Good morning, before we begin our presentation, I'll note that in this conference call, we will be making certain forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as anticipate, budget, estimate, expect, project and plan, believes, and other words in terms of similar meaning in connection with the 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.

For a discussion of factors that could cause results to differ, please see the company's press release that was issued yesterday, the materials relating to this call posted on the company's website and the company's filings with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K for the year ended December 31, 2010 and the company's subsequent reports filed with the SEC. At this time, I would like to introduce Gerry Buchanan, the President of Genco Shipping & Trading.

Good morning, and welcome to Genco's Fourth Quarter and Full Year 2011 Conference Call. With me today is Peter Georgiopoulos, our Chairman; and John Wobensmith, our Chief Financial Officer.

I'll begin today's call by discussing our fourth quarter highlights as outlined on Slide 3 of the presentation. I will then turn the call over to John to review our financial results for the 3-month period ended December 31, 2011.

Following this, I will discuss the industry current fundamentals. John, Peter and I will then be happy to take your questions.

During the fourth quarter, Genco further expanded its high-quality fleet while maintaining an opportunistic time charter approach. By preserving the ability to benefit from a rising freight environment combined with a fleet of first-in-class vessels, we remain well positioned to increase the company's future earnings potential when market conditions improve.

Turning to Slide 5. Net income attributable to Genco for the 3 months ended December 31, 2011 was $0.3 million or $0.01 basic and diluted earnings per share.

Genco's cash position, excluding Baltic Trading Limited, was $229.4 million, which reflects the cash flows generated by our sizable fleet. During the fourth quarter, we completed the acquisition of 5 Handysize vessels from companies within the Metrostar group of companies with the delivery of the Genco Spirit.

By expanding our leading reputation as an owner and operator of modern tonnage, we have further strengthened the company's future commercial prospects and increased our long-term earning power.

Consistent with our opportunistic time charter approach, the Genco Spirit commenced a long-term spot-market-related time charter with Cargo International S.A., a leading international producer of market raw food and agricultural products. The rate for the time charter will be based on 115% of the average of daily rates of the Handy -- Baltic Handysize index, incorporating 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.

Going forward, we will continue to seek opportunities to secure our vessels in short-term or spot-market-related contracts with high credit quality counter parties, a core differentiator for our company, effectively preserving the ability to take advantage of future rate increases. Additionally, we increased our financial flexibility and strengthened our balance sheet during the quarter by amending each of our 3 credit facilities under favorable terms, which John will discuss later and in more detail on the call.

Moving to Slide 6, we provide a summary of our current fleet. As I mentioned earlier, we completed the Metrostar acquisition during the fourth quarter, the fourth newbuilding delivered to Genco in 2011.

This acquisition, along with the acquisition of 13 Supramax vessels from affiliates of Bourbon SA completed earlier in the year, combined to expand our world-class fleet by 31% on a deadweight tonnage basis, excluding Baltic Trading vessel, solidifying Genco's position as an industry bellwether. Management's success in maintaining the operational integrity of our entire fleet during a period of considerable growth is testimony to our integration expertise and continues to serve Genco and its shareholders well.

Excluding Baltic Trading's fleet, we currently own a fleet of 53 drybulk vessels, consisting of 9 Capesize, 8 Panamax, 17 Supramax, 6 Handymax and 13 Handysize vessels with a total carrying capacity of approximately 3,810,000 deadweight. Importantly, the average age of our fleet is 6.8 years, well below the industry average of approximately 12 years.

Our modern and diverse fleet bodes well for Genco to continue to provide leading international charters with service that adheres to the highest operational standards and take advantage of the positive long-term demand for the global transportation of iron ore, steel and other commodities.

I will now turn the call over to John.

Thank you, Gerry. Turning to Slide 8.

I will begin by providing an overview of our financial results for the fourth quarter and year ended December 31, 2011. Please note that we are reporting our financials on a consolidated basis as a result of the Baltic Trading IPO in March of 2010 and our 25.1% equity ownership in Baltic Trading.

For the 3 months and year ended December 31, 2011, we recorded total revenues of $97.1 million and $392.2 million, respectively. This compares with revenues for the fourth quarter of 2010 and year ended December 31, 2010 of $130.6 million and $448.7 million, respectively.

