• | our future operating or financial results; |
• | our continued borrowing availability under our debt agreements and compliance with the covenants contained therein; |
• | our ability to procure or have access to financing, our liquidity and the adequacy of cash flows for our operations; |
• | our ability to successfully employ our existing and newbuilding dry bulk vessels; |
• | changes in our operating expenses, including bunker prices, dry docking and insurance costs; |
• | our ability to fund future capital expenditures and investments in the construction, acquisition and refurbishment of our vessels (including the amount and nature thereof and the timing of completion thereof, the delivery and commencement of operations dates, expected downtime and lost revenue); |
• | planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including drydocking, surveys, upgrades and insurance costs; |
• | risks associated with vessel construction; |
• | our expectations regarding the availability of vessel acquisitions and our ability to complete acquisition transactions planned; |
• | vessel breakdowns and instances of off-hire; |
• | potential conflicts of interest involving members of our board of directors and senior management; |
• | potential liability from pending or future litigation; |
• | potential exposure or loss from investment in derivative instruments; |
• | general dry bulk shipping market trends, including fluctuations in charter hire rates and vessel values; |
• | changes in supply and demand in the dry bulk shipping industry, including the market for our vessels and the number of newbuildings under construction; |
• | the strength of world economies; |
• | stability of Europe and the Euro; |
• | fluctuations in interest rates and foreign exchange rates; |
• | changes in seaborne and other transportation; |
• | changes in governmental rules and regulations or actions taken by regulatory authorities; |
• | general domestic and international political conditions; |
• | potential disruption of shipping routes due to accidents or political events; and |
• | other factors discussed in "Item 3.D. Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2016 filed with the Commission on April 5, 2017. |
GOLDEN OCEAN GROUP LTD (registrant) | ||||
Date: | September 1, 2017 | By: | /s/ Per Heiberg | |
Name: Per Heiberg | ||||
Title: Principal Financial Officer | ||||
• | Newcastlemax, which are vessels with carrying capacities of between 200,000 dwt and 210,000 dwt; |
• | Capesize, which are vessels with carrying capacities of between 100,000 dwt and 200,000 dwt; |
• | Panamax, which are vessels with carrying capacities of between 65,000 and 100,000 dwt; and |
• | Ultramax, which are vessels with carrying capacities of between 55,000 and 65,000 dwt. |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Time charter revenues | 85,175 | 38,527 | 46,648 | ||||
Voyage charter revenues | 95,821 | 56,473 | 39,348 | ||||
Bareboat charter revenues | — | 2,387 | (2,387 | ) | |||
Other revenues | 661 | 2,862 | (2,201 | ) | |||
Total operating revenues | 181,657 | 100,249 | 81,408 |
• | an increase of $34.8 million primarily attributable to improved rates captured in index-linked time charters for ten of our Capesize vessels and short term time charters, |
• | an increase of $5.0 million following the delivery of 13 vessels purchased from Quintana and Hemen, |
• | an increase of $4.2 million attributable to five newbuilding vessels delivered after June 30, 2016, each of which traded on time charters during the first six months of 2017, |
• | an increase of $1.7 million attributable to five vessels delivered during the first six months of 2016 that traded for a longer period on time charters during the first six months of 2017, and |
• | an increase of $1.0 million attributable to lower amortization of charter party contracts recognized against time charter revenues as certain contracts were fully amortized prior to June 30, 2017. |
• | an increase of $14.7 million primarily attributable to improved freight rates for owned vessels on a same ship basis compared to the first six months of 2016, |
• | an increase of $6.7 million attributable to short term chartered-in vessels, |
• | an increase of $4.9 million attributable to five vessels delivered after June 30, 2016, each of which traded on spot charters during the first six months of 2017, |
• | an increase of $12.7 million attributable to five vessels delivered during the first six months of 2016 that traded for a longer period on spot charters and under improved market conditions during the first six months of 2017, and |
