UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-Q






[X]
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d)
 OF THE
SECURITIES EXCHANGE ACT OF 1934


For the
quarterly period ended September 30, 2009




[ 
      ]
            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
              (State
      or other jurisdiction of
              incorporation
      or organization)
            
            98-043-9758
              (I.R.S.
      Employer
              Identification
      No.)299
      Park Avenue, 20th
      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  ý    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  ý    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 ý                                                                                 Accelerated
filer  o


Non-accelerated
filer   (Do not check if a smaller reporting
company)                                    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    ý




The
number of shares outstanding of each of the issuer’s classes of common stock, as
of November 9, 2009:


Common stock, $0.01 per share —
31,724,548 shares.








Genco
Shipping & Trading Limited





Page




PART I —
FINANCIAL INFORMATION




Item
      1.
            Financial
      Statements




a)
            Consolidated
      Balance Sheets -




September 30,
      2009 and December 31, 2008
            4




b)
            Consolidated
      Statements of Operations -




For the three
      and nine months ended September 30, 2009 and 2008
            5




c)
            Consolidated
      Statements of Shareholders’ Equity and Comprehensive Income
    -




For the nine
      months ended September 30, 2009
            6




d)
            Consolidated
      Statements of Cash Flows -




For the nine
      months ended September 30, 2009 and 2008
            7




e)
            Notes
      to Consolidated Financial
Statements




For the three
      and nine months ended September 30, 2009 and 2008
            8






Item
      2.
            Management’s
      Discussion and Analysis of




Financial Condition and Results of Operations
            24




Item
      3.
            Quantitative
      and Qualitative Disclosures About Market Risk
            40




Item
      4.
            Controls
      and Procedures
            42




PART
II      OTHER INFORMATION




Item
      1.
            Legal
      Proceedings
            42





Item
      1A.
            Risk
      Factors
            43





Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            43





Item
      5.
            Other
      Information
            44





Item
      6.
            Exhibits
            45














3




Genco
Shipping & Trading Limited


Consolidated
Balance Sheets as of September 30, 2009


and
December 31, 2008


(U.S.
Dollars in thousands, except for share data)




September
      30,
                2009
            
            
            December
      31, 2008(unaudited)AssetsCurrent
      assets:Cash
      and cash equivalents
            
            $
            243,757
            
            
            $
            124,956Restricted
      cash
            
            
            17,000
            
            
            
            —Due
      from charterers, net of a reserve of $80 and $244,
      respectively
            
            
            1,413
            
            
            
            2,297Prepaid
      expenses and other current assets
            
            
            12,955
            
            
            
            13,495Total
      current assets
            
            
            275,125
            
            
            
            140,748Noncurrent
      assets:Vessels,
      net of accumulated depreciation of $201,892 and $140,388,
      respectively
            
            
            1,919,161
            
            
            
            1,726,273Deposits
      on vessels
            
            
            30,608
            
            
            
            90,555Deferred
      drydock, net of accumulated depreciation of $3,350 and $2,868,
      respectively
            
            
            10,533
            
            
            
            8,972Other
      assets, net of accumulated amortization of $2,315 and $1,548,
      respectively
            
            
            7,759
            
            
            
            4,974Fixed
      assets, net of accumulated depreciation and amortization of $1,439 and
      $1,140, respectively
            
            
            2,389
            
            
            
            1,712Fair
      value of derivative instruments
            
            
            1,327
            
            
            
            —Investments
            
            
            49,238
            
            
            
            16,772Total
      noncurrent assets
            
            
            2,021,015
            
            
            
            1,849,258Total
      assets
            
            $
            2,296,140
            
            
            $
            1,990,006Liabilities and Shareholders’
      EquityCurrent
      liabilities:Accounts
      payable and accrued expenses
            
            $
            21,175
            
            
            $
            17,345Current
      portion of long term debt
            
            
            50,000
            
            
            
            —Deferred
      revenue
            
            
            10,073
            
            
            
            10,356Fair
      value of derivative instruments
            
            
            815
            
            
            
            2,491Total
      current liabilities
            
            
            82,063
            
            
            
            30,192Noncurrent
      liabilities:Deferred
      revenue
            
            
            2,427
            
            
            
            2,298Deferred
      rent credit
            
            
            692
            
            
            
            706Fair
      market value of time charters acquired
            
            
            9,304
            
            
            
            23,586Fair
      value of derivative instruments
            
            
            50,094
            
            
            
            63,446Long-term
      debt
            
            
            1,289,500
            
            
            
            1,173,300Total
      noncurrent liabilities
            
            
            1,352,017
            
            
            
            1,263,336Total
      liabilities
            
            
            1,434,080
            
            
            
            1,293,528Commitments
      and contingenciesShareholders’
      equity:Common
      stock, par value $0.01; 100,000,000 shares authorized; issued and
      outstanding
              31,724,548
      and 31,709,548 shares at September 30, 2009 and December 31, 2008,
      respectively
            
            
            317
            
            
            
            317Paid-in
      capital
            
            
            721,334
            
            
            
            717,979Accumulated
      other comprehensive deficit
            
            
            (16,918
            )
            
            
            (66,014
            )Retained
      earnings
            
            
            157,327
            
            
            
            44,196Total
      shareholders’ equity
            
            
            862,060
            
            
            
            696,478Total
      liabilities and shareholders’ equity
            
            $
            2,296,140
            
            
            $
            1,990,006See
      accompanying notes to consolidated financial statements.








4







Genco
Shipping & Trading Limited


Consolidated
Statements of Operations for the Three and Nine Months Ended September 30, 2009
and 2008


(U.S.
Dollars in Thousands, Except for Earnings per Share and Share Data)


(Unaudited)





For
      the Three Months
                Ended
      September 30,
            
            
            For
      the Nine Months
                Ended
      September 30,2009
            
            
            2008
            
            
            2009
            
            
            2008Revenues
            
            $
            92,949
            
            
            $
            107,557
            
            
            $
            283,301
            
            
            $
            303,798Operating
      expenses:Voyage
      expenses
            
            
            1,002
            
            
            
            1,748
            
            
            
            3,866
            
            
            
            3,216Vessel
      operating expenses
            
            
            14,766
            
            
            
            11,509
            
            
            
            42,235
            
            
            
            33,615General
      and administrative expenses
            
            
            3,782
            
            
            
            4,133
            
            
            
            11,775
            
            
            
            12,975Management
      fees
            
            
            878
            
            
            
            712
            
            
            
            2,620
            
            
            
            2,050Depreciation
      and amortization
            
            
            22,297
            
            
            
            18,840
            
            
            
            64,179
            
            
            
            51,453Gain
      on sale of vessel
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (26,227
            )Total
      operating expenses
            
            
            42,725
            
            
            
            36,942
            
            
            
            124,675
            
            
            
            77,082Operating
      income
            
            
            50,224
            
            
            
            70,615
            
            
            
            158,626
            
            
            
            226,716Other
      (expense) income:Other
      expense
            
            
            (15
            )
            
            
            (629
            )
            
            
            (298
            )
            
            
            (2,009
            )Interest
      income
            
            
            104
            
            
            
            634
            
            
            
            169
            
            
            
            1,609Interest
      expense
            
            
            (16,042
            )
            
            
            (12,031
            )
            
            
            (45,366
            )
            
            
            (35,433
            )Income
      from investments
            
            
            -
            
            
            
            4,410
            
            
            
            -
            
            
            
            7,001Other
      expense
            
            
            (15,953
            )
            
            
            (7,616
            )
            
            
            (45,495
            )
            
            
            (28,832
            )Net
      income
            
            $
            34,271
            
            
            $
            62,999
            
            
            $
            113,131
            
            
            $
            197,884Earnings
      per share-basic
            
            $
            1.10
            
            
            $
            2.00
            
            
            $
            3.62
            
            
            $
            6.60Earnings
      per share-diluted
            
            $
            1.09
            
            
            $
            1.99
            
            
            $
            3.60
            
            
            $
            6.56Weighted
      average common shares outstanding-basic
            
            
            31,295,916
            
            
            
            31,423,483
            
            
            
            31,275,061
            
            
            
            29,974,547Weighted
      average common shares outstanding-diluted
            
            
            31,473,369
            
            
            
            31,610,262
            
            
            
            31,420,304
            
            
            
            30,166,060Dividends
      declared per share
            
            $
            -
            
            
            $
            1.00
            
            
            $
            -
            
            
            $
            2.85See
      accompanying notes to consolidated financial statements.











5




Genco
Shipping & Trading Limited


Consolidated
Statement of Shareholders’ Equity and Comprehensive Income
(Unaudited)


For the
Nine Months Ended September 30, 2009


(U.S.
Dollars in Thousands Except for Per Share and Share Data)





Common
                Stock
            
            
            Paid
      in
                Capital
            
            
            Retained
                Earnings
            
            
            Accumulated
      Other Comprehensive Deficit
            
            
            Comprehensive
      Income
            
            
            TotalBalance
      – January 1, 2009
            
            $
            317
            
            
            $
            717,979
            
            
            $
            44,196
            
            
            $
            (66,014
            )
            
            
            
            
            $
            696,478Net
      income
            
            
            
            
            
            
            
            
            
            
            113,131
            
            
            
            
            
            
            $
            113,131
            
            
            
            113,131Unrealized
      gain on investments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            24,102
            
            
            
            24,102
            
            
            
            24,102Unrealized
      gain on currency translation on investments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            8,364
            
            
            
            8,364
            
            
            
            8,364Unrealized
      gain on cash flow hedges
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            16,630
            
            
            
            16,630
            
            
            
            16,630Comprehensive
      income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            $
            162,227Issuance
      of 15,000 shares of nonvested stock
            
            
            —
            
            
            
            —
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            —Nonvested
      stock amortization
            
            
            
            
            
            
            3,355
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            3,355Balance
      – September 30, 2009
            
            $
            317
            
            
            $
            721,334
            
            
            $
            157,327
            
            
            $
            (16,918
            )
            
            
            
            
            
            $
            862,060







See
accompanying notes to consolidated financial statements.







6


Genco
Shipping & Trading Limited


Consolidated
Statement of Cash Flows for the Nine Months Ended September 30, 2009 and
2008


(U.S.
Dollars in Thousands)


(Unaudited)




For
      the Nine Months
              Ended
      September 30,2009
            
            
            2008Cash
      flows from operating activities:Net
      income
            
            $
            113,131
            
            
            $
            197,884Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
      and amortization
            
            
            64,179
            
            
            
            51,453Amortization
      of deferred financing costs
            
            
            767
            
            
            
            556Amortization
      of fair market value of time charterers acquired
            
            
            (14,282
            )
            
            
            (16,545
            )Realized
      gain on forward currency contracts
            
            
            -
            
            
            
            (3,382
            )Unrealized
      loss on derivative instruments
            
            
            275
            
            
            
            57Unrealized
      loss on hedged investment
            
            
            -
            
            
            
            8,848Unrealized
      gain on forward currency contracts
            
            
            -
            
            
            
            (3,375
            )Realized
      income on investment
            
            
            -
            
            
            
            (7,001
            )Amortization
      of nonvested stock compensation expense
            
            
            3,355
            
            
            
            4,671Gain
      on sale of vessel
            
            
            -
            
            
            
            (26,227
            )Change
      in assets and liabilities:Decrease
      in due from charterers
            
            
            884
            
            
            
            828Increase
      in prepaid expenses and other current assets
            
            
            (1,683
            )
            
            
            (3,118
            )Increase
      in accounts payable and accrued expenses
            
            
            3,760
            
            
            
            3,749(Decrease)
      increase in deferred revenue
            
            
            (154
            )
            
            
            3,369Decrease
      in deferred rent credit
            
            
            (14
            )
            
            
            (14
            )Deferred
      drydock costs incurred
            
            
            (3,938
            )
            
            
            (4,327
            )Net
      cash provided by operating activities
            
            
            166,280
            
            
            
            207,426Cash
      flows from investing activities:Purchase
      of vessels
            
            
            (191,541
            )
            
            
            (411,968
            )Deposits
      on vessels
            
            
            (908
            )
            
            
            (57,408
            )Purchase
      of investments
            
            
            -
            
            
            
            (10,251
            )Proceeds
      from forward currency contracts, net
            
            
            -
            
            
            
            3,426Realized
      income on investment
            
            
            -
            
            
            
            7,001Deposits
      of restricted cash
            
            
            (17,000
            )
            
            
            -Proceeds
      from sale of vessels
            
            
            -
            
            
            
            43,084Purchase
      of other fixed assets
            
            
            (678
            )
            
            
            (162
            )Net
      cash used in investing activities
            
            
            (210,127
            )
            
            
            (426,278
            )Cash
      flows from financing activities:Proceeds
      from 2007 Credit Facility
            
            
            166,200
            
            
            
            461,500Repayments
      on the 2007 Credit Facility
            
            
            -
            
            
            
            (268,000
            )Cash
      dividends paid
            
            
            -
            
            
            
            (85,590
            )Net
      proceeds from issuance of common stock
            
            
            -
            
            
            
            195,554Payments
      to acquire and retire common stock
            
            
            
            
            
            
            (10,040
            )Payment
      of deferred financing costs
            
            
            (3,552
            )
            
            
            (3,613
            )Net
      cash provided by financing activities
            
            
            162,648
            
            
            
            289,811Net
      increase in cash and cash equivalents
            
            
            118,801
            
            
            
            70,959Cash
      and cash equivalentsat beginning of
      period
            
            
            124,956
            
            
            
            71,496Cash
      and cash equivalentsat end of
      period
            
            $
            243,757
            
            
            $
            142,455See
      accompanying notes to consolidated financial statements.









7


Genco
Shipping & Trading Limited


(U.S.
Dollars in Thousands Except Per Share and Share Data)




Notes to Consolidated
Financial Statements for the Three and Nine Months Ended September 30, 2009 and
2008 (unaudited)




1 - GENERAL
INFORMATION




The
accompanying consolidated financial statements include the accounts of Genco
Shipping & Trading Limited (“GS&T”) and its wholly owned
subsidiaries (collectively, the “Company,” “we” or “us”). The Company is engaged
in the ocean transportation of drybulk cargoes worldwide through the ownership
and operation of drybulk carrier vessels. GS&T was incorporated on
September 27, 2004 under the laws of the Marshall Islands and as of
September 30, 2009, is the sole owner of all of the outstanding shares of the
following subsidiaries: Genco Ship Management LLC; Genco Investments LLC; and
the ship-owning subsidiaries as set forth below.