The decrease in total revenues for the fourth quarter of 2011 compared to the prior-year period is primarily due to lower charter rates achieved by some of our vessels, offset by the increase in the size of our fleet and consolidated revenues from Baltic Trading Limited.

Operating income for the fourth quarter and year ended December 31, 2011 was $24 million and $112.6 million, respectively. This compares with the operating income for the fourth quarter and year ended December 31, 2010 of $60.1 million and $221.3 million, respectively.

The decrease in operating income for the 3 months and year ended December 31, 2011 compared to the corresponding year earlier period is attributable to higher expenses associated with the operation of a larger fleet and lower rates achieved for our fleet in the respective periods of 2011. Interest expense for the fourth quarter of 2011 was $22.1 million and $86.7 million for the year ended December 31, 2011.

This compares to interest expense of $22 million for the fourth quarter of 2010 and $72.7 million for the year ended December 31, 2010.

The company recorded net income attributable to Genco for the fourth quarter of 2011 of $0.3 million or $0.01 basic and diluted earnings per share. Net income attributable to Genco for the year ended December 31, 2011 was $25.4 million or $0.72 basic and diluted earnings per share.

This compares to net income attributable to Genco of $34.8 million or $0.99 basic and $0.90 diluted earnings per share for the fourth quarter of 2010, and net income attributable to Genco of $141.2 million or $4.28 basic and $4.07 diluted earnings per share for the year ended December 31, 2010. For the 3 months and year ended December 31, 2011, Genco also recorded income tax expense of $344,000 and $1.4 million, respectively.

This compares to income tax expense for the fourth quarter and year ended December 31, 2010 of $654,000 and $1.8 million, respectively.

This income tax expense includes federal, state and local income taxes on net income earned by Genco Management USA Limited, one of our wholly-owned subsidiaries and relates to income generated from the technical and commercial management of vessels for Baltic Trading Limited, sale and purchase fees payable to us by Baltic Trading Limited, if any, and service revenue from the technical management of vessels owned by Maritime Equity Partners LLC.

our sizable cash position, including restricted cash, was $237.7 million as of December 31, 2011, enhancing our ability to operate in a soft rate environment. Excluding the consolidation of Baltic Trading, Genco's cash position was $229.4 million.

Our total assets as of December 31, 2011 were $3.1 billion, consisting primarily of our current fleet, cash and cash equivalents. Our EBITDA for the 3 months ended December 31, 2011, was $57.3 million, which represents an EBITDA margin of 59% of revenues.

Moving to Slide 11. Our utilization rate was 99% for the fourth quarter of 2011 compared to 99.4% in the year earlier period.

Our time charter equivalent rate for the fourth quarter of 2011 was $16,805 per day. This compares to $24,303 per day recorded in the fourth quarter of 2010.

The decrease in time charter equivalent rates resulted from lower charter rates achieved in the fourth quarter of 2011 versus the same period last year for the majority of the vessels in our fleet. For the fourth quarter of 2011, our daily vessel operating expenses were $5,142 per vessel per day versus $4,990 per vessel per day for the fourth quarter of 2010.

The increase in daily vessel operating expenses for the fourth quarter of 2011 compared to the prior year period is primarily due to higher crew cost, offset by lower lube consumption and expenses related to stores and supplies. Daily vessel operating expenses for the year ended December 31, 2011 were $4,819 per vessel per day versus $4,852 per vessel per day for the year ended December 31, 2010.

As we have stated in the past, we believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all the expenses that each vessel in our fleet will incur over a full year of operation. In maintaining an efficient cost structure, we are pleased that our daily vessel operating expenses for the year ended December 31, 2011 were below our budget of $5,000 per vessel per day on a weighted basis.

Based on estimates provided by our technical managers and management's expectation, our initial full year 2012 daily vessel operating expense budget is $5,200 per vessel per day on an average weighted basis for the 53 vessels in our fleet.

On Slide 12, we present our pro forma balance sheet, which shows our pro forma cash position of $209.9 million, which includes $19.5 million of estimated debt amortization under the 3 credit facilities for the first quarter of 2012. Pro forma cash excludes Baltic Trading Limited's cash balance of $8.3 million.

Our pro forma debt to total capital ratio was 58% as of December 31, 2011. During the fourth quarter, we entered into agreements to amend our $1.4 billion revolving credit facility, our $253 million senior secured term loan facility and our $100 million term loan facility.

