earned by GS&T pursuant to the management agreement entered into with Baltic Trading, which includes commercial service fees, technical service fees and sale and purchase fees, if any.

 	 	For the three months ended
June 30,	 	For the six months ended
June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
Intersegment revenue	 	 	 	 	 	 	 	 	 	
GS&T	 	$	743	 	$	2,429	 	$	1,472	 	$	2,429	 	
Baltic Trading	 	—	 	—	 	—	 	—	 	
Total operating segments	 	743	 	2,429	 	1,472	 	2,429	 	
Eliminating revenue	 	(743	)	(2,429	)	(1,472	)	(2,429	)	
Total consolidated intersegment revenue	 	$	—	 	$	—	 	$	—	 	$	—	 	
 
The following table presents a reconciliation of total net income for the Company’s two operating segments to total consolidated net income for the three and six months ended June 30, 2011 and 2010.  The eliminating net income noted in the following table consists of the elimination of intercompany transactions between GS&T and Baltic Trading as well as dividends received by GS&T from Baltic Trading for its Class B shares of Baltic Trading.

 	 	For the three months ended
June 30,	 	For the six months ended
June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
Net income	 	 	 	 	 	 	 	 	 	
GS&T	 	$	10,484	 	$	38,172	 	$	25,278	 	$	71,781	 	
Baltic Trading	 	(353	)	2,602	 	(2,046	)	2,092	 	
Total operating segments	 	10,131	 	40,774	 	23,232	 	73,873	 	
Eliminating net income	 	(303	)	(2,116	)	(1,233	)	(2,116	)	
Total consolidated net income	 	$	9,828	 	$	38,658	 	$	21,999	 	$	71,757	 	
 
The following table presents a reconciliation of total assets for the Company’s two operating segments to total consolidated net assets as of June 30, 2011 and December 31, 2010.  The eliminating assets noted in the following table consist of the elimination of intercompany transactions resulting from the capitalization of fees paid to GS&T by Baltic Trading as vessel assets, including related accumulated depreciation, as well as the outstanding receivable balance due to GS&T from Baltic Trading as of June 30, 2011 and December 31, 2010.
 
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 	 	June 30,
2011	 	December 31,
2010	 	
Total assets	 	 	 	 	 	
GS&T	 	$	2,803,943	 	$	2,792,056	 	
Baltic Trading	 	387,918	 	396,154	 	
Total operating segments	 	3,191,861	 	3,188,210	 	
Eliminating assets	 	(3,941	)	(5,502	)	
Total consolidated assets	 	$	3,187,920	 	$	3,182,708	 	
 
4 - CASH FLOW INFORMATION
 
As of June 30, 2011 and December 31, 2010, the Company had nine and ten interest rate swaps, respectively, which are described and discussed in Note 11 — Interest Rate Swap Agreements. The fair value of all nine of the swaps is in a liability position of $35,362, $9,770 of which was classified within current liabilities, as of June 30, 2011.  At December 31, 2010, the ten swaps were in a liability position of $43,297, $4,417 of which was classified within current liabilities.
 
For the six months ended June 30, 2011, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in accounts payable and accrued expenses consisting of $1,386 for the purchase of vessels, $77 associated with deposits on vessels and $51 for the purchase of other fixed assets.  Additionally, for the six months ended June 30, 2011 the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in prepaid expenses and other current assets as of June 30, 2011 consisting of $22 interest receivable associated with deposits on vessels.
 
For the six months ended June 30, 2010, 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 $692 for the purchase of vessels, $289 associated with deposits on vessels, $48 associated with deposits on vessels to be sold and $69 for the purchase of other fixed assets.  Additionally, for the six months ended June 30, 2010, the Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in accounts payable and accrued expenses consisting of $434 associated with deferred financing fees and $35 associated with common stock issuance costs related to the initial public offering of Baltic Trading.  Also, for the six months ended June 30, 2010, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in prepaid expenses and other current assets as of June 30, 2010 consisting of $17 associated with deposits on vessels.
 
For the six months ended June 30, 2011, the Company made a reclassification of $6,989 from deposits on vessels to vessels, net of accumulated depreciation, due to the completion of the purchase of the Genco Rhone and Genco Avra.
 
During the six months ended June 30, 2011 and 2010, cash paid for interest, net of amounts capitalized and including bond coupon interest paid, was $40,225 and $30,897, respectively.
 
During the six months ended June 30, 2011 and 2010, cash paid for estimated income taxes was $695 and $0, respectively.
 
On March 5, 2010, the Board of Directors approved a grant of 75,000 shares of nonvested common stock to Peter Georgiopoulos, Chairman of the Board.  The fair value of such nonvested stock was $1,718.  Additionally, on May 13, 2010, the Company made grants of nonvested common stock under the Genco Shipping & Trading Limited 2005 Equity Incentive Plan in the amount of 15,000 shares in the aggregate to directors of the Company.  The fair value of such nonvested stock was $331.
 
On March 10, 2010, 358,000 and 108,000 shares of Baltic Trading’s nonvested common stock were granted to Peter Georgiopoulos, Chairman of the Board, and John Wobensmith, Baltic Trading’s President and Chief Financial Officer, respectively, which were approved by Baltic Trading’s Board of Directors on such date.  The fair value of such nonvested stock was $6,524 based on the IPO price of $14.00 per share.  Both of these grants of nonvested common stock vest ratably in four annual installments commencing on the first anniversary of the closing of Baltic Trading’s IPO, March 15, 2010.  Additionally, on March 15, 2010, Baltic Trading made grants of nonvested common stock in the amount of 12,500 shares in the aggregate to directors of Baltic Trading.  The fair value of such nonvested stock was $175 based on the IPO price of $14.00 per share.  These grants vested on March 15, 2011, the first anniversary of the grant date.
 
On May 12, 2011, the Company made grants of nonvested common stock under the Genco Shipping & Trading Limited 2005 Equity Incentive Plan in the amount of 15,000 shares in the aggregate to directors of the Company.  The fair value of such nonvested stock was $120.
 
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On May 12, 2011, Baltic Trading made grants of nonvested common stock in the amount of 12,500 shares to directors of Baltic Trading.  The fair value of such nonvested stock was $87.
 
5 - VESSEL ACQUISITIONS AND DISPOSITIONS
 
On March 29, 2011, GS&T took delivery of the Genco Rhone, a 58,000 dwt Supramax vessel, which was purchased from Bourbon S.A. (“Bourbon”) pursuant to the Master Agreement dated June 24, 2010 between GS&T and Bourbon.  The Genco Rhone is the last of 13 vessels to be acquired and retained by GS&T under such agreements.  GS&T paid a total purchase price of approximately $35.7 million for the Genco Rhone which was financed with available cash, including proceeds from its concurrent offerings of common stock and 5.00% Convertible Senior Notes due August 15, 2015, which were completed on July 27, 2010.   The Company drew down from the $253 million term loan facility to refund $21.5 million associated with the purchase of the Genco Rhone on March 30, 2011.
 
On May 12, 2011, GS&T took delivery of the Genco Avra, a 35,000 dwt Handysize newbuilding, which was purchased from companies within the Metrostar group of companies pursuant to the agreement dated June 3, 2010 to acquire five Handysize vessels.  Genco Avra is the third of five vessels to be delivered pursuant to the aforementioned agreement.  GS&T utilized available cash of $9.9 million, as well as $20.0 million under its $100 million term loan facility, to pay the remaining balance of $29.9 million.
 
Refer to Note 1 — General Information for a listing of the vessels for which GS&T and Baltic Trading have entered into agreements to purchase.
 
The Genco Avra, the Handysize vessel acquired from Metrostar during the second quarter of 2011, had an existing below market time charter at the time of acquisition.  GS&T recorded a liability for time charter acquired of $372 during the second quarter of 2011.  Below market time charters, including those acquired during previous periods, were amortized as an increase to voyage revenue in the amount of $496 and $1,103 for the three months ended June 30, 2011 and 2010, respectively, and $969 and $2,435  for the six months ended June 30, 2011 and 2010, respectively.
 
Capitalized interest expense associated with newbuilding contracts for the three months ended June 30, 2011 and 2010 was $48 and $145, respectively.  Capitalized interest expense associated with newbuilding contracts for the six months ended June 30, 2011 and 2010 was $127 and $145, respectively.
 
6 - INVESTMENTS
 
The Company holds an investment in the capital stock of Jinhui Shipping and Transportation Limited (“Jinhui”).  Jinhui is a drybulk shipping owner and operator focused on the Supramax segment of drybulk shipping.  This investment is designated as Available For Sale (“AFS”) and is reported at fair value, with unrealized gains and losses recorded in shareholders’ equity as a component of accumulated other comprehensive loss (“AOCI”).  At June 30, 2011 and December 31, 2010, the Company held 16,335,100 shares of Jinhui capital stock which is recorded at its fair value of $42,450 and $54,714, respectively, based on the closing price on June 30, 2011 and December 30, 2010.
 
The Company reviews the investment in Jinhui for other than temporary impairment on a quarterly basis.  There were no impairment charges recognized for the three and six months ended June 30, 2011 and 2010.
 
The unrealized gain on the Jinhui capital stock remains a component of AOCI, since this investment is designated as an AFS security.
 
Refer to Note 12 — Accumulated Other Comprehensive (Loss) Income for a breakdown of the components of AOCI.
 
7 - EARNINGS PER COMMON SHARE
 
The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the year. The computation of diluted earnings per share assumes the vesting of nonvested stock awards (refer to Note 17 — Nonvested Stock Awards), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive.  Of the 807,987 nonvested shares outstanding at June 30, 2011 (refer to Note 17 — Nonvested Stock Awards), 664,738 shares are anti-dilutive.  The Company’s diluted earnings per share will also reflect the assumed conversion under the Company’s convertible debt if the impact is dilutive under the “if converted” method. The impact of the shares convertible under the Company’s convertible notes is excluded from the computation of diluted earnings per share when interest expense per common share obtainable upon conversion is greater than basic earnings per share.
 
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The components of the denominator for the calculation of basic earnings per share and diluted earnings per share are as follows:

 	 	Three Months Ended 
 June 30,	 	Six Months Ended 
 June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
 	 	 	 	 	 	 	 	 	 	
Common shares outstanding, basic:	 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding, basic	 	35,150,352	 	31,413,874	 	35,146,254	 	31,409,858	 	
 	 	 	 	 	 	 	 	 	 	
Common shares outstanding, diluted:	 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding, basic	 	35,150,352	 	31,413,874	 	35,146,254	 	31,409,858	 	
 	 	 	 	 	 	 	 	 	 	
Dilutive effect of convertible notes	 	—	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Dilutive effect of restricted stock awards	 	54,297	 	149,005	 	65,382	 	143,368	 	
 	 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding, diluted	 	35,204,649	 	31,562,879	 	35,211,636	 	31,553,226	 	
 
8 - RELATED PARTY TRANSACTIONS
 
The following represent the only related party transactions disclosed in these condensed consolidated financial statements:
 
The Company makes available employees performing internal audit services to General Maritime Corporation (“GMC”), where the Company’s Chairman, Peter C. Georgiopoulos, also serves as Chairman of the Board.   For the six months ended June 30, 2011 and 2010, the Company invoiced $91 and $66, respectively, to GMC, which includes time associated with such internal audit services.  Additionally, during the six months ended June 30, 2011 and 2010, the Company incurred travel and other expenditures totaling $164 and $148, respectively, reimbursable to GMC or its service provider.   At June 30, 2011 the amount due to the Company from GMC was $33 and at December 31, 2010 the amount due to GMC from the Company was $74.
 
During the six months ended June 30, 2011 and 2010, the Company incurred legal services (primarily in connection with vessel acquisitions) aggregating $13 and $206, respectively, from Constantine Georgiopoulos, the father of Peter C. Georgiopoulos, Chairman of the Board.  At June 30, 2011 and December 31, 2010, $0 and $234, respectively, were outstanding to Constantine Georgiopoulos.
 
During the six months ended June 30, 2011 and 2010, the Company utilized the services of North Star Maritime, Inc. (“NSM”) which is owned and operated by one of GS&T’s directors, Rear Admiral Robert C. North, USCG (ret.).  NSM, a marine industry consulting firm, specializes in international and domestic maritime safety, security and environmental protection issues.  NSM billed $2 and $8 for services rendered during the six months ended June 30, 2011 and 2010.  There are no amounts due to NSM at June 30, 2011 and December 31, 2010.
 
During 2009 and 2010, GS&T and Baltic Trading, respectively, entered into agreements with Aegean Marine Petroleum Network, Inc. (“Aegean”) to purchase lubricating oils for certain vessels in their fleets.  Peter C. Georgiopoulos, Chairman of the Board of the Company, is Chairman of the Board of Aegean.  During the six months ended June 30, 2011 and 2010, the Company incurred costs for lubricating oils supplied by Aegean to the Company’s vessels aggregating $854 and $621, respectively.  At June 30, 2011 and December 31, 2010, $44 and $302 remained outstanding, respectively.
 
During the six months ended June 30, 2011 and 2010, the Company invoiced MEP for technical services provided and expenses paid on MEP’s behalf aggregating $1,665 and $26, respectively.  MEP is managed by a company owned by Peter C. Georgiopoulos, Chairman of the Board.  At June 30, 2011 and December 31, 2010, $4 and $57, respectively, was due to the Company from MEP.  Total service revenue earned by the Company for technical service provided to MEP for the six months ended June 30, 2011 and 2010 was $1,629 and $0, respectively.
 
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9 - LONG-TERM DEBT
 
Long-term debt consists of the following:

 	 	June 30, 2011	 	December 31, 2010	 	
 	 	 	 	 	 	
2007 Credit Facility	 	$	1,252,000	 	$	1,277,000	 	
$100 Million Term Loan Facility	 	57,117	 	38,880	 	
$253 Million Term Loan Facility	 	238,543	 	226,809	 	
2010 Baltic Trading Credit Facility	 	101,250	 	101,250	 	
Less: Current portion	 	(110,610	)	(71,841	)	
 	 	 	 	 	 	
Long-term debt	 	$	1,538,300	 	$	1,572,098	 	
 
2007 Credit Facility
 
On July 20, 2007, the Company entered into a credit facility with DnB Nor Bank ASA (as amended, the “2007 Credit Facility”). The maximum amount that may be borrowed under the 2007 Credit Facility at June 30, 2011 is $1,252,000.  As of June 30, 2011, the Company has utilized its maximum borrowing capacity under the 2007 Credit Facility.
 
The collateral maintenance financial covenant is currently waived and the Company’s cash dividends and share repurchases have been suspended until this covenant can be satisfied.
 
The significant covenants in the 2007 Credit Facility have been disclosed in the 2010 10-K.  As of June 30, 2011, the Company believes it is in compliance with all of the financial covenants under its 2007 Credit Facility with the exception of the collateral maintenance financial covenant, which has been waived as discussed above.
 
At June 30, 2011, there were no letters of credit issued under the 2007 Credit Facility.
 
$100 Million Term Loan Facility
 
On August 12, 2010, the Company entered into the $100,000 secured term loan facility (“$100 Million Term Loan Facility”). As of June 30, 2011, three drawdowns of $20,000 each had been made for the deliveries of the Genco Ocean, Genco Bay and Genco Avra.  These drawdowns were made on August 17, 2010, August 23, 2010 and May 9, 2011, respectively.  During the six months ended June 30, 2011, total required repayments of $1,763 were made.  As of June 30, 2011, total availability under the $100 Million Term Loan Facility was $40,000. The Company has used or intends to use 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 (Refer to Note 5 — Vessel Acquisitions and Dispositions).
 
The Company believes it is in compliance with all of the financial covenants under the $100 Million Term Loan Facility as of June 30, 2011.
 
$253 Million Term Loan Facility
 
On August 20, 2010, the Company entered into the $253,000 senior secured term loan facility (“$253 Million Term Loan Facility”).  As of June 30, 2011, total drawdowns of $253,000 have been made under the $253 Million Term Loan Facility to fund or refund to the Company a portion of the purchase price of the 13 Bourbon vessels delivered during the third quarter of 2010 and first quarter of 2011.  As of June 30, 2011, there was no availability under the $253 Million Term Loan Facility.
 
The Company believes it is in compliance with all of the financial covenants under the $253 Million Term Loan Facility as of June 30, 2011.
 
2010 Baltic Trading Credit Facility
 
On April 16, 2010, Baltic Trading entered into a $100,000 senior secured revolving credit facility with Nordea Bank Finland plc, acting through its New York branch (as amended, the “2010 Baltic Trading Credit Facility”).  An amendment to the 2010 Baltic Trading Credit Facility was entered into by Baltic Trading effective November 30, 2010.  Among other things, this amendment increased the commitment amount of the 2010 Baltic Trading Credit Facility from $100,000 to $150,000.  As of June 30, 2011, total available working capital borrowings were $23,500 as $1,500 was drawn down during 2010 for working capital purposes.  As of June 30, 2011, $43,750 remained available under the 2010 Credit Facility as the total commitment under this facility decreased by $5,000 from $150,000 to $145,000 on May 31, 2011.
 
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Table of Contents
 
As of June 30, 2011, the Company believes Baltic Trading is in compliance with all of the financial covenants under the 2010 Baltic Trading Credit Facility.
 