Below is
the list of the Company’s wholly owned ship-owning subsidiaries as of September
30, 2009:




Wholly
      Owned
              Subsidiaries
            Vessels
              Acquired
            Dwt
            Date
              Delivered
            Year
              BuiltGenco
      Reliance Limited.........................
            Genco
      Reliance
            29,952
            12/6/04
            1999Genco
      Vigour Limited............................
            Genco
      Vigour
            73,941
            12/15/04
            1999Genco
      Explorer Limited..........................
            Genco
      Explorer
            29,952
            12/17/04
            1999Genco
      Carrier Limited.............................
            Genco
      Carrier
            47,180
            12/28/04
            1998Genco
      Sugar Limited..............................
            Genco
      Sugar
            29,952
            12/30/04
            1998Genco
      Pioneer Limited...........................
            Genco
      Pioneer
            29,952
            1/4/05
            1999Genco
      Progress Limited.........................
            Genco
      Progress
            29,952
            1/12/05
            1999Genco
      Wisdom Limited.........................
            Genco
      Wisdom
            47,180
            1/13/05
            1997Genco
      Success Limited.........................
            Genco
      Success
            47,186
            1/31/05
            1997Genco
      Beauty Limited...........................
            Genco
      Beauty
            73,941
            2/7/05
            1999Genco
      Knight Limited............................
            Genco
      Knight
            73,941
            2/16/05
            1999Genco
      Leader Limited............................
            Genco
      Leader
            73,941
            2/16/05
            1999Genco
      Marine Limited...........................
            Genco
      Marine
            45,222
            3/29/05
            1996Genco
      Prosperity Limited.....................
            Genco
      Prosperity
            47,180
            4/4/05
            1997Genco
      Muse Limited .....................
            Genco
      Muse
            48,913
            10/14/05
            2001Genco
      Acheron Limited .................
            Genco
      Acheron
            72,495
            11/7/06
            1999Genco
      Surprise Limited ..................
            Genco
      Surprise
            72,495
            11/17/06
            1998Genco
      Augustus Limited ................
            Genco
      Augustus
            180,151
            8/17/07
            2007Genco
      Tiberius Limited ..................
            Genco
      Tiberius
            175,874
            8/28/07
            2007Genco
      London Limited ..................
            Genco
      London
            177,833
            9/28/07
            2007Genco
      Titus Limited .......................
            Genco
      Titus
            177,729
            11/15/07
            2007Genco
      Challenger Limited ..............
            Genco
      Challenger
            28,428
            12/14/07
            2003Genco
      Charger Limited ..................
            Genco
      Charger
            28,398
            12/14/07
            2005Genco
      Warrior Limited ..................
            Genco
      Warrior
            55,435
            12/17/07
            2005Genco
      Predator Limited .................
            Genco
      Predator
            55,407
            12/20/07
            2005Genco
      Hunter Limited ...................
            Genco
      Hunter
            58,729
            12/20/07
            2007Genco
      Champion Limited ...............
            Genco
      Champion
            28,445
            1/2/08
            2006Genco
      Constantine Limited ............
            Genco
      Constantine
            180,183
            2/21/08
            2008Genco
      Raptor LLC.........................
            Genco
      Raptor
            76,499
            6/23/08
            2007Genco
      Cavalier LLC......................
            Genco
      Cavalier
            53,617
            7/17/08
            2007Genco
      Thunder LLC.....................
            Genco
      Thunder
            76,499
            9/25/08
            2007Genco
      Hadrian Limited .................
            Genco
      Hadrian
            169,694
            12/29/08
            2008Genco
      Commodus Limited .............
            Genco
      Commodus
            169,025
            7/22/09
            2009Genco
      Maximus Limited ................
            Genco
      Maximus
            169,025
            9/18/09
            2009Genco
      Claudius Limited .................
            Genco
      Claudius
            170,500
            Q4
      2009 (1)
            2009
      (2)






8













2 - SUMMARY OF
      SIGNIFICANT ACCOUNTING
POLICIES




Principles of
      consolidation




The
accompanying 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 and its wholly owned subsidiaries. All intercompany accounts and
transactions have been eliminated in consolidation.




Basis of
Presentation





The
accompanying unaudited consolidated financial statements have been prepared in
accordance with U.S. GAAP for interim financial information and the rules and
regulation of the Securities and Exchange Commission (the “SEC”).  In
the opinion of management of the Company, all adjustments necessary for a fair
presentation of financial position and operating results have been included in
the statements. Interim results are not necessarily indicative of results for a
full year. The accompanying unaudited consolidated financial statements should
be read in conjunction with the Company’s consolidated financial statements
included in the Annual Report on our Form 10-K for the year ended
December 31, 2008 (the “2008 10-K”).





Fixed assets,
net




Fixed
assets, net are stated at cost less accumulated depreciation and
amortization.  Depreciation and amortization are based on a straight
line basis over the estimated useful life of the specific asset placed in
service.  The following table is used to determine the typical
estimated useful lives:




Description                               Useful
lives




Leasehold
improvements                                   
15 years


Furniture,
fixtures & other
equipment                 5
years


Vessel
equipment                                                 2-15
years


Computer
equipment                                              3
years





Depreciation
and amortization expense for fixed assets for the three months ended September
30, 2009 and 2008 was $115 and $105, respectively.  Depreciation and
amortization expense for fixed assets for the nine months ended September 30,
2009 and 2008 was $299 and $308, respectively.




Deferred
revenue





Deferred
revenue primarily relates to cash received from charterers prior to it being
earned. These amounts are recognized as income when
earned.  Additionally, deferred revenue includes estimated customer
claims mainly due to time charter performance issues.  As of September
30, 2009 and December 31, 2008, the Company had a reserve of $1,616 and $1,350,
respectively, related to these estimated customer claims.





Concentration of credit
risk





Financial
instruments that potentially subject the Company to concentrations of credit
risk are amounts due from charterers and cash and cash equivalents. With respect
to amounts due from charterers, the Company attempts to limit its credit risk by
performing ongoing credit evaluations and, when deemed necessary, requiring
letters of credit, guarantees or collateral.  During the three months
ended September 30, 2009 and 2008, the Company earned








9








100% of
its revenues from eighteen and nineteen customers,
respectively.  Additionally, the Company earned 100% of its revenues
from twenty-two and twenty customers for the nine months ended September 30,
2009 and 2008, respectively.  Management does not believe significant
risk exists in connection with the Company’s concentrations of credit at
September 30, 2009 and December 31, 2008.





For the
three months ended September 30, 2009, there are two customers that individually
accounted for more than 10% of revenues, Cargill International S.A. and Pacific
Basin Chartering Ltd., which represented 30.43% and 12.40% of revenues,
respectively.  For the three months ended September 30, 2008, there
were two customers that individually accounted for more than 10% of revenues,
Cargill International S.A. and Pacific Basin Chartering Ltd., which represented
27.53% and 12.60% of revenues, respectively.





For the
nine months ended September 30, 2009, there are two customers that individually
accounted for more than 10% of revenues, Cargill International S.A. and Pacific
Basin Chartering Ltd.,, which represented 30.41% and 14.33% of revenues,
respectively.  For the nine months ended September 30, 2008, there
were two customers that individually accounted for more than 10% of revenues,
Cargill International S.A. and Pacific Basin Chartering Ltd., which represented
29.36% and 14.52% of revenues, respectively.





The
Company maintains all of its cash and cash equivalents with three financial
institutions.  None of the Company's cash and cash equivalent balances
are covered by insurance in the event of default by these financial
institutions.





Derivative financial
instruments




Interest rate risk
management




The
Company is exposed to interest rate risk due to fluctuations in variable
interest rates.  The Company’s objective is to manage the impact of
interest rate changes on its earnings and cash flow in relation to borrowings
primarily for the purpose of acquiring drybulk vessels.  These
borrowings are subject to a variable borrowing rate.  The Company uses
pay-fixed receive-variable interest rate swaps to manage future interest costs
and the risk associated with changing interest rate
obligations.  These swaps are designated as cash flow hedges of future
variable rate interest payments and are tested for effectiveness on a quarterly
basis.




The
differential to be paid or received for any swap agreement designated as a cash
flow hedge is recognized as an adjustment to interest expense as
incurred.  Additionally, the changes in value for the portion of the
swaps that are effectively hedging future interest payments are reflected as a
component of other comprehensive deficit (“OCI”).





For the
portion of the forward interest rate swaps that are not effectively hedged, the
change in the value and the rate differential to be paid or received is
recognized as income or (expense) from derivative instruments and is listed as a
component of other (expense) income until such time the Company has obligations
against which the swap is designated and is an effective hedge.





New accounting
pronouncements





In June 2009, the Financial Accounting
Standards Board (the “FASB”) issued the FASB Accounting Standard Codification
and the Hierarchy U.S. GAAP (the “Codification”), which replaced prior guidance
and modified the U.S. GAAP hierarchy to include only two levels of U.S.
GAAP:  authoritative and nonauthoritative (formerly SFAS No. 168, “The
FASB Accounting Standard Codification and the hierarchy of Generally Accepted
Accounting Principles”).  The Codification became the source of
authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental
entities.  Rules and interpretive releases of the SEC under authority
of federal securities laws are also sources of authoritative U.S. GAAP for SEC
registrants.  On the effective date of the Codification, it superseded
all then-existing non-SEC accounting and reporting standards.  All
other nongrandfathered non-SEC accounting literature not included in the
Codification became nonauthoritative.  The Codification is effective
for fiscal years and interim periods ending after September 15,
2009.  The adoption of the Codification in the current quarter did not
have a material impact on the Company’s consolidated interim financial
statements.






10





In May 2009, the FASB issued additional
guidance related to subsequent events (formerly SFAS No. 165, “Subsequent
Events”) .  This guidance is intended to establish general standards
of accounting for and disclosure of events that occur after the balance sheet
date but before financial statements are issued or are available to be
issued.  Specifically, it sets forth the period after the balance
sheet date during which management of a reporting entity should evaluate events
or transactions that may occur for potential recognition or disclosure in the
financial statements, the circumstances under which an entity should recognize
events or transactions occurring after the balance sheet date in its financial
statements, and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date.  This
guidance is effective for fiscal years and interim periods ended after June 15,
2009 and is applied prospectively.  The adoption of this guidance
during the quarter ended June 30, 2009 did not have a material impact on the
Company’s consolidated interim financial statements.





In April 2009, the FASB issued guidance
related to interim disclosures about fair value of financial instruments which
requires disclosures about fair value of financial instruments for interim
reporting periods of publicly traded companies as well as in annual financial
statements (formerly FASB Staff Position 107-1 and Accounting Principles Board
28-1, “Interim Disclosures about Fair Value of Financial
Instruments”).  This guidance is effective for interim reporting
periods ended after June 15, 2009, with early adoption permitted for periods
ended after March 15, 2009.  The adoption of this guidance in the
quarter ended June 30, 2009 did not have an impact on the Company’s consolidated
interim financial statements.  See Note 10 – Fair Value of Financial
Instruments for the Company’s disclosures about the fair value of financial
instruments.





In February 2008, the FASB issued
guidance delaying the effective date of fair value measurement guidance to
fiscal years beginning after November 15, 2008 and interim periods with those
fiscal years for all nonfinancial assets and liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually) until January 1, 2009 for calendar year end entities
(formerly FASB Staff Position 157-2, “Effective Date of FASB Statement No.
157”). The Company has already adopted this fair value measurement guidance
except as it applies to nonfinancial assets and liabilities. The adoption of
this guidance did not have a material impact on the Company’s consolidated
interim financial statements.





In
December 2007, the FASB issued guidance that will significantly change the
accounting for business combinations (formerly SFAS No. 141 (Revised 2007),
“Business Combinations”).  Under this guidance, an acquiring entity
will be required to recognize all the assets acquired and liabilities assumed in
a transaction at the acquisition-date fair value, with limited exceptions. This
guidance also includes a substantial number of new disclosure requirements and
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. The Company adopted this guidance effective
January 1, 2009.  As these provisions are applied prospectively, the
impact to the Company cannot be determined until any such transactions
occur.





In
March 2008, the FASB issued guidance related to disclosures about
derivative instruments and hedging activities, which amends previous guidance
(formerly SFAS No. 161, “Disclosures about Derivative Instruments and Hedging
Activities, an amendment of FASB Statement 133”). The new guidance is intended
to improve financial reporting about derivative instruments and hedging
activities by requiring enhanced disclosures to enable investors to better
understand their effects on an entity’s financial position, results of
operations and cash flows. The new standard also improves transparency about how
and why a company uses derivative instruments and how derivative instruments and
related hedged items are accounted for under previous hedging guidance. It is
effective for financial statements issued for fiscal years and interim periods
which began November 15, 2008, with early application
encouraged.  The Company adopted the provisions of this guidance
effective January 1, 2009.  See Note 8 – Long-Term Debt and Note 2 –
Summary of Significant Accounting Policies, for the Company’s disclosures about
its derivative instruments and hedging activities.





3 - CASH FLOW
INFORMATION





The
Company currently has eleven interest rate swaps, and these swaps are described
and discussed in Note 8 – Long-Term Debt. The fair value of ten of the swaps is
in a liability position of $50,909 and one of the swaps is in an asset position
of $1,327 as of September 30, 2009.  At December 31, 2008, nine swaps
were in a liability position of $65,937.








11





For the
nine months ended September 30, 2009, the Company had non-cash investing
activities not included in the Consolidated Statement of Cash Flows for items
included in accounts payable and accrued expenses as of September 30, 2009
consisting of $513 for the purchase of vessels, $70 associated with deposits on
vessels and $297 for the purchase of other fixed
assets.  Additionally, for the nine months ended September 30, 2009,
the Company had non-cash investing activities not included in the Consolidated
Statement of Cash Flows for items included in prepaid expenses and other current
assets as of September 30, 2009 consisting of $130 associated with deposits on
vessels. For the nine months ended September 30, 2008, the Company had non-cash
investing activities not included in the Consolidated Statement of Cash Flows
for items included in accounts payable and accrued expenses as of September 30,
2008 consisting of $407 for the purchase of vessels, $483 associated with
deposits on vessels, $25 for the purchase of other fixed assets and $51 for the
purchase of investments.  For the nine months ended September 30,
2008, the Company also had non-cash financing activities not included in the
Consolidated Statement of Cash Flows for items in accounts payable and accrued
expenses as of September 30, 2008 consisting of $160 associated with deferred
financing costs and $1,460 associated with share repurchases, which are
reflected as share repurchases at September 30, 2008.  Additionally,
for the nine months ended September 30, 2008, the Company had non-cash investing
activities not included in the Consolidated Statement of Cash Flows for items
included in prepaid expenses and other current assets as of September 30, 2008
consisting of $4,455 associated with deposits on vessels.





