Attached files
| file | filename |
|---|---|
| 8-K/A - GENCO SHIPPING & TRADING LIMITED 8-KA 7-17-2015 - GENCO SHIPPING & TRADING LTD | form8ka.htm |
Exhibit 99.1
GENCO SHIPPING & TRADING LIMITED
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On July 17, 2015, Genco Shipping & Trading Limited, a Marshall Islands corporation (“Genco”), Baltic Trading Limited, a Marshall Islands corporation (“Baltic Trading”), and Poseidon Merger Sub Limited, a Marshall Islands corporation and an indirect wholly owned subsidiary of Genco (“Merger Sub”), completed the merger (the “merger”) contemplated by the Agreement and Plan of Merger by and among Baltic Trading, Genco and Merger Sub, dated as of April 7, 2015, as amended (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Baltic Trading, with Baltic Trading continuing as the surviving corporation and an indirect wholly owned subsidiary of Genco.
The following unaudited pro forma condensed combined financial statements of Genco give effect to the merger. The Unaudited Pro Forma Condensed Combined Balance Sheet assumes the merger closed on June 30, 2015. The Unaudited Pro Forma Condensed Combined Statement of Operations assumes the merger closed on January 1, 2014 for the six months ended June 30, 2015. The unaudited pro forma financial information is based on the respective historical consolidated financial statements of Genco and Baltic Trading, and the assumptions and adjustments set forth in the accompanying explanatory notes. In addition, due to Genco’s emergence from bankruptcy on July 9, 2014 and Genco’s adoption of fresh‑start reporting on that date, the pro forma statement of operations financial data assumes that fresh‑start reporting was also adopted effective January 1, 2014. As a result, financial data for periods prior to Genco’s adoption of fresh‑start reporting are not comparable to financial data of periods after that date (“Successor Company”).
Genco prepares its consolidated financial statements in accordance with U.S. GAAP and has consolidated Baltic Trading both prior to and after the merger. The Baltic Trading common shares that Genco acquired in the merger were recognized as a noncontrolling interest in the historical consolidated financial statements of Genco included in Genco’s Annual Report on Form 10‑K/A for the year ended December 31, 2014, filed with the SEC on April 30, 2015 and quarterly report on Form 10‑Q for the three months ended March 31, 2015 filed with the SEC on May 8, 2015. Under U.S. GAAP, changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are considered equity transactions (i.e. transactions with owners in their capacity as owners) with any difference between the amount by which the noncontrolling interest is adjusted and the fair value of the consideration paid attributed to the equity of the parent.
The unaudited pro forma financial information was prepared using the consolidation methodology used in Genco’s historical financials since Genco remains in control of Baltic Trading and, therefore, the historical basis of Genco’s assets and liabilities was not affected by the merger. The unaudited pro forma financial information has been developed from the audited consolidated financial statements and related notes of Genco included in the Annual Report on Form 10‑K/A of Genco for the fiscal year ended December 31, 2014, the unaudited interim consolidated financial statements and related notes of Genco included in the Quarterly Report on Form 10‑Q of Genco for the six months ended June 30, 2015 and the audited consolidated financial statements and related notes of Baltic Trading contained in the Annual Report on Form 10‑K of Baltic Trading for the fiscal year ended December 31, 2014, and should be read in conjunction with such historical financial statements and the managements’ discussion and analysis of Genco and Baltic Trading set forth in such historical reports, each of which is incorporated by reference into this report. The unaudited pro forma financial information is provided for illustrative purposes only and is based on available information and assumptions that Genco believes are reasonable. It does not purport to represent what the actual consolidated results of operations or the consolidated financial position of Genco would have been had the merger occurred on the dates indicated, nor is it necessarily indicative of future consolidated results of operations or consolidated financial position. The actual financial position and results of operations will differ, perhaps significantly, from the pro forma amounts reflected herein due to a variety of factors, including changes in operating results following the date of the unaudited pro forma financial information.