Specifically, both the maximum leverage ratio and the interest coverage ratio covenants have been waived for each facility through and including the quarter ended March 31, 2013. A new covenant has also been introduced through and including the quarter ended March 31, 2013 relating to the company's leverage.

In connection with these agreements, we prepaid an aggregate of $62.5 million in principal loan amount. By drawing upon our strong relationships with our leading banks including DNB NOR, Deutsche Bank and Crédit Agricole, we have increased Genco's financial flexibility and strengthened the company's balance sheet.

We appreciate the continued support of our lending group, which serves as a core differentiator for our company and highlights Genco's industry leadership. Going forward, we remain committed to exploring opportunities aimed at further strengthening our capital structure in a manner that best serves the company and its shareholders.

On Slide 13, we present our anticipated expense levels. We expect our daily vessel operating expenses for 2012 to be $5,200 per vessel per day on a weighted basis of an average number of 53 vessels.

For the first quarter of 2012, we expect our daily free cash flow expense rate to be $15,849 and our daily net income expense rate for Genco consolidated to be $17,284. I will now turn the call back to Gerry for making comments [ph] on the industry.

Thank you, John. I will take this opportunity to spend a few moments discussing the industry fundamentals.

I'll start with Slide 15, which points to the drybulk indices. Represented on this slide is the overall Baltic Dry Index.

As can be seen when looking at the graph, the BDI has shown weakness since the beginning of the year, with freight rates under pressure through the first week of February. As was the case for 2011, we believe that seasonal factors contribute to the most recent downturn in rates, including order timing issues for iron ore cargoes due to the celebration of Chinese New Year, increased deliveries of newbuilding vessels for the month of January as compared to the previous 3 months and short-term weather-related issues in Brazil, temporarily reducing the iron ore output.

A marginal rebound has taken place after the index reached a low of 647 points on February 3, which is primarily due to our relative pick up in iron ore cargo fixtures and increased grain demand as the South American grain season picks up.

On Slide 16. We summarized the recent market developments in the drybulk freight market.

As mentioned on previous calls, one of the major reasons behind an extended weak rate environment through the first half of 2011 was significantly reduced iron ore and coal cargoes due to weather-related disruptions in Brazil and Australia. Similar weather-related disruptions were observed in the beginning of 2012, although to a much smaller extent.

As a result, we experienced a brief shutdown at Port Hedland in Australia, unveiled declared force majeure on 2 million tons of iron ore shipments from January 11 to January 23 of this year. Another factor contributing to the low rate environment since the beginning of the year has been seasonably low steel production due to the Chinese New Year celebrations, moving to higher iron ore inventories and lower demand for iron ore cargoes.

Iron ore inventories have slightly decreased over the last 2 weeks to 99.3 million tons from a record high of 101.5 million tons. Moreover, vessel deliveries increased significantly as compared to December with net additions of $10 million deadweight.

Lastly, I note that efforts of the Chinese government to monitor inflation have resulted in a reduced CPI growth of 4.5% in January, paralleled with a commitment from Chinese policy makers to ease monetary policy. Going forward, we believe that a number of catalysts will affect the drybulk market.

These short and long-term catalysts are listed on Slide 17. First, as just mentioned, after a period of sustained monetary tightening, the Chinese government decreased bank reserve requirements by 50 basis points, effective February 24, 2012, the second such decrease in the last 3 months.

This latest move is believed to free-up about $64 billion in lending to spur growth and coincide with the Chinese government's announcement earlier in the year that their 5 largest banks can extend 5% more loans in the first quarter of 2012 as compared to the same period last year. Second, China's 12th 5-year plan is a long-term catalyst as it stresses numerous infrastructure programs such as the construction of highways, airports, hospitals and railways, as well as the urbanization and development of Central and Western regions.

Seaborne trade should also be positively affected by planned volume expansion as iron ore and coal miners increase production and invest into higher-capacity port facilities over the next few years. Higher imported volumes could also further induce a price arbitrage between domestic and imported iron ore prices, thereby enhancing ton miles in the long run.

On the supply side, the increased scrapping of vessels was a positive trend for 2011, which we expect will continue in 2012 as volatility in charter rates continues and scrap steel prices remain high. Capesize vessel deliveries likely peaked in 2011, with almost 25% fewer Capesize vessels delivering in January this year versus 2011.