Interest rates
 
The following tables sets forth the effective interest rate associated with the interest expense for the Company’s debt facilities noted above, including the rate differential between the pay fixed, receive variable rate on the interest rate swap agreements that were in effect (refer to Note 11 — Interest Rate Swap Agreements), combined, and the cost associated with unused commitment fees.  Additionally, it includes the range of interest rates on the debt, excluding the impact of swaps and unused commitment fees:

 	 	Three months ended June 30,	 	Six Months Ended June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
Effective Interest Rate	 	4.40	%	4.76	%	4.43	%	4.70	%	
Range of Interest Rates (excluding impact of swaps and unused commitment fees)	 	2.19% to 3.31	%	2.25% to 3.60	%	2.19% to 3.31	%	2.25% to 3.60	%	
 
10 — CONVERTIBLE SENIOR NOTES
 
The Company issued $125,000 of 5.0% Convertible Senior Notes on July 27, 2010 (the “2010 Notes”).  The Indenture includes customary agreements and covenants by the Company, including with respect to events of default.
 
The following tables provide additional information about the Company’s 2010 Notes.

 	 	June 30, 2011	 	December 31,
2010	 	
Carrying amount of the equity component (additional paid-in capital)	 	$	24,375	 	$	24,375	 	
Principal amount of the 2010 Notes	 	125,000	 	125,000	 	
Unamortized discount of the liability component	 	20,739	 	22,691	 	
Net carrying amount of the liability component	 	104,262	 	102,309	 	

 	 	For the three
months ended
June 30, 2011	 	For the six
months ended
June 30, 2011	 	
Effective interest rate on liability component	 	10.01	%	10.01	%	
Cash interest expense recognized	 	$	1,563	 	$	3,093	 	
Non-cash interest expense recognized	 	986	 	1,952	 	
Non-cash deferred financing costs included in interest expense	 	179	 	357	 	

The remaining period over which the unamortized discount will be recognized is 4.1 years. As of June 30, 2011, the if-converted value of the 2010 Notes does not exceed their principal amount.
 
The 2010 Notes have been classified as a noncurrent liability on the consolidated balance sheet as of June 30, 2011 because the Company can settle the principal amount of the notes with shares, cash, or a combination thereof at its discretion.
 
11 - INTEREST RATE SWAP AGREEMENTS
 
As of June 30, 2011 and December 31, 2010, the Company had nine and ten interest rate swap agreements outstanding, respectively, with DnB NOR Bank ASA to manage interest costs and the risk associated with changing interest rates related to the Company’s 2007 Credit Facility. The total notional principal amount of the swaps at June 30, 2011 and December 31, 2010 was $706,233 and $756,233, respectively, and the swaps have specified rates and durations.
 
16 

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The following table summarizes the interest rate swaps designated as cash flow hedges that were in place as of June 30, 2011 and December 31, 2010:

Interest Rate Swap Detail	 	June 30, 2011	 	December 31,
2010	 	
Trade
Date	 	Fixed
Rate	 	Start Date
of Swap	 	End date
of Swap	 	Notional
Amount
Outstanding	 	Notional
Amount
Outstanding	 	
9/6/05	 	4.485	%	9/14/05	 	7/29/15	 	$	106,233	 	$	106,233	 	
3/29/06	 	5.25	%	1/2/07	 	1/1/14	 	50,000	 	50,000	 	
3/24/06	 	5.075	%	1/2/08	 	1/2/13	 	50,000	 	50,000	 	
7/31/07	 	5.115	%	11/30/07	 	11/30/11	 	100,000	 	100,000	 	
8/9/07	 	5.07	%	1/2/08	 	1/3/12	 	100,000	 	100,000	 	
8/16/07	 	4.985	%	3/31/08	 	3/31/12	 	50,000	 	50,000	 	
8/16/07	 	5.04	%	3/31/08	 	3/31/12	 	100,000	 	100,000	 	
1/22/08	 	2.89	%	2/1/08	 	2/1/11	 	—	 	50,000	 	
1/9/09	 	2.05	%	1/22/09	 	1/22/14	 	100,000	 	100,000	 	
2/11/09	 	2.45	%	2/23/09	 	2/23/14	 	50,000	 	50,000	 	
 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	$	706,233	 	$	756,233	 	
 
The following table summarizes the derivative asset and liability balances at June 30, 2011 and December 31, 2010:

 	 	Asset Derivatives	 	Liability Derivatives	 	
 	 	Balance	 	Fair Value	 	Balance	 	Fair Value	 	
 	 	Sheet
Location	 	June 30, 2011	 	December
31, 2010	 	Sheet
Location	 	June 30, 2011	 	December
31, 2010	 	
Derivatives designated as hedging instruments	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest rate contracts	 	Fair value of derivative instruments (Current Assets)	 	$	—	 	$	—	 	Fair value of derivative instruments (Current Liabilities)	 	$	9,770	 	$	4,417	 	
Interest rate contracts	 	Fair value of derivative instruments (Noncurrent Assets)	 	—	 	—	 	Fair value of derivative instruments (Noncurrent Liabilities)	 	25,592	 	38,880	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total derivatives designated as hedging instruments	 	 	 	—	 	—	 	 	 	35,362	 	43,297	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Derivatives	 	 	 	$	—	 	$	—	 	 	 	$	35,362	 	$	43,297	 	
 
The following tables present the impact of derivative instruments and their location within the Condensed Consolidated Statement of Operations:
 
The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Three Month Period Ended June 30, 2011

Derivatives in Cash
Flow Hedging	 	Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)	 	Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective	 	Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)	 	Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective	 	Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)	 	
Relationships	 	2011	 	Portion)	 	2011	 	Portion)	 	2011	 	
Interest rate contracts	 	$	(6,578	)	Interest Expense	 	$	(7,289	)	Other Income (Expense)	 	$	7	 	

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The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Three Month Period Ended June 30, 2010

Derivatives in Cash
Flow Hedging	 	Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)	 	Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective	 	Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)	 	Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective	 	Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)	 	
Relationships	 	2010	 	Portion)	 	2010	 	Portion)	 	2010	 	
Interest rate contracts	 	$	(12,682	)	Interest Expense	 	$	(7,594	)	Other Income (Expense)	 	$	12	 	

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Six Month Period Ended June 30, 2011

Derivatives in Cash
Flow Hedging	 	Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)	 	Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective	 	Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)	 	Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective	 	Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)	 	
Relationships	 	2011	 	Portion)	 	2011	 	Portion)	 	2011	 	
Interest rate contracts	 	$	(6,685	)	Interest Expense	 	$	(14,600	)	Other Income (Expense)	 	$	19	 	

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Six Month Period Ended June 30, 2010

Derivatives in Cash
Flow Hedging	 	Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)	 	Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective	 	Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)	 	Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective	 	Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)	 	
Relationships	 	2010	 	Portion)	 	2010	 	Portion)	 	2010	 	
Interest rate contracts	 	$	(23,993	)	Interest Expense	 	$	(15,204	)	Other Income (Expense)	 	$	35	 	

At June 30, 2011, ($21,528) of AOCI is expected to be reclassified into interest expense over the next 12 months associated with interest rate derivatives.
 
The Company is required to provide collateral in the form of vessel assets to support the interest rate swap agreements, excluding vessel assets of Baltic Trading.  At June 30, 2011, the Company’s 35 vessels mortgaged under the 2007 Credit Facility served as collateral in the aggregate amount of $100,000.
 
12 - ACCUMULATED OTHER COMPREHENSIVE LOSS
 
The components of AOCI included in the accompanying condensed consolidated balance sheets consist of net unrealized gain (loss) on cash flow hedges and net unrealized gain (loss) from investments in Jinhui stock as of June 30, 2011 and December 31, 2010.

 	 	AOCI	 	Net Unrealized
Gain
(Loss) on Cash
Flow Hedges	 	Unrealized
Gain (Loss)
on
Investments	 	
AOCI — December 31, 2010	 	$	(5,210	)	$	(43,152	)	$	37,942	 	
Change in unrealized gain on investments	 	(12,264	)	 	 	(12,264	)	
Unrealized gain on cash flow hedges	 	7,916	 	7,916	 	 	 	
AOCI — June 30, 2011	 	$	(9,558	)	$	(35,236	)	$	25,678	 	
 
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13 - FAIR VALUE OF FINANCIAL INSTRUMENTS
 
The fair values of the Company’s financial instruments at June 30, 2011 and December 31, 2010 are noted below.  All carrying values approximate the instrument’s fair values with the exception of the 2010 Notes.

 	 	June 30, 2011	 	December 31,
2010	 	
Cash and cash equivalents	 	$	286,230	 	$	270,877	 	
Restricted cash	 	9,750	 	9,000	 	
Investments	 	42,450	 	54,714	 	
Floating rate debt	 	1,648,910	 	1,643,939	 	
2010 Notes	 	106,789	 	129,531	 	
Derivative instruments — liability position	 	35,362	 	43,297	 	

The fair value of the investments is based on quoted market rates.  The fair value of the floating rate debt under the 2007 Credit Facility, $100 Million Term Loan Facility, $253 Million Term Loan Facility and the 2010 Baltic Trading Credit Facility are estimated based on current rates offered to the Company for similar debt of the same remaining maturities.  Additionally, the Company considers its creditworthiness in determining the fair value of floating rate debt under the credit facilities.  The carrying value approximates the fair market value for these floating rate loans.  The fair value of the convertible senior notes payable represents the market value of the 2010 Notes at June 30, 2011 without bifurcating the value of the conversion option.  The fair value of the interest rate swaps is the estimated amount the Company would receive to terminate the swap agreements at the reporting date, taking into account current interest rates and the creditworthiness of both the swap counterparty and the Company.
 
The Accounting Standards Codification 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 guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:
 
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
 
The following table summarizes the valuation of the Company’s investments and financial instruments by the above pricing levels as of the valuation dates listed:

 	 	June 30, 2011	 	
 	 	Total	 	Quoted
market
prices in
active
markets
(Level 1)	 	Significant
Other
Observable
Inputs
(Level 2)	 	
Investments	 	$	42,450	 	$	42,450	 	$	—	 	
Derivative instruments — liability position	 	35,362	 	—	 	35,362	 	

 	 	December 31, 2010	 	
 	 	Total	 	Quoted
market
prices in
active
markets
(Level 1)	 	Significant
Other
Observable
Inputs
(Level 2)	 	
Investments	 	$	54,714	 	$	54,714	 	$	—	 	
Derivative instruments — liability position	 	43,297	 	—	 	43,297	 	

The Company holds an investment in the capital stock of Jinhui , which is classified as a long-term investment.  The stock of Jinhui is publicly traded on the Oslo Stock Exchange and is considered a Level 1 item.
 
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The Company’s interest rate derivative instruments are pay-fixed, receive-variable interest rate swaps based on LIBOR.  The Company has elected to use the income approach to value the derivatives, using observable Level 2 market inputs at measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact.  Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets (specifically futures contracts on LIBOR for the first two years) and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR cash and swap rates and credit risk at commonly quoted intervals).  Mid-market pricing is used as a practical expedient for fair value measurements.  Refer to Note 11 — Interest Rate Swap Agreements for further information regarding the Company’s interest rate swap agreements.  ASC 820-10 states that the fair value measurement of an asset or liability must reflect the nonperformance risk of the entity and the counterparty. Therefore, the impact of the counterparty’s creditworthiness when in an asset position and the Company’s creditworthiness when in a liability position has also been factored into the fair value measurement of the derivative instruments in an asset or liability position and did not have a material impact on the fair value of these derivative instruments.  As of June 30, 2011, both the counterparty and the Company are expected to continue to perform under the contractual terms of the instruments.
 
14 - OTHER ASSETS, NET
 
Other assets consist of deferred financing costs, which include fees, commissions and legal expenses associated with securing loan facilities and other debt offerings.  Total net deferred financing costs consist of the following as of June 30, 2011 and December 31, 2010:

 	 	June 30, 2011	 	December
31, 2010	 	
 	 	 	 	 	 	
2007 Credit Facility	 	$	10,074	 	$	10,074	 	
$100 Million Term Loan Facility	 	1,318	 	1,318	 	
$253 Million Term Loan Facility	 	3,567	 	3,529	 	
2010 Notes	 	3,637	 	3,637	 	
2010 Baltic Trading Credit Facility	 	3,027	 	2,940	 	
Total deferred financing costs	 	21,623	 	21,498	 	
Less: accumulated amortization	 	6,133	 	4,561	 	
Total	 	$	15,490	 	$	16,937	 	
 
Amortization expense for deferred financing costs for the three months ended June 30, 2011 and 2010 was $793 and $338, respectively.  Amortization expense for deferred financing costs for the six months ended June 30, 2011 and 2010 was $1,572 and $602, respectively.  This amortization expense is recorded as a component of interest expense in the Condensed Consolidated Statements of Operations.
 
15 - REVENUE FROM TIME CHARTERS
 
Total voyage revenue earned on time charters, including revenue earned in vessel pools and spot market-related time charters, for the three months ended June 30, 2011 and 2010 was $98,511 and $105,337, respectively, and for the six months ended June 30, 2011 and 2010 was $199,130 and $200,018, respectively.  Included in revenues for the three months ended June 30, 2011 and 2010 was profit sharing revenue of $29 and $65, respectively.  Additionally, included in revenues for the six months ended June 30, 2011 and 2010 was profit sharing revenue of $122 and $65, respectively.  Future minimum time charter revenue, based on vessels committed to noncancelable time charter contracts as of July 20, 2011 is expected to be $63,036 for the remainder of 2011, $53,005 during 2012, $4,790 during 2013 and $748 during 2014, assuming off-hire due to any scheduled drydocking and that no additional off-hire time is incurred.  For most drydockings, the Company assumes twenty days of offhire.  Future minimum revenue excludes revenue earned for the five vessels currently in pool arrangements and vessels that are currently on or will be on spot market-related time charters as spot rates cannot be estimated.
 
16 - COMMITMENTS AND CONTINGENCIES
 
In September 2005, the Company entered into a 15-year lease for office space in New York, New York for which there was a free rental period from September 1, 2005 to July 31, 2006.  The monthly straight-line rental expense from September 1, 2005 to August 31, 2020 is $39.  As a result of the straight-line rent calculation generated by the free rent period and the tenant work credit, the Company had a deferred rent credit at June 30, 2011 and December 31, 2010 of $632 and $657, respectively.  Rent expense under this lease for the three months ended June 30, 2011 and 2010 was $117 for each respective period.  Rent expense under this lease for the six months ended June 30, 2011 and 2010 was $233 for each respective period.
 
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Future minimum rental payments on the above lease for the next five years and thereafter are as follows: $259 for the remainder of 2011, $518 annually for 2012 through 2014, $529 for 2015 and a total of $2,568 for the remaining term of the lease.
 
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 will be $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 is 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 will constitute one lease agreement.  As a result of the straight-line rent calculation generated by the free rent period and the tenant work credit, the monthly straight-line rental expense for the term of the entire lease from June 1, 2011 to September 30, 2025 will be $130.  The Company had a deferred rent credit at June 30, 2011 of $602.  Rent expense pertaining to this new lease for the three and six months ended June 30, 2011 was $130.
 
Future minimum rental payments on the above lease for the next five years and thereafter are as follows: $164 for the remainder of 2011, $982 annually for 2012 through 2014, $1,037 for 2015 and a total of $18,658 for the remaining term of the lease.
 
The remaining vessel that the Company has agreed to purchase from Metrostar, the Genco Spirit, is expected to be delivered during the fourth quarter of 2011 for a remaining purchase price of $29,925.  The Genco Mare was delivered to the Company on July 20, 2011 refer to Note 20 — Subsequent Events for further information.
 
17 - NONVESTED STOCK AWARDS
 
The table below summarizes the Company’s nonvested stock awards for the six months ended June 30, 2011 under the Genco Shipping & Trading Limited 2005 Equity Incentive Plan (the “GS&T Plan”):

 	 	Number of
Shares	 	Weighted
Average Grant
Date Price	 	
Outstanding at January 1, 2011	 	809,087	 	$	19.40	 	
Granted	 	15,000	 	8.00	 	
Vested	 	(15,000	)	22.05	 	
Forfeited	 	(1,100	)	14.65	 	
 	 	 	 	 	 	
Outstanding at June 30, 2011	 	807,987	 	$	19.15	 	
 
The total fair value of shares that vested under the GS&T Plan during the six months ended June 30, 2011 and 2010 was $120 and $331, respectively.
 
For the three and six months ended June 30, 2011 and 2010, the Company recognized nonvested stock amortization expense for the GS&T Plan, which is included in general, administrative and management fees, as follows:

 	 	Three Months Ended
June 30,	 	Six Months Ended
June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
General, administrative and management fees	 	$	1,478	 	$	1,145	 	$	2,972	 	$	2,190	 	

The fair value of nonvested stock at the grant date is equal to the closing stock price on that date.  The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures.  As of June 30, 2011, unrecognized compensation cost of $8,384 related to nonvested stock will be recognized over a weighted average period of 3.96 years.
 
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The following table presents a summary of Baltic Trading’s nonvested stock awards for the six months ended June 30, 2011 under the Baltic Trading Plan:

 	 	Number of
Common
Shares	 	Weighted
Average Grant
Date Price	 	
Outstanding at January 1, 2011	 	583,500	 	$	13.40	 	
Granted	 	12,500	 	6.92	 	
Vested	 	(129,000	)	14.00	 	
Forfeited	 	—	 	—	 	
 	 	 	 	 	 	
Outstanding at June 30, 2011	 	467,000	 	$	13.06	 	
 
The total fair value of shares that vested under the Baltic Trading Plan during the six months ended June 30, 2011 and 2010 was $1,131 and $0, respectively.
 