• | an increase of $0.3 million following delivery of two vessels purchased from Quintana and Hemen. |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Other operating income (expenses) | 2,993 | 330 | 2,663 |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Gain on sale of assets and amortization of deferred gains | 128 | 166 | (38 | ) |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Voyage expenses and commissions | 55,011 | 37,942 | 17,069 |
• | an increase of $6.4 million resulting from a higher number of owned vessels that traded in the spot market in the current period compared to the prior period, |
• | an increase of $3.8 million resulting from five newbuildings delivered after June 30,2016 that traded in the spot market in the current period, |
• | an increase of $5.4 million resulting from five newbuilding vessels delivered during the six months ended June 30, 2016, each of which traded in the spot market for a longer period during the six months ended June 30, 2017, |
• | an increase of $1.0 million attributable to a higher number of chartered-in vessels in the current period as compared to the prior period, and |
• | an increase of $0.5 million following the delivery of 13 vessels purchased from Quintana and Hemen. |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Ship operating expenses | 58,608 | 50,667 | 7,941 |
• | an increase of $3.7 million following the delivery of 13 vessels purchased from Quintana and Hemen in 2017, |
• | an increase of $3.4 million attributable to the delivery of five newbuilding vessels after June 30, 2016, |
• | an increase of $1.8 million attributable to vessels on a same ship basis compared to the first six months of 2016, and |
• | an increase of $1.1 million attributable to the full six months of operating expenses, for five newbuildings delivered in the first quarter of 2016. |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Charter hire expenses | 29,454 | 26,920 | 2,534 |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Administrative expenses | 6,128 | 6,886 | (758 | ) |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Provision for uncollectible receivables | — | 1,800 | (1,800 | ) |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Impairment loss on leased vessels | — | 985 | (985 | ) |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Depreciation | 35,984 | 30,794 | 5,190 |
• | an increase of $2.8 million attributable to the delivery of five newbuildings after June 30, 2016, |
• | an increase of $1.4 million following the delivery of 13 vessels purchased from Quintana and Hemen, and |
• | an increase of $1.0 million attributable to the full six months of depreciation for five newbuildings delivered in the first quarter of 2016. |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Interest income | 830 | 831 | (1 | ) |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Interest on fixed rate debt | 3,088 | 3,052 | 36 | ||||
Interest on floating rate debt | 17,015 | 12,580 | 4,435 | ||||
Interest on related party debt | 26 | — | 26 | ||||
Capital lease interest expense | 585 | 1,146 | (561 | ) | |||
Interest on other obligations | — | 10 | (10 | ) | |||
Commitment fees | 727 | 1,169 | (442 | ) | |||
Interest capitalized on newbuildings | — | (2,201 | ) | 2,201 | |||
Amortization of deferred charges | 691 | 643 | 48 | ||||
Amortization of fair value adjustments as a result of the Merger | 4,986 | 4,596 | 390 | ||||
27,118 | 20,995 | 6,123 |
• | an increase of $4.4 million on the floating rate debt, which is due to the following: |
◦ | an increase of $1.8 million primarily attributable to interest on increased accumulated deferred repayments for the period from July 1, 2016 to March 31, 2017 on four loan facilities, |
◦ | an increase of $1.5 million attributable to additional draw downs on the $425.0 million term loan facility since June, 30 2016, including increase due to deferred repayments on the facility for the period from July 1, 2016 to March 31, 2017, and |
◦ | an increase of $1.1 million on debt facilities assumed upon the Quintana vessel acquisition, |
• | a decrease of $2.2 million on interest capitalized on newbuildings as the remaining newbuildings are considered substantially completed, |
• | an increase of $0.4 million in respect of the $38.8 million fair value adjustment on the convertible bond recorded upon the Merger. |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Equity results of associated companies, including impairment | 243 | (2,952 | ) | 3,195 |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Impairment loss on marketable securities | — | (10,050 | ) | 10,050 |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Loss on derivatives | (3,796 | ) | (17,821 | ) | 14,025 |