Slippage of newbuilding vessel deliveries are expected to continue at levels similar to last year as financing concerns continue and certain European banks are reducing funding availability. Albeit a front-loaded order book in 2012, only 44% of the scheduled deliveries for January actually got delivered.

On Slide 18, we talk more about the demand side fundamentals, which emphasize China and further detail the impacts of its 12th 5-year plan. Chinese steel production increased by 8.9% in 2011 as compared to 2010, while urban fixed asset investment rose 23.8% year-on-year for 2011.

Appetite for crude steel production stems from the continuous infrastructure projects in China as part of the last 5-year plan, including the building of 36 million housing units and investing in railway and urban subway system. Increased electricity needs in China should also bode well for the freight rates as the country's coal consumption is expected to grow by 150 million tons and dependence on seaborne coal is already evident as China's 2011 imports increase by 11%, making the world's top importer of coal.

Incremental commodity demand is also expected from India and its growth potential going forward. In the steel sector, the World Steel Association forecasts apparent steel usage to grow by 7.9% in 2012, following a surprising growth in production of 8% in 2011.

India's growing steel demand is also reducing iron ore exports to China via higher export duties and bans, forcing Chinese steel mills to source imported ore from longer ton-mile origins.

Moving to Slide 19. On the left of the page, we show the expansion plans of key iron ore producers as recently revised by the respective companies.

You can see the combined iron ore expansion plans for 2016, which accumulate to 487 million tons per annum or 46% of 2011 seaborne iron ore trade. Brazilian iron ore exports increased during each quarter last year, with new record figures attained for each of the third and fourth quarters of 2011.

Overall exports increased by 6% on a year-over-year basis, reaching 331 million tons. Going forward, we expect exports from both Brazil and Australia to increase as miners bring greater amounts of iron ore into the market.

Indicatively, Australian exports are forecasted to grow by 12% in 2012, reaching 481 million tons. Rio Tinto, the world's second-largest iron ore producer behind Vale, expects iron ore demands to nearly double in the next 8 years, providing for a yearly addition of 100 million tons on top of existing production to meet growth projections.

In order to keep up with this expected growth and demand, Rio Tinto, as well as BHP Billiton, plan to invest $3.4 billion and $14.9 billion, respectively, to boost iron ore output capacity in their Western Australian mines. Volume capacity is also planned at receiving ports, with China expected to add 390 million tons of iron ore port capacity by 2015.

On the coal front, we expect demand to increase in the medium term as a result of both higher steel production in China and India, and higher power consumption in the growing countries. Indian coal demand is projected to climb 41% to 980 million tons over the next 5 years with a potential of 265 million tons to be sourced from imports.

On Slide 20, we discuss the supply-side fundamentals, which remain uncertain. First, we will discuss the drybulk order book through 2014, which is depicted on the graph on the bottom left of the slide.

Although we believe that 2011 was the heaviest year for vessel deliveries, the order book remains at significant levels, representing approximately 30% of the existing world fleet. European lenders are still limiting availability and resources allocated to shipping, making it harder for owners to finance vessels that have not already delivered.

Second, we believe that scrapping will continue to play a significant role throughout 2012, especially if volatility in the freight rate environment persists. Approximately 23% of the world fleet is 20 years or older, and 18% is greater than 25 years old.

As illustrated on the graph at the bottom right of the page, 2011 was a record year for scrapping with 22.3 million deadweight scrapped, 3.6 million deadweight tons have been scrapped to date with 1.9 million deadweight tons scrapped in January, representing a 20% increase over the same period last year. Looking ahead to 2012, we believe that scrapping could potentially remain at high levels, considering the percentage of the fleet that's aging as well as the current combination of high scrap steel prices and suppressed freight rates.

Operations in Bangladesh yards have resumed again after a brief shutdown towards the end of last year. A new 5% tax has been added for purchasing vessels for scrap, however, and it's uncertain whether it will remain in place going forward.

It is also reported that a new scrapyard with a capability to scrap approximately 75 ships a year is set to begin operation in the middle of the year in Dalian, China. Lastly, we believe that slippage of newbuilding vessel deliveries continues as financing concerns are still on the table and a newbuilding price floor is supported by rising steel prices and appreciation of the Chinese currency.