For the nine months ended September 30,
2009, the Company made a non-cash reclassification of $60,454 from deposits on
vessels to vessels, net of accumulated depreciation, due to the completion of
the purchase of the Genco Commodus and Genco Maximus.





During
the nine months ended September 30, 2009 and 2008, cash paid for interest, net
of amounts capitalized, was $42,101 and $34,859 respectively.





On
January 10, 2008, the Board of Directors approved a grant of 100,000 shares of
nonvested common stock to Peter Georgiopoulos, Chairman of the
Board.  The fair value of such nonvested stock was $4,191 on the grant
date and was recorded in equity.  Additionally, on February 13, 2008
and July 24, 2008, the Company made grants of nonvested common stock under the
Genco Shipping and Trading Limited 2005 Equity Incentive Plan in the amount of
12,500 and 15,000 shares, respectively, to directors of the
Company.  The fair value of such nonvested stock was $689 and $938,
respectively, on the grant dates and was recorded in equity.





On July
24, 2009, the Company made grants of nonvested common stock under the Genco
Shipping and Trading Limited 2005 Equity Incentive Plan in the amount of 15,000
shares to directors of the Company.  The fair value of such nonvested
stock was $374 on the grant date and was recorded in equity.





4 - VESSEL ACQUISITIONS AND
DISPOSITIONS





Below
market time charters acquired were amortized as a net increase to revenue in the
amount of $4,813 and $4,935 for the three months ended September 30, 2009 and
2008, respectively.  Below market time charters acquired were
amortized as a net increase to revenue in the amounts of $14,282 and $16,545,
respectively, for the nine months ended September 30, 2009 and
2008.





Capitalized
interest expense associated with newbuilding contracts for the three months
ended September 30, 2009 and 2008 was $331 and $1,543,
respectively.  Capitalized interest expense associated with
newbuilding contracts for the nine months ended September 30, 2009 and 2008 was
$1,317 and $4,328, respectively.





5
–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 OCI.  At September 30, 2009 and
December 31, 2008, the Company held 16,335,100 shares of Jinhui capital stock
which is recorded at its fair value of $49,238 and $16,772, respectively based
on the closing price on September 30, 2009 and December 31, 2008 of 17.40 NOK
and 7.14 NOK, respectively.






12






During
the fourth quarter of 2008, the Company reviewed the investment in Jinhui for
indicators of other-than-temporary impairment in accordance with Accounting
Standards Codification 320-10, Investments – Debt and Equity Securities (“ASC
320-10”) (formerly FSP 115-1, “Recognition and Presentation of
Other-Than-Temporary Impairments”).  Based on this review, the Company
deemed the investment in Jinhui to be other-than-temporarily impaired as of
December 31, 2008 due to the severity of the decline in its market value versus
our cost basis.  As a result, during the fourth quarter of 2008, the
Company recorded a $103,892 impairment charge.  As a result of the
other-than-temporary impairment, the new cost basis of this investment is 7.14
NOK per share, the value of the investment at December 31, 2008.  The
Company reviews the investment in Jinhui for impairment on a quarterly
basis.  There were no impairment charges recognized for the three and
nine month periods ended September 30, 2009 and 2008, respectively.




The
unrealized currency translation gain for the Jinhui capital stock remains a
component of OCI since this investment is designated as an AFS
security.  For the three and nine months ended September 30, 2008, the
hedged portion of the currency translation (loss)/gain has been reclassed to the
income statement as a component of other (expense) income.




Refer to
Note 9 – Accumulated Other Comprehensive Deficit for a breakdown of the
components of accumulated OCI.




Effective
on August 16, 2007, the Company elected to utilize hedge accounting for forward
contracts hedging the currency risk associated with the Norwegian Kroner cost
basis in the Jinhui stock.  The hedge was limited to the lower of the
cost basis or the market value at time of the designation.  The
unrealized appreciation in the stock and the currency translation gain above the
cost basis was recorded as a component of OCI.  Realized gains and
losses on the sale of these securities will be reflected in the Consolidated
Statement of Operations in other (expense) income once sold.  Time
value of the forward contracts was excluded from effectiveness testing and
recognized in income.  For the three and nine months ended September
30, 2008, an immaterial amount was recognized in other income or (expense)
associated with excluded time value and ineffectiveness.  For the
three and nine months ended September 30, 2009, no hedges were
utilized.




At
September 30, 2009 and December 31, 2008, the Company did not have a short-term
forward currency contract to hedge the Company’s exposure to the Norwegian
Kroner related to the cost basis of Jinhui stock as described
above.  The Company elected to discontinue the forward currency
contract and hedge due to the underlying market value of Jinhui in October
2008.  The gain (loss) associated with these short-term forward
currency contracts held during the three and nine months ended September 30,
2008 is included as a component of other income (expense) and is offset by a
reclassification from OCI for the hedged portion of the currency gain (loss) on
investment.





The
following table sets forth the net loss, realized and unrealized, related to the
forward currency contracts and to the hedged translation on the cost basis of
the Jinhui stock.  These are included as a component of
other  income (expense).





Three
      Months Ended
              September
      30,
            
            
            Nine
      Months Ended
              September
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008Net
      (loss), realized and unrealized
            
            $
            –
            
            
            $
            (765
            )
            
            $
            –
            
            
            $
            (2,047
            )




6 - 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 (see Note 18 –
Nonvested Stock Awards), for which the assumed proceeds upon vesting are deemed
to be the amount of compensation cost attributable to future services and not
yet recognized using the treasury stock method, to the extent
dilutive.






13





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




Three
      Months Ended
              September
      30,
            
            
            Nine
      Months Ended
              September
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008Common
      shares outstanding, basic:Weighted
      average common shares outstanding, basic
            
            
            31,295,916
            
            
            
            31,423,483
            
            
            
            31,275,061
            
            
            
            29,974,547Common
      shares outstanding, diluted:Weighted
      average common shares outstanding, basic
            
            
            31,295,916
            
            
            
            31,423,483
            
            
            
            31,275,061
            
            
            
            29,974,547Dilutive
      effect of restricted stock awards
            
            
            177,453
            
            
            
            186,779
            
            
            
            145,243
            
            
            
            191,513Weighted
      average common shares outstanding, diluted
            
            
            31,473,369
            
            
            
            31,610,262
            
            
            
            31,420,304
            
            
            
            30,166,060




7 - RELATED PARTY
TRANSACTIONS




The
following are related party transactions not disclosed elsewhere in these
financial statements:




The
Company makes an employee performing internal audit services available to
General Maritime Corporation (“GMC”), where the Company’s Chairman, Peter C.
Georgiopoulos, also serves as Chairman of the Board.   For the
nine months ended September 30, 2009 and 2008, the Company invoiced $98 and
$100, respectively, to GMC which includes time associated with such internal
audit services of $94 as well as $4 of office expenses.  Additionally,
during the nine months ended September 30, 2009 and 2008, the Company incurred
travel and other related expenditures totaling $124 and $252, respectively,
reimbursable to GMC or its service provider.   At September 30,
2009 and December 31, 2008, the amount due to the Company from GMC is $15 and
$62, respectively.




During
the nine months ended September 30, 2009 and 2008, the Company incurred legal
services aggregating $37 and $87, respectively, from Constantine Georgiopoulos,
father of Peter C. Georgiopoulos, Chairman of the Board. At September 30, 2009
and December 31, 2008, $37 and $1, respectively, was outstanding to Constantine
Georgiopoulos.




8 - LONG-TERM
DEBT




Long-term
debt consists of the following:




September
      30, 2009
            
            
            December
      31, 2008Outstanding
      total debt
            
            $
            1,339,500
            
            
            $
            1,173,300Less:
      Current portion
            
            
            (50,000
            )
            
            
            —Long-term
      debt
            
            $
            1,289,500
            
            
            $
            1,173,300





2007 Credit
Facility





On July
20, 2007, the Company entered into a credit facility with DnB Nor Bank ASA (the
“2007 Credit Facility”) for the purpose of acquiring nine new Capesize vessels
and refinancing the Company’s prior credit facility








14








which it
had entered into as of July 29, 2005 (the “2005 Credit Facility”) and short-term
line of credit facility entered into as of May 3, 2007 (the “Short-Term
Line”).  DnB Nor Bank ASA is also Mandated Lead Arranger, Bookrunner,
and Administrative Agent. The Company has used borrowings under the 2007 Credit
Facility to repay amounts outstanding under the Company’s previous credit
facilities, which have been terminated.  The maximum amount that may
be borrowed under the 2007 Credit Facility at September 30, 2009 is
$1,339,500.  As of September 30, 2009, the Company has utilized its
maximum borrowing capacity under the 2007 Credit Facility.




On
January 26, 2009, the Company entered into an amendment to the 2007 Credit
Facility (the “2009 Amendment”) which implemented the following modifications to
the terms of the 2007 Credit Facility:





·
            Compliance
      with the existing collateral maintenance financial covenant was waived
      effective for the year ended December 31, 2008 and until the Company can
      represent that it is in compliance with all of its financial covenants and
      is otherwise able to pay a dividend and purchase or redeem shares of
      common stock under the terms of the Credit Facility in effect before the
      2009 Amendment.  The Company’s cash dividends and share
      repurchases were suspended until the Company can represent that it is in a
      position to again satisfy the collateral maintenance
    covenant.





·
            The
      total amount of the 2007 Credit Facility is subject to quarterly
      reductions of $12,500 beginning March 31, 2009 through March 31, 2012 and
      $48,195 of the total facility amount thereafter until the maturity
      date.  A final payment of $250,600 will be due on the maturity
      date.





·
            The
      applicable margin to be added to the London Interbank Offered Rate to
      calculate the rate at which the Company’s borrowings bear interest is
      2.00% per annum (the “Applicable
Margin”).





·
            The
      commitment commission payable to each lender is 0.70% per annum of the
      daily average unutilized commitment of such
  lender.





The significant covenants in the 2007
Credit Facility have been disclosed in the 2008 10-K.  As of September
30, 2009, the Company believes it is in compliance with all of the financial
covenants under its 2007 Credit Facility, as amended.





The Company has recorded $17,000 of
restricted cash, or $500 per vessel, as a current asset at September 30,
2009.  Since the Company has utilized its maximum borrowing capacity
under the 2007 Credit Facility at September 30, 2009, the Company was required
to hold this balance at September 30, 2009 to comply with the minimum cash
balance covenant under its 2007 Credit Facility, as amended.





At September 30, 2009, there were no
letters of credit issued under the 2007 Credit Facility.





The
following table sets forth the repayment of the outstanding debt of $1,339,500
at September 30, 2009 under the 2007 Credit Facility, as amended:




Period
      Ending December 31,
            
            Total2009
      (October 1, 2009 – December 31, 2009)
            
            $
            12,5002010
            
            
            50,0002011
            
            
            50,0002012
            
            
            108,8902013
            
            
            192,780Thereafter
            
            
            925,330Total
      long-term debt
            
            $
            1,339,500






15






Interest
rates





The following tables sets forth the
effective interest rate associated with the interest expense for the 2007 Credit
Facility, as amended, including the rate differential between the pay fixed
receive variable rate on the swaps that were in effect, combined, and the cost
associated with unused commitment fees.  Additionally, it includes the
range of interest rates on the debt, excluding the unused commitment
fees:





Three
      months ended September 30,
            
            
            Nine
      Months Ended September 30,2009
            
            
            2008
            
            
            2009
            
            
            2008Effective
      Interest Rate
            
            
            5.13
            %
            
            
            5.27
            %
            
            
            5.23
            %
            
            
            5.27
            %Range
      of Interest Rates (excluding impact of swaps)
            
            2.25%
      to 3.25
            %
            
            3.35%
      to 4.66
            %
            
            1.23%
      to 5.56
            %
            
            2.98%
      to 6.10
            %








Interest rate swap
agreements





The
Company has entered into eleven interest rate swap agreements with DnB NOR Bank
to manage interest costs and the risk associated with changing interest rates
related to our 2007 Credit Facility. The total notional principal amount of the
swaps at September 30, 2009 is $831,233 and the swaps have specified rates and
durations.





The
following table summarizes the interest rate swaps designated as cash flow
hedges that are in place as of September 30, 2009 and December 31,
2008:





Interest
      Rate Swap Detail
            
            September
      30,
                2009
            
            
            December
      31, 2008Trade
              Date
            
            Fixed
              Rate
            
            Start
      Date
              of
      Swap
            End
      date
              of
      Swap
            
            Notional
                Amount
                Outstanding
            
            
            Notional
                Amount
                Outstanding9/6/05
            
            
            4.485
            %
            9/14/05
            7/29/15
            
            $
            106,233
            
            
            $
            106,2333/29/06
            
            
            5.25
            %
            1/2/07
            1/1/14
            
            
            50,000
            
            
            
            50,0003/24/06
            
            
            5.075
            %
            1/2/08
            1/2/13
            
            
            50,000
            
            
            
            50,0009/7/07
            
            
            4.56
            %
            10/1/07
            12/31/09
            
            
            75,000
            
            
            
            75,0007/31/07
            
            
            5.115
            %
            11/30/07
            11/30/11
            
            
            100,000
            
            
            
            100,0008/9/07
            
            
            5.07
            %
            1/2/08
            1/3/12
            
            
            100,000
            
            
            
            100,0008/16/07
            
            
            4.985
            %
            3/31/08
            3/31/12
            
            
            50,000
            
            
            
            50,0008/16/07
            
            
            5.04
            %
            3/31/08
            3/31/12
            
            
            100,000
            
            
            
            100,0001/22/08
            
            
            2.89
            %
            2/1/08
            2/1/11
            
            
            50,000
            
            
            
            50,0001/9/09
            
            
            2.05
            %
            1/22/09
            1/22/14
            
            
            100,000
            
            
            
            —2/11/09
            
            
            2.45
            %
            2/23/09
            2/23/14
            
            
            50,000
            
            
            
            —$
            831,233
            
            
            $
            681,233


The
following table summarizes the derivative asset and liability balances at
September 30, 2009:









16





Asset
      Derivatives
            
            Liability
      DerivativesAs
      of September 30
            2009
            
            2009Balance Sheet Location
            
            Fair Value
            
            Balance Sheet Location
            
            Fair ValueDerivatives
      designated as hedging instruments under Statement 133Interest
      rate contracts
            Fair
      value of derivative instruments (Current Assets)
            
            $
            –
            
            Fair
      value of derivative instruments (Current Liabilities)
            
            $
            815Interest
      rate contracts
            Fair
      value of derivative instruments (Noncurrent Assets)
            
            
            1,327
            
            Fair
      value of derivative instruments (Noncurrent Liabilities)
            
            
            50,094Total
      derivatives designated as hedging instruments under Statement
      133
            
            
            $
            1,327
            
            
            