For the three and six months ended June 30, 2011 and 2010, the Company recognized nonvested stock amortization expense for the Baltic Trading Plan, which is included in general, administrative and management fees, as follows:

 	 	Three Months Ended
June 30,	 	Six Months Ended
June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
General, administrative and management fees	 	$	606	 	$	882	 	$	1,551	 	$	1,093	 	

The Company is amortizing Baltic Trading’s grants over the applicable vesting periods, net of anticipated forfeitures.  As of June 30, 2011, unrecognized compensation cost of $3,461 related to nonvested stock will be recognized over a weighted average period of 2.81 years.
 
18 - SHARE REPURCHASE PROGRAM
 
Since the inception of its share repurchase program through June 30, 2011, the Company has repurchased and retired 278,300 shares of its common stock for $11,500.  Currently, the terms of the 2007 Credit Facility require the Company to suspend all share repurchases until the Company can represent that it is in a position to again satisfy the collateral maintenance covenant.  No share repurchases were made during the three and six months ended June 30, 2011 and 2010.
 
19 - LEGAL PROCEEDINGS
 
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.
 
20 - SUBSEQUENT EVENTS
 
On July 20, 2011, the Company took delivery of the Genco Mare, a 34,428 dwt Handysize newbuilding, from a company within the Metrostar group of companies.  The Company utilized cash on hand and drew down $20,000 on its $100 Million Term Loan Facility on July 15, 2011 to fund the remaining purchase price of the vessel in the amount of $29,925.
 
On July 25, 2011, Baltic Trading declared a dividend of $0.10 per share to be paid on or about August 12, 2011 to shareholders of record as of August 5, 2011.  The aggregate amount of the dividend is expected to be approximately $2.3 million, of which approximately $1.7 million will be paid to minority shareholders, which Baltic Trading anticipates will be funded from cash on hand at the time payment is to be made.
 
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ITEM 2 .	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 	
 
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) changes in demand or rates in the drybulk shipping industry; (ii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iii) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (iv) 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; (v) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, repairs, maintenance and general and administrative expenses; (vi) the adequacy of our insurance arrangements; (vii) changes in general domestic and international political conditions; (viii) acts of war, terrorism, or piracy; (ix) changes in the condition of the our 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; (x) the number of offhire days needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims including offhire days; (xi) our acquisition or disposition of vessels; (xii) the completion of definitive documentation with respect to time charters; (xiii) charterers’ compliance with the terms of their charters in the current market environment; (xiv) the fulfillment of the closing conditions under, or the execution of customary additional documentation for, our agreements to acquire vessels; 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, 2010 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.  Excluding vessels of Baltic Trading Limited (“Baltic Trading”), as of July 26, 2011, our fleet consisted of nine Capesize, eight Panamax, 17 Supramax, six Handymax and 12 Handysize drybulk carriers, with an aggregate carrying capacity of approximately 3,776,000 dwt, and the average age of our fleet was approximately 6.4 years, as compared to the average age for the world fleet of approximately 13 years for the drybulk shipping segments in which we compete.   After the expected delivery of one Handysize vessels that we have agreed to acquire and retain, we will own a fleet of 53 drybulk vessels, consisting of nine Capesize, eight Panamax, 17 Supramax, six Handymax and 13 Handysize vessels, excluding the vessels of Baltic Trading.  We seek to deploy our vessels on time charters, spot market-related time charters or in vessel pools trading in the spot market, to reputable charterers, including Lauritzen Bulkers A/S or LB/IVS Pool, in which Lauritzen Bulkers A/S acts as the pool manager (collectively, “Lauritzen Bulkers”), Cargill International S.A., Pacific Basin Chartering Ltd., COSCO Bulk Carriers Co., Ltd., and Oldendorff GMBH and Co. KG. Lubeck.  The majority of the vessels in our current fleet are presently engaged under time charter contracts that expire (assuming the option periods in the time charters are not exercised) between August 2011 and June 2013.
 
In addition, as of July 26, 2011, Baltic Trading’s fleet consisted of two Capesize, four Supramax and three Handysize drybulk carriers with an aggregate carrying capacity of approximately 672,000 dwt.
 
See pages 31 - 35 for a table of all vessels that have been delivered or are expected to be delivered to us, including Baltic Trading’s vessels.
 
We intend to acquire additional modern, high-quality drybulk carriers through timely and selective acquisitions of vessels in a manner that is accretive to our cash flow.  We expect to fund acquisitions of additional vessels using cash reserves set aside for this purpose, additional borrowings and may consider additional debt and equity financing alternatives from time to time.
 
On June 3, 2010, we entered into an agreement to purchase a total of eight Handysize drybulk vessels, including five newbuildings, from companies within the Metrostar group of companies for an aggregate purchase price of $266.0 million.  Five of these vessels will be owned by us and three are owned by Baltic Trading.  Additionally, on June 24, 2010, we entered into a Master Agreement with Bourbon SA (“Bourbon”) to purchase 16 drybulk vessels, including two newbuildings, for an aggregate purchase price of $545.0 million.  We have retained 13 of the 16 vessels, including one newbuilding, and the remaining three vessels were immediately resold to Maritime Equity Partners LLC (“MEP”), a company managed by a company owned by our Chairman, Peter C.
 
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Georgiopoulos.  A total of seven vessels have been delivered from companies within the Metrostar group of companies and all 16 vessels have been delivered from Bourbon, three of which were sold to MEP.  The remaining Metrostar vessel is planned to be delivered during November 2011.
 
In order to fund the acquisition of these vessels, we entered into two senior secured term loan facilities.  On August 20, 2010, we entered into a $253 million senior secured term loan facility to be utilized to fund a portion of the purchase price of the acquisition of 13 vessels from affiliate of Bourbon SA.  On August 12, 2010, we entered into a $100 million senior secured term loan facility to be utilized to fund or refund to us a portion of the purchase price of the acquisition of five vessels from companies within the Metrostar group of companies.  The Baltic Trading vessels have been funded utilizing its $150 million senior secured revolving credit facility for bridge financing.
 
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 and voyage 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.
 
From time to time in the current global economic environment, our charterers with long-term time charters may request to renegotiate the terms of our charters with them.  As a general matter, we do not agree to make changes to the terms of our charters in response to such requests.  The failure of any charterer to meet its obligations under our long-term time charters could have an adverse effect on our results of operations.
 
Baltic Trading, formerly a wholly-owned subsidiary of the Company, completed its IPO on March 15, 2010.  As of June 30, 2011, the Company’s wholly-owned subsidiary Genco Investments LLC owned 5,699,088 shares of Baltic Trading’s Class B Stock, which represents a 25.22% ownership interest in Baltic Trading at June 30, 2011 and 83.50% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock.  Baltic Trading is consolidated with the Company, as we control a majority of the voting interest in Baltic Trading.  Management’s discussion and analysis of the Company’s results of operations and financial condition in this section includes the results of Baltic Trading.
 
We entered into a long-term management agreement (the “Management Agreement”) with Baltic Trading pursuant to which we apply our expertise and experience in the drybulk industry to provide Baltic Trading with commercial, technical, administrative and strategic services.  The Management Agreement is for an initial term of approximately fifteen years and will automatically renew for additional five-year periods unless terminated in accordance with its terms.  Baltic Trading will pay us for the services we provide it as well as reimburse us for our costs and expenses incurred in providing certain of these services.  Management fee income we earn from the Management Agreement net of any allocated shared expenses, such as salary, office expenses and other general and administrative fees, will be taxable to us.  Upon consolidation with Baltic Trading, any management fee income earned will be eliminated for financial reporting purposes.
 
We provide technical services for drybulk vessels purchased by MEP under an agency agreement between us and MEP.  These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services will be provided for a fee of $750 per ship per day plus reimbursement of out-of-pocket costs and will be provided for an initial term of one year.  MEP will have the right to cancel provision of services on 60 days notice with payment of a one-year termination fee or without fee upon a Company change of control.  The Company may terminate provision of the services at any time on 60 days notice.  Mr. Georgiopoulos is a minority investor, and affiliates of Oaktree Capital Management, L.P., of which Stephen A. Kaplan is a principal, are majority investors in MEP.  This arrangement was approved by an independent committee of our Board of Directors.
 
During January 2011, the Genco Success, a 1997-built Handymax vessel, was on charter to Korea Line Corporation (“KLC”) when KLC filed for a rehabilitation application.  We estimate that we have a claim of approximately $1.1 million against KLC related primarily to unpaid revenue earned prior to re-delivery of the vessel.  If a rehabilitation plan is approved by the South Korean courts and it is determined that we will receive a cash settlement for our outstanding claim, any amounts due from KLC will be recorded once the collectibility of the receivable has been assessed and the amount has been deemed collectible.
 
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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, 2011 and 2010 on a consolidated basis, which includes the operations of Baltic Trading.

 	 	For the three months ended June 30,	 	Increase	 	 	 	
 	 	2011	 	2010	 	(Decrease)	 	% Change	 	
Fleet Data:	 	 	 	 	 	 	 	 	 	
Ownership days (1)	 	 	 	 	 	 	 	 	 	
Capesize	 	1,001.0	 	866.6	 	134.4	 	15.5	%	
Panamax	 	728.0	 	728.0	 	—	 	—	 	
Supramax	 	1,911.0	 	591.2	 	1,319.8	 	223.2	%	
Handymax	 	546.0	 	546.0	 	—	 	—	 	
Handysize	 	1,232.6	 	728.0	 	504.6	 	69.3	%	
 	 	 	 	 	 	 	 	 	 	
Total	 	5,418.6	 	3,459.8	 	1,958.8	 	56.6	%	
 	 	 	 	 	 	 	 	 	 	
Available days (2)	 	 	 	 	 	 	 	 	 	
Capesize	 	1,001.0	 	855.5	 	145.5	 	17.0	%	
Panamax	 	728.0	 	728.0	 	—	 	—	 	
Supramax	 	1,911.0	 	583.9	 	1,327.1	 	227.3	%	
Handymax	 	516.3	 	546.0	 	(29.7	)	(5.4	)%	
Handysize	 	1,231.1	 	717.6	 	513.5	 	71.6	%	
 	 	 	 	 	 	 	 	 	 	
Total	 	5,387.4	 	3,431.0	 	1,956.4	 	57.0	%	
 	 	 	 	 	 	 	 	 	 	
Operating days (3)	 	 	 	 	 	 	 	 	 	
Capesize	 	1,001.0	 	853.6	 	147.4	 	17.3	%	
Panamax	 	724.1	 	717.9	 	6.2	 	0.9	%	
Supramax	 	1,901.0	 	582.4	 	1,318.6	 	226.4	%	
Handymax	 	510.6	 	540.3	 	(29.7	)	(5.5	)%	
Handysize	 	1,220.6	 	716.0	 	504.6	 	70.5	%	
 	 	 	 	 	 	 	 	 	 	
Total	 	5,357.3	 	3,410.2	 	1,947.1	 	57.1	%	
 	 	 	 	 	 	 	 	 	 	
Fleet utilization (4)	 	 	 	 	 	 	 	 	 	
Capesize	 	100.0	%	99.8	%	0.2	%	0.2	%	
Panamax	 	99.5	%	98.6	%	0.9	%	0.9	%	
Supramax	 	99.5	%	99.7	%	(0.2	)%	(0.2	)%	
Handymax	 	98.9	%	98.9	%	—	 	—	 	
Handysize	 	99.1	%	99.8	%	(0.7	)%	(0.7	)%	
Fleet average	 	99.4	%	99.4	%	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Average Daily Results:	 	 	 	 	 	 	 	 	 	
Time Charter Equivalent (5)	 	 	 	 	 	 	 	 	 	
Capesize	 	$	27,164	 	$	44,233	 	$	(17,069	)	(38.6	)%	
Panamax	 	23,333	 	30,849	 	(7,516	)	(24.4	)%	
Supramax	 	16,360	 	24,468	 	(8,108	)	(33.1	)%	
Handymax	 	15,557	 	27,875	 	(12,318	)	(44.2	)%	
Handysize	 	12,275	 	20,087	 	(7,812	)	(38.9	)%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	18,299	 	30,405	 	(12,106	)	(39.8	)%	
 	 	 	 	 	 	 	 	 	 	
Daily vessel operating expenses (6)	 	 	 	 	 	 	 	 	 	
Capesize	 	$	5,124	 	$	5,330	 	$	(206	)	(3.9	)%	
Panamax	 	4,735	 	4,728	 	7	 	0.1	%	
Supramax	 	4,518	 	4,586	 	(68	)	(1.5	)%	
Handymax	 	5,195	 	4,234	 	961	 	22.7	%	
Handysize	 	4,396	 	4,225	 	171	 	4.0	%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	4,700	 	4,671	 	29	 	0.6	%	
 
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 	 	For the six months ended June 30,	 	Increase	 	 	 	
 	 	2011	 	2010	 	(Decrease)	 	% Change	 	
Fleet Data:	 	 	 	 	 	 	 	 	 	
Ownership days (1)	 	 	 	 	 	 	 	 	 	
Capesize	 	1,991.0	 	1,676.6	 	314.4	 	18.8	%	
Panamax	 	1,448.0	 	1,448.0	 	—	 	—	 	
Supramax	 	3,713.6	 	951.2	 	2,762.4	 	290.4	%	
Handymax	 	1,086.0	 	1,086.0	 	—	 	—	 	
Handysize	 	2,402.6	 	1,448.0	 	954.6	 	65.9	%	
 	 	 	 	 	 	 	 	 	 	
Total	 	10,641.2	 	6,609.8	 	4,031.4	 	61.0	%	
 	 	 	 	 	 	 	 	 	 	
Available days (2)	 	 	 	 	 	 	 	 	 	
Capesize	 	1,991.0	 	1,649.9	 	341.1	 	20.7	%	
Panamax	 	1,429.7	 	1,448.0	 	(18.3	)	(1.3	)%	
Supramax	 	3,711.7	 	932.5	 	2,779.2	 	298.0	%	
Handymax	 	1,056.3	 	1,073.4	 	(17.1	)	(1.6	)%	
Handysize	 	2,401.1	 	1,433.8	 	967.3	 	67.5	%	
 	 	 	 	 	 	 	 	 	 	
Total	 	10,589.8	 	6,537.6	 	4,052.2	 	62.0	%	
 	 	 	 	 	 	 	 	 	 	
Operating days (3)	 	 	 	 	 	 	 	 	 	
Capesize	 	1,990.5	 	1,648.0	 	342.5	 	20.8	%	
Panamax	 	1,418.3	 	1,435.5	 	(17.2	)	(1.2	)%	
Supramax	 	3,689.7	 	930.1	 	2,759.6	 	296.7	%	
Handymax	 	1,048.9	 	1,058.4	 	(9.5	)	(0.9	)%	
Handysize	 	2,383.3	 	1,432.2	 	951.1	 	66.4	%	
 	 	 	 	 	 	 	 	 	 	
Total	 	10,530.7	 	6,504.2	 	4,026.5	 	61.9	%	
 	 	 	 	 	 	 	 	 	 	
Fleet utilization (4)	 	 	 	 	 	 	 	 	 	
Capesize	 	100.0	%	99.9	%	0.1	%	0.1	%	
Panamax	 	99.2	%	99.1	%	0.1	%	0.1	%	
Supramax	 	99.4	%	99.7	%	(0.3	)%	(0.3	)%	
Handymax	 	99.3	%	98.6	%	0.7	%	0.7	%	
Handysize	 	99.3	%	99.9	%	(0.6	)%	(0.6	)%	
Fleet average	 	99.4	%	99.5	%	(0.1	)%	(0.1	)%	

 	 	For the six months ended June 30,	 	Increase	 	 	 	
 	 	2011	 	2010	 	(Decrease)	 	% Change	 	
 	 	(U.S. dollars)	 	 	 	 	 	
Average Daily Results:	 	 	 	 	 	 	 	 	 	
Time Charter Equivalent (5)	 	 	 	 	 	 	 	 	 	
Capesize	 	$	27,295	 	$	44,775	 	$	(17,480	)	(39.0	)%	
Panamax	 	24,564	 	30,470	 	(5,906	)	(19.4	)%	
Supramax	 	16,234	 	24,514	 	(8,280	)	(33.8	)%	
Handymax	 	18,976	 	27,313	 	(8,337	)	(30.5	)%	
Handysize	 	11,857	 	19,524	 	(7,667	)	(39.3	)%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	18,720	 	30,326	 	(11,606	)	(38.3	)%	
 	 	 	 	 	 	 	 	 	 	
Daily vessel operating expenses (6)	 	 	 	 	 	 	 	 	 	
Capesize	 	$	5,193	 	$	5,411	 	$	(218	)	(4.0	)%	
Panamax	 	4,744	 	4,614	 	130	 	2.8	%	
Supramax	 	4,562	 	4,598	 	(36	)	(0.8	)%	
Handymax	 	4,997	 	4,474	 	523	 	11.7	%	
Handysize	 	4,447	 	4,186	 	261	 	6.2	%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	4,723	 	4,697	 	26	 	0.6	%	
 
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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. 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 
 June 30,	 	For the six months ended 
 June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
 	 	 	 	 	 	 	 	 	 	
Voyage revenues (in thousands)	 	$	98,511	 	$	105,337	 	$	199,130	 	$	200,018	 	
Voyage expenses (in thousands)	 	(74	)	1,018	 	894	 	1,755	 	
 	 	$	98,585	 	$	104,319	 	198,236	 	$	198,263	 	
Total available days	 	5,387.4	 	3,431.0	 	10,589.8	 	6,537.6	 	
Total TCE rate	 	$	18,299	 	$	30,405	 	$	18,720	 	$	30,326	 	
 