As indicated earlier in the call, slippage for January 2012 was estimated at 56%. This concludes our presentation, and we are now happy to take your questions.

I just had a few follow-up questions. With the first one pertaining to Gerry's very last comment and that's the fact that when you look at shipyard delivery slippage, we've seen a market increase in the amount of slippage from already high levels last year to over 50% in January and we're seeing that continuing through February.

My question is how much of that increase or is there any way to know how much of that increase is a function of increasingly difficult financing terms? Or how much of it is just simply that you've seen a lot of non-deliveries over the last few years, the guys that keep the order book have just kept rolling those things forward and those things just aren't coming?

Is there a way to know how much of it is financing-related to increase? Or how much of it is just a function of it's finally time to -- for those things to show up and they're just not coming?

I think that -- I think it's the -- what you've just said, the latter. I think most of it is never going to come because at this point, you think about these orders that were done 2007, 2008, that have been rolled, rolled, rolled, they were options.

So I think most of these are not going to come. So you can call it slippage.

I think it's just ships that disappeared that will continue to disappear. I mean, someone who ordered a ship in 2008 or 2007 is not going to pay for it -- given where the market is today, they're better off losing their deposit and go and order a new one at a cheaper price.

So I think those ships are not coming at this point.

Got you. Very helpful, Peter.

And then just as a follow-up and this one is probably going to be maybe a little bit harder to kind of guesstimate, but is there a way to kind of pin or peg how much of the order book is maybe not real, maybe 1/4 of it, 30% of it? Is there a way to kind of know to say, okay, well, x percent are coming from these yards, they just aren't coming?

Or x percent or underwater are represented by options aren't going to be declared and they're just not coming? Is there a way to know how much of that 30% of the order book may not be real at this point?

No. Well, I mean, there isn't.

I mean, well, I think using 40% to 50% number, if you want to estimate, that's probably not a bad guess. We couldn't give you a hard number or a method to figure it out.

It's just sort of waiting and see what comes or doesn't come.

Got you. And just maybe follow the trend of monthly deliveries, and so just see kind of where we're going to end up?

Yes.

Got you. Okay, perfect.

And then just 2 follow-up questions. One, also staying on the supply-side of the industry, another trend that we've seen is that newbuilding orders to date have really dried up.

I mean, I think there've only been 10 newbuilding orders placed this year, which is less than 1/3 of the run rate for last year. My question on that front is what is that doing to the shipyards?

And are we starting to see those guys getting wound down, some of the less strong ones? And what is that potentially doing to asset values and does that maybe create an opportunity to pick assets up on the cheap as these guys start competing with each other?

I mean, I think what it does to the yards, I think you've seen a lot of the second-tier, third-tier yards shut down already. You've seen other ones move to repair yards or like the Dalian yard move to scrapping.

But there is a point where they can't build ships much cheaper because of the cost of steel, if you about think it, you're in a strange environment where the price of ships have gone down, the price of steel has gone up. So there's a certain level where these guys just can't take an order.

And I think we're at that level with asset values versus steel prices. So I think that's the point we're at.

So I mean, I think, there will be opportunities over the next 12 months or so. But we think one thing that's benefited the dry cargo market is that you've seen an increase in orders and container ships at LNG.

It's huge, a bunch of people running out and ordering LNGs and container ships. Now we're happy for that to happen all day long because it takes out capacity otherwise used for dry cargo ships.

All right, got you. Perfect.

And then just one final question before I turn it over. Speaking of opportunities, I mean, are you guys being approached by or seeing companies more in distress not as strong financially as you are?

I mean, are you guys seeing them out there may be looking to offload some assets on the cheap? And is that something that you'd be interested in?

Or do you think it's just better to kind of sit back and let things kind of play out and pick your spots?

We think -- right now, we haven't seen anything big out there. We've seen sort of onesies and twosies, a little sort of 1 ship here, 2 ships there popping out, but there isn't -- hasn't been anything sort of very big in trouble that we've seen.

Just a handful of follow-up questions and mostly on the balance sheet and I guess before I start, I just wanted to be sure, I mean, your prepayment associated with your waivers, did that change your amortization schedule at all? Does that basically remain constant?

It remains the same.

Okay. All right, great.