Six Months Ended June 30, | Change | ||||||
(in thousands of $) | 2017 | 2016 | $ | ||||
Other financial items | 455 | (1,196 | ) | 1,651 |
• | a decrease of $0.8 million relating to an unrealized foreign exchange loss on a Euro denominated fixed deposit that existed as of June 30, 2016, |
• | a decrease of $0.2 million loss on the sale of marketable securities recorded in the six months ended June 30, 2016 and, |
• | a decrease of $1.0 million cash distribution from marketable securities recorded in the six months ended June 30, 2017. |
Six Months Ended June 30, | ||||
(in thousands of $) | 2017 | 2016 | ||
Net cash provided by operating activities | 10,290 | (36,447 | ) | |
Net cash used in investing activities | (137,822 | ) | (176,323 | ) |
Net cash provided by financing activities | 37,289 | 320,926 | ||
Net change in cash and cash equivalents | (90,243 | ) | 108,156 | |
Cash and cash equivalents at beginning of period | 212,942 | 102,617 | ||
Cash and cash equivalents at end of period | 122,699 | 210,773 |
Six months ended June 30, | ||||||||
2017 | 2016 | |||||||
Operating revenues | ||||||||
Time charter revenues | 85,175 | 38,527 | ||||||
Voyage charter revenues | 95,821 | 56,473 | ||||||
Bareboat charter revenues | — | 2,387 | ||||||
Other revenues | 661 | 2,862 | ||||||
Total operating revenues | 181,657 | 100,249 | ||||||
Gain on sale of assets and amortization of deferred gains | 128 | 166 | ||||||
Other operating income (expenses) | 2,993 | 330 | ||||||
Operating expenses | ||||||||
Voyage expenses and commission | 55,011 | 37,942 | ||||||
Ship operating expenses | 58,608 | 50,667 | ||||||
Charter hire expenses | 29,454 | 26,920 | ||||||
Administrative expenses | 6,128 | 6,886 | ||||||
Provision for uncollectible receivables | — | 1,800 | ||||||
Impairment loss on leased vessels | — | 985 | ||||||
Depreciation | 35,984 | 30,794 | ||||||
Total operating expenses | 185,185 | 155,994 | ||||||
Net operating income (loss) | (407 | ) | (55,249 | ) | ||||
Other income (expenses) | ||||||||
Interest income | 830 | 831 | ||||||
Interest expense | (27,118 | ) | (20,995 | ) | ||||
Equity results of associated companies, including impairment | 243 | (2,952 | ) | |||||
Impairment loss on marketable securities | — | (10,050 | ) | |||||
Gain (loss) on derivatives | (3,796 | ) | (17,821 | ) | ||||
Other financial items | 455 | (1,196 | ) | |||||
Net other income (expenses) | (29,386 | ) | (52,183 | ) | ||||
Net (loss) before income taxes | (29,793 | ) | (107,432 | ) | ||||
Income tax expense | 47 | 20 | ||||||
Net income (loss) | (29,840 | ) | (107,452 | ) | ||||
Per share information: | ||||||||
(Loss) per share: basic and diluted | $ | (0.26 | ) | $ | (1.27 | ) |
Six months ended June 30, | ||||||
2017 | 2016 | |||||
Comprehensive loss, net | ||||||
Net loss | (29,840 | ) | (107,452 | ) | ||
Net changes related to marketable securities | ||||||
Unrealized gain (loss) | 2,648 | (10,683 | ) | |||
Reclassification of loss to the statement of operations | — | 10,050 | ||||
Other comprehensive income (loss) | 2,648 | (633 | ) | |||
Comprehensive loss, net | (27,192 | ) | (108,085 | ) |
June 30, | December 31, | |||||
2017 | 2016 | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | 122,699 | 212,942 | ||||
Restricted cash | 4,361 | 315 | ||||
Marketable securities | 9,172 | 6,524 | ||||
Trade accounts receivable, net | 14,389 | 14,755 | ||||
Other receivables | 18,166 | 10,987 | ||||
Related party receivables | 3,470 | 1,927 | ||||
Derivative instruments receivable | 1,086 | 1,594 | ||||
Inventories | 26,017 | 17,953 | ||||
Prepaid expenses and accrued income | 6,896 | 6,524 | ||||
Voyages in progress | 9,027 | 3,998 | ||||
Favorable charter party contracts | 19,741 | 22,413 | ||||
Total current assets | 235,024 | 299,932 | ||||
Restricted cash | 64,168 | 53,797 | ||||
Vessels and equipment, net | 2,243,448 | 1,758,939 | ||||
Vessels under capital leases, net | 2,512 | 2,956 | ||||
Newbuildings | 126,506 | 180,562 | ||||
Favorable charter party contracts | 44,397 | 53,686 | ||||
Investments in associated companies | 5,211 | 4,224 | ||||
Other long term assets | 8,806 | 7,527 | ||||
Total assets | 2,730,072 | 2,361,623 | ||||
LIABILITIES AND EQUITY | ||||||
Current liabilities | ||||||
Current portion of obligations under capital leases | 5,043 | 4,858 | ||||
Derivative instruments payable | 4,539 | 1,990 | ||||
Related party payables | 906 | 1,387 | ||||
Trade accounts payables | 6,056 | 2,882 | ||||
Accrued expenses | 20,563 | 17,867 | ||||
Other current liabilities | 19,835 | 14,617 | ||||
Total current liabilities | 56,942 | 43,601 | ||||
Long-term liabilities | ||||||