(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

 	 	For the three months ended June 30,	 	 	 	 	 	
 	 	2011	 	2010	 	Change	 	% Change	 	
 	 	(U.S. dollars in thousands, except for per share amounts)	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	
Voyage revenue	 	$	98,511	 	$	105,337	 	$	(6,826	)	(6.5	)%	
Service revenue	 	819	 	—	 	819	 	100.0	%	
 	 	 	 	 	 	 	 	 	 	
Total revenue	 	99,330	 	105,337	 	(6,007	)	(5.7	)%	
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Voyage expenses	 	(74	)	1,018	 	(1,092	)	(107.3	)%	
Vessel operating expenses	 	25,465	 	16,160	 	9,305	 	57.6	%	
General, administrative and management fees	 	8,298	 	7,164	 	1,134	 	15.8	%	
Depreciation and amortization	 	34,025	 	26,259	 	7,766	 	29.6	%	
Other operating income	 	—	 	(206	)	206	 	(100.0	)%	
 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	67,714	 	50,395	 	17,319	 	34.4	%	
 	 	 	 	 	 	 	 	 	 	
Operating income	 	31,616	 	54,942	 	(23,326	)	(42.5	)%	
Other expense	 	(21,433	)	(15,565	)	(5,868	)	37.7	%	
 	 	 	 	 	 	 	 	 	 	
Income before income taxes	 	10,183	 	39,377	 	(29,194	)	(74.1	)%	
Income tax expense	 	(355	)	(719	)	364	 	(50.6	)%	
 	 	 	 	 	 	 	 	 	 	
Net income	 	9,828	 	38,658	 	(28,830	)	(74.6	)%	
Less: Net (loss) income attributable to noncontrolling interest	 	(262	)	1,899	 	(2,161	)	(113.8	)%	
Net income attributable to Genco Shipping & Trading Limited	 	$	10,090	 	$	36,759	 	$	(26,669	)	(72.6	)%	
 	 	 	 	 	 	 	 	 	 	
Earnings per share - Basic	 	$	0.29	 	$	1.17	 	$	(0.88	)	(75.2	)%	
Earnings per share - Diluted	 	$	0.29	 	$	1.16	 	$	(0.87	)	(75.0	)%	
Dividends declared and paid per share	 	$	—	 	$	—	 	$	—	 	—	 	
Weighted average common shares outstanding - Basic	 	35,150,352	 	31,413,874	 	3,736,478	 	11.9	%	
Weighted average common shares outstanding - Diluted	 	35,204,649	 	31,562,879	 	3,641,770	 	11.5	%	
 	 	 	 	 	 	 	 	 	 	
EBITDA (1)	 	$	65,847	 	$	79,299	 	$	(13,452	)	(17.0	)%	
 
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 	 	For the six months ended June 30,	 	 	 	 	 	
 	 	2011	 	2010	 	Change	 	% Change	 	
 	 	(U.S. dollars in thousands, except for per share amounts)	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	
Voyage revenue	 	$	199,130	 	$	200,018	 	$	(888	)	(0.4	)%	
Service revenue	 	1,629	 	—	 	1,629	 	100.0	%	
 	 	 	 	 	 	 	 	 	 	
Total revenue	 	200,759	 	200,018	 	741	 	0.4	%	
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Voyage expenses	 	894	 	1,755	 	(861	)	(49.1	)%	
Vessel operating expenses	 	50,260	 	31,047	 	19,213	 	61.9	%	
General, administrative and management fees	 	17,149	 	12,960	 	4,189	 	32.3	%	
Depreciation and amortization	 	67,106	 	51,094	 	16,012	 	31.3	%	
Other operating income	 	—	 	(206	)	206	 	(100.0	)%	
 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	135,409	 	96,650	 	38,759	 	40.1	%	
 	 	 	 	 	 	 	 	 	 	
Operating income	 	65,350	 	103,368	 	(38,018	)	(36.8	)%	
Other expense	 	(42,637	)	(30,892	)	(11,745	)	38.0	%	
 	 	 	 	 	 	 	 	 	 	
Income before income taxes	 	22,713	 	72,476	 	(49,763	)	(68.7	)%	
Income tax expense	 	(714	)	(719	)	5	 	(0.7	)%	
 	 	 	 	 	 	 	 	 	 	
Net income	 	21,999	 	71,757	 	(49,758	)	(69.3	)%	
Less: Net (loss) income attributable to noncontrolling interest	 	(1,517	)	1,550	 	(3,067	)	(197.9	)%	
Net income attributable to Genco Shipping & Trading Limited	 	$	23,516	 	$	70,207	 	$	(46,691	)	(66.5	)%	
 	 	 	 	 	 	 	 	 	 	
Earnings per share - Basic	 	$	0.67	 	$	2.24	 	$	(1.57	)	(70.1	)%	
Earnings per share - Diluted	 	$	0.67	 	$	2.23	 	$	(1.56	)	(70.0	)%	
Dividends declared and paid per share	 	$	—	 	$	—	 	$	—	 	—	 	
Weighted average common shares outstanding - Basic	 	35,146,254	 	31,409,858	 	3,736,396	 	11.9	%	
Weighted average common shares outstanding - Diluted	 	35,211,636	 	31,553,226	 	3,658,410	 	11.6	%	
 	 	 	 	 	 	 	 	 	 	
EBITDA (1)	 	$	133,862	 	$	152,937	 	$	(19,075	)	(12.5	)%	

(1)           EBITDA represents net income attributable to Genco Shipping & Trading Limited 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 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 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 consolidated statements of cash flows.  The definition of EBITDA used here may not be comparable to that used by other companies.  The foregoing definition of EBITDA differs from the definition of Consolidated EBITDA used in the financial covenants of our 2007 Credit Facility, our $253 Million Term Loan Credit Facility, and our $100 Million Term Loan Credit Facility.  Specifically, Consolidated EBITDA substitutes gross interest expense (which includes amortization of deferred financing costs) for net interest expense used in our definition of EBITDA, includes adjustments for restricted stock amortization and non-
 
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cash charges for deferred financing costs related to the refinancing of other credit facilities or any non-cash losses from our investment in Jinhui, and excludes extraordinary gains or losses and gains or losses from derivative instruments used for hedging purposes or sales of assets other than inventory sold in the ordinary course of business.  The following table demonstrates our calculation of EBITDA and provides a reconciliation of EBITDA to net income attributable to Genco Shipping & Trading Limited for each of the periods presented above:

 	 	For the three months ended June 30,	 	For the six months ended June 30,	 	
 	 	2011	 	2010	 	2011	 	2010	 	
 	 	 	 	 	 	 	 	 	 	
Net income attributable to Genco Shipping & Trading Limited	 	$	10,090	 	$	36,759	 	$	23,516	 	$	70,207	 	
Net interest expense	 	21,377	 	15,562	 	42,526	 	30,917	 	
Income tax expense	 	355	 	719	 	714	 	719	 	
Depreciation and amortization	 	34,025	 	26,259	 	67,106	 	51,094	 	
 	 	 	 	 	 	 	 	 	 	
EBITDA (1)	 	$	65,847	 	$	79,299	 	$	133,862	 	$	152,937	 	
 
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Results of Operations
 
The following tables set forth information about the vessels in our fleet, including Baltic Trading’s vessels, as of July 26, 2011:
 
Genco Shipping & Trading Limited

Vessel	 	Year 
 Built	 	Charterer	 	Charter
Expiration (1)	 	Cash Daily 
 Rate (2)	 	Net
Revenue
Daily
Rate (3)	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Capesize Vessels	 	 	 	 	 	 	 	 	 	 	 	
Genco Augustus	 	2007	 	Cargill International S.A.	 	December 2011	 	100% of BCI	 	 	 	
Genco Tiberius	 	2007	 	Cargill International S.A.	 	September 2011	 	31,000	 	 	 	
Genco London	 	2007	 	Cargill International S.A.	 	September 2011	 	31,000	 	 	 	
Genco Titus	 	2007	 	Cargill International S.A.	 	September 2011	 	45,000(4)	 	46,250	 	
Genco Constantine	 	2008	 	Cargill International S.A.	 	August 2012	 	52,750(4)	 	 	 	
Genco Hadrian	 	2008	 	Cargill International S.A.	 	October 2012	 	65,000(4)	 	 	 	
Genco Commodus	 	2009	 	Swissmarine Services S.A.	 	May 2012	 	99% of BCI(5)	 	 	 	
Genco Maximus	 	2009	 	Swissmarine Services S.A.	 	November 2011	 	98.5% of BCI	 	 	 	
Genco Claudius	 	2010	 	Swissmarine Services S.A.	 	January 2012	 	98.5% of BCI	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Panamax Vessels	 	 	 	 	 	 	 	 	 	 	 	
Genco Beauty	 	1999	 	U-Sea Bulk A/S, Copenhagen	 	March 2012	 	100% of BPI(6)	 	 	 	
Genco Knight	 	1999	 	Swissmarine Services S.A.	 	February 2012	 	100% of BPI(6)	 	 	 	
Genco Leader	 	1999	 	J. Aron & Company	 	December 2011	 	100% of BPI	 	 	 	
Genco Vigour	 	1999	 	Global Maritime Investments Ltd.	 	December 2011	 	100% of BPI	 	 	 	
Genco Acheron	 	1999	 	Cargill International S.A.	 	September 2011	 	24,000(7)	 	 	 	
Genco Surprise	 	1998	 	Global Maritime Investments Ltd.	 	November 2011	 	97% of BPI	 	 	 	
Genco Raptor	 	2007	 	COSCO Bulk Carriers Co., Ltd.	 	April 2012	 	52,800	 	 	 	
Genco Thunder	 	2007	 	Swissmarine Services S.A.	 	November 2011	 	100% of BPI	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Supramax Vessels	 	 	 	 	 	 	 	 	 	 	 	
Genco Predator	 	2005	 	Pacific Basin Chartering Ltd.	 	May 2012	 	103% of BSI(8)	 	 	 	
Genco Warrior	 	2005	 	Klaveness Chartering	 	November 2011	 	102% of BSI	 	 	 	
Genco Hunter	 	2007	 	Pacific Basin Chartering Ltd.	 	June 2012	 	106% of BSI(8)	 	 	 	
Genco Cavalier	 	2007	 	MUR Shipping B.V.	 	September 2011	 	19,200	 	 	 	
Genco Lorraine	 	2009	 	Olam International Ltd.	 	June 2012	 	18,500	 	 	 	
Genco Loire	 	2009	 	Oldendorff GMBH and Co.	 	August 2011	 	20,250	 	 	 	
Genco Aquitaine	 	2009	 	Klaveness Chartering	 	March 2012	 	102% of BSI(9)	 	 	 	
Genco Ardennes	 	2009	 	Klaveness Chartering	 	August 2012	 	19,000	 	 	 	
Genco Auvergne	 	2009	 	Trafigura Beheer B.V.	 	October 2011	 	102% of BSI	 	 	 	
Genco Bourgogne	 	2010	 	Setaf-Saget SAS	 	November 2011	 	19,900	 	 	 	
Genco Brittany	 	2010	 	Swissmarine Services S.A.	 	December 2011	 	102% of BSI	 	 	 	
Genco Languedoc	 	2010	 	Swissmarine Services S.A.	 	November 2011	 	102% of BSI	 	 	 	
Genco Normandy	 	2007	 	Louis Dreyfus Commodities Suisse S.A.	 	October 2011	 	12,000(10)	 	 	 	
Genco Picardy	 	2005	 	Trafigura Beheer B.V.	 	December 2011	 	100% of BSI	 	 	 	
Genco Provence	 	2004	 	Setaf -Saget SAS	 	December 2011	 	20,250	 	 	 	
Genco Pyrenees	 	2010	 	Setaf-Saget SAS	 	December 2011	 	15,250(11)	 	 	 	
Genco Rhone	 	2011	 	AMN Bulkcarriers Inc.	 	February 2012	 	102% of BSI	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Handymax Vessels	 	 	 	 	 	 	 	 	 	 	 	
Genco Success	 	1997	 	Swissmarine Services S.A.	 	January 2012	 	90% of BSI	 	 	 	
Genco Carrier	 	1998	 	ED & F MAN Shipping Ltd.	 	February 2012	 	92.5% of BSI	 	 	 	
Genco Prosperity	 	1997	 	Pacific Basin Chartering Ltd	 	May 2012	 	92% of BSI(12)	 	 	 	
 
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Genco Wisdom	 	1997	 	Klaveness Chartering	 	September 2011	 	14,150	 	 	 	
Genco Marine	 	1996	 	ED & F MAN Shipping Ltd.	 	May 2012	 	92% of BSI(12)	 	 	 	
Genco Muse	 	2001	 	Trafigura Beheer B.V.	 	April 2012	 	95% of BSI(13)	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Handysize Vessels	 	 	 	 	 	 	 	 	 	 	 	
Genco Explorer	 	1999	 	Lauritzen Bulkers A/S	 	October 2011	 	Spot(14)	 	 	 	
Genco Pioneer	 	1999	 	Lauritzen Bulkers A/S	 	October 2011	 	Spot(14)	 	 	 	
Genco Progress	 	1999	 	Lauritzen Bulkers A/S	 	July 2012	 	Spot(14)	 	 	 	
Genco Reliance	 	1999	 	Lauritzen Bulkers A/S	 	July 2012	 	Spot(14)	 	 	 	
Genco Sugar	 	1998	 	Lauritzen Bulkers A/S	 	July 2012	 	Spot(14)	 	 	 	
Genco Charger	 	2005	 	AMN Bulkcarriers Inc.	 	December 2011	 	100% of BHSI	 	 	 	
Genco Challenger	 	2003	 	AMN Bulkcarriers Inc.	 	December 2011	 	100% of BHSI	 	 	 	
Genco Champion	 	2006	 	Pacific Basin Chartering Ltd.	 	March 2012	 	100% of BHSI(15)	 	 	 	
Genco Ocean	 	2010	 	Cargill International S.A.	 	June 2013	 	$8,500-$13,500 with 50% profit sharing(16)	 	(17	)	
Genco Bay	 	2010	 	Cargill International S.A.	 	January 2013	 	$8,500-$13,500 with 50% profit sharing(16)	 	(17	)	
Genco Avra	 	2011	 	Cargill International S.A.	 	March 2014	 	$8,500-$13,500 with 50% profit sharing(16)	 	(17	)	
Genco Mare	 	2011	 	Cargill International S.A.	 	May 2015	 	115% of BHSI(19)	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Vessels to be Delivered Handysize Vessels	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Genco Spirit	 	2011 (18)	 	Cargill International S.A.	 	34.5-37.5 months after delivery	 	$8,500-$13,500 with 50% profit sharing(16)	 	(20	)	

(1) The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course.  Except for the Genco Titus, Genco Constantine, and Genco Hadrian under the terms of each contract, the charterer is entitled to extend the time charters from two to four months in order to complete the vessel’s final voyage plus any time the vessel has been off-hire. The charterer of the Genco Titus and Genco Hadrian has the option to extend the charter for a period of one year.  The Genco Constantine has the option to extend the charter for a period of eight months.
 
(2) Time charter rates presented are the gross daily charterhire rates before third-party commissions 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.
 
(3) For the vessels acquired with a below-market time charter rate, the approximate amount of revenue on a daily basis to be recognized as revenues is displayed in the column named ‘‘Net Revenue Daily Rate’’ and is net of any third-party commissions. Since these vessels were acquired with existing time charters with below-market rates, we allocated the purchase price between the respective vessels and an intangible liability for the value assigned to the below-market charterhire. This intangible liability is amortized as an increase to voyage revenues over the minimum remaining terms of the applicable charters. The minimum remaining term for the Genco Titus is on September 16, 2011, at which point the respective liabilities were or will be amortized to zero and the vessels began or will begin earning the ‘‘Cash Daily Rate.’’ For cash flow purposes, we will continue to receive the rate presented in the ‘‘Cash Daily Rate’’ column until the charter expires.
 
(4) These charters include a 50% index-based profit sharing component above the respective base rates listed in the table. The profit sharing between the charterer and us for each 15-day period is calculated by taking the average over that period of the published Baltic Cape Index of the four time charter routes, as reflected in daily reports. If such average is more than the base rate payable under the charter, the excess amount is allocable 50% to each of the charterer and us. A third-party brokerage commission of 3.75% based on the profit sharing amount due to us is payable out of our share.
 
(5) We have reached an agreement with Swissmarine Services S.A. on a spot market-related time charter for 10.5 to 13.5 months based on 99% of the average of the daily rates of the Baltic Capesize Index, or BCI, as reflected in daily reports.  Hire is paid every 15 days in arrears net of a 5.00% third party brokerage commission.  We maintain the option to convert to a fixed rate based on Capesize FFA values at 99%.  The vessel delivered to its new charterer on June 28, 2011.
 
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(6) We have reached an agreement with U-Sea Bulk A/S, Copenhagen on a spot market-related time charter for the Genco Beauty based on 100% of the Baltic Panamax Index, or BPI, as reflected in daily reports, except for the initial 30 days after delivery in which hire is based on 100% of the Baltic Panamax P3A.  The charter commenced on April 24, 2011.  For the Genco Knight, we have reached an agreement with Swissmarine Services S.A. for 10.5 to 13.5 months that commenced on March 23, 2011 at a rate based on 100% of the BPI as reflected in daily reports.  For both vessels, hire is paid every 15 days in arrears net of a 5.00% third party brokerage commission.  We maintain the option to convert to a fixed rate based on Panamax FFA values at 100%.
 