            $
            50,909Total
      Derivatives
            
            
            $
            1,327
            
            
            
            $
            50,909





The
following tables present the impact of derivative instruments and their location
within the unaudited Consolidated Statement of Operations:





The
      Effect of Derivative Instruments on the Consolidated Statement of
      OperationsFor
      the Three Month Period Ended September 30, 2009Derivatives
      in
              Statement
      133 Cash
              Flow
      Hedging
              Relationships
            
            Amount
      of
              Gain
      or
              (Loss)
              Recognized
              in
              Accumulated
              OCI
      on
              Derivative
              (Effective
              Portion)
            
            Location
      of
              Gain
      or (Loss)
              Reclassified
              from
              Accumulated
              OCI
      into
              income
              (Effective
              Portion)
            
            Amount
      of
              Gain
      or (Loss) Reclassified
              from
              Accumulated
              OCI
      into
              income
              (Effective
              Portion)
            
            Location
      of
              Gain
      or (Loss)
              Recognized
      in
              Income
      on
              Derivative
              (Ineffective
              Portion)
            
            Amount
      of
              Gain
      or (Loss) Recognized in Income on Derivative (Ineffective
              Portion)2009
            
            
            2009
            
            
            2009Interest
      rate contracts
            
            $
            (13,123
            )
            Interest
      Expense
            
            $
            (7,850
            )
            Other
      Income (Expense)
            
            $
            (14
            )














17







The
      Effect of Derivative Instruments on the Consolidated Statement of
      OperationsFor
      the Nine Month Period Ended September 30, 2009Derivatives
      in
              Statement
      133 Cash
              Flow
      Hedging
              Relationships
            Amount
      of
              Gain
      or
              (Loss)
              Recognized
              in
              Accumulated
              OCI
      on
              Derivative
              (Effective
              Portion)
            Location
      of
              Gain
      or (Loss)
              Reclassified
              from
              Accumulated
              OCI
      into
              income
              (Effective
              Portion)
            Amount
      of
              Gain
      or (Loss)
              Reclassified
              from
              Accumulated
              OCI
      into
              income
              (Effective
              Portion)
            Location
      of
              Gain
      or (Loss)
              Recognized
      in
              Income
      on
              Derivative
              (Ineffective
              Portion)
            Amount
      of
              Gain
      or (Loss)
              Recognized
      in
              Income
      on
              Derivative
              (Ineffective
              Portion)2009
            2009
            2009Interest
      rate contracts
            ($3,482)
            Interest
      Expense
            ($20,112)
            Other
      Income (Expense)
            ($275)





The
liability associated with the swaps at December 31, 2008 was $65,937, which was
presented as the fair value of derivatives on the balance
sheet.  Hedge ineffectiveness associated with the interest rate swaps
resulted in other income (expense) of $14 and ($7) for the three and nine months
ended September 30, 2008.





At
September 30, 2009, ($28,410) of OCI 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.  Each of the Company’s
thirty-four vessels serves as collateral in the aggregate amount of
$100,000.





9 – ACCUMULATED OTHER
COMPREHENSIVE DEFICIT




The
components of accumulated other comprehensive deficit included in the
accompanying consolidated balance sheets consist of net unrealized gain (loss)
on cash flow hedges, net unrealized gain (loss) from investments, and cumulative
translation adjustments on the investment in Jinhui stock as of September 30,
2009 and December 31, 2008.





Accumulated
      OCI
            
            
            Unrealized
      Gain (loss) on Cash Flow Hedges
            
            
            Unrealized
      Gain on Investments
            
            
            Currency
      Translation Gain on InvestmentsOCI
      – January 1, 2009
            
            $
            ( 66,014
            )
            
            $
            ( 66,014
            )
            
            $
            —
            
            
            $
            —Unrealized
      gain on investments
            
            
            24,102
            
            
            
            
            
            
            
            24,102Translation
      gain on investments
            
            
            8,364
            
            
            
            
            
            
            
            
            
            
            
            8,364Unrealized
      gain on cash flow hedges
            
            
            16,630
            
            
            
            16,630OCI
      – September 30, 2009
            
            $
            (16,918
            )
            
            $
            (49,384
            )
            
            $
            24,102
            
            
            $
            8,364





10 - FAIR VALUE OF FINANCIAL
INSTRUMENTS




The
estimated fair values of the Company’s financial instruments are as
follows:




September
      30,
                2009
            
            
            December
      31, 2008Cash
      and cash equivalents
            
            $
            243,757
            
            
            $
            124,956Restricted
      cash
            
            
            17,000
            
            
            
            —Investments
            
            
            49,238
            
            
            
            16,772






18




Floating
      rate debt
              
              
              1,339,500
              
              
              
              1,173,300Derivative
      instruments –
                asset
      position
              
              
              1,327
              
              
              
              —Derivative
      instruments – liability position
              
              
              50,909
              
              
              
              65,937


The fair
value of the investments is based on quoted market rates.  The fair
value of the revolving credit facility is 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 the revolving credit facility.  The
carrying value approximates the fair market value for the floating rate
loans.  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”) (formerly SFAS No. 157, “Fair Value Measurements”)
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 our investments and financial
instruments by the above ASC 820-10 pricing levels as of the valuation dates
listed:





September
      30, 2009Total
            
            
            Quoted
      market prices in active markets
                (Level
      1)
            
            
            Significant
      Other Observable Inputs
                (Level
      2)Cash
      Equivalents
            
            $
            75,033
            
            
            $
            75,033Investments
            
            
            49,238
            
            
            
            49,238Derivative
      instruments –
              asset
      position
            
            
            1,327
            
            
            
            
            
            
            
            1,327Derivative
      instruments – liability position
            
            
            50,909
            
            
            
            
            
            
            
            50,909




The
Company had an investment of $75,033 in the JPMorgan US Dollar Liquidity Fund
Institutional at September 30, 2009.  The JPMorgan US Dollar Liquidity
Fund Institutional is a money market fund which invests its assets in high
quality transferable short term USD-denominated fixed and floating rate debt
securities and has a portfolio with a weighted average investment maturity that
will not exceed sixty days.  The value of this fund is publicly
available and is considered a Level 1 item.  The Company holds an
investment in the capital stock of Jinhui, which is classified as a long-term
investment.  The stock of Jinhui is publicly traded on the Oslo Stock
Exchange and is considered a Level 1 item.  The Company’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











19








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 8 – Long-Term Debt 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 September 30, 2009, both the counterparty and the Company are expected to
continue to perform under the contractual terms of the instruments.




11 - PREPAID EXPENSES AND
OTHER CURRENT ASSETS







Prepaid
      expenses and other current assets consist of the
  following:


September
                30,
      2009
            
            
            December
                31,
      2008Lubricant
      inventory and other stores
            
            $
            4,166
            
            
            $
            3,772Prepaid
      items
            
            
            3,079
            
            
            
            2,581Insurance
      receivable
            
            
            1,521
            
            
            
            2,345Interest
      receivable on deposits for vessels to be acquired
            
            
            1,324
            
            
            
            3,547Other
            
            
            2,865
            
            
            
            1,250Total
            
            $
            12,955
            
            
            $
            13,495




12 – OTHER ASSETS,
NET




Other assets consist of deferred
financing costs which include fees, commissions and legal expenses associated
with securing loan facilities. These costs are amortized over the life of the
related debt, and are included in interest expense. The Company has unamortized
deferred financing costs of $7,759 and $4,974, respectively, at September 30,
2009 and December 31, 2008 associated with the 2007 Credit Facility. Accumulated
amortization of deferred financing costs as of September 30, 2009 and December
31, 2008 was $2,315 and $1,548, respectively.  Amortization expense
for deferred financing costs for the three months ended September 30, 2009 and
2008 was $270 and $214, respectively.  Amortization expense for
deferred financing costs for the nine months ended September 30, 2009 and 2008
was $767 and $556, respectively.




13 - FIXED
ASSETS




Fixed
      assets consist of the following:




September
                30,
      2009
            
            
            December
                31,
      2008Fixed
      assets:Vessel
      equipment
            
            $
            1,934
            
            
            $
            958Leasehold
      improvements
            
            
            1,146
            
            
            
            1,146Furniture
      and fixtures
            
            
            347
            
            
            
            347Computer
      equipment
            
            
            401
            
            
            
            401Total
      cost
            
            
            3,828
            
            
            
            2,852Less:
      accumulated depreciation and amortization
            
            
            1,439
            
            
            
            1,140Total
            
            $
            2,389
            
            
            $
            1,712




14 – ACCOUNTS PAYABLE AND
ACCRUED EXPENSES




Accounts
      payable and accrued expenses consist of the
  following:








20






September
                30,
      2009
            
            
            December
                31,
      2008Accounts
      payable
            
            $
            3,946
            
            
            $
            4,371Accrued
      general and administrative expenses
            
            
            10,021
            
            
            
            5,937Accrued
      vessel operating expenses
            
            
            7,208
            
            
            
            7,037Total
            
            $
            21,175
            
            
            $
            17,345




15 - REVENUE FROM TIME
CHARTERS




Total
revenue earned on time charters, including revenue earned in vessel pools, for
the three months ended September 30, 2009 and 2008 was $92,949 and $107,557,
respectively, and for the nine months ended September 30, 2009 and 2008 was
$283,301 and $303,798. Included in revenues for the three months ended September
30, 2009 and 2008 was $524 and $6,358 of profit sharing revenue, respectively,
and for the nine months ended September 30, 2009 and 2008, profit sharing
revenue was $1,647 and $22,829.  Future minimum time charter revenue,
based on vessels committed to noncancelable time charter contracts as of October
28, 2009 is expected to be $84,828 for the remaining quarter of 2009, $224,392
during 2010, $98,234 during 2011 and $35,563 during 2012, assuming off-hire due
to any scheduled drydocking and that no additional off-hire time is
incurred.  For most drydockings, we assume twenty days of offhire;
however, for certain drydockings where limited procedures are to be performed,
we assume ten days of offhire.  Future minimum revenue excludes the
future acquisition of the remaining one Capesize vessel, which is to be
delivered to Genco in the future, since estimated delivery dates are not
firm.  Additionally, future minimum revenue excludes revenue earned
for the six vessels currently in pool arrangements, namely the Genco Predator,
Genco Explorer, Genco Pioneer, Genco Progress, Genco Reliance, and Genco Sugar,
as pool rates cannot be estimated.




16 - LEASE
PAYMENTS




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 has a deferred rent credit at September 30, 2009 and
December 31, 2008 of $692 and $706, respectively.  Rent expense for
the three months ended September 30, 2009 and 2008, was $117 for each respective
period.  Rent expense for the nine months ended September 30, 2009 and
2008, was $350 for each of the respective periods.





Future
minimum rental payments on the above lease for the next five years and
thereafter are as follows: $121 for the remainder of 2009, $496 for 2010, $518
for 2011 through 2013 and a total of $3,614 for the remaining term of the
lease.





17 - SAVINGS
PLAN




In August
2005, the Company established a 401(k) plan which is available to full-time
employees who meet the plan’s eligibility requirements.  This 401(k)
plan is a defined contribution plan, which permits employees to make
contributions up to maximum percentage and dollar limits allowable by IRS Code
Sections 401(k), 402(g), 404 and 415 with the Company matching up to the first
six percent of each employee’s salary on a dollar-for-dollar
basis.  The matching contribution vests immediately.  For
three months ended September 30, 2009 and 2008, the Company’s matching
contribution to the Plan was $31 and $24, respectively, and for the nine months
ended September 30, 2009 and 2008, the Company’s matching contribution to the
Plan was $116 and $112.




18- NONVESTED STOCK
AWARDS




On July
12, 2005, the Company’s board of directors approved the Genco Shipping and
Trading Limited 2005 Equity Incentive Plan (the “Plan”).  Under this
plan, the Company’s board of directors, the compensation committee, or another
designated committee of the board of directors may grant a variety of
stock-based incentive awards to employees, directors and consultants whom the
compensation committee (or other committee or the board








21








of
directors) believes are key to the Company’s success.  Awards may
consist of incentive stock options, nonqualified stock options, stock
appreciation rights, dividend equivalent rights, nonvested stock, unrestricted
stock and performance shares.  The aggregate number of shares of
common stock available for award under the Plan is 2,000,000
shares.




Grants of
nonvested common stock to executives and employees vest ratably on each of the
four anniversaries of the determined vesting date.  Grants of
nonvested common stock to directors vest the earlier of the first anniversary of
the grant date or the date of the next annual shareholders’ meeting, which are
typically held during May.  Grants of nonvested common stock to the
Company’s Chairman, Peter C. Georgiopoulos which are not granted as part of
grants made to all directors vest ratably on each of the ten anniversaries of
the vesting date.





The
following table presents a summary of the Company’s nonvested stock awards for
the nine months ended September 30, 2009:




Number
      of
                Shares
            
            
            Weighted
                Average
      Grant
                Date
      PriceOutstanding
      at January 1, 2009
            
            
            449,066
            
            
            $
            27.96Granted
            
            
            15,000
            
            
            
            24.93Vested
            
            
            (41,478
            )
            
            
            33.11Forfeited
            
            
            —
            
            
            
            —Outstanding
      at September 30, 2009
            
            
            422,588
            
            
            $
            27.35




For
      the three and nine months ended September 30, 2009 and 2008, the Company
      recognized nonvested stock amortization expense, which is included in
      general and administrative expenses, as
follows:





Three
      Months Ended September 30,
            
            
            Nine
      Months Ended September 30,2009
            
            
            2008
            
            
            2009
            
            
            2008General
      and administrative expenses
            
            $
            1,032
            
            
            $
            1,477
            
            
            $
            3,355
            
            
            $
            4,671








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 September 30, 2009, unrecognized
      compensation cost related to nonvested stock will be recognized over a
      weighted average period of 4.72
years.














22







19 – SHARE REPURCHASE
PROGRAM





On
February 13, 2008, our board of directors approved a share repurchase program
for up to a total of $50,000 of the Company's 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
will be 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 of 1934, as amended (the “Exchange
Act”).  The program does not require the Company to purchase any
specific number or amount of shares and may be suspended or reinstated at any
time in the Company's discretion and without notice.  Repurchases will
be subject to restrictions under the 2007 Credit Facility.  The 2007
Credit Facility was amended as of February 13, 2008 to permit the share
repurchase program and provide that the dollar amount of shares repurchased is
counted toward the maximum dollar amount of dividends that may be paid in any
fiscal quarter.  Subsequently, on January 26, 2009, the Company
entered into the 2009 Amendment which amended the 2007 Credit Facility to
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.  Refer to Note 8 – Long-Term Debt.