Obviously, you guys are pretty successful in those negotiations and you got a pretty strong cash position here, but your amortization steps up towards the back half of the year and then keeps going at a higher run rate. I guess, have you guys started to have conversations about augmenting that schedule yet?

Or is it just too early? Is that a back half of the year or a 2013 conversation?

I mean, I think it's a little too early, but as you've seen what we've done in the past, we obviously we have a good relationship with the banks and that will continue.

Okay, all right. That's helpful.

I guess if I look at, I guess, the covenants that are left for you guys, and correct me if I'm wrong here, but you guys basically are just left right now with effectively a book value-based covenant and I'm just curious as to given that asset values have come off materially, how would you guys characterize the risk of an asset write-down here? And I guess, how often is this conversation being had with your auditors?

Well, we've just -- we've obviously just finished the year end and we haven't had any events that would trigger an impairment analysis, but we've done it. The auditors have looked at it and passed on it.

Got you. Is there a normal schedule for that?

Or is it annual or quarterly?

It would typically be done annually. But keep in mind we have a young fleet so to do the cash flows on that basis average rates.

There's plenty of room.

All right, so it's annually and you would need really an event to trigger it, so you guys just basically freed [ph] it, okay. All right.

That's really helpful. And John, I know I asked you about this actually by the last 2 quarters.

But given the strength of your currency value and your equity, is there any change at all in the ways you guys are thinking about Baltic being a standalone subsidiary?

No, not right now.

This is Josh, on for Justin. I just want to follow-up on, I guess, maybe first one of Doug's questions and the slippage that we've seen so far year-to-date.

I was just wondering how easy it is for owners to maybe delay taking delivery of maybe a fully constructed ship. I mean, where rates kind of where they are, can they wait till maybe the summer time?

No. You can delay it a little bit, a couple of weeks, maybe a month at most, and you can make up excuses why you won't take delivery of the ship, but it's not much more than that.

If they're saying there's a delay more than a couple -- sometimes they could delay the ship and some within a couple of weeks. If that ship doesn't come, it's probably not coming.

Got it. So that is some real slippage that we're seeing so far then?

Yes, as I said earlier, I don't think it's slippage, I think they're gone. That's just my opinion.

It doesn't mean -- I got a lawyer here. I got to be careful what I say.

I guess, just following on with the broader market. Cape rates are pretty weak levels and I guess a lot of it's seasonal.

But we've seen some of the iron ore majors come back to the spot market and start placing ships again. Can you talk about maybe potential tightening of the Cape market and maybe how much the market can -- I guess, the spot market can move in the near term?

Or are you expecting rates to kind of bounce around at current levels for the next couple of months?

No, I think, look, as you said, this is a seasonally slow time period and we also saw the Chinese stock up before the end of 2011, which is normal buying patterns for them as we've seen over the last 6 or 7 years, they tend to come into the market. They buy and then they pull back for 30 or 45 days.

So I think it's a combination of that. You had a little bit -- obviously, some flooding issues, although not anything like what we saw last year take place at the end of the year, early first quarter.

And the seasonally slow period, I think it's a combination of all. So to answer your question, yes, we expect things to pick back up and if you look at the one-year time charter rates on Capes right now, they are somewhere in the mid-teens.

So clearly, the chartering market believes things are going to pick up as well.

Got it. And maybe switching over back to company specific.

The shares have really rallied above the lows from, I guess, Q4. How do you guys think about your capital structure and liquidity?

You still have over $210 million pro forma at Genco parent, but would you consider to maybe opportunistically raise any equity or capital?

Yes, I mean, I guess, a logical question, but we just don't comment on those things.

Understood. And then, I guess, one more call before I turn -- one more question before I turn it over.

I guess, second hand asset values are pretty weak, I guess, at or below the troughs we saw recently. How do you view fleet growth in the near-term?

And outside of, I guess, that debt-to-cap covenant, are there any other restrictions on acquisitions imposed by your loans or lenders?

No. I mean, there are no restrictions on acquisitions.

There are no restrictions on use of cash except it - it's been in place for a while and that's dividend restrictions, but not on utilizing the cash for acquisitions. On the fleet growth side, I think it's tough to tell.

I mean, we've talked a little bit about it earlier. It's a little bit of a black box, except we see the large numbers of ships that are just not hitting the water.

And the huge amount of scrapping. That's something else that I don't think anybody's really touched on.