(7) We have reached an agreement with Cargill International S.A. on a time charter for 65 to 75 days at a rate of $24,000 per day less a 5.00% third party brokerage commission.  Hire payment is made every 15 days in advance.  The vessel delivered to charterers on July 18, 2011.
 
(8) We have reached an agreement with Pacific Basin Chartering Ltd. on two spot market-related time charters for 11 to 13.5 months with rates based on 103% and 106% of the average of the Baltic Supramax Index, or BSI, as reflected in daily reports for the Genco Predator and Genco Hunter, respectively.  Hire is paid every 15 days in arrears net of a 5.00% third party brokerage commission.  Genco maintains the option to convert the balance of any period to a fixed rate based on Supramax FFA values at 103% for the Genco Predator and after the initial 45 days at 106% for the Genco Hunter.  The Genco Predator began on its new rate on June 16, 2011 while the Genco Hunter began on its new rate on July 5, 2011.
 
(9) We have reached an agreement with Klaveness Chartering on a spot market-related time charter based on 102% of the BSI, as reflected in daily reports.  Hire is paid every 15 days in arrears less a 5.00% third party brokerage commission.  We maintain the option to convert the balance of any period to a fixed rate based on Supramax FFA values at 102%.  The duration of the charter is 11 to 13.5 months commencing on April 26, 2011.
 
(10) We have reached an agreement with Louis Dreyfus Commodities Suisse S.A. on a time charter at a rate of $12,000 per day less a 5.00% third party brokerage commission for 3 to 5.5 months.  Hire payment is made every 15 days in advance.  The vessel will deliver to its new charterer on or about July 31, 2011.
 
(11) We have reached an agreement with Setaf-Saget SAS on a time charter for 6 to 8.5 months at a rate of $15,250 per day.  Hire is paid every 15 days in advance less a 3.75% third party brokerage commission.  The vessel was delivered in direct continuation from its previous time charter with Setaf-Saget SAS, which ended on June 10, 2011.
 
(12) We have reached an agreement with ED & F MAN Shipping Ltd. and Pacific Basin Chartering Ltd. on spot market-related time charters for the Genco Marine and Prosperity, respectively for 11 to 13.5 months at a rate based on 92% of the average of the daily rates of the BSI, as reflected in daily reports.  Hire payment is made every 15 days in arrears less a 5.00% third party brokerage commission.  We maintain the option to convert the balance period to a fixed rate based on Supramax FFA values at 92%, however, for the Genco Prosperity cannot do so until 45 days after delivery.  The Genco Marine went into drydock for scheduled repairs on May 19, 2011 and came out of the yard on June 5, 2011 then delivered to its new charterer.  The Genco Prosperity began on its new rate on June 9, 2011.
 
(13) We have reached an agreement with Trafigura Beheer B.V. on a spot market-related time charter based on 95% of the average of the daily rates of the BSI, as reflected in daily reports.  The duration of the charter is 11 to 14.5 months with payment being made every 15 days in arrears less a 5.00% third party brokerage commission.  We maintain the option to convert to a fixed rate based on Supramax FFA values at 95%.  The charter began on May 23, 2011.  The vessel went into drydock for scheduled repairs on April 17, 2011 and came out of the yard on April 28, 2011.
 
(14) We have reached an agreement to enter these vessels into the LB/IVS Pool whereby Lauritzen Bulkers A/S acts as the pool manager. We can withdraw up to two vessels with three months’ notice and the remaining three vessels with 12 months’ notice.
 
(15) We have reached an agreement with Pacific Basin Chartering Ltd. on a spot market-related time charter based on 100% of the average of the daily rates of the Baltic Handysize Index, or BHSI, as reflected in daily reports.  The duration of the charter is 11 to 13.5 months with hire paid every 15 days in arrears net of a 5.00% third party brokerage commission.  We maintain the option to convert the balance of any period to a fixed rate based on Handysize FFA values at 100%.  The vessel began its new rate on April 21, 2011.
 
(16) The rate for the spot market-related time charter will be linked with a floor of $8,500 and a ceiling of $13,500 daily with a 50% profit sharing arrangement to apply to any amount above the ceiling. The rate will be based on 115% of the average of the daily rates of the BHSI, as reflected in daily reports. Hire will be paid every 15 days in advance net of a 5.00% third party brokerage commission.
 
(17) These vessels were acquired with existing time charters with below-market rates. As described in footnote 20, intangible liabilities will be amortized as an increase to voyage revenues over the minimum remaining terms of the applicable charters. Specifically, for the Genco Avra,
 
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Genco Ocean and Genco Bay, the daily amount of amortization associated with them will be approximately $350, $700 and $750 per day over the actual cash rate earned, respectively.
 
(18) Built & delivery date for vessel being delivered in the future is an estimate based on guidance received from the sellers and shipyard.
 
(19) The rate for the spot market-related time charter will be based on 115% of the average of the daily rates of the BHSI, as reflected in daily reports. Hire will be paid every 15 days in advance net of a 5.00% third party brokerage commission. The time charter commenced on July 21, 2011 following delivery of the vessel to us.
 
(20) This vessel was acquired with an existing time charter with a below-market rate. For the time charters that are below-market, Genco allocates the purchase price between the respective vessels and an intangible liability for the value assigned to the below-market charter-hire. This intangible liability will be amortized as an increase to voyage revenues over the minimum remaining terms of the applicable charters, at which point the respective liabilities will be amortized to zero and the vessels will begin earning the ‘‘Cash Daily Rate.’’ For cash flow purposes, we will continue to receive the rate presented in the ‘‘Cash Daily Rate’’ column until the charter expires.
 
Baltic Trading Limited

Vessel	 	Year 
 Built	 	Charterer	 	Charter
Expiration(1)	 	Employment
Structure	
 	 	 	 	 	 	 	 	 	
Capesize Vessels	 	 	 	 	 	 	 	 	
Baltic Bear	 	2010	 	Swissmarine Services S.A.	 	March 2012	 	101.5% of BCI (2)	
Baltic Wolf	 	2010	 	Cargill International S.A.	 	September 2011	 	100% of BCI (3)	
Supramax Vessels	 	 	 	 	 	 	 	 	
Baltic Leopard	 	2009	 	Resource Marine PTE Ltd.
(part of the Macquarie group of companies)	 	March 2012	 	97 % of BSI (4)	
Baltic Panther	 	2009	 	Klaveness Chartering	 	April 2013	 	95 % of BSI (5)	
Baltic Jaguar	 	2009	 	Resource Marine PTE Ltd.
(part of the Macquarie group of companies)	 	May 2012	 	97 % of BSI (4)	
Baltic Cougar	 	2009	 	AMN Bulkcarriers Inc.	 	August 2012	 	96 % of BSI (6)	
Handysize Vessels	 	 	 	 	 	 	 	 	
Baltic Wind	 	2009	 	Cargill International S.A.	 	May 2013	 	115% of BHSI (7)	
Baltic Cove	 	2010	 	Cargill International S.A.	 	February 2014	 	115% of BHSI (7)	
Baltic Breeze	 	2010	 	Cargill International S.A.	 	July 2014	 	115% of BHSI (7)	

(1)	The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Under the terms of each contract, the charterer is entitled to extend the time charters from two to four months in order to complete the vessel’s final voyage plus any time the vessel has been off-hire.	
(2)	Baltic Trading has agreed to terms on a spot market-related time charter with Swissmarine Services S.A. at a rate based on 101.5% of the Baltic Capesize Index (BCI). Hire is paid in arrears net of a 6.25% brokerage commission which includes the 1.25% commission payable to GS&T. The duration is 10.5 to 13.5 months. The vessel delivered to charterers on May 1, 2011.	
(3)	Under the terms of the agreements, the rate for the spot market-related time charter is based on the average of the daily rates of the BCI, as reflected in daily reports. Hire is paid every 15 days in arrears net of a 5.00% brokerage commission, which includes the 1.25% commission payable to GS&T. Baltic Trading is not responsible for voyage expenses, including fuel.	
(4)	Baltic Trading has reached an agreement with Resource Marine PTE Ltd. on two spot market-related time charters based on 97% of the average of the daily rates of the Baltic Supramax Index (BSI), as reflected in daily reports. Hire is paid every 15 days in arrears net of a 6.25% brokerage commission, which includes the 1.25% commission payable to GS&T. The duration of both is 11 to 13.5 months with the Baltic Leopard beginning on April 24, 2011 and the Baltic Jaguar beginning on June 7, 2011.	
(5)	Baltic Trading has reached an agreement with Klaveness Chartering on a spot market-related time charter based on 95% of the average of the daily rates of the BSI, as reflected in daily reports. The duration is 22.5 to 25.5 months with hire paid every 15 days in arrears net of a 6.25% brokerage commission, which includes the 1.25% commission payable to GS&T. The vessel was delivered to its new charterer on May 21, 2011.	
(6)	Baltic Trading has agreed to an extension with AMN Bulkcarriers Inc., on a spot market-related time charter based on 96% of the average of the daily rates of the BSI, as reflected in daily reports. Hire is paid every 15 days in arrears net of a 5.00% brokerage commission, which includes the 1.25% commission payable to GS&T. The duration is 11 to 13.5 months and is to commence on	

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 	or about September 14, 2011 when the maximum period of the initial time charter with AMN Bulkcarriers Inc., is scheduled to be completed.	
(7)	The rate for each of the spot market-related time charters is based on 115% of the average of the daily rates of the Baltic Handysize Index (BHSI), as reflected in daily reports. Hire is paid every 15 days in advance net of a 6.25% brokerage commission, which includes the 1.25% commission payable to GS&T.	
 
Three months ended June 30, 2011 compared to the three months ended June 30, 2010
 
VOYAGE REVENUES-
 
For the three months ended June 30, 2011, voyage revenues decreased 6.5% to $98.5 million versus $105.3 million for the three months ended June 30, 2010.  Revenues decreased by approximately $6.8 million primarily as a result of lower charter rates achieved by some of our vessels partially offset by the increase in the size of our fleet and an increase in revenues earned by Baltic Trading’s vessels of $2.9 million.
 
The average Time Charter Equivalent (“TCE”) rate of our fleet decreased 39.8% to $18,299 a day for the three months ended June 30, 2011 from $30,405 a day for the three months ended June 30, 2010.  The decrease in TCE rates resulted from lower charter rates achieved in the second quarter of 2011 versus the same period last year for the majority of the vessels in our fleet.  Reduced cargo availability in April and May due to weather related events that occurred in the first quarter of 2011, coupled with continued deliveries of newbuilding vessels were the main contributors of reduced rates which affected the earnings of our vessels trading on spot market-related charters.  These effects were slightly offset by increased scrapping of older tonnage and the return of iron ore and coal cargoes in June of this year.
 
For the three months ended June 30, 2011 and 2010, we had 5,418.6 and 3,459.8 ownership days, respectively.  The increase in ownership days is a result of the delivery of 14 vessels during the third quarter of 2010 and two vessels during the first and second quarter of 2011, as well as a full quarter of ownership for Baltic Trading’s fleet of nine vessels, which were acquired after March 31, 2010.  Fleet utilization was stable at 99.4% during both periods.
 
During 2010, the Baltic Dry Index (a drybulk index) went from a high on May 26, 2010 of 4,209 and fell to a low of 1,700 on July 15, 2010.  At December 31, 2010, the index was 1,773.  The index subsequently decreased to a low of 1,043 on February 4, 2011 and as of July 21, 2011 was at 1,325.  The lower index was mainly driven by a deteriorating freight rate environment in the Capesize sector. Supramax and Panamax vessels experienced less volatility through the cycle as a result of the broader cargo versatility of the vessels and demand strength of minor bulks.  Reduced cargo availability in April and May due to weather related events that occurred in the first quarter of 2011, coupled with continued deliveries of newbuilding vessels were the main contributors of reduced rates, which affected the earnings of our vessels trading on spot market-related charters. The effect of these contributors was slightly offset by increased scrapping of older tonnage and the return of iron ore and coal cargoes in June of this year.
 
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 include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services are provided for a fee of $750 per ship per day.  During the three months ended June 30, 2011 and 2010, total service revenue was $0.8 million and $0, respectively.
 
VOYAGE EXPENSES-
 
For the three months ended June 30, 2011 and 2010, we did not incur significant port and canal charges or any significant expenses related to the consumption of bunkers (fuel) as part of our vessels’ overall expenses because all of our vessels were employed under time charters, spot market-related time charters, or in pools that require the charterer or pool to bear all of those expenses.
 
For the three months ended June 30, 2011 and 2010, voyage expenses were ($0.1) million and $1.0 million, respectively, and consisted primarily of brokerage commissions paid to third parties.  Additionally, we recognized net gains relative to bunker fuel for vessels coming off time charters amounting to $1,294 and $459 for the three months ended June 30, 2011 and 2010, respectively.
 
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VESSEL OPERATING EXPENSES-
 
Vessel operating expenses increased by $9.3 million for the three months ended June 30, 2011 as compared to the three months ended June 30, 2010 primarily a result of the operation of a larger fleet.  Additionally, the increase was due to a full quarter of operation of nine Baltic Trading vessels which were delivered during the second, third and fourth quarters of 2010, which accounted for $2.5 million of additional vessel operating expenses during the three months ended June 30, 2011 over the comparative prior year period.  The increase was also related to higher crew expenses, partially offset by lower insurance and lube expenses during the three months ended June 30, 2011 as compared to the three months ended June 30, 2010.
 
Daily vessel operating expenses increased to $4,700 per vessel per day for the three months ended June 30, 2011 from $4,671 per day for the three months ended June 30, 2010.  The increase in daily vessel operating expenses was due to higher crew costs on certain of our vessels.  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.  For the first half of 2011, we budgeted daily vessel operating expenses at a weighted average rate of $5,200 per vessel per day.  Our actual daily vessel operating expenses per vessel for the three months ended June 30, 2011 were $500 below the budgeted rate.  Based on our expenses to date for the year, we expect DVOE for the second half of 2011 to be $5,000.
 
Our vessel operating expenses, which generally represent fixed costs for each vessel, will increase as a result of the expansion of our fleet. Other factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for crewing, lubes, and insurance, may also cause these expenses to increase.
 
GENERAL, ADMINISTRATIVE AND MANAGEMENT FEES-
 
For the three months ended June 30, 2011 and 2010, general, administrative and management fees were $8.3 million and $7.2 million, respectively.  The increase in general, administrative and management fees was primarily due to the addition of personnel as the fleet expanded.  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.  The increase in general, administrative and management fees was also a result of higher management fees related to the operation of a larger fleet.
 
DEPRECIATION AND AMORTIZATION-
 
Depreciation and amortization charges increased by $7.8 million during the second quarter of 2011 as compared to the second quarter of 2010 primarily due to the operation of a larger fleet, including the 14 vessels delivered during the third quarter of 2010 and two vessels delivered during the six months ended June 30, 2011 as well as the nine Baltic Trading vessels delivered during 2010, which accounted for $2.4 million of the increase.  This increase was slightly offset by a decrease in depreciation due to the change in estimated salvage value from $175 per lightweight ton to $245 per lightweight ton of $0.6 million.  Refer to Note 2 — Summary of Significant Accounting Policies in our condensed consolidated financial statements for further information regarding this change.
 
OTHER (EXPENSE) INCOME-
 
NET INTEREST EXPENSE-
 
For the three months ended June 30, 2011 and 2010, net interest expense was $21.4 million and $15.6 million, respectively.  Net interest expense during the three months ended June 30, 2011 consisted of interest expense under our 2007 Credit Facility, $100 Million Term Loan Facility, $253 Million Term Loan Facility, and Baltic Trading’s $150 million senior secured revolving credit facility as well as interest expense related to our 5.0% Convertible Senior Notes (the “2010 Notes”).  Additionally, interest income, unused commitment fees associated with the credit facilities noted above as well as amortization of deferred financing costs related to the credit facilities noted above are included in net interest expense during the three months ended June 30, 2011.  The increase in net interest expense for the second quarter of 2011 versus the second quarter of 2010 was primarily a result of borrowing under the additional credit facilities entered into by the Company during 2010 due to the acquisition of additional vessels during 2010 and 2011, as well as net interest expense incurred by Baltic Trading, which increased by $0.9 million compared to the same period in the prior year.  Net interest expense during the second quarter of 2010 consisted primarily of interest expense under our 2007 Credit Facility and Baltic Trading’s $150 million senior secured revolving credit facility as well as unused commitment fees and deferred financing costs related to these facilities.
 
INCOME TAX EXPENSE-
 
For the three months ended June 30, 2011, income tax expense was $0.4 million as compared to $0.7 million during the three months ended June 30, 2010.  Income tax expense consists primarily of federal, state and local income taxes on net income earned by Genco Management (USA) Limited (“Genco (USA)”), one of our wholly-owned subsidiaries.  Pursuant to certain agreements, we technically and commercially manage vessels for Baltic Trading, as well as provide technical management of vessels for MEP in
 
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exchange for specified fees for these services provided.  These services are provided by Genco (USA), which has elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) is subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services.  Refer to the “Income taxes” section of Note 2 — Summary of Significant Accounting Policies included in our condensed consolidated financial statements for further information.  The decrease in income tax expense during the three months ended June 30, 2011 as compared to the same period during the prior year is a result of additional income earned by Genco (USA) during the three months ended June 30, 2010.  This was due to the 1% purchase fee due to Genco (USA) from Baltic Trading pursuant to the Management Agreement related to the delivery of five vessels during the three months ended June 30, 2010.  There were no similar transactions during the three months ended June 30, 2011.
 