Since the
inception of the share repurchase program through September 30, 2009, the
Company repurchased and retired 278,300 shares of its common stock for
$11,500.  An additional 3,130 shares of common stock were repurchased
from employees for $41 during 2008 pursuant to the Company’s Equity Incentive
Plan rather than the share repurchase program.  No repurchases were
made during the three and nine months ended September 30, 2009.





20 - 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 adverse effect on the
Company, its financial condition, results of operations or cash
flows.




21 – SUBSEQUENT
EVENTS




Subsequent events have been evaluated
through November 9, 2009, the date of issuance of the financial statements
herein.




On
October 14, 2009, we announced the proposed initial public offering of our
subsidiary, Baltic Trading Limited (“Baltic”), which intends to conduct a
drybulk shipping business focused on the spot market.  We intend to
make a $75,000 capital contribution to Baltic prior to Baltic’s initial public
offering, which Baltic would use along with proceeds from its initial public
offering to acquire its initial fleet.














23







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) 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; (ix) 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; (x) our acquisition or
disposition of vessels; (xi) the fulfillment of the closing conditions under, or
the execution of customary additional documentation for,
our  agreement to acquire one drybulk vessel; (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;
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, 2008 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 incorporated on September 27, 2004 to transport
iron ore, coal, grain, steel products and other drybulk cargoes along worldwide
shipping routes through the ownership and operation of drybulk carrier vessels.
As of October 28, 2009, our fleet consisted of eight Capesize, eight Panamax,
four Supramax, six Handymax and eight Handysize drybulk carriers, with an
aggregate carrying capacity of approximately 2,734,000 dwt, and the average age
of our fleet was approximately 6.9 years, as compared to the average age for the
world fleet of approximately 15 years for the drybulk shipping segments in which
we compete. We seek to deploy our vessels on time charters, or in vessel pools
trading in the spot market, to reputable charterers, including Lauritzen Bulkers
A/S, Cargill International S.A., Pacific Basin Chartering Ltd., COSCO Bulk
Carriers Co., Ltd., and Hyundai Merchant Marine Co. Ltd.  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 November 2009 and October 2012.




See pages
30-31 for a table of all vessels currently in our fleet or
expected to be delivered to us.





We intend to continue to
grow our fleet through timely and selective acquisitions of vessels in a manner
that is accretive to our cash flow. In connection with the acquisitions and
deliveries made in 2007, 2008 and 2009 and our growth strategy, we negotiated
the 2007 Credit Facility that we have used to acquire vessels.





Our
management team and our other employees are responsible for the commercial and
strategic management of our fleet. Commercial management includes the
negotiation of charters for vessels, managing the mix of various types of
charters, such as time charters and voyage charters, and monitoring the
performance of our vessels under their charters. Strategic management includes
locating, purchasing, financing and selling vessels. We








24








currently
contract with two 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.





On
October 14, 2009, we announced the proposed initial public offering of our
subsidiary, Baltic Trading Limited (“Baltic”), which intends to conduct a
drybulk shipping business focused on the spot market.  We intend to
make a $75 million capital contribution to Baltic prior to Baltic’s initial
public offering, which Baltic would use along with proceeds from its initial
public offering to acquire its initial fleet.





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 nine months ended September 30, 2009
and 2008.




For the three months ended September
      30,
            
            
            Increase2009
            
            
            2008
            
            
            (Decrease)
            
            
            %
      ChangeFleet
      Data:Ownership
      days (1)Capesize
            
            
            635.3
            
            
            
            460.0
            
            
            
            175.3
            
            
            
            38.1
            %Panamax
            
            
            736.0
            
            
            
            649.5
            
            
            
            86.5
            
            
            
            13.3
            %Supramax
            
            
            368.0
            
            
            
            351.5
            
            
            
            16.5
            
            
            
            4.7
            %Handymax
            
            
            552.0
            
            
            
            552.0
            
            
            
            –
            
            
            
            –Handysize
            
            
            736.0
            
            
            
            736.0
            
            
            
            –
            
            
            
            –Total
            
            
            3,027.3
            
            
            
            2,749.0
            
            
            
            278.3
            
            
            
            10.1
            %Available
      days (2)Capesize
            
            
            634.1
            
            
            
            460.0
            
            
            
            174.1
            
            
            
            37.8
            %Panamax
            
            
            724.3
            
            
            
            608.1
            
            
            
            116.2
            
            
            
            19.1
            %Supramax
            
            
            355.8
            
            
            
            349.6
            
            
            
            6.2
            
            
            
            1.8
            %Handymax
            
            
            552.0
            
            
            
            552.0
            
            
            
            –
            
            
            
            –Handysize
            
            
            724.6
            
            
            
            719.3
            
            
            
            5.3
            
            
            
            0.7
            %Total
            
            
            2,990.8
            
            
            
            2,689.0
            
            
            
            301.8
            
            
            
            11.2
            %Operating
      days (3)Capesize
            
            
            629.1
            
            
            
            459.7
            
            
            
            169.4
            
            
            
            36.9
            %Panamax
            
            
            722.9
            
            
            
            603.0
            
            
            
            119.9
            
            
            
            19.9
            %Supramax
            
            
            350.4
            
            
            
            325.3
            
            
            
            25.1
            
            
            
            7.7
            %Handymax
            
            
            549.8
            
            
            
            549.5
            
            
            
            0.3
            
            
            
            0.1
            %Handysize
            
            
            723.9
            
            
            
            718.7
            
            
            
            5.2
            
            
            
            0.7
            %Total
            
            
            2,976.1
            
            
            
            2,656.2
            
            
            
            319.9
            
            
            
            12.0
            %Fleet
      utilization (4)Capesize
            
            
            99.2
            %
            
            
            99.9
            %
            
            
            (0.7
            %)
            
            
            (0.7
            %)Panamax
            
            
            99.8
            %
            
            
            99.2
            %
            
            
            0.6
            %
            
            
            0.6
            %Supramax
            
            
            98.5
            %
            
            
            93.1
            %
            
            
            5.4
            %
            
            
            5.8
            %Handymax
            
            
            99.6
            %
            
            
            99.5
            %
            
            
            0.1
            %
            
            
            0.1
            %








25






Handysize
            
            
            99.9
            %
            
            
            99.9
            %
            
            
            –
            
            
            
            –Fleet average
            
            
            99.5
            %
            
            
            98.8
            %
            
            
            0.7
            %
            
            
            0.7
            %




For the three months ended September
      30,
            
            
            Increase2009
            
            
            2008
            
            
            (Decrease)
            
            
            %
      Change(U.S.
      dollars)Average
      Daily Results:Time
      Charter Equivalent (5)Capesize
            
            $
            55,402
            
            
            $
            70,772
            
            
            $
            (15,370
            )
            
            
            (21.7
            %)Panamax
            
            
            29,268
            
            
            
            36,837
            
            
            
            (7,569
            )
            
            
            (20.5
            %)Supramax
            
            
            21,436
            
            
            
            45,415
            
            
            
            (23,979
            )
            
            
            (52.8
            %)Handymax
            
            
            26,600
            
            
            
            37,160
            
            
            
            (10,560
            )
            
            
            (28.4
            %)Handysize
            
            
            18,366
            
            
            
            20,111
            
            
            
            (1,745
            )
            
            
            (8.7
            %)Fleet
      average
            
            
            30,743
            
            
            
            39,349
            
            
            
            (8,606
            )
            
            
            (21.9
            %)Daily
      vessel operating expenses (6)Capesize
            
            $
            5,403
            
            
            $
            4,633
            
            
            $
            770
            
            
            
            16.6
            %Panamax
            
            
            4,980
            
            
            
            4,343
            
            
            
            637
            
            
            
            14.7
            %Supramax
            
            
            5,005
            
            
            
            4,186
            
            
            
            819
            
            
            
            19.6
            %Handymax
            
            
            4,841
            
            
            
            4,455
            
            
            
            386
            
            
            
            8.7
            %Handysize
            
            
            4,285
            
            
            
            3,569
            
            
            
            716
            
            
            
            20.1
            %Fleet average
            
            
            4,878
            
            
            
            4,187
            
            
            
            691
            
            
            
            16.5
            %







For the nine months ended September
      30,
            
            
            Increase2009
            
            
            2008
            
            
            (Decrease)
            
            
            %
      ChangeFleet
      Data:Ownership
      days (1)Capesize
            
            
            1,721.3
            
            
            
            1,319.0
            
            
            
            402.3
            
            
            
            30.5
            %Panamax
            
            
            2,184.0
            
            
            
            1,805.3
            
            
            
            378.7
            
            
            
            21.0
            %Supramax
            
            
            1,092.0
            
            
            
            897.5
            
            
            
            194.5
            
            
            
            21.7
            %Handymax
            
            
            1,638.0
            
            
            
            1,644.0
            
            
            
            (6.0
            )
            
            
            (0.4
            %)Handysize
            
            
            2,184.0
            
            
            
            2,190.4
            
            
            
            (6.4
            )
            
            
            (0.3
            %)Total
            
            
            8,819.3
            
            
            
            7,856.2
            
            
            
            963.1
            
            
            
            12.3
            %Available
      days (2)Capesize
            
            
            1,720.1
            
            
            
            1,318.9
            
            
            
            401.2
            
            
            
            30.4
            %Panamax
            
            
            2,160.8
            
            
            
            1,759.6
            
            
            
            401.2
            
            
            
            22.8
            %Supramax
            
            
            1,079.8
            
            
            
            895.6
            
            
            
            184.2
            
            
            
            20.6
            %Handymax
            
            
            1,604.6
            
            
            
            1,644.0
            
            
            
            (39.4
            )
            
            
            (2.4
            %)Handysize
            
            
            2,155.0
            
            
            
            2,140.6
            
            
            
            14.4
            
            
            
            0.7
            %Total
            
            
            8,720.3
            
            
            
            7,758.7
            
            
            
            961.6
            
            
            
            12.4
            %Operating
      days (3)Capesize
            
            
            1,714.4
            
            
            
            1,318.6
            
            
            
            395.8
            
            
            
            30.0
            %Panamax
            
            
            2,130.1
            
            
            
            1,739.0
            
            
            
            391.1
            
            
            
            22.5
            %Supramax
            
            
            1,057.6
            
            
            
            867.6
            
            
            
            190.0
            
            
            
            21.9
            %   26
   Handymax
            
            
            1,595.5
            
            
            
            1,631.6
            
            
            
            (36.1
            )
            
            
            (2.2
            %)Handysize
            
            
            2,139.2
            
            
            
            2,135.8
            
            
            
            3.4
            
            
            
            0.2
            %Total
            
            
            8,636.8
            
            
            
            7,692.6
            
            
            
            944.2
            
            
            
            12.3
            %Fleet  utilization
      (4)Capesize
            
            
            99.7
            %
            
            
            100.0
            %
            
            
            (0.3
            %)
            
            
            (0.3
            %)Panamax
            
            
            98.6
            %
            
            
            98.8
            %
            
            
            (0.2
            %)
            
            
            (0.2
            %)Supramax
            
            
            97.9
            %
            
            
            96.9
            %
            
            
            1.0
            %
            
            
            1.0
            %Handymax
            
            
            99.4
            %
            
            
            99.2
            %
            
            
            0.2
            %
            
            
            0.2
            %Handysize
            
            
            99.3
            %
            
            
            99.8
            %
            
            
            (0.5
            %)
            
            
            (0.5
            %)Fleet average
            
            
            99.0
            %
            
            
            99.1
            %
            
            
            (0.1
            %)
            
            
            (0.1
            %)




For the nine months ended September
      30,
            
            
            Increase2009
            
            
            2008
            
            
            (Decrease)
            
            
            %
      Change(U.S.
      dollars)Average
      Daily Results:Time
      Charter Equivalent (5)Capesize
            
            $
            57,838
            
            
            $
            74,277
            
            
            $
            (16,439
            )
            
            
            (22.1
            %)Panamax
            
            
            29,475
            
            
            
            34,771
            
            
            
            (5,296
            )
            
            
            (15.2
            %)Supramax
            
            
            27,080
            
            
            
            48,206
            
            
            
            (21,126
            )
            
            
            (43.8
            %)Handymax
            
            
            28,224
            
            
            
            33,684
            
            
            
            (5,460
            )
            
            
            (16.2
            %)Handysize
            
            
            19,364
            
            
            
            20,035
            
            
            
            (671
            )
            
            
            (3.3
            %)Fleet
      average
            
            
            32,044
            
            
            
            38,742
            
            
            
            (6,698
            )
            
            
            (17.3
            %)Daily
      vessel operating expenses (6)Capesize
            
            $
            5,270
            
            
            $
            4,794
            
            
            $
            476
            
            
            
            9.9
            %Panamax
            
            
            5,139
            
            
            
            4,446
            
            
            
            693
            
            
            
            15.6
            %Supramax
            
            
            4,741
            
            
            
            4,297
            
            
            
            444
            
            
            
            10.3
            %Handymax
            
            
            4,603
            
            
            
            4,408
            
            
            
            195
            
            
            
            4.4
            %Handysize
            
            
            4,224
            
            
            
            3,726
            
            
            
            498
            
            
            
            13.4
            %Fleet average
            
            
            4,789
            
            
            
            4,279
            
            
            
            510
            
            
            
            11.9
            %





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 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.






27






(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
              September
      30,
            
            
            For
      the nine months ended
              September
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008(U.S.
      dollars in thousands)Voyage
      revenues
            
            $
            92,949
            
            
            $
            107,557
            
            
            $
            283,301
            
            
            $
            303,798Voyage
      expenses
            
            
            1,002
            
            
            
            1,748
            
            
            
            3,866
            
            
            
            3,216Net
      voyage revenue
            
            $
            91,947
            
            
            $
            105,809
            
            
            $
            279,435
            
            
            $
            300,582







(6) Daily vessel operating
expenses.  We define daily vessel operating expenses as vessel
operating expense 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.