GENCO SHIPPING & TRADING LIMITED
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 2015
(Dollars In Thousands)
|
Successor
Company
As
Reported
|
Successor
Company
Pro forma
|
|||||||||||
|
June 30,
2015
|
Pro forma
Adjustments
|
June 30,
2015
|
||||||||||
|
Assets
|
||||||||||||
|
Current assets:
|
||||||||||||
|
Cash and cash equivalents
|
$
|
61,648
|
$
|
—
|
$
|
61,648
|
||||||
|
Restricted cash
|
9,750
|
9,750
|
||||||||||
|
Due from charterers, net of a reserve of $1,292
|
14,456
|
14,456
|
||||||||||
|
Prepaid expenses and other current assets
|
22,616
|
22,616
|
||||||||||
|
Total current assets
|
108,470
|
—
|
108,470
|
|||||||||
|
Noncurrent assets:
|
||||||||||||
|
Vessels, net of accumulated depreciation of $70,977
|
1,490,043
|
1,490,043
|
||||||||||
|
Deposits on vessels
|
19,926
|
19,926
|
||||||||||
|
Deferred drydock, net of accumulated amortization of $1,325
|
12,539
|
12,539
|
||||||||||
|
Deferred financing costs, net of accumulated amortization of $1,780
|
11,348
|
11,348
|
||||||||||
|
Fixed assets, net of accumulated depreciation and amortization of $236
|
1,017
|
1,017
|
||||||||||
|
Other noncurrent assets
|
514
|
514
|
||||||||||
|
Restricted cash
|
300
|
300
|
||||||||||
|
Investments
|
25,443
|
25,443
|
||||||||||
|
Total noncurrent assets
|
1,561,130
|
—
|
1,561,130
|
|||||||||
|
Total assets
|
$
|
1,669,600
|
$
|
—
|
$
|
1,669,600
|
||||||
|
Liabilities and Equity
|
||||||||||||
|
Current liabilities:
|
||||||||||||
|
Accounts payable and accrued expenses
|
$
|
33,132
|
$
|
—
|
$
|
33,132
|
||||||
|
Current portion of long‑term debt
|
44,792
|
44,792
|
||||||||||
|
Deferred revenue
|
1,398
|
1,398
|
||||||||||
|
Total current liabilities:
|
79,322
|
—
|
79,322
|
|||||||||
|
Noncurrent liabilities:
|
||||||||||||
|
Long‑term lease obligations
|
789
|
789
|
||||||||||
|
Long‑term debt
|
403,825
|
403,825
|
||||||||||
|
Total noncurrent liabilities
|
404,614
|
—
|
404,614
|
|||||||||
|
Total liabilities
|
483,936
|
—
|
483,936
|
|||||||||
|
Commitments and contingencies
|
||||||||||||
|
Equity:
|
||||||||||||
|
Genco Shipping & Trading Limited shareholders’ equity:
|
||||||||||||
|
Successor Company common stock, par value $0.01; 250,000,000 shares authorized; 61,610,503 shares issued and outstanding at June 30, 2015
|
615
|
113
|
(1)
|
728
|
||||||||
|
Successor Company additional paid‑in capital
|
1,274,588
|
197,775
|
(1)
|
1,472,363
|
||||||||
|
Accumulated other comprehensive loss
|
(26,360
|
)
|
(26,360
|
)
|
||||||||
|
Retained deficit
|
(261,067
|
)
|
(261,067
|
)
|
||||||||
|
Total Genco Shipping & Trading Limited shareholders’ equity
|
987,776
|
197,888
|
1,185,664
|
|||||||||
|
Noncontrolling interest
|
197,888
|
(197,888
|
)(1)
|
—
|
||||||||
|
Total equity
|
1,185,664
|
—
|
1,185,664
|
|||||||||
|
Total liabilities and equity
|
$
|
1,669,600
|
$
|
—
|
$
|
1,699,600
|
||||||
| (1) | To adjust for the issuance of approximately 11,287,132 shares of Genco common stock to Baltic Trading Limited shareholders (other than Genco, Baltic Trading, or any of their respective wholly owned subsidiaries) as consideration in the merger and the elimination of the noncontrolling interest in the Successor Company's consolidated balance sheet as of June 30, 2015 as an adjustment to additional paid-in capital. |