NET (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST-
 
For the three months ended June 30, 2011 and 2010, net (loss) income attributable to noncontrolling interest was ($0.3) million and $1.9 million, respectively.  These amounts represent the net (loss) income attributable to the noncontrolling interest of Baltic Trading, which completed its IPO on March 15, 2010.
 
Six months ended June 30, 2011 compared to the six months ended June 30, 2010
 
VOYAGE REVENUES-
 
For the six months ended June 30, 2011, voyage revenues decreased 0.4% to $199.1 million versus $200.0 million for the six months ended June 30, 2010.  Revenues decreased by approximately $0.9 million primarily as a result of lower charter rates achieved by the majority of our vessels substantially offset by the increase in the size of our fleet and an increase in revenues earned by Baltic Trading’s vessels of $12.5 million.
 
The average TCE rate of our fleet decreased 38.3% to $18,720 a day for the six months ended June 30, 2011 from $30,326 a day for the six months ended June 30, 2010.  The decrease in TCE rates resulted from lower charter rates achieved during the six months ended June 30, 2011 versus the same period last year for the majority of the vessels in our fleet.
 
For the six months ended June 30, 2011 and 2010, we had 10,641.2 and 6,609.8 ownership days, respectively.  The increase in ownership days is a result of the delivery of 14 vessels during the third quarter of 2010 and two vessels during the first and second quarter of 2011 as well as a full quarter of ownership for Baltic Trading’s fleet of nine vessels which were acquired after March 31, 2010.  Fleet utilization was stable at 99.4% and 99.5% for the six month periods ended June 30, 2011 and 2010, respectively.
 
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 include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services are provided for a fee of $750 per ship per day.  During the six months ended June 30, 2011 and 2010, total service revenue was $1.6 million and $0, respectively.
 
VOYAGE EXPENSES-
 
For the six months ended June 30, 2011 and 2010, we did not incur significant port and canal charges or any significant expenses related to the consumption of bunkers (fuel) as part of our vessels’ overall expenses because all of our vessels were employed under time charters, spot market-related time charters, or in pools that require the charterer or pool to bear all of those expenses.
 
For the six months ended June 30, 2011 and 2010, voyage expenses were $0.9 million and $1.8 million, respectively, and consisted primarily of brokerage commissions paid to third parties.  Additionally, we recognized net gains relative to bunker fuel for vessels coming off time charters amounting to $1,653 and $1,016 for the six months ended June 30, 2011 and 2010, respectively.
 
VESSEL OPERATING EXPENSES-
 
Vessel operating expenses increased by $19.2 million for the six months ended June 30, 2011 as compared to the six months ended June 30, 2010  primarily a result of the operation of a larger fleet.  Additionally, the increase was due to the operation of nine Baltic Trading vessels which were delivered during the second, third and fourth quarters of 2010, which accounted for $6.4 million of additional vessel operating expenses during the six months ended June 30, 2011 over the comparative prior year period.  The increase
 
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was also related to higher crew expenses offset by lower insurance and lube expenses during the six months ended June 30, 2011 as compared to the six months ended June 30, 2010.
 
Daily vessel operating expenses increased to $4,723 per vessel per day for the six months ended June 30, 2011 from $4,697 per day for the six months ended June 30, 2010.  The increase in daily vessel operating expenses was due to higher crew costs on certain of our vessels.  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.  For the first half of 2011, we budgeted daily vessel operating expenses at a weighted average rate of $5,200 per vessel per day.  Our actual daily vessel operating expenses per vessel for the six months ended June 30, 2011 were $477 below the budgeted rate.  Based on our expenses to date for the year, we expect DVOE for the second half of 2011 to be $5,000.
 
GENERAL, ADMINISTRATIVE AND MANAGEMENT FEES-
 
For the six months ended June 30, 2011 and 2010, general, administrative and management fees were $17.1 million and $13.0 million, respectively.  The increase in general, administrative and management fees was primarily due to the increase in expenses associated with the operation of Baltic Trading, which resulted in $1.0 million of additional expenses, as well as the addition of personnel as the fleet expanded.  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.  The increase in general, administrative and management fees was also a result of higher management fees related to the operation of a larger fleet.
 
DEPRECIATION AND AMORTIZATION-
 
Depreciation and amortization charges increased by $16.0 million during the six months ended June 2011 as compared to the same period during 2010 primarily due to the operation of a larger fleet, including the 14 vessels delivered during the third quarter of 2010 and two vessels delivered during the six months ended June 30, 2011 as well as the nine Baltic Trading vessels delivered during 2010, which accounted for $6.0 million of the increase.  This increase was slightly offset by a decrease in depreciation due to the change in estimated salvage value from $175 per lightweight ton to $245 per lightweight ton of $1.2 million.  Refer to Note 2 — Summary of Significant Accounting Policies in our condensed consolidated financial statements for further information regarding this change.
 
OTHER (EXPENSE) INCOME-
 
NET INTEREST EXPENSE-
 
For the six months ended June 30, 2011 and 2010, net interest expense was $42.5 million and $30.9 million, respectively.  Net interest expense during the six months ended June 30, 2011 consisted of interest expense under our 2007 Credit Facility, $100 Million Term Loan Facility, $253 Million Term Loan Facility, and Baltic Trading’s $150 million senior secured revolving credit facility as well as interest expense related to the 2010 Notes.  Additionally, interest income, unused commitment fees and amortization of deferred financing costs related to the credit facilities noted above are included in net interest expense during the six months ended June 30, 2011.  The increase in net interest expense for the six months ended June 30, 2011 versus the same period during 2010 was primarily a result of borrowing under the additional credit facilities entered into by the Company during 2010 due to the acquisition of additional vessels during 2010 and 2011, as well as net interest expense incurred by Baltic Trading, which increased by $1.9 million.  Net interest expense during the six months ended June 30, 2011 consisted primarily of interest expense under our 2007 Credit Facility and Baltic Trading’s $150 million senior secured revolving credit facility as well as unused commitment fees and deferred financing costs related to these facilities.
 
INCOME TAX EXPENSE-
 
For the six months ended June 30, 2011 and 2010, income tax expense was $0.7 million.  This income tax expense consists primarily of federal, state and local income taxes on net income earned by Genco Management (USA) Limited (“Genco (USA)”), one of our wholly-owned subsidiaries.  Pursuant to certain agreements, we technically and commercially manage vessels for Baltic Trading, as well as provide technical management of vessels for MEP in exchange for specified fees for these services provided.  These services are provided by Genco (USA), which has elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) is subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services.  Refer to the “Income taxes” section of Note 2 — Summary of Significant Accounting Policies included in our condensed consolidated financial statements for further information.
 
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NET (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST-
 
For the six months ended June 30, 2011 and 2010, net (loss) income attributable to noncontrolling interest was ($1.5) million and $1.6 million, respectively.  These amounts represent the net (loss) income attributable to the noncontrolling interest of Baltic Trading, which completed its IPO on March 15, 2010.
 
LIQUIDITY AND CAPITAL RESOURCES
 
To date, we have financed our capital requirements with cash flow from operations, equity offerings, convertible notes and bank debt.  We have used our funds primarily to fund vessel acquisitions, regulatory compliance expenditures , the repayment of bank debt and the associated interest expense and the payment of dividends .  We will require capital to fund ongoing operations, acquisitions and debt service.   Please refer to the discussion under the subheading “Dividend Policy” below for additional information regarding dividends.  We also may consider debt and additional equity financing alternatives from time to time.  However, if market conditions become negative, we may be unable to raise additional equity capital or debt financing on acceptable terms or at all.
 
Currently, our wholly-owned subsidiary Genco Investments LLC owns 5,699,088 shares of Baltic Trading’s Class B Stock, which represents a 25.22% ownership interest in Baltic Trading and 83.5% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock.  On April 16, 2010, Baltic Trading entered into a $100 million senior secured revolving credit facility with Nordea Bank Finland plc, acting through its New York branch (the “2010 Baltic Trading Credit Facility”).  The 2010 Baltic Trading Credit Facility was subsequently amended effective November 30, 2010 which increased the borrowing capacity from $100 million to $150 million.  The amended 2010 Baltic Trading Credit Facility matures on November 30, 2016.  Refer to the 2010 10-K for a description of this facility as well as a description of the amendment entered into effective November 30, 2010.  To remain in compliance with a net worth covenant in the 2010 Baltic Trading Credit Facility, Baltic Trading would need to maintain a net worth of $232.8 million after the payment of any dividends.  We do not believe these restrictions have a significant impact on our liquidity.
 
We have entered into two secured term loan facilities during August 2010 in order to fund future vessel acquisitions.  On August 12, 2010, we entered into a $100 million secured term loan facility to fund or refund to us a portion of the purchase price of the acquisition of five vessels from companies within the Metrostar group of companies.  Additionally, on August 20, 2010, we entered into a $253 million senior secured term loan facility to fund a portion of the purchase price of the acquisition of 13 vessels from Bourbon.  Refer to the 2010 10-K for further information regarding these loan facilities.
 
On July 21, 2010, in two concurrent public offerings, we sold $125 million aggregate principal amount of the 2010 Notes and 3,593,750 shares of common stock at a purchase price of $15.28 per share, which reflected a price to the public of $16.00 per share less underwriting discounts and commissions of $0.72 per share. Such amounts reflected the exercise in full of the underwriters’ overallotment options.
 
The 2007 Credit Facility, the $253 Million Term Loan Facility, and the $100 Million Term Loan Facility each include a maximum leverage ratio covenant limiting the ratio of our net debt to EBITDA to a maximum of 5.5 to 1.  We calculate the leverage ratio under our 2007 Credit Facility, $253 Million Term Loan Facility, and $100 Million Term Loan Facility by dividing our Average Consolidated Net Indebtedness by our Consolidated EBITDA as defined under these facilities.  There is no leverage ratio covenant under the Baltic Trading 2010 Credit Facility.  Average Consolidated Net Indebtedness is the monthly average of our indebtedness as defined under the facilities, which at June 30, 2011 consisted of long-term debt, the 2010 Notes, cash and cash equivalents (excluding restricted cash) and the letter of credit issued related to leases.
 
Pursuant to the current terms of the 2007 Credit Facility, the existing collateral maintenance financial covenant is waived, which required us to maintain pledged vessels with a value equal to at least 130% of our current borrowings, and accelerated the reductions of the total facility which began on March 31, 2009.  Please read the 2010 10-K for further details.  The collateral maintenance covenant is waived until we can represent that we are in compliance with all of our financial covenants.  Under the collateral maintenance covenants of our $253 Million Term Loan Facility, our $100 Million Term Loan Facility, and the 2010 Baltic Trading Credit Facility, the aggregate valuations of our vessels pledged under each facility must at least be a certain percentage of loans outstanding (or, in the case of the Baltic Trading Credit Facility, the total amount we may borrow), which percentages are 135%, 130%, and 140%, respectively.  Under our $253 Million Term Loan Facility, the amount payable upon early termination of any interest rate swaps under the facility is added to outstanding loans for purposes of this covenant.  If our valuations fall below the applicable percentage, we must provide additional acceptable collateral, repay a portion of our borrowings, or (in the case of the 2010 Baltic Trading Credit Facility) permanently reduce the amount we may borrow under the facility to the extent required to restore our compliance with the applicable covenant.
 
We were in compliance with the maximum leverage ratio covenant under our credit facilities at June 30, 2011 and would have remained in compliance at that date with a 10% reduction in our EBITDA.  However, due to the current prolonged weakness in drybulk shipping rates and borrowings we expect to make under our $100 Million Term Loan Facility for our remaining vessel acquisition, we may not meet this ratio at some point during 2011 if these market conditions continue.  While we are seeking waivers
 
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or modifications to our credit agreements, which may be subject to certain conditions, and may also seek to raise additional capital through equity or debt offerings or selling assets (including vessels), we cannot be certain that we will accomplish any such actions.  Absent such waivers or modifications, if we do not comply with these covenants, it would be an event of default under our credit agreements if we do not remedy our noncompliance within the applicable period following notice from our lenders.  Upon an event of default under any of these three credit facilities, our lenders under each of these facilities may declare the indebtedness under our credit facilities to be immediately due and payable, and they may also terminate our ability to borrow further amounts under these facilities.  In addition, if payment of any of our credit facility indebtedness were accelerated and such acceleration remained uncured within 30 days after we receive notice under the Indenture for our 2010 Notes, we would be in default under the Indenture, and our indebtedness under the 2010 Notes could be declared immediately due and payable unless we obtain a waiver.  We can make no assurances that we could obtain additional or substitute financing if payment of any our indebtedness is accelerated.  As a result, we may experience a material adverse effect on our business, financial condition, results of operations, and cash flows.
 
Dividend Policy
 
Historically, our dividend policy, which commenced in November 2005, has been to declare quarterly distributions to shareholders by each February, May, August and November, substantially equal to our available cash from operations during the previous quarter, less cash expenses for that quarter (principally vessel operating expenses and debt service) and any reserves our Board of Directors determines we should maintain.  These reserves covered, among other things, drydocking, repairs, claims, liabilities and other obligations, interest expense and debt amortization, acquisitions of additional assets and working capital.  In the future, we may incur other expenses or liabilities that would reduce or eliminate the cash available for distribution as dividends.  Under the current terms of the 2007 Credit Facility, we are required to suspend the payment of cash dividends until we can represent that we are in a position to satisfy the collateral maintenance covenant.  Refer to the 2010 10-K for further information regarding the current terms of the 2007 Credit Facility.  As such, a dividend has not been declared during 2009, 2010 or the six months ended June 30, 2011.
 
As a result of the 2009 Amendment to the 2007 Credit Facility, we have suspended the payment of cash dividends effective for the fourth quarter of 2008, and payment of cash dividends will remain suspended until we can meet the collateral maintenance covenant contained in the 2007 Credit Facility.
 
The declaration and payment of any dividend is subject to the discretion of our board of directors and our compliance with the collateral maintenance covenant, which is currently waived.  The timing and amount of dividend payments will depend on our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of distributions to shareholders and other factors.  Our board of directors may review and amend our dividend policy from time to time in light of our plans for future growth and other factors.
 
We believe that, under current law, our dividend payments from earnings and profits will constitute “qualified dividend income” and, as such, will generally be subject to a 15% U.S. federal income tax rate with respect to non-corporate U.S. shareholders that meet certain holding period and other requirements (through 2012). Distributions in excess of our earnings and profits will be treated first as a non-taxable return of capital to the extent of a U.S. shareholder’s tax basis in its common stock on a dollar-for-dollar basis and, thereafter, as capital gain.
 
Share Repurchase Program
 
On February 13, 2008, our board of directors approved our share repurchase program for up to a total of $50.0 million of our common stock.  Share repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions.  The timing and amount of purchases under the program were determined by management based upon market conditions and other factors.  Purchases may be made pursuant to a program adopted under Rule 10b5-1 under the Securities Exchange Act.  The program does not require us to purchase any specific number or amount of shares and may be suspended or reinstated at any time in our discretion and without notice.  Repurchases under the program are subject to restrictions under the 2007 Credit Facility.  Currently, the terms of the 2007 Credit Facility require us to suspend all share repurchases until we can represent that we are in a position to again satisfy the collateral maintenance covenant.  Refer to the 2010 10-K for further information.  There were no share repurchases during the three and six months ended June 30, 2011 or 2010.
 
Cash Flow
 
Net cash provided by operating activities for the six months ended June 30, 2011 and 2010 was $83.0 million and $118.0 million, respectively. The decrease in cash provided by operating activities was primarily due to lower net income for the first half of 2011, which resulted primarily from lower charter rates achieved in the 2011 period versus the same period last year for the majority of the vessels in our fleet. For the six months ended June 30, 2011 as compared to June 30, 2010, the lower net income was offset by
 
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significantly higher depreciation and amortization due to the operation of a larger fleet as well as a lower impact of the amortization of time charters acquired.
 
Net cash used in investing activities for the six months ended June 30, 2011 and 2010 was $68.3 million and $304.6 million, respectively.  The decrease was primarily due to fewer funds used for deposits and purchases of vessels during the first half of 2011 compared to the first half of 2010. Five of the initial six vessels in Baltic Trading’s fleet were acquired during the first half of 2010. For the six months ended June 30, 2011, cash used in investing activities primarily related to the purchase of vessels in the amount of $67.2 million. For the six months ended June 30, 2010, cash used in investing activities primarily related to purchases of vessels in the amount of $214.4 million and deposits on vessels in the amount of $84.9 million.
 
Net cash provided by financing activities was $0.7 million during the six months ended June 30, 2011 as compared to $194.4 million during the six months ended June 30, 2010. Cash provided by financing activities in 2011 mainly consisted of $21.5 million of proceeds from the $253 Million Term Loan Facility related to the Bourbon vessels acquired offset by the following uses of cash: a $25.0 million repayment of debt under the 2007 Credit Facility, $9.8 million repayment of debt under the $253 Million Term Loan Facility, $1.8 million repayment of debt under the $100 Million Term Loan Facility and the $3.9 million dividend payments of our subsidiary, Baltic Trading, to its outside shareholders. For the same period last year, cash provided by financing activities consisted of $214.5 million of proceeds from the initial public offering of Baltic Trading Limited offset by repayments on the 2007 Credit Facility of $25.0 million, $3.7 million for payments of common stock issuance costs and offset by $10.0 million of proceeds from the 2010 Baltic Trading Credit Facility.
 