Operating
      Data




(U.S.
      dollars in thousands, except for per
              share
      amounts)2009
            
            
            
            2008
            
            
            Increase(Decrease)
            
            
            %
              Change(U.S. dollars in thousands,
              except for per share
      amounts)Revenues
            
            $
            92,949
            
            
            $
            107,557
            
            $
            (14,608
            
            
            (13.6
            %)Operating
      Expenses:Voyage
      expenses
            
            
            1,002
            
            
            
            1,748
            
            
            (746
            
            
            (42.7
            %)Vessel
      operating expenses
            
            
            14,766
            
            
            
            11,509
            
            
            3,257
            
            
            28.3
            %General
      and administrative expenses
            
            
            3,782
            
            
            
            4,133
            
            
            (351
            
            
            (8.5
            %)Management
      fees
            
            
            878
            
            
            
            712
            
            
            166
            
            
            23.3
            %Depreciation
      and amortization
            
            
            22,297
            
            
            
            18,840
            
            
            3,457
            
            
            18.3
            %Total operating
      expenses
            
            
            42,725
            
            
            
            36,942
            
            
            5,783
            
            
            15.7
            %Operating
      income
            
            
            50,224
            
            
            
            70,615
            
            
            (20,391
            
            
            (28.9
            %)Other
      (expense) income
            
            
            (15,953
            )
            
            
            (7,616
            )
            
            (8,337
            
            
            109.5
            %Net
      income
            
            $
            34,271
            
            
            $
            62,999
            
            $
            (28,728
            
            
            (45.6
            %)Earnings
      per share - Basic
            
            $
            1.10
            
            
            $
            2.00
            
            $
            (0.90
            
            
            (45.0
            %)Earnings
      per share - Diluted
            
            $
            1.09
            
            
            $
            1.99
            
            $
            (0.90
            
            
            (45.2
            %)Dividends
      declared and paid per share
            
            $
            –
            
            
            $
            1.00
            
            $
            (1.00
            
            
            (100.0
            %)Weighted
      average common shares outstanding - Basic
            
            
            31,295,916
            
            
            
            31,423,483
            
            
            (127,567
            
            
            (0.4
            %)








28






Weighted
      average common shares outstanding - Diluted
            
            
            31,473,369
            
            
            
            31,610,262
            
            
            (136,893
            
            
            (0.4
            %)EBITDA
      (1)
            
            $
            72,506
            
            
            $
            93,236
            
            $
            (20,730
            
            
            (22.2
            %)




For the nine months ended2009
            
            
            
            2008
            
            
            Increase(Decrease)
            
            
            %
      Change(U.S.
      dollars in thousands,
              except
      for per share amounts)Revenues
            
            $
            283,301
            
            
            $
            303,798
            
            $
            (20,497
            )
            
            (6.7
            %)Operating
      Expenses:Voyage
      expenses
            
            
            3,866
            
            
            
            3,216
            
            
            650
            
            
            20.2
            %Vessel
      operating expenses
            
            
            42,235
            
            
            
            33,615
            
            
            8,620
            
            
            25.6
            %General
      and administrative expenses
            
            
            11,775
            
            
            
            12,975
            
            
            (1,200
            
            
            (9.2
            %)Management
      fees
            
            
            2,620
            
            
            
            2,050
            
            
            570
            
            
            27.8
            %Depreciation
      and amortization
            
            
            64,179
            
            
            
            51,453
            
            
            12,726
            
            
            24.7
            %Gain
      on sale of vessel
            
            
            -
            
            
            
            (26,227
            )
            
            26,227
            
            
            (100.0
            %)Total operating
      expenses
            
            
            124,675
            
            
            
            77,082
            
            
            47,593
            
            
            61.7
            %Operating
      income
            
            
            158,626
            
            
            
            226,716
            
            
            (68,090
            
            
            (30.0
            %)Other
      (expense) income
            
            
            (45,495
            )
            
            
            (28,832
            )
            
            (16,663
            
            
            57.8
            %Net
      income
            
            $
            113,131
            
            
            $
            197,884
            
            $
            (84,753
            
            
            (42.8
            %)Earnings
      per share - Basic
            
            $
            3.62
            
            
            $
            6.60
            
            $
            (2.98
            
            
            (45.2
            %)Earnings
      per share - Diluted
            
            $
            3.60
            
            
            $
            6.56
            
            $
            (2.96
            
            
            (45.1
            %)Dividends
      declared and paid per share
            
            $
            –
            
            
            $
            2.85
            
            $
            (2.85
            
            
            (100.0
            %)Weighted
      average common shares outstanding - Basic
            
            
            31,275,061
            
            
            
            29,974,547
            
            
            1,300,514
            
            
            4.3
            %Weighted
      average common shares outstanding - Diluted
            
            
            31,420,304
            
            
            
            30,166,060
            
            
            1,254,244
            
            
            4.2
            %EBITDA
      (1)
            
            $
            222,507
            
            
            $
            283,161
            
            $
            (60,654
            
            
            (21.4
            %)





(1)
            EBITDA
      represents net income plus net interest expense 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 consolidating
      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 source of liquidity or
      cash flows as shown in our consolidated statement of cash
      flows.  The definition of EBITDA used here may not be comparable
      to that used by other companies.  The following table
      demonstrates our calculation of EBITDA and provides a reconciliation of
      EBITDA to net income for each of the periods presented
    above:








29









For
      the three months ended
                September
      30,
            
            
            For
      the nine months ended
                September
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008Net
      income
            
            $
            34,271
            
            
            $
            62,999
            
            
            $
            113,131
            
            
            $
            197,884Net
      interest expense
            
            
            15,938
            
            
            
            11,397
            
            
            
            45,197
            
            
            
            33,824Depreciation
      and amortization
            
            
            22,297
            
            
            
            18,840
            
            
            
            64,179
            
            
            
            51,453EBITDA (1)
            
            $
            72,506
            
            
            $
            93,236
            
            
            $
            222,507
            
            
            $
            283,161





(1)
See above for an explanation of EBITDA




Results
of Operations




The
following table sets forth information about the vessels in our fleet as of
October 28, 2009 as well as vessels to be acquired:





Vessel
            Year
              Built
            Charterer
            Charter
      Expiration (1)
            Cash
      Daily
              Rate
      (2)
            Net
      Revenue Daily Rate (3)
            Expected
      Delivery (4)Capesize VesselsGenco
      Augustus
            2007
            Cargill
      International S.A.
            December
      2009
            45,263
            62,750
            -Genco
      Tiberius
            2007
            Cargill
      International S.A.
            January
      2010
            45,263
            62,750
            -Genco
      London
            2007
            SK
      Shipping Co., Ltd
            August
      2010
            57,500
            64,250
            -Genco
      Titus
            2007
            Cargill
      International S.A.
            September
      2011
            45,000(5)
            46,250
            -Genco
      Constantine
            2008
            Cargill
      International S.A.
            August
      2012
            52,750(5)
            
            -Genco
      Hadrian
            2008
            Cargill
      International S.A.
            October
      2012
            65,000(5)
            
            -Genco
      Commodus
            2009
            Morgan
      Stanley Capital Group Inc.
            June
      2011
            36,000
            
            -Genco
      Maximus
            2009
            Cargill
      International S.A.
            December
      2009
            31,750
            
            -Genco
      Claudius
            2009(6)
            To
      Be Determined (“TBD”)
            TBD
            TBD
            
            Q4
      2009Panamax VesselsGenco
      Beauty
            1999
            Cargill
      International S.A./LD Commodities Suisse, Geneva
            Oct
      09/Feb 10
            15,000/19,125(7)
            
            -Genco
      Knight
            1999
            Swissmarine
      Services S.A.
            January
      2010
            16,500(8)
            
            -Genco
      Leader
            1999
            Baumarine
      AS
            November
      2009
            20,742(9)
            
            -Genco
      Vigour
            1999
            C
      Transport Panamax Ltd.
            November
      2009
            20,000
            
            -Genco
      Acheron
            1999
            Global
      Chartering Ltd
              (a
      subsidiary of ArcelorMittal Group)
            July
      2011
            55,250
            
            -Genco
      Surprise
            1998
            Hanjin
      Shipping Co., Ltd.
            December
      2010
            42,100
            
            -Genco
      Raptor
            2007
            COSCO
      Bulk Carriers Co., Ltd.
            April
      2012
            52,800
            
            -Genco
      Thunder
            2007
            Baumarine
      AS/ Klaveness Chartering
            Dec
      09/Mar 10
            20,079/20,000(10)
            
            -Supramax VesselsGenco
      Predator
            2005
            Bulkhandling
      Handymax A/S
            April
      2010
            Spot(11)Genco
      Warrior
            2005
            Hyundai
      Merchant Marine Co. Ltd.
            November
      2010
            38,750
            
            -Genco
      Hunter
            2007
            Pacific
      Basin Chartering Ltd.
            Oct
      09/Jan 10
            16,000/17,000(12)
            
            -    30
  Genco
      Cavalier
              2007
              Clipper
      Bulk Shipping NV
              November
      2009
              16,750
              
              -
  Handymax VesselsGenco
      Success
            1997
            Korea
      Line Corporation
            February
      2011
            33,000(13)
            
            -Genco
      Carrier
            1998
            Louis
      Dreyfus Corporation
            March
      2011
            37,000
            
            -Genco
      Prosperity
            1997
            Pacific
      Basin Chartering Ltd
            June
      2011
            37,000
            
            -Genco
      Wisdom
            1997
            Hyundai
      Merchant Marine Co. Ltd.
            February
      2011
            34,500
            
            -Genco
      Marine
            1996
            STX
      Pan Ocean Co. Ltd.
            Nov
      09/Feb 10
            13,750/15,500(14)
            
            -Genco
      Muse
            2001
            Global
      Maritime Investments Ltd.
            November
      2009
            15,000Handysize VesselsGenco
      Explorer
            1999
            Lauritzen
      Bulkers A/S
            January
      2010
            Spot(15)
            
            -Genco
      Pioneer
            1999
            Lauritzen
      Bulkers A/S
            January
      2010
            Spot(15)
            
            -Genco
      Progress
            1999
            Lauritzen
      Bulkers A/S
            January
      2010
            Spot(15)
            
            -Genco
      Reliance
            1999
            Lauritzen
      Bulkers A/S
            October
      2010
            Spot(15)
            
            -Genco
      Sugar
            1998
            Lauritzen
      Bulkers A/S
            October
      2010
            Spot(15)
            
            -Genco
      Charger
            2005
            Pacific
      Basin Chartering Ltd.
            November
      2010
            24,000
            
            -Genco
      Challenger
            2003
            Pacific
      Basin Chartering Ltd.
            November
      2010
            24,000
            
            -Genco
      Champion
            2006
            Pacific
      Basin Chartering Ltd.
            December
      2010
            24,000
            
            -





(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 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 term of the charter.  For
cash flow purposes, we will continue to receive the rate presented in the “Cash
Daily Rate” column until the charter expires.


(4) Dates
for vessels being delivered in the future are estimates based on guidance
received from the sellers and/or the respective shipyards.


(5) 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.


(6) Year
built for vessels being delivered in the future are estimates based on guidance
received from the sellers and/or the respective shipyards.


(7) We
have reached an agreement to charter the vessel for 4 to 6.5 months at a rate of
$19,125 per day, less a 5% third-party commission. The vessel is expected to
enter into the time charter following the completion of its previous time
charter on or about October 29, 2009.


(8) We
have extended the short-term time charter for approximately 3.5 to 6.5 months at
a rate of $16,500 per day, less a 5% third-party commission. The vessel entered
into the time charter following the completion of its previous time charter on
October 4, 2009.


(9) We
reached an agreement to enter the vessel into the Baumarine Pool with an option
to convert the balance period of the charter party to a fixed rate, but only
after June 1, 2009. We exercised the option to convert the balance period of the
charter party to a fixed rate on June 3, 2009 at a gross rate of $20,742 per
day.


(10) We
have reached an agreement to charter the vessel for 3.5 to 6 months at a rate of
$20,000 per day, less a 5% third-party commission. The vessel is expected to
enter into the time charter following the completion of its previous time
charter on December 15, 2009.








31








(11) We
entered the vessel into the Bulkhandling Handymax Pool with an option to convert
the balance period of the charter party to a fixed rate, but only after January
1, 2009. We extended the charter party by an additional 5 to 7.5 months starting
November 5, 2009. In addition to a 1.25% third-party brokerage commission, the
charter party calls for a management fee.


(12) We
have reached an agreement to extend the time charter contract for this vessel
for 3 to 5.5 months at a rate of $17,000 per day less a 5% third-party
commission. The extension began following the completion of its previous time
charter on October 25, 2009.


(13) We
extended the time charter for an additional 35 to 37.5 months at a rate of
$40,000 per day for the first 12 months, $33,000 per day for the following 12
months, $26,000 per day for the next 12 months and $33,000 per day thereafter
less a 5% third-party commission. In all cases, the rate for the duration of the
time charter will average $33,000 per day. For purposes of revenue recognition,
the time charter contract is reflected on a straight-line basis at approximately
$33,000 per day for 35 to 37.5 months in accordance with U.S. GAAP.


(14) We
have reached an agreement to extend the time charter contract for this vessel
for 3 to 5.5 months at a rate of $15,500 per day less a 5% third-party
commission. The extension is expected to commence following the completion of
its current time charter on or about November 11, 2009.


(15) We
have reached an agreement to enter these vessels into a spot pool managed by
Lauritzen Bulkers beginning at the expiration of their current time charters in
August 2009. Under the pool agreement, we can withdraw up to three vessels with
three months’ notice until December 31, 2009 and the remaining two vessels with
12 months’ notice. After December 31, 2009, we can withdraw up to two vessels
with three months’ notice and the remaining three vessels with 12 months’
notice.




Three
      months ended September 30, 2009 compared to the three months ended
      September 30, 2008




REVENUES-




For the
three months ended September 30, 2009, revenues decreased 13.6% to $92.9 million
versus $107.6 million for the three months ended September 30,
2008.  Revenues in both periods consisted of charter hire revenue
earned by our vessels.  The decrease in revenues was due to lower
charter rates achieved for some of our vessels, reflecting the generally lower
rates for charters entered into in current market conditions, offset by
additional revenue from the operation of a larger fleet.




The
average Time Charter Equivalent (“TCE”) rate of our fleet decreased 21.9% to
$30,743 a day for the three months ended September 30, 2009 from $39,349 a day
for the three months ended September 30, 2008.  The decrease in TCE
rates was due to lower charter rates achieved in the third quarter of 2009
compared to the third quarter of 2008 for five of the Panamax vessels, six of
the Supramax and Handymax vessels, and five of the Handysize vessels in our
current fleet.   Furthermore, lower TCE rates were achieved in
the third quarter of 2009 compared to the same period last year due to the
comparatively lower revenue from the profit sharing agreements on two of our
Capesize vessels.   This was partially offset by higher revenues
on one of our Handymax vessels despite the general decrease in TCE
rates.




For the
three months ended September 30, 2009 and 2008, we had ownership days of 3,027.3
days and 2,749.0 days, respectively.  Fleet utilization was 99.5% and
98.8% for the three month periods ended September 30, 2009 and 2008,
respectively.




The
current freight rate environment showed some signs of strength over the last
quarter stemming from increased commodity demand out of China. As
China moved ahead with the implementation of its infrastructure
stimulus program, demand for commodities such as iron ore and
coal pushed drybulk freight rates higher, led by increased demand for
Capesize vessels importing iron ore from Brazil and Australia. 
The rates that our vessels earn in the future may be affected if the current
freight rate environment persists or worsens following expiration of our current
charters.