I mean last year, it's 25 million tons scrapped. That is -- that was 5x a year before.

I mean, it's a huge number of ships and so far this year, we're ahead of schedule than we were last -- the schedule we had last year. So you're seeing serious number of ships come out of the market also, which we think definitely helps.

Got it. Actually, just one more question for John maybe.

There is that $527,000 other operating income item. I know it's small dollars, but just kind of curious if you could maybe provide some more insight on that.

Yes, sure. It's the same thing that we had last year, and it was disclosed in the K.

It's a payment that came from Samson. As you remember, Samson went bankrupt probably 3 years ago now and we obviously had a claim.

So every year, we're getting a payment on that claim and we have some shares as well, but I wouldn't say they’re worth anything right now.

Just a couple of questions here. We've seen some major write-down of asset values from some of your peers in recent weeks.

I'm just wondering what the possibility is that you need to write down the value of your vessels particularly your Capes?

Didn't we just discuss that? We just had that question on the call, sorry.

Okay. I'm sorry.

I must have missed that.

We just answered that question and the answer is no. We did an impairment analysis at the end of this year and we have a young fleet, so the cash flows are substantial to not take any impairment write-down.

So we don't see that as an issue. And we -- if you look at last year's K, we discussed that quite a bit and we'll do that again this year.

Okay. And then just a broader-base question.

There continues to be delays regarding the Chinese ports' acceptance of Vale's VLOC. So I'm just curious what you think the outcome could possibly be here and how you see that affecting the traditional Capesize market?

Look, I think it's a little too early to tell except that, at least, on paper, it looks like it's going to require quite a few Capes to actually move that product into China. They've already done one discharge on the tran shipment ship and from what I understand, that iron ore is still sitting here.

And I think it's gone a lot slower than they anticipated. I mean, it's going to be expensive, obviously and I think it will benefit over all Capes and Panamaxes.

Natasha, I think weather will come into play in this is well, the tran shipment is down in the Philippines, and they don't get the best of weather down there and that's going to cause havoc.

Okay. Alright.

And then just lastly, I know you've sort of touched on this, but you do have a substantial amount of vessels exposed to the spot market which has run index-link charters. And I understand that you obviously don't want re-charter out at these low rates, but I'm just curious about what kind of liquidity?

Is there even any liquidity in the Capesize period market?

Yes, like I said, the one-year rates are somewhere in the mid-teens. We've seen a few of those deals done, so yes, there is some liquidity.

But as you correctly pointed out, we think these rates are too low to lock-in long term.

What kind of number do you sort of have in mind when you start thinking about potentially locking out tonnage?

Yes, I mean, Natasha, we're asked this question all the time, and we just don't comment on it for obvious reasons.

Just a couple of quick questions, actually. The first one is somewhat balance sheet related, maybe also strategy-oriented.

You guys still have a pretty meaningful position in Jinhui, and I know that, or I believe that stock secures the DNB facility. Could you maybe just comment on what you're thinking with that?

Is it still just sort of a long-term hold and long-term investment? Or is there any possibility of monetizing that in order to reduce the balance of the facility?

That -- it's a long-term hold.

Okay. And another question I had, kind of going back towards the supply angle, obviously, fuel costs right now are, I guess, at record levels and we've heard of lot about vessels in excess of 15 years old not being as efficient and not really being economic and have -- on the tanker market in some areas we've seen some scrapping.

Is that -- especially given fuel cost where it is, I mean, is that really changing the dynamics? Are we going to see -- granted I understand there's a limit on the capacity for the scrapyards to take tonnage, but are we going to see large number of layups or scrapping of vessels that are still well short maybe of their 25-year useful life just because it doesn't make sense, given the relative economics for the vessels and where fuel prices are?

Yes, I mean, I think particularly on the Capes, you could see 20-year-old vessels scrapped. I think 15 is being aggressive.

But yes, around the 20-year-old range, if rates stay in depressed levels then, yes, I would definitely say that. And just to comment on your capacity of scrapyards, there obviously is a finite amount.

But as Peter correctly pointed out, we're still -- we're already above where we were this time last year. And you've got another yard in China that's opening up somewhere in the early third quarter at least is projected right now at Dalian.

And from what I've read, that shipyard can take up to 75 vessels a year. So you're actual seeing capacity growth that's planned in the future for scrapping.