Credit Facilities
 
Refer to the 2010 10-K for a summary and description of our outstanding credit facilities, including the underlying financial and non-financial covenants.
 
As of June 30, 2011, we believe we are in compliance with all of the financial covenants under our 2007 Credit Facility (with the exception of the collateral maintenance financial covenant, which has been waived as discussed in Note 9 — Long-Term Debt of our condensed consolidated financial statements), the $100 Million Term Loan Facility, the $253 Million Term Loan Facility and the 2010 Baltic Trading Credit Facility.
 
Interest Rate Swap Agreements, Forward Freight Agreements and Currency Swap Agreements
 
At June 30, 2011 and December 31, 2010, we had nine and ten interest rate swap agreements with DnB NOR Bank, respectively, to manage interest costs and the risk associated with changing interest rates. The total notional principal amount of the swaps is $706.2 million and $756.2 million, respectively, and the swaps have specified rates and durations.
 
Refer to the table in Note 11 — Interest Rate Swap Agreements of our condensed consolidated financial statements, which summarizes the interest rate swaps in place as of June 30, 2011 and December 31, 2010.
 
We have considered the creditworthiness of both ourselves and the counterparty in determining the fair value of the interest rate derivatives, and such consideration resulted in an immaterial adjustment to the fair value of derivatives on the balance sheet. Valuations prior to any adjustments for credit risk are validated by comparison with counterparty valuations.  Amounts are not and should not be identical due to the different modeling assumptions.  Any material differences are 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 contract, 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, 2011.
 
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Contractual Obligations
 
The following table sets forth our contractual obligations and their maturity dates as of June 30, 2011.  The table incorporates our agreement with Metrostar to acquire two remaining Handysize vessels for an aggregate remaining purchase price of $59.9 million.  Additionally, the table incorporates the employment agreement entered into in September 2007 with our Chief Financial Officer, John Wobensmith.  The interest and borrowing fees reflect the 2007 Credit Facility, the 2010 Baltic Trading Credit Facility, as amended, the $100 Million Term Loan Facility, the $253 Million Term Loan Facility and the 2010 Notes utilizing the coupon rate of 5% which were issued on July 27, 2010 and the interest rate swap agreements as discussed above under the section “Interest Rate Swap Agreements, Forward Freight Agreements and Currency Swap Agreements.”  The following table also incorporates the future lease payments associated with the current lease agreement as well at the new lease agreement entered into effective April 4, 2011.  Refer to Note 16 — Commitments and Contingencies for further information regarding the terms of the current and new lease agreements.

 	 	Total	 	Less than One 
 Year (1)	 	One to Three
Years	 	Three to Five
Years	 	More than
Five Years	 	
 	 	(U.S. dollars in thousands)	 	
Credit Agreements (3)	 	$	1,648,911	 	$	37,458	 	$	399,696	 	$	583,834	 	$	627,923	 	
2010 Notes	 	125,000	 	—	 	—	 	125,000	 	—	 	
Remainder of purchase price of vessels (2)	 	59,850	 	59,850	 	—	 	—	 	—	 	
Interest and borrowing fees	 	237,582	 	38,872	 	111,686	 	69,195	 	17,829	 	
Executive employment agreement	 	575	 	237	 	338	 	—	 	—	 	
Office leases	 	27,713	 	423	 	2,999	 	3,065	 	21,226	 	
Totals	 	$	2,099,631	 	$	136,840	 	$	514,719	 	$	781,094	 	$	666,978	 	

(1)	Represents the six-month period ending December 31, 2011.	
(2)	The timing of this obligation is based on the actual or estimated delivery dates for the anticipated delivery of vessels as provided by the seller of the respective vessels. Upon the delivery of the Genco Mare on July 20, 2011, the remaining aggregate purchase price of $29.9 million was paid to the seller of the vessels.	
(3)	On July 15, 2011, $20.0 million was drawn down by GS&T in order to fund the purchase of the Genco Mare, which was delivered on July 20, 2011.	
 
Interest expense has been estimated using the fixed hedge rate for the effective period and notional amount of the debt which is effectively hedged and 0.25% for the portion of the debt that has no designated swap against it, plus the applicable bank margin of 2.00% for the 2007 Credit Facility and 3.00% for the $100 Million Term Loan Facility, $253 Million Term Loan Facility and the amended 2010 Baltic Trading Credit Facility.  We are obligated to pay certain commitment fees in connection with all of our credit facilities, which have been reflected within interest and borrowing fees.
 
Capital Expenditures
 
We make capital expenditures from time to time in connection with our vessel acquisitions.  Excluding Baltic Trading’s vessels, our fleet currently consists of nine Capesize drybulk carriers, eight Panamax drybulk carriers, 17 Supramax drybulk carriers, six Handymax drybulk carriers and 12 Handysize drybulk carriers.  Baltic Trading’s fleet currently consists of two Capesize drybulk carriers, four Supramax drybulk carriers and three Handysize drybulk carriers.
 
In addition to acquisitions that we may undertake in future periods, we will incur additional expenditures due to special surveys and drydockings. We estimate our drydocking costs and scheduled off-hire days for our fleet through 2012 to be:

Year	 	Estimated Drydocking Cost	 	Estimated Off-hire Days	 	
 	 	(U.S. dollars in millions)	 	 	 	
 	 	 	 	 	 	
2011 (July 1- December 31, 2011)	 	$	5.6	 	180	 	
2012	 	$	11.9	 	385	 	
 
The costs reflected are estimates based on drydocking our vessels in China.  We estimate that each drydock will result in 20 days of off-hire.  Actual costs will vary based on various factors, including where the drydockings are actually performed.  Three of Baltic Trading’s Supramax drybulk carriers that are drydocking during 2012 are anticipated to complete the required maintenance in only fifteen days.  We expect to fund these costs with cash from operations.
 
During the six months ended June 30, 2011 and 2010, we incurred a total of $1.8 million and $2.6 million of drydocking costs, respectively.
 
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We estimate that nine of our vessels will be drydocked in the remainder of 2011.  An additional 20 of our vessels, including three of Baltic Trading’s vessels, will be drydocked in 2012.
 
Refer to “Contractual Obligations” above for the remaining purchase price of vessels that we have agreed to purchase from Metrostar.
 
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 2010 10-K, with the exception of the accounting policies noted below or in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011.
 
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 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.  Effective January 1, 2011, we increased the estimated scrap value of the vessels from $175/lwt to $245/lwt prospectively based on the 15-year average scrap value of steel.  This increase in the residual value of the vessels will decrease the annual depreciation charge over the remaining useful life of the vessel.  During the three and six months ended June 30, 2011, the increase in the estimated scrap value resulted in a decrease in depreciation expense of approximately $0.6 million and $1.2 million, respectively.  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.  U nder 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 below under “Impairment of long-lived assets.” Excluding the three Bourbon vessels we resold immediately upon delivery to MEP at our cost, we have sold three of our vessels since our inception and realized a profit in each instance.  However, we did determine to cancel an acquisition of six drybulk newbuildings in November 2008, incurring a $53.8 million loss from the forfeiture of our deposit and related interest.
 
Pursuant to our bank 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 bank 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 $100 Million Term Loan Facility and our $253 Million Term Loan Facility, as well as the 2010 Baltic Trading Credit Facility, at June 30, 2011, and the collateral maintenance covenant under our 2007 Credit Facility was waived at June 30, 2011, as discussed in Note 9 — Long-Term Debt in our condensed consolidated financial statements.  In the chart below, we list each of our vessels that represent the collateral for the aforementioned credit facilities, the year it was built, the year we acquired it, and its carrying value at June 30, 2011.  We have indicated by an asterisk those vessels for which the vessel valuations for covenant compliance purposes under our bank credit facilities as of the most recent compliance testing date were lower than their carrying values at June 30, 2011.  For the Genco Ocean and the Genco Bay, the last compliance testing date was February 17, 2011, in accordance with the terms of the $100 Million Term Loan Facility; for the Genco Avra, the valuation was obtained as of the date the vessel was delivered on May 12, 2011; and for all other vessels, the compliance testing date was June 30, 2011, in accordance with the terms of the applicable credit facility.
 
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The amount by which the carrying value at June 30, 2011 of vessels marked with an asterisk exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $0.1 million to $70.8 million.  The average amount by which the carrying value of the vessels marked with an asterisk exceeded the valuation of such vessels for covenant compliance purposes was $22.6 million.  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, which can be significant.

Vessels	 	Year Built	 	Year Acquired	 	Carrying Value
(U.S. Dollars in
thousands)	 	
2007 Credit Facility	 	 	 	 	 	 	 	
Genco Reliance	 	1999	 	2004	 	$	17,087	 	
Genco Vigour*	 	1999	 	2004	 	23,302	 	
Genco Explorer	 	1999	 	2004	 	16,983	 	
Genco Carrier	 	1998	 	2004	 	17,416	 	
Genco Sugar	 	1998	 	2004	 	15,990	 	
Genco Pioneer	 	1999	 	2005	 	16,864	 	
Genco Progress	 	1999	 	2005	 	17,003	 	
Genco Wisdom	 	1997	 	2005	 	16,515	 	
Genco Success	 	1997	 	2005	 	16,445	 	
Genco Beauty*	 	1999	 	2005	 	23,451	 	
Genco Knight	 	1999	 	2005	 	23,216	 	
Genco Leader	 	1999	 	2005	 	23,198	 	
Genco Marine	 	1996	 	2005	 	15,960	 	
Genco Prosperity	 	1997	 	2005	 	16,705	 	
Genco Muse*	 	2001	 	2005	 	22,870	 	
Genco Acheron	 	1999	 	2006	 	23,028	 	
Genco Surprise	 	1998	 	2006	 	21,937	 	
Genco Augustus*	 	2007	 	2007	 	110,874	 	
Genco Tiberius*	 	2007	 	2007	 	111,058	 	
Genco London*	 	2007	 	2007	 	112,204	 	
Genco Titus*	 	2007	 	2007	 	112,669	 	
Genco Challenger*	 	2003	 	2007	 	35,222	 	
Genco Charger*	 	2005	 	2007	 	38,412	 	
Genco Warrior*	 	2005	 	2007	 	56,284	 	
Genco Predator*	 	2005	 	2007	 	57,791	 	
Genco Hunter*	 	2007	 	2007	 	61,332	 	
Genco Champion*	 	2006	 	2008	 	40,020	 	
Genco Constantine*	 	2008	 	2008	 	118,182	 	
Genco Raptor*	 	2007	 	2008	 	80,945	 	
Genco Cavalier*	 	2007	 	2008	 	66,132	 	
Genco Thunder*	 	2007	 	2008	 	81,025	 	
Genco Hadrian*	 	2008	 	2008	 	115,720	 	
Genco Commodus*	 	2009	 	2009	 	118,136	 	
Genco Maximus*	 	2009	 	2009	 	118,062	 	
Genco Claudius*	 	2010	 	2009	 	119,793	 	
TOTAL	 	 	 	 	 	$	1,881,831	 	
 	 	 	 	 	 	 	 	
$ 100 Million Term Loan Facility	 	 	 	 	 	 	 	
Genco Bay*	 	2010	 	2010	 	33,306	 	
Genco Ocean*	 	2010	 	2010	 	33,337	 	
Genco Avra*	 	2011	 	2011	 	34,201	 	
TOTAL	 	 	 	 	 	$	100,844	 	
 	 	 	 	 	 	 	 	
$ 253 Million Term Loan Facility	 	 	 	 	 	 	 	
Genco Aquitaine*	 	2009	 	2010	 	35,127	 	
Genco Ardennes*	 	2009	 	2010	 	35,276	 	
Genco Auvergne*	 	2009	 	2010	 	35,233	 	
Genco Bourgogne*	 	2010	 	2010	 	35,188	 	
Genco Brittany*	 	2010	 	2010	 	35,241	 	
Genco Languedoc*	 	2010	 	2010	 	35,424	 	
 
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Genco Loire*	 	2009	 	2010	 	32,135	 	
Genco Lorraine*	 	2009	 	2010	 	31,821	 	
Genco Normandy*	 	2007	 	2010	 	29,498	 	
Genco Picardy*	 	2005	 	2010	 	29,333	 	
Genco Provence*	 	2004	 	2010	 	28,991	 	
Genco Pyrenees*	 	2010	 	2010	 	35,130	 	
Genco Rhone*	 	2011	 	2011	 	36,798	 	
TOTAL	 	 	 	 	 	$	435,195	 	
 	 	 	 	 	 	 	 	
2010 Baltic Trading Credit Facility	 	 	 	 	 	 	 	
Baltic Leopard*	 	2009	 	2009	 	33,718	 	
Baltic Panther*	 	2009	 	2010	 	33,796	 	
Baltic Cougar*	 	2009	 	2010	 	33,946	 	
Baltic Jaguar*	 	2009	 	2010	 	33,843	 	
Baltic Bear*	 	2010	 	2010	 	70,512	 	
Baltic Wolf*	 	2010	 	2010	 	70,159	 	
Baltic Wind*	 	2009	 	2010	 	32,350	 	
Baltic Cove*	 	2010	 	2010	 	32,637	 	
Baltic Breeze*	 	2010	 	2010	 	33,202	 	
TOTAL	 	 	 	 	 	$	374,163	 	
 	 	 	 	 	 	 	 	
Consolidated Total	 	 	 	 	 	$	2,792,033	 	

*                  Please see paragraphs preceding the table.
 
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.  We held nine and ten interest rate swap agreements with DnB NOR Bank at June 30, 2011 and December 31, 2010, respectively, to manage future interest costs and the risk associated with changing interest rates .  The total notional principal amount of the swaps is $706.2 million and $756.2 million, respectively, and the swaps have specified rates and durations.  Refer to the table in Note 11 — Interest Rate Swap Agreements of our condensed consolidated financial statements which summarizes the interest rate swaps in place as of June 30, 2011 and December 31, 2010.
 
The swap agreements with effective dates prior to June 30, 2011 synthetically convert variable rate debt to fixed rate debt at the fixed interest rate of the swap plus the applicable margin of 2.00% as discussed as discussed in the “2007 Credit Facility” section of Note 9 — Long-Term Debt of our condensed consolidated financial statements.
 
The total liability associated with the swaps at June 30, 2011 is $35.4 million, of which $9.8 million is current, and $43.3 million at December 31, 2010, of which $4.4 million is current, and is presented as the fair value of derivatives on the balance sheet.  As of June 30, 2011 and December 31, 2010, the Company has accumulated other comprehensive (deficit) income (“AOCI”) of ($35.2) million and ($43.2) million, respectively, related to the effectively hedged portion of the swaps.  Hedge ineffectiveness associated with the interest rate swaps resulted in a minimal amount of other (expense) income during the three and six months ended June 30, 2011 and 2010.  At June 30, 2011, ($21.5) million of AOCI is expected to be reclassified into income over the next 12 months associated with interest rate derivatives.
 
We are subject to market risks relating to changes in LIBOR rates because we have significant amounts of floating rate debt outstanding.  For the six months ended June 30, 2011 and 2010, we paid LIBOR plus 2.00% on the 2007 Credit Facility for the debt in excess of any designated swap’s notional amount for such swap’s effective period.  During the six months ended June 30, 2011, we also paid LIBOR plus 3.00% on the outstanding debt under the $100 Million Term Loan Facility, the $253 Million Term Loan Facility and the 2010 Baltic Trading Credit Facility.  There was no interest expense incurred on outstanding debt related to the $100 Million Term Loan Facility and the $253 Million Term Loan Facility as these credit facilities were not entered into until the third quarter of
 
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2010.  A 1% increase in LIBOR would result in an increase of $4.6 million in interest expense for the six months ended June 30, 2011, considering the increase would be only on the unhedged portion of the debt.
 
Derivative financial instruments
 
As of June 30, 2011 and December 31, 2010, we held nine and ten interest rate swap agreements, respectively, with DnB NOR Bank to manage interest costs and the risk associated with changing interest rates.  The total notional principal amount of the swaps is $706.2 million and $756.2 million, respectively, and the swaps have specified rates and durations.  Refer to the table in Note 11 — Interest Rate Swap Agreements of our condensed consolidated financial statements, which summarizes the interest rate swaps in place as of June 30, 2011 and December 31, 2010.
 
The differential to be paid or received for these swap agreements is recognized as an adjustment to interest expense as incurred.  The interest rate differential pertaining to the interest rate swaps for the three months ended June 30, 2011 and 2010 was $7.3 million and $7.6 million, respectively.  The interest rate differential pertaining to the interest rate swaps for the six months ended June 30, 2011 and 2010 was $14.6 million and $15.2 million, respectively.  The Company is currently utilizing cash flow hedge accounting for the swaps whereby the effective portion of the change in value of the swaps is reflected as a component of AOCI.  The ineffective portion is recognized as other (expense) income, which is a component of other (expense) income.  If for any period of time we did not designate the swaps for hedge accounting, the change in the value of the swap agreements prior to designation would be recognized as other (expense) income.
 
Amounts receivable or payable arising at the settlement of hedged interest rate swaps are deferred and amortized as an adjustment to interest expense over the period of interest rate exposure provided the designated liability continues to exist.  Amounts receivable or payable arising at the settlement of unhedged interest rate swaps are reflected as other (expense) income and is listed as a component of other (expense) income.
 
Refer to “Interest rate risk” section above for further information regarding the 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.
 
As part of our business strategy, we may enter into short-term forward currency contracts to protect ourselves from the risk arising from the fluctuation in the exchange rate associated with the cost basis of the Jinhui shares.
 