VOYAGE
EXPENSES-




For the
three months ended September 30, 2009 and 2008, we did not incur port and canal
charges or any significant expenses related to the consumption of bunkers (fuel)
as part






32










For the
three months ended September 30, 2009 and 2008, voyage expenses were $1.0
million and $1.7 million, respectively, and consisted primarily of
brokerage commissions paid to third parties.




VESSEL
OPERATING EXPENSES-




Vessel
operating expenses increased to $14.8 million from $11.5 million for the three
months ended September 30, 2009 and 2008, respectively.  This increase
was primarily due to the operation of a larger fleet and higher crewing
expenses, as well as the operation of more Capesize vessels during the three
months ended September 30, 2009 as compared to the three months ended September
30, 2008.




Daily
vessel operating expenses grew to $4,878 per vessel per day for the three months
ended September 30, 2009 from $4,187 per day for the three months ended
September 30, 2008.  The increase in daily vessel operating expenses
was due to higher expenses related to repairs and maintenance and spare parts,
as well as the operation of a greater number of Capesize vessels during the
third quarter of 2009 versus the same period last year.  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
2009, we budgeted daily vessel operating expenses at a weighted average rate of
$5,350 per vessel per day.  Our actual daily vessel operating expenses
per vessel for the quarter ended September 30, 2009 have been $472 below the
budgeted rate.  We expect that our actual daily vessel operating
expenses per vessel for the quarter ending December 31, 2009 will also be
slightly below the budgeted rate.





Our
vessel operating expenses, which generally represent fixed costs, 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
AND ADMINISTRATIVE EXPENSES-




For the
three months ended September 30, 2009 and 2008, general and administrative
expenses were $3.8 million and $4.1 million, respectively.  The
decrease in general and administrative expenses was due to a decrease in costs
associated with employee stock-based compensation and other administrative
costs, offset by an increase in legal fees during the third quarter of 2009 as
compared to the third quarter of 2008.




MANAGEMENT
FEES-




We incur
management fees to third-party technical management companies for the day-to-day
management of our vessels, including performing routine maintenance, attending
to vessel operations and arranging for crews and supplies.  For the
three months ended September 30, 2009 and 2008, management fees were $0.9
million and $0.7 million, respectively.   The increase was
primarily due to the operation of a larger fleet as well as an increase in
monthly management fees.





DEPRECIATION
AND AMORTIZATION-




For the
three months ended September 30, 2009, depreciation and amortization charges
grew to $22.3 million from $18.8 million for the three months ended
September 30, 2008.  The increase was primarily due to the operation
of a larger fleet.





OTHER
(EXPENSE) INCOME-





NET
INTEREST EXPENSE-





For the
three months ended September 30, 2009 and 2008, net interest expense was $15.9
million and $11.4 million, respectively.  Net interest expense
consisted primarily of interest expense under our 2007 Credit
Facility








33








during
both periods.  Additionally, interest income as well as amortization
of deferred financing costs related to the 2007 Credit Facility are included in
both periods.  The increase in net interest expense for third quarter
2009 versus third quarter 2008 was mostly a result of higher outstanding debt
due to the acquisition of additional vessels during the second quarter through
the fourth quarter of 2008 and the third quarter of 2009 as well as an increase
in the Applicable Margin as a result of the 2009 Amendment to the 2007 Credit
Facility.




Nine
months ended September 30, 2009 compared to the nine months ended September 30,
2008





REVENUES-





For the
nine months ended September 30, 2009, revenues decreased 6.7% to $283.3 million
versus $303.8 million for the nine months ended September 30,
2008.  Revenues in both periods consisted of charter hire revenue
earned by our vessels.  The decrease in revenues was due to lower
charter rates achieved for some of our vessels, reflecting the generally lower
rates for charters entered into in current market conditions, offset by
additinal revenue from the operation of a larger fleet.




The
average TCE rate of our fleet decreased 17.3% to $32,044 a day for the nine
months ended September 30, 2009 from $38,742 a day for the nine months ended
September 30, 2008.  The decrease in TCE rates was due to lower
charter rates achieved in the nine months ended September 30, 2009 versus the
comparable period in 2008 for six of the Panamax vessels, five of the Supramax
and Handymax vessels, and six of the Handysize vessels in our current fleet.
Furthermore, lower TCE rates were achieved in the nine months ended September
30, 2009 versus the same period last year due to less profit sharing revenue
earned for two of the Capesize vessels.  This was slightly offset by
higher revenues on two of our Panamax vessels and four of our Handymax vessels
despite the general decrease in TCE rates.




For the
nine months ended September 30, 2009 and 2008, we had ownership days of 8,819.3
days and 7,856.2 days, respectively.  Fleet utilization for the nine
months ended September 30, 2009 and 2008 was 99.0% and 99.1%,
respectively.




VOYAGE
EXPENSES-




For the
nine months ended September 30, 2009 and 2008, we did not incur 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 or in pools that require the charterer or pool to
bear all of those expenses.




For the
nine months ended September 30, 2009 and 2008, voyage expenses were $3.9 million
and $3.2 million, respectively, and consisted primarily of brokerage commissions
paid to third parties.




VESSEL
OPERATING EXPENSES-




Vessel
operating expenses increased to $42.2 million from $33.6 million for the nine
months ended September 30, 2009 and 2008, respectively.  This was due
mostly to higher crewing and insurance expenses as well as the operation of
a larger fleet, namely Capesize vessels, for the nine months ended September 30,
2009 as compared to the nine months ended September 30, 2008.




Daily
vessel operating expenses grew to $4,789 per vessel per day for the nine months
ended September 30, 2009 from $4,279 per day for the nine months ended September
30, 2008.  The increase in daily vessel operating expenses was due to
higher crewing, insurance and repairs and maintenance expenses, as well as the
operation of a greater number of Capesize vessels during the first nine months
of 2009 versus the same period last year.   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 2009, we budgeted daily vessel operating
expenses at a weighted average rate of $5,350 per vessel per day.  Our
actual daily vessel operating expenses per vessel for the nine months ended
September 30, 2009 have been $561 below the budgeted rate.  We expect
that our actual daily vessel operating expenses per vessel for the quarter
ending December 31, 2009 will also be slightly below the budgeted
rate.






34






GENERAL
AND ADMINISTRATIVE EXPENSES-




For the
nine months ended September 30, 2009 and 2008, general and administrative
expenses were $11.8 million and $13.0 million, respectively.  The
decrease in general and administrative expenses was primarily due to costs
associated with lower employee stock based compensation.




MANAGEMENT
FEES-




We incur management fees to third-party
technical management companies for the day-to-day management of our vessels,
including performing routine maintenance, attending to vessel operations and
arranging for crews and supplies.  For the nine months ended September
30, 2009 and 2008, management fees were $2.6 million and $2.1 million,
respectively.  The increase was primarily due to the operation of a
larger fleet as well as an increase in monthly management fees.




DEPRECIATION
AND AMORTIZATION-




For the
nine months ended September 30, 2009, depreciation and amortization charges grew
to $64.2 million from $51.5 million for the nine months ended September 30,
2008.  The increase primarily was due to the operation of a larger
fleet.




OTHER
(EXPENSE) INCOME-





NET
INTEREST EXPENSE-





For the
nine months ended September 30, 2009 and 2008, net interest expense was $45.2
million and $33.8 million, respectively.  Net interest expense
consisted primarily of interest expense under our 2007 Credit Facility during
both periods.  Additionally, interest income as well as amortization
of deferred financing costs related to the 2007 Credit Facility, are included in
both periods.  The increase in net interest expense for the nine
months ended September 30, 2009 versus the nine months ended September 30, 2008
was mostly a result of higher outstanding debt due to the acquisition of
additional vessels during the second quarter through the fourth quarter of 2008
and the third quarter of 2009 as well as an increase in the Applicable Margin as
a result of the 2009 Amendment to the 2007 Credit Facility.




LIQUIDITY
AND CAPITAL RESOURCES




To date,
we have financed our capital requirements with cash flow from operations, equity
offerings 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.  We
expect to rely on operating cash flows to implement our growth plan, as we
currently have no remaining availability under our 2007 Credit
Facility.  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 current market
conditions persist, we may be unable to raise additional equity capital or debt
financing on acceptable terms or at all.




We
anticipate that internally generated cash flow will be sufficient to fund the
operations of our fleet, including our working capital requirements, for the
next twelve months.  As a result of the reduction in the market values
of vessels, we have entered into the 2009 Amendment.  The 2009
Amendment waived the existing collateral maintenance financial covenant, 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 “2007 Credit Facility”
section below for further details of the terms of the amendment.  We
anticipate utilizing internally generated cash flow to fund the anticipated
acquisition of the remaining Capesize vessel we have agreed to acquire and
expect to receive delivery of this vessel during the fourth quarter of
2009.  The collateral maintenance covenant will be waived until we can
represent that we are in compliance with all of our financial
covenants.






35







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.  On January 26, 2009, we entered into the 2009 Amendment
pursuant to which 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 “2007 Credit Facility” section below for
further information regarding this amendment.  As such, a dividend was
not declared for the quarter ended September 30, 2009.  The following
table summarizes the dividends declared based on the results of the respective
fiscal quarter:





Dividend
      per
                share
            Declaration
                dateFISCAL YEAR ENDED DECEMBER 31, 20093rd
      Quarter
            –
            N/A2nd
      Quarter
            –
            N/A1st
      Quarter
            –
            N/AFISCAL YEAR ENDED DECEMBER 31, 20084th
      Quarter
            –
            N/A3rd
      Quarter
            $1.00
            10/23/082nd
      Quarter
            $1.00
            7/24/081st
      Quarter
            $1.00
            4/29/08FISCAL YEAR ENDED DECEMBER 31, 20074th
      Quarter
            $0.85
            2/13/083rd
      Quarter
            $0.66
            10/25/072nd
      Quarter
            $0.66
            7/26/071st
      Quarter
            $0.66
            4/26/07




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 as part of the 2009 Amendment.  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
2010). 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.  The 2007 Credit Facility was amended
as of February 13, 2008 to permit the share repurchase program and provide that
the dollar amount of shares repurchased is counted toward the maximum dollar
amount of dividends that may be paid in any fiscal
quarter.  Subsequently, on January 26, 2009, we entered into the 2009
Amendment, which amended the 2007








36








Credit
Facility to 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 “2007 Credit Facility” section below for
further information regarding this amendment.  Pursuant to the 2009
Amendment, there were no share repurchases during the three and nine months
ended September 30, 2009.





Cash
Flow





Net
cash provided by operating activities for the nine months ended September 30,
2009 and 2008 was $166.3 million and $207.4 million, respectively. The decrease
in cash provided by operating activities was primarily due to a decrease in cash
flows generated by the operation of our fleet due to lower charter rates and
higher operating expenses. In addition, cash paid for interest increased by $7.2
million during the nine months ended September 30, 2009 as a result of an
increase in the debt outstanding under the Company’s 2007 Credit Facility.
During the nine months ended September 30, 2008, a $26.2 million gain on sale of
vessels was recognized from the sale of the Genco Trader and $7.0 million of
income was received from our investment in stock of Jinhui Shipping and
Transportation Limited.





Net cash
used in investing activities for the nine months ended September 30, 2009 and
2008 was $210.1 million and $426.3 million, respectively.  The
decrease was primarily due to decreases in cash used for the purchase of vessels
and deposits on vessels offset by a decline in cash provided by the sale of
vessels. For the nine months ended September 30, 2009, cash used in investing
activities primarily related to the purchase of vessels in the amount of $191.5
million and deposits of restricted cash in the amount of $17 million. For the
nine months ended September 30, 2008, net cash used in investing activities
primarily related to the purchase of vessels in the amount of $412.0 million as
well as deposits on vessels in the amount of $57.4 million and the purchase of
short term investments of $10.3 million, offset by the proceeds from the sale of
the Genco Trader in the amount of $43.1 million and $7.0 million of income
received from our investment in Jinhui Shipping and Transporation
Limited.




Net cash
provided by financing activities was $162.6 million during the nine months ended
September 30, 2009 as compared to $289.8 million during the nine months ended
September 30, 2008. The $127.2 million decrease in net cash provided by
financing activities was primarily due to the issuance of common stock in the
amount of $195.6 million, completed during the nine month period last year, and
was offset by $85.6 million of cash dividends paid during the same period. For
the nine months ended September 30, 2009 cash provided by financing activities
consisted of $166.2 million of proceeds from the 2007 Credit Facility slightly
offset by $3.5 million of deferred financing costs. For the same period last
year, net cash provided by financing activities consisted of the drawdown of
$461.5 million related to the purchase of vessels and $195.6 million in net
proceeds from our May 2008 follow-on offering. These inflows were offset by the
repayment of $268.0 million under the 2007 Credit Facility and the payment of
cash dividends of $85.6 million.





2007
Credit Facility





On July
20, 2007, we entered into a credit facility with DnB Nor Bank ASA (the “2007
Credit Facility”) for the purpose of acquiring the nine Capesize vessels and
refinancing our 2005 Credit Facility and Short-Term Line.  DnB Nor
Bank ASA is also Mandated Lead Arranger, Bookrunner, and Administrative Agent.
We have used borrowings under the 2007 Credit Facility to repay amounts
outstanding under our previous credit facilities, which have been
terminated.  The maximum amount that may be borrowed under the 2007
Credit Facility at September 30, 2009 is $1.3 billion.  As of
September 30, 2009, we have utilized our maximum borrowing capacity under the
2007 Credit Facility.




On
January 26, 2009, we entered into the 2009 Amendment, which implements the
following modifications to the terms of the 2007 Credit Facility:





·
            Compliance
      with the existing collateral maintenance financial covenant was waived
      effective for the year ended December 31, 2008 and until we can represent
      that we are in compliance with all of our financial covenants and are
      otherwise able to pay a dividend and purchase or redeem shares of common
      stock under the terms of the 2007 Credit Facility in effect before the
      2009 Amendment.  Our cash dividends and share repurchases will
      be suspended until we can represent that we are in a position to again
      satisfy the collateral maintenance
covenant.








37





·
            The
      total amount of the 2007 Credit Facility will be subject to quarterly
      reductions of $12.5 million beginning March 31, 2009 through March 31,
      2012 and $48.2 million of the total facility amount thereafter until the
      maturity date.  A final payment of $250.6 million will be due on
      the maturity date.





·
            The
      Applicable Margin to be added to the London Interbank Offered Rate to
      calculate the rate at which our borrowings bear interest is 2.00% per
      annum.