So again, just kind of leading off that, I guess, well, there is a little over 22 million deadweight ton scrapped last year. How big could that number get?

Do you any inkling?

No, but I think if you look at what most people are projecting for this year, it's going to be a bigger number.

Okay. And then lastly, just kind of sort of in line with what Natasha was asking with respect to the VLOCs, I've heard varying opinions as to what's going on there and what the motivation is behind the Chinese, whether it's just trying to play the usual games on iron ore pricing or protectionist policy with respect to domestic shipowners or the physical limitations of some of the really most or almost all of the ports in China and the fact that they'd have to dredge it in order to allow the vessels to come in.

What do you think is really behind that? And do you think in the long term, the policy of not allowing these really large vessels to come into port is going to stick?

Or is that just kind of a negotiating tool?

I'm not sure what they will be negotiating. But as you said, there are varying number of opinions out there.

I'm not privy to sitting at any -- the table with Vale and the Chinese, but I think the Chinese actually also put it on tankers. So I think it's -- I think they're serious about it.

Okay. So you don't think that -- you don't envision it turning around any time soon?

That's something that probably sticks?

I think so. And if you look at what Vale's doing, I mean, they're still -- they're going ahead with building a transshipment place in our port in Malaysia.

The Philippines, they're putting into service. I don't think it's a short-term event.

Maybe 2 points of clarification just real quick, John, on the -- your revised terms, I guess, from an interest expense perspective. You did the -- you got the amendments in the late part of the fourth quarter, so did you prorate the increase, the step-up in the interest rate from that point and then go forward?

I'm just trying to get a sense. I thought it was actually going to be a little bit more retroactive, I just want to get sense on when it starts?

No, it was not retroactive.

Okay. So it's from like late December kind of onward?

Right.

Okay. And then the one-time payment that you needed to make the 25 basis points, did that roll through the cash flow and then it'll be amortized to deferred financing costs or something like that?

I'm just trying to get a sense, where do we see that?

Yes, you are exactly right.

Okay, perfect. That's what I thought.

I just wanted to make sure. And then there's been a lot of discussion about the order book.

I guess, one question I had when you look at the order book in 2013 and '14, in particular, it's about 40% of what's out there right now. Do you feel like slippage rates that we've seen apply to that to those orders?

Were those orders more likely placed kind of after we've seen rates kind of come down quite a bit following late 2008 into 2009? Do you think that those slippage rates kind of continue?

What are your thoughts there? I guess, I'm curious.

Yes, I think the slippage continues, again, Peter commented earlier on the call. But the one thing that I don't think we pointed out was on the financing side, we're really seeing a shrinkage of available capital from banks.

And just over the last 2 months, there are 3 shipping banks that I know of that are not doing any new deals and in some cases, selling loans. So I think you're going to continue to see a shrinkage in the short to medium term on available capital from banks, which I actually view as a positive.

Sure, absolutely. And then I guess when you think about putting an order in now, so for the 10 or so, the handful that have been delivered so far this year, I know you guys haven't put any in, but when you think conceptually about how that needs to work, can you put an order in really without committed financing right now?

Are yards accepting those types of orders? And have they been excepting those types of orders?

I haven't seen that, no.

Okay. I'm just trying to get a sense because whether or not there's committed financing for those '13 and '14 deliveries, just trying to get a sense of what your thoughts are.

But I guess it sound like you're thinking there could be continued meaningful slippage in those years as well.

Yes, I don't -- at this point, I don't see what would turn that around.

Okay. And then one final question just when you think about Australia as far as the level of production that you're going to see from a coal standpoint.

Obviously, last year was a disrupted year from weather. We've had some really kind of intermittent issues with weather so far year-to-date in Australia.

I guess, maybe what are your thoughts as far as increased production on the coal side specifically coming out of Australia in 2012?

Well, I clearly am not a weatherman. So I can't predict what we can have in the next month.

But so far, this year has obviously been a lot lighter in terms of disruptions than what we saw last year. But as far as capacity expansion, I think you're -- I think they've projected somewhere around 10% to 12% as far iron ore -- sorry, as far as coal exports out of Australia.

It's all going to depend obviously on what China's doing on the import side and what India is doing on the import side and right now, things look pretty good on both the thermal and the met coal side.