GENCO SHIPPING & TRADING LIMITED
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE
SIX MONTHS ENDED JUNE 30, 2015
(Dollars In Thousands)
|
Successor
Company
Historical
|
Successor
Company
Pro Forma
|
|||||||||||
|
For the Six
Months Ended
June 30, 2015
|
Pro forma
Adjustments
|
Six months
Ended
June 30, 2015
|
||||||||||
|
Revenues:
|
||||||||||||
|
Voyage revenues
|
$
|
67,381
|
$
|
67,381
|
||||||||
|
Service revenues
|
1,629
|
1,629
|
||||||||||
|
Total revenues
|
69,010
|
69,010
|
||||||||||
|
Operating expenses:
|
||||||||||||
|
Voyage expenses
|
8,137
|
8,137
|
||||||||||
|
Vessel operating expenses
|
58,599
|
58,599
|
||||||||||
|
General, administrative and management fees
|
46,815
|
46,815
|
||||||||||
|
Depreciation and amortization
|
38,809
|
38,809
|
||||||||||
|
Impairment of vessel assets
|
35,396
|
35,396
|
||||||||||
|
Loss on sale of vessels
|
1,210
|
1,210
|
||||||||||
|
Total operating expenses
|
188,966
|
188,966
|
||||||||||
|
Operating loss
|
(119,956
|
)
|
(119,956
|
)
|
||||||||
|
Other (expense) income:
|
||||||||||||
|
Other expense
|
(54
|
)
|
(54
|
)
|
||||||||
|
Interest income
|
49
|
49
|
||||||||||
|
Interest expense
|
(9,012
|
)
|
(9,012
|
)
|
||||||||
|
Other expense
|
(9,017
|
)
|
(9,017
|
)
|
||||||||
|
Loss before reorganization items, net
|
(128,973
|
)
|
(128,973
|
)
|
||||||||
|
Reorganization items, net
|
(833
|
)
|
833
|
(2)
|
—
|
|||||||
|
Loss before income taxes
|
(129,806
|
)
|
833
|
(128,973
|
)
|
|||||||
|
Income tax expense
|
(1,260
|
)
|
—
|
(1,260
|
)
|
|||||||
|
Net loss
|
(131,066
|
)
|
833
|
(130,233
|
)
|
|||||||
|
Less: Net loss attributable to noncontrolling interest
|
(52,293
|
)
|
52,293
|
(3)
|
—
|
|||||||
|
Net loss attributable to Genco Shipping &Trading
|
$
|
(78,773
|
)
|
$
|
(51,460
|
)
|
$
|
(130,233
|
)
|
|||
|
Net loss per share—basic
|
$
|
(1.30
|
)
|
$
|
N/
|
A
|
$
|
(1.82
|
)
|
|||
|
Net loss per share—diluted
|
$
|
(1.30
|
)
|
$
|
N/
|
A
|
$
|
(1.82
|
)
|
|||
|
Dividends declared per share
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
|
Weighted average common shares outstanding—Basic
|
60,459,145
|
N/
|
A
|
71,746,277
|
||||||||
|
Weighted average common shares outstanding—Diluted
|
60,459,145
|
N/
|
A
|
71,746,277
|
||||||||
| (2) | To eliminate $833 of costs recorded in the Successor Company’s condensed combined statement of operations for the six months ended June 30, 2015 directly associated with Genco’s post‑ bankruptcy activity and application of fresh‑start reporting, which are comprised of the following: |
|
Successor
Company
|
||||
|
For the Six Months
Ended
June 30, 2015
|
||||
|
Professional fees incurred
|
$
|
476
|
||
|
Trustee fees incurred
|
357
|
|||
|
Total reorganization items, net
|
$
|
833
|
||
| (3) | To eliminate the non-controlling interest recorded in the Successor Company’s condensed combined statement of operations for the six months ended June 30, 2015. |