·
            The
      commitment commission payable to each lender is 0.70% per annum of the
      daily average unutilized commitment of such
  lender.





The significant covenants in the 2007
Credit Facility have been disclosed in the 2008 10-K. As of September 30, 2009,
we believe we are in compliance with all of the financial covenants under our
2007 Credit Facility, as amended.





We have recorded $17,000 of restricted
cash, or $500 per vessel, as a current asset at September 30,
2009.  Since we have utilized our maximum borrowing capacity under the
2007 Credit Facility at September 30, 2009, we were required to hold this
balance at September 30, 2009 to comply with the minimum cash balance covenant
under the 2007 Credit Facility, as amended.





Interest
Rate Swap Agreements, Forward Freight Agreements and Currency Swap
Agreements




We have
entered into eleven interest rate swap agreements 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 $831.2 million and the swaps have
specified rates and durations.





Refer to
the table in Note 8 – Long-Term Debt of our financial statements which
summarizes the interest rate swaps in place as of September 30, 2009 and
December 31, 2008.





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.





We had
entered into a number of short-term forward currency contracts to protect
ourselves from the risk associated with the fluctuation in the exchange rate
associated with the cost basis of the Jinhui shares as described in Note 5 –
Investment of our financial statements.  As forward contracts expired,
we continued to enter into new forward currency contracts for the cost basis of
the investment, excluding commissions.  However, hedge accounting was
limited to the lower of the cost basis or the market value at time of
designation.  We elected to discontinue the forward currency contracts
as of October 10, 2008 due to the declining underlying market value of
Jinhui.




As part
of our business strategy, we may enter into arrangements commonly known as
forward freight agreements, or FFAs, to hedge and manage market risks relating
to the deployment of our existing fleet of vessels.  These
arrangements may include future contracts, or commitments to perform in the
future a shipping service between ship owners, charters 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








38








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 September 30, 2009.




Contractual
Obligations





The
following table sets forth our contractual obligations and their maturity dates
as of September 30, 2009.  The table incorporates the agreement to
acquire one remaining Capesize vessel for approximately $96 million, inclusive
of commissions for these acquisitions, and the employment agreement entered into
in September 2007 with our Chief Financial Officer, John
Wobensmith.  We plan to fund the remaining vessel acquisition with
cash on hand or cash generated from operations.  The interest and fees
are also reflective of the 2007 Credit Facility, including the 2009 Amendment,
and the interest rate swap agreements as discussed above under “Interest Rate
Swap Agreements, Forward Freight Agreements and Currency Swap
Agreements.”   The interest and fees related to the 2007 Credit
Facility reflect the repayment of $12.5 million of debt which was paid on
October 21, 2009, which is prior to the required repayment date of December 31,
2009.





Total
            
            
            Within
      One
                Year
      (1)
            
            
            One
      to Three
                Years
            
            
            Three
      to Five
                Years
            
            
            More
      than
                Five
      Years(U.S.
      dollars in thousands)2007
      Credit Agreement
            
            $
            1,339,500
            
            
            $
            12,500
            (2)
            
            $
            100,000
            
            
            $
            301,670
            
            
            $
            925,330Remainder
      of purchase price of vessels (3)
            
            $
            96,000
            
            
            $
            96,000
            
            
            $
            –
            
            
            $
            –
            
            
            $
            –Interest
      and borrowing fees
            
            $
            266,182
            
            
            $
            16,357
            
            
            $
            119,452
            
            
            $
            75,511
            
            
            $
            54,862Executive
      employment agreement
            
            $
            407
            
            
            $
            106
            
            
            $
            301
            
            
            $
            –
            
            
            $
            –Office
      lease
            
            $
            5,785
            
            
            $
            121
            
            
            $
            1,014
            
            
            $
            1,036
            
            
            $
            3,614




(1)
            Represents
      the three month period ending December 31,
2009.


(2)
            $12.5
      million of outstanding debt was repaid on October 21,
  2009.


(3)
            The
      timing of this obligation is based on the estimated delivery date for the
      remaining Capesize vessel which is currently being constructed, and the
      obligation is inclusive of the commission due to brokers upon purchase of
      the vessel.





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 0.3125% for the
portion of the debt that has no designated swap against it, plus the applicable
bank margin of 2.00%.  We are obligated to pay certain commitment fees
in connection with the 2007 Credit Facility, 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. Our fleet currently consists of eight Capesize drybulk carriers,
eight Panamax drybulk carriers, four Supramax drybulk carriers, six Handymax
drybulk carriers and eight Handysize drybulk carriers.





In
addition to acquisitions that we may undertake in future periods, we will incur
additional capital expenditures due to special surveys and drydockings. We
estimate our drydocking costs and scheduled off-hire days for our fleet through
2010 to be:








39







Year
            
            Estimated Drydocking Cost
              (U.S.
      dollars in millions)
            
            
            Estimated Off-hire Days2009
      (October 1- December 31, 2009)
            
            $
            0.6
            
            
            
            202010
            
            $
            5.1
            
            
            
            160




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.  Two of our Capesize drybulk carriers that are
drydocking during 2010 are anticipated to complete the required maintenance in
only ten days.  We expect to fund these costs with cash from
operations.




During
the nine months ended September 30, 2009, we incurred a total of $3.9 million of
drydocking costs.




We
estimate that one vessel will be drydocked in the remainder of
2009.  An additional nine of our vessels will be drydocked in
2010.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements.





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.  However, we expect our costs to increase based on the
anticipated increased cost for crewing and lubes.




CRITICAL
ACCOUNTING POLICIES




Refer to
the Critical Accounting Policies as disclosed in the 2008 10-K.  There have
been no changes in these policies in the nine months ended September 30,
2009.




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.  The Company has entered into eleven
interest rate swap agreements with DnB NOR Bank to manage future interest costs
and the risk associated with changing interest rates.  We held eleven
interest rate risk management instruments at September 30, 2009 as compared to
nine interest rate risk management instruments at December 31,
2008.  The total notional principal amount of the swaps is $831.2
million, and the swaps have specified rates and durations.  Refer to
the table in Note 8 – Long-Term Debt of our financial statements which
summarizes the interest rate swaps in place as of September 30, 2009 and
December 31, 2008.




The swap
agreements with effective dates prior to September 30, 2009 synthetically
convert variable rate debt to fixed rate debt at the fixed interest rate of swap
plus the Applicable Margin as defined in the “2007 Credit Facility” section of
Note 8 – Long-Term Debt of our financial statements.




The
liability associated with the swaps at September 30, 2009 is $50.9 million and
$65.9 million at December 31, 2008, and are presented as the fair value of
derivatives on the balance sheet.  Additionally, at September 30,
2009, the Company had one swap in an asset position of $1.3
million.  As of September 30, 2009 and December 31, 2008, the Company
has accumulated OCI of ($49.4) million and ($66.0) million, respectively,
related to the effectively hedged portion of the swaps.  At September
30, 2009, ($28.4) million of OCI is expected to be reclassified into income over
the next 12 months associated with interest rate derivatives.






40







We are
subject to market risks relating to changes in interest rates because we have
significant amounts of floating rate debt outstanding.  For the nine
months ended September 30, 2008, we paid LIBOR plus 0.85% 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 nine months ended September
30, 2009, effective January 26, 2009 as a result of the 2009 amendment to the
2007 Credit Facility, 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.  A 1% increase in LIBOR would result in an increase
of $2.4 million in interest expense for the nine months ended September 30,
2009, considering the increase would be only on the unhedged portion of the
debt.





Derivative financial
instruments




As of
September 30, 2009, the Company has entered into eleven interest rate swap
agreements 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 $831.2 million, and the swaps have specified rates and
durations.  Refer to the table in Note 8 – Long-Term Debt of our
financial statements which summarizes the interest rate swaps in place as of
September 30, 2009 and December 31, 2008.




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 September 30, 2009 and 2008 was $7.9
million and $3.4 million, respectively.  The interest rate
differential pertaining to the interest rate swaps for the nine months ended
September 30, 2009 and 2008 was $20.1 million and $7.3 million.  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 OCI.  The ineffective portion is recognized as other
expense, which is a component of other (expense) income.  For any
period of time that the Company did not designate the swaps for hedge
accounting, the change in the value of the swap agreements prior to designation
was recognized as other (expense) income and was listed as a component of 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.





The
Company had entered into a number of short-term forward currency contracts to
protect the Company from the risk associated with the fluctuation in the
exchange rate associated with the cost basis of the Jinhui shares as described
in Note 5 - Investments of our financial statements.  The use of
short-term forward currency contracts was discontinued on October 10, 2008 due
to the underlying value of Jinhui.  For further information on these
forward currency contracts, please see page 38 under the heading “Interest Rate
Swap Agreements, Forward Freight Agreements and Currency 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.





The
Company had entered into a number of short-term forward currency contracts to
protect the Company from the risk associated with the fluctuation in the
exchange rate associated with the cost basis of the Jinhui shares as described
in Note 5 - Investments of our financial statements.  For further
information on these forward currency contracts, please see page 38 under the
heading “Interest Rate Swap Agreements, Forward Freight Agreements and Currency
Swap Agreements.”





The
Company utilized hedge accounting on the cost basis of the Jinhui stock through
October 10, 2008 when the use of the forward currency contract was discontinued
due to the underlying value of Jinhui.








41





Investments





The
Company holds investments in Jinhui of $49.2 million which are classified as
available for sale under Accounting Standards Codification 320-10, Investments –
Debt and Equity Securities (“ASC 320-10”) (formerly SFAS No. 115, “Accounting
for Certain Investments in Debt and Equity Securities”).The Company classifies the
investment as a current or noncurrent asset based on the Company’s 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.  During 2008,
we reviewed the investment in Jinhui for indicators of other-than-temporary
impairment.  This determination required significant
judgment.  In making this judgment, we evaluated, among other factors,
the duration and extent to which the fair value of the investment is less than
its cost; the general market conditions, including factors such as industry and
sector performance, and our intent and ability to hold the
investment.  The Company’s investment in Jinhui was deemed to be
other-than-temporarily impaired at December 31, 2008 due to the severity of the
decline in its market value versus our cost basis.  During the quarter
ended December 31, 2008, the Company recorded a $103.9 million impairment loss
which was reclassified from OCI and recorded as a loss in the income statement
for the quarter ended December 31, 2008.  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 and amount of any additional
impairment.  For the quarter ended September 30, 2009, we have not
deemed our investment to be impaired.  In the event we determine that
the Jinhui investment is subject to any additional impairment, the amount of the
impairment would be reclassified from OCI and recorded as a loss in the income
statement 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.





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
adverse effect on the Company, its financial condition, results of operations or
cash flows.




ITEM
1A.    RISK FACTORS





In addition to the other information
set forth in this report, you should carefully consider the factors discussed in
Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for
the year ended December 31, 2008, which could materially affect our
business, financial condition or future results.  Below is updated
information to the following risk factors contained in our Annual Report on Form
10-K for the year ended December 31, 2008.











42






The
current global economic turndown may continue to negatively impact our
business.


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.




U.S.
tax authorities could treat us as a “passive foreign investment company,” which
could have adverse U.S. federal income tax consequences to U.S.
shareholders.





As
detailed in our Form 10-K for the year ended December 31, 2008, whether a
foreign corporation is a “passive foreign investment company,” or PFIC, depends
on the portion of the corporation’s gross income that consists of “passive
income” or the portion of its assets that produce or are held for the production
of “passive income” for any taxable year.   Income derived from
the performance of services does not constitute passive income, while rental
income would generally constitute passive income unless we were treated under
specific rules as deriving our rental income in the active conduct of a trade or
business.  We do not believe that our existing operations would cause
us to be deemed a PFIC with respect to any taxable year, as we treat the gross
income we derive or are deemed to derive from our time and spot chartering
activities as services income, rather than rental income.





There is,
however, no direct legal authority under the PFIC rules addressing our method of
operation.  Moreover, in a recent case not concerning PFICs, Tidewater Inc. v. U.S.,
2009-1 USTC ¶ 50,337, the Fifth Circuit held that a vessel time charter at issue
generated rental, rather than services, income.  However, the court's
ruling was contrary to the position of the U.S. Internal Revenue Service, which
we sometimes refer to as the IRS, that the time charter income should be treated
as services income, and the terms of the time charter in that case differ in
material respects from the terms of our time charters.  No assurance
can be given that the IRS, or a court of law will accept our position, and there
is a risk that the IRS or a court of law could determine that we are a
PFIC.





Acts
of piracy on ocean-going vessels have recently increased in frequency, which
could adversely affect our business.





In
response to piracy incidents in 2008 and 2009, particularly in the Gulf of Aden
off the coast of Somalia, after consultation with regulatory authorities, we
have stationed guards on some of our vessels in certain instances.  While
our use of guards is intended to deter and prevent the hijacking of our vessels,
it may also increase our risk of liability for death or injury to persons or
damage to personal property.  While we believe we generally have adequate
insurance in place to cover such liability, if we do not, it could adversely
impact our business, results of operations, cash flows, and financial
condition.




ITEM
2.          UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




During the nine months ended September
30, 2009, we did not repurchase any shares of our common stock pursuant to our
share repurchase program.




ITEM
      5.
            OTHER
      INFORMATION




In
compliance with Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, we have
provided certifications of our Principal Executive Officer and Principal
Financial Officer to the Securities and Exchange Commission.  The
certifications provided pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 accompanying this report have not been filed pursuant to the Exchange
Act.









43







Item
6.  EXHIBITS




Exhibit
            Document3.1
            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
      April 9, 2007.(4)10.1
            Form
      of Director Restricted Stock Grant Agreement dated as of July 24,
      2009.*31.1
            Certification
      of President pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.*31.2
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.*32.1
            Certification
      of President pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.*32.2
            Certification
      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.*





(*)            
Filed with this report.




(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.

















(Remainder
of page left intentionally blank)







44


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 LIMITEDDATE:
      November 9, 2009
            
            By: /s/ Robert Gerald
      Buchanan
              Robert
      Gerald Buchanan
              President
              (Principal
      Executive Officer)DATE:
      November 9, 2009
            
            By: /s/ John C.
      Wobensmith
              John
      C. Wobensmith
              Chief
      Financial Officer, Secretary and Treasurer
              (Principal
      Financial and Accounting Officer)







45







Exhibit
Index


Exhibit
              Document3.1
              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
      April 9, 2007.(4)10.1
              Form
      of Director Restricted Stock Grant Agreement dated as of July 24,
      2009.*31.1
              Certification
      of President pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.*31.2
              Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.*32.1
              Certification
      of President pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.*32.2
              Certification
      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.*
 
 (*)            
Filed with this report.
  (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.


(Remainder of page left intentionally
blank)