Investments
 
We hold an investment in Jinhui of $42.5 million, which is classified as available for sale under Accounting Standards Codification 320-10, Investments — Debt and Equity Securities (“ASC 320-10”).  The investment is classified as a noncurrent asset based on our intent to hold the investment at each reporting date.  The investments that are classified as available for sale are subject to risk of changes in market value, which if determined to be impaired (other than temporarily impaired), could result in realized impairment losses.  The Company reviews the carrying value of such investments on a quarterly basis to determine if any valuation adjustments are appropriate under ASC 320-10.  We will continue to evaluate the investment on a quarterly basis to determine the likelihood of any further significant adverse effects on the fair value.  For the three and six months ended June 30, 2011, we have not deemed our investment to be impaired.  In the event we determine that the Jinhui investment is subject to any impairment, the amount of the impairment would be reclassified from AOCI and recorded as a loss in the Condensed Consolidated Statement of Operations for the amount of the impairment.

ITEM 4 .	 	CONTROLS AND PROCEDURES 	
 
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
 
Under the supervision and with the participation of our management, including our President and 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 President and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.
 
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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.

PART II:	 	OTHER INFORMATION 	
 	 	 	
ITEM 1 .	 	LEGAL PROCEEDINGS 	
 
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.
 
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ITEM 6 .  EXHIBITS 

Exhibit	 	Document	
 	 	 	
3.1	 	Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited.(1)	
 	 	 	
3.2	 	Articles of Amendment of Articles of Incorporation of Genco Shipping & Trading Limited as adopted July 21, 2005.(2)	
 	 	 	
3.3	 	Articles of Amendment of Articles of Incorporation of Genco Shipping & Trading Limited as adopted May 18, 2006.(3)	
 	 	 	
3.4	 	Certificate of Designations of Series A Preferred Stock.(4)	
 	 	 	
3.5	 	Amended and Restated By-Laws of Genco Shipping & Trading Limited, dated as of March 24, 2010.(5)	
 	 	 	
4.1	 	Indenture, dated July 27, 2010, between Genco Shipping & Trading Limited and The Bank of New York Mellon.(6)	
 	 	 	
4.2	 	Supplemental Indenture, dated July 27, 2010, between Genco Shipping & Trading Limited and The Bank of New York Mellon.(6)	
 	 	 	
10.1	 	Form of Director Restricted Stock Grant Agreement dated as of May 12, 2011.*	
 	 	 	
31.1	 	Certification of 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 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, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010 (Unaudited), (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2011 and 2010 (Unaudited), (iii) Condensed Consolidated Statements of Equity for the six months ended June 30, 2011 and 2010 (Unaudited), (iv) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2011 and 2010 (Unaudited), (v) Condensed Consolidated Statements of Cash Flow for the six months ended June 30, 2011 and 2010 (Unaudited), and (vi) Notes to Condensed Consolidated Financial Statements for the three and six months ended June 30, 2011 and 2010 (Unaudited).**	

(*)	 	Filed with this report.	
 	 	 	
(**)	 	Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 hereto are not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are not deemed filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.	
 	 	 	
(1)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Registration Statement on Form S-1/A, filed with the Securities and Exchange Commission on July 6, 2005.	
 	 	 	
(2)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Registration Statement on Form S-1/A, filed with the Securities and Exchange Commission on July 21, 2005.	
(3)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on May 18, 2006.	
 	 	 	
(4)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 9, 2007.	
 	 	 	
(5)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and	
 
48 

Table of Contents

 	 	Exchange Commission on March 25, 2010.	
 	 	 	
(6)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 27, 2010.	
 
(Remainder of page left intentionally blank)
 
49 

Table of Contents
 
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: July 26, 2011	By:	/s/ Robert Gerald Buchanan	
 	Robert Gerald Buchanan	
 	President	
 	(Principal Executive Officer)	

DATE: July 26, 2011	By:	/s/ John C. Wobensmith	
 	John C. Wobensmith	
 	Chief Financial Officer & Secretary	
 	(Principal Financial and Accounting Officer)	
 
50 

Table of Contents
 
Exhibit Index

Exhibit	 	Document	
 	 	 	
3.1	 	Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited.(1)	
 	 	 	
3.2	 	Articles of Amendment of Articles of Incorporation of Genco Shipping & Trading Limited as adopted July 21, 2005.(2)	
 	 	 	
3.3	 	Articles of Amendment of Articles of Incorporation of Genco Shipping & Trading Limited as adopted May 18, 2006.(3)	
 	 	 	
3.4	 	Certificate of Designations of Series A Preferred Stock.(4)	
 	 	 	
3.5	 	Amended and Restated By-Laws of Genco Shipping & Trading Limited, dated as of March 24, 2010.(5)	
 	 	 	
4.1	 	Indenture, dated July 27, 2010, between Genco Shipping & Trading Limited and The Bank of New York Mellon.(6)	
 	 	 	
4.2	 	Supplemental Indenture, dated July 27, 2010, between Genco Shipping & Trading Limited and The Bank of New York Mellon.(6)	
 	 	 	
10.1	 	Form of Director Restricted Stock Grant Agreement dated as of May 12, 2011.*	
 	 	 	
31.1	 	Certification of 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 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, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010 (Unaudited), (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2011 and 2010 (Unaudited), (iii) Condensed Consolidated Statements of Equity for the six months ended June 30, 2011 and 2010 (Unaudited), (iv) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2011 and 2010 (Unaudited), (v) Condensed Consolidated Statements of Cash Flow for the six months ended June 30, 2011 and 2010 (Unaudited), and (vi) Notes to Condensed Consolidated Financial Statements for the three and six months ended June 30, 2011 and 2010 (Unaudited).**	

(*)	 	Filed with this report.	
 	 	 	
(**)	 	Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 hereto are not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are not deemed filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.	
(1)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Registration Statement on Form S-1/A, filed with the Securities and Exchange Commission on July 6, 2005.	
 	 	 	
(2)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Registration Statement on Form S-1/A, filed with the Securities and Exchange Commission on July 21, 2005.	
 	 	 	
(3)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on May 18, 2006.	
 	 	 	
(4)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 9, 2007.	
 	 	 	
(5)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and	
 	 	Exchange Commission on March 25, 2010.	
 	 	 	
(6)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 27, 2010.	
 
(Remainder of page left intentionally blank)
 
51 

Exhibit 10.1
 
Genco Shipping & Trading Limited
Director Restricted Stock Grant Agreement
 
THIS AGREEMENT, made as of May 12, 2011, between GENCO SHIPPING & TRADING LIMITED (the “Company”) and                                        (the “Participant”).
 
WHEREAS, the Company has adopted and maintains the Genco Shipping & Trading Limited 2005 Equity Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts the successful conduct of the business of the Company depends, with incentives to: (a) enter into and remain in the service of the Company, (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company;
 
WHEREAS, the Plan provides that the Board of Directors of the Company (the “Board of Directors”) shall administer the Plan and determine the key persons to whom awards shall be granted and the amount and type of such awards; and
 
WHEREAS, the Board of Directors has determined that the purposes of the Plan would be furthered by granting the Participant an award under the Plan as set forth in this Agreement;
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
 
1.             Grant of Restricted Stock .  Pursuant to, and subject to, the terms and conditions set forth herein and in the Plan, the Board of Directors hereby grants to the Participant 2,500 restricted shares (the “Restricted Stock”) of common stock of the Company, par value $0.01 per share (“Common Stock”).
 
2.             Grant Date .  The Grant Date of the Restricted Stock is May 12, 2011.
 
3.             Incorporation of Plan .  All terms, conditions and restrictions of the Plan are incorporated herein and made part hereof as if stated herein.  If there is any conflict between the terms and conditions of the Plan and this Agreement, the terms and conditions of the Plan, as interpreted by the Board of Directors, shall govern.  Except as otherwise provided herein, all capitalized terms used herein shall have the meaning given to such terms in the Plan.
 
4.             Vesting .  Subject to the further provisions of this Agreement, the Restricted Stock shall vest on the earlier of (i) the date of the annual shareholders meeting of the Company next following the date hereof (the “Annual Meeting Date”) and (ii) the occurrence of a Change in Control, as defined in Section 3.8(a) of the Plan, as in effect on the date of such occurrence (each such date, the “Vesting Date”).
 
5.             Restrictions on Transferability .  Until a share of Restricted Stock vests, the Participant shall not transfer the Participant’s rights to such share of Restricted Stock or to any rights related thereto.  Any attempt to transfer unvested shares of Restricted Stock or any rights related thereto, whether by transfer, pledge, hypothecation or otherwise and whether voluntary or

 
involuntary, by operation of law or otherwise, shall not vest the transferee with any interest or right in or with respect to such shares of Restricted Stock or such related rights.
 
6.             Termination of Service .
 
(a)           In the event that the Participant’s Service with the Company terminates before the Vesting Date for any reason other than the Participant’s death or disability (as defined in the Plan), the Restricted Stock, together with any property received in respect of such shares, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates, and the Participant promptly shall return to the Company any certificates evidencing the Restricted Stock, together with any cash dividends or other property received in respect of such shares.  For purposes hereof, “Service” means a continuous time period during which the Participant is at least one of the following:  an employee or a director of, or a consultant to, the Company.
 
(b)           In the event that the Participant’s Service with the Company terminates before the Vesting Date for reason of the Participant’s death or disability (as defined in the Plan), all shares of Restricted Stock shall become vested immediately prior to such termination of Service.
 
7.             Issuance of Shares .
 
(a)           Reasonably promptly after the Grant Date, the Company shall issue and deliver to the Participant a stock certificate, registered in the name of the Participant, evidencing the shares of Restricted Stock or shall instruct its transfer agent to issue shares of Restricted Stock which shall be maintained in book entry form on the books of the transfer agent.  Such certificate may bear the following legend:
 
“THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, HYPOTHECATION ENCUMBRANCE OR OTHER DISPOSAL OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THE GENCO SHIPPING & TRADING LIMITED 2005 EQUITY INCENTIVE PLAN AND A RESTRICTED STOCK GRANT AGREEMENT BETWEEN GENCO SHIPPING & TRADING LIMITED AND THE HOLDER OF RECORD OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE.  NO TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IN CONTRAVENTION OF SUCH PLAN AND RESTRICTED STOCK GRANT AGREEMENT SHALL BE VALID OR EFFECTIVE.  COPIES OF SUCH AGREEMENT MAY BE OBTAINED BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THE CERTIFICATE TO THE SECRETARY OF GENCO SHIPPING & TRADING LIMITED.”
 
If the Restricted Stock is in book entry form, it shall be subject to electronic coding or stop order indicating that such shares of Restricted Stock are restricted by the terms of this Agreement and the Plan.  Such legend, electronic coding or stop order shall not be removed until such shares of Restricted Stock vest.
 
(b)           Reasonably promptly after any such shares of Restricted Stock vest pursuant to Section 4 hereof, (i) in the case of certificated shares, in exchange for the surrender to the Company of the certificates evidencing the Restricted Stock, delivered to the Participant under Section 7(a) hereof, and the certificates evidencing any other securities received in respect of such
 
2 

 
shares, if any, the Company shall issue and deliver to the Participant (or the Participant’s legal representative, beneficiary or heir) a certificate evidencing such shares of Restricted Stock and such other securities, free of the legend provided in Section 7(a) hereof and (ii) in the case of book entry shares, the Company shall cause to be lifted and removed any electronic coding or stop order established pursuant to Section 7(a) hereof.
 
(c)           The Company may require as a condition of the delivery of stock certificates or the removal of any electronic coding or stop order, pursuant to Section 7(b) hereof, that the Participant remit to the Company an amount sufficient in the opinion of the Company to satisfy any federal, state and other governmental tax withholding requirements related to the vesting of the applicable shares.  The Board of Directors, in its sole discretion, may permit the Participant to satisfy such obligation by delivering shares of Common Stock or by directing the Company to withhold from delivery shares of Common Stock, in either case valued at their Fair Market Value on the Vesting Date with fractional shares being settled in cash.
 
(d)           The Participant shall not be deemed for any purpose to be, or have rights as, a shareholder of the Company by virtue of the grant of Restricted Stock, except to the extent a stock certificate is issued therefor or an appropriate book entry is made on the books of the transfer agent reflecting the issuance thereof pursuant to Section 7(a) hereof, and then only from the date such certificate is issued or such book entry is made.  Upon the issuance of a stock certificate or the making of an appropriate book entry on the books of the transfer agent, the Participant shall have the rights of a shareholder with respect to the Restricted Stock, including the right to vote the shares, subject to the restrictions on transferability and the forfeiture provisions, as set forth in this Agreement.
 
8.             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 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 1933 Act 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.
 
9.             Dividends, etc .  Any cash dividends or other property (but not including securities) received by a Participant with respect to a share of Restricted Stock shall be returned to the Company in the event such share of Restricted Stock is forfeited.  Any securities received by a Participant with respect to a share of Restricted Stock as a result of any dividend, recapitalization, merger, consolidation, combination, exchange of shares or otherwise will not vest until such share of Restricted Stock vests and shall be forfeited if such share of Restricted Stock is forfeited.  Unless the
 
3 

 
Board of Directors otherwise determines, such securities shall bear the legend or be subject to the electronic coding or stop order set forth in Section 7(a) hereof.
 
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 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 Agreement, or any waiver on the part of any party or any provisions or conditions of this 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.           Right of Discharge Preserved .  Nothing in this Agreement shall confer upon the Participant the right to continue as a director of or in other service of the Company, or affect any right which the Company may have to terminate such service.
 
12.           Integration .  This Agreement contains the entire understanding of the parties with respect to its subject matter.  There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein.  This Agreement, including, without limitation, the Plan, supersedes all prior agreements and understandings between the parties with respect to its subject matter.
 
13.           Counterparts .  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
 
14.           Governing Law .  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without regard to the provisions governing conflict of laws.
 
15.           Obligation to Notify .  If the Participant makes the election permitted under Section 83(b) of the Internal Revenue Code of 1986, as amended (that is, an election to include in gross income in the year of transfer the amounts specified in Section 83(b)), the Participant shall notify the Company of such election within 10 days of filing notice of the election with the Internal Revenue Service and shall within the same 10-day period remit to the Company an amount sufficient in the opinion of the Company to satisfy any federal, state and other governmental tax withholding requirements related to such inclusion in Participant’s income. The Participant should consult with his or her tax advisor to determine the tax consequences of acquiring the Restricted Stock and the advantages and disadvantages of filing the Section 83(b) election.  The Participant acknowledges that it is his or her sole responsibility, and not the Company’s, to file a timely election under Section 83(b), even if the Participant requests the Company or its representatives to make this filing on his or her behalf.
 
16.           Reduction in Benefits .  Unless the Participant and the Company agree otherwise in writing, in the event that the Participant would incur an Excise Tax on any payments or benefits under this Agreement as a result of a Change of Control (or any other change described in Section 280G(b)(2) of the Code), the Company shall reduce the payments or benefits to be paid to or
 
4 

 
granted to Participant hereunder to the greater of (i) the maximum amount payable to the Participant without the imposition of any Excise Tax with respect to the Restricted Stock and (ii) the amount that yields the Participant the greatest after-tax amount of benefits under this Agreement after taking into account any Excise Tax imposed on Participant, whether due to payments and benefits under this Agreement or otherwise.  “Excise Tax” means the tax imposed by Section 4999 of the Code and any successor tax.  The determination of whether the Participants payments and benefits should be reduced and the amount of any such reduction shall be made by independent counsel selected by the Participant and reasonably acceptable to the Company (“Independent Counsel”).  For purposes of such determination, (x) the total amount of payments and benefits received by the Participant as a result of such Change in Control (or such other change) shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, except to the extent that, in the opinion of Independent Counsel, a payment or benefit hereunder (in whole or in part) does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code and the Treasury Regulations under Section 280G of the Code (the “Regulations”), or such “excess parachute payments” (in whole or in part) are not subject to the Excise Tax; (y) the amount of the payments and benefits hereunder that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of such payments and benefits or (B) the amount of “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code (after applying clause (x) hereof); and (z) the value of any noncash benefits or any deferred payment or benefit shall be determined by Independent Counsel in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.  All fees and expenses of Independent Counsel shall be borne by the Company.
 
17.           Participant Acknowledgment .  The Participant hereby acknowledges receipt of a copy of the Plan.  The Participant hereby acknowledges that all decisions, determinations and interpretations of the Board of Directors in respect of the Plan, this Agreement and the Restricted Stock shall be final and conclusive.
 
[Signature page follows]
 
5 

 
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement and the Plan as of the day and year first written above.

 	GENCO SHIPPING & TRADING LIMITED	

 	By:	 	
 	Name:	John C. Wobensmith	
 	Title:	Chief Financial Officer	

 
6 

Exhibit 31.1
 
CERTIFICATION
 
I, Robert Gerald Buchanan, certify that:
 
1.                I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 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/ Robert Gerald Buchanan	
 	Name: Robert Gerald Buchanan	
Date:  July 26, 2011	Title: President	

Exhibit 31.2
 
CERTIFICATION
 
I, John C. Wobensmith, certify that:
 
1.                I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 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:  July 26, 2011	Title: Chief Financial Officer & Secretary	

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, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned 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: July 26, 2011	/s/ Robert Gerald Buchanan	
 	Name: Robert Gerald Buchanan	
 	Title: 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, 2011, 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: July 26, 2011	/s/ John C. Wobensmith	
 	Name: John C. Wobensmith	
 	Title: Chief Financial Officer & Secretary	
 
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.