Long-term debt | 1,287,498 | 1,058,418 | ||||
Obligations under capital leases | 10,125 | 12,673 | ||||
Other long term liabilities | 8,136 | 8,212 | ||||
Total liabilities | 1,362,701 | 1,122,904 | ||||
Commitments and contingencies | ||||||
Equity | ||||||
Share capital (129,522,992 shares. 2016: 105,965,192 shares. All shares are issued and outstanding at par value $0.05) | 6,477 | 5,299 | ||||
Additional paid in capital | 356,530 | 201,864 | ||||
Contributed capital surplus | 1,378,824 | 1,378,824 |
Accumulated other comprehensive income | 4,935 | 2,287 | ||||
Retained deficit | (379,395 | ) | (349,555 | ) | ||
Total equity | 1,367,371 | 1,238,719 | ||||
Total liabilities and equity | 2,730,072 | 2,361,623 |
Six months ended June 30, | ||||||
2017 | 2016 | |||||
Net cash used in operating activities | 10,290 | (36,447 | ) | |||
Investing activities | ||||||
Changes in restricted cash | (14,416 | ) | (21,037 | ) | ||
Additions to newbuildings and vessels | (122,662 | ) | (203,035 | ) | ||
Investment in associated companies | (1,000 | ) | (754 | ) | ||
Dividends received from associated company | 256 | 256 | ||||
Proceeds from sale of marketable securities | — | 125 | ||||
Proceeds from sale of vessels | — | 48,122 | ||||
Net cash used in investing activities | (137,822 | ) | (176,323 | ) | ||
Financing activities | ||||||
Proceeds from long-term debt | 50,000 | 142,200 | ||||
Repayment of long-term debt | (68,531 | ) | (22,219 | ) | ||
Repayment of capital leases | (2,363 | ) | (3,511 | ) | ||
Debt fees paid | — | (898 | ) | |||
Net proceeds from share issuance | 58,183 | 205,354 | ||||
Net cash provided by financing activities | 37,289 | 320,926 | ||||
Net change in cash and cash equivalents | (90,243 | ) | 108,156 | |||
Cash and cash equivalents at beginning of period | 212,942 | 102,617 | ||||
Cash and cash equivalents at end of period | 122,699 | 210,773 |
Six months ended June 30, | ||||||
2017 | 2016 | |||||
Number of shares outstanding | ||||||
Balance at beginning of period | 105,965,192 | 34,535,128 | ||||
Shares issued | 23,557,800 | 71,430,612 | ||||
Shares canceled | — | (548 | ) | |||
Balance at end of period | 129,522,992 | 105,965,192 | ||||
Share capital | ||||||
Balance at beginning of period | 5,299 | 1,727 | ||||
Shares issued | 1,178 | 3,570 | ||||
Balance at end of period | 6,477 | 5,297 | ||||
Additional paid in capital | ||||||
Balance at beginning of period | 201,864 | — | ||||
Shares issued | 154,378 | 201,784 | ||||
Stock option expense | 288 | — | ||||
Balance at end of period | 356,530 | 201,784 | ||||
Contributed capital surplus | ||||||
Balance at beginning of period | 1,378,824 | 1,378,766 | ||||
Restricted stock unit expense | — | 8 | ||||
Stock option expense | — | 35 | ||||
Balance at end of period | 1,378,824 | 1,378,809 | ||||
Other comprehensive loss | ||||||
Balance at beginning of period | 2,287 | — | ||||
Other comprehensive loss | 2,648 | (633 | ) | |||
Balance at end of period | 4,935 | (633 | ) | |||
Retained deficit | ||||||
Balance at beginning of period | (349,555 | ) | (221,844 | ) | ||
Net loss | (29,840 | ) | (107,452 | ) | ||
Balance at end of period | (379,395 | ) | (329,296 | ) | ||
Total equity | 1,367,371 | 1,255,961 |
(in thousands of $) | 2017 | 2016 | ||||
Net loss | (29,840 | ) | (107,452 | ) |
(in thousands) | 2017 | 2016 | ||||
Weighted average number of shares outstanding - basic | 114,134 | 84,405 | ||||
Impact of share options & restricted stock units | — | 2 | ||||
Weighted average number of shares outstanding - diluted | 114,134 | 84,407 |
(in thousands of $) | 2017 | ||
Balance at December 31, 2016 | 6,524 | ||
Unrealized gain | 2,648 | ||
Balance at June 30, 2017 | 9,172 |
(in thousands of $) | Cost | Accumulated Depreciation | Net Book Value | ||||||
Balance at December 31, 2016 | 1,873,795 | (114,856 | ) | 1,758,939 | |||||
Additions | 343,895 | — | |||||||
Disposals | — | — | |||||||
Transfer from newbuildings | 176,598 | — | |||||||
Depreciation | — | (35,984 | ) | ||||||
Balance at June 30, 2017 | 2,394,288 | (150,840 | ) | 2,243,448 |
(in thousands of $) | |||
Balance at December 31, 2016 | 180,562 | ||
Installments and newbuilding supervision fees | 122,542 | ||
Interest capitalized | — | ||
Transfers to Vessels and Equipment | (176,598 | ) | |
Balance at June 30, 2017 | 126,506 |
(in thousands of $) | |||
Balance at December 31, 2016 | 2,956 | ||
Depreciation | (444 | ) | |
Balance at June 30, 2017 | 2,512 |
(in thousands of $) | |||
2017 (remaining six months) | 2,996 | ||
2018 | 5,944 | ||
2019 | 5,944 | ||
2020 | 1,791 | ||
2021 | — | ||
Thereafter | — | ||
Minimum lease payments | 16,675 | ||
Less: imputed interest | (1,507 | ) | |
Present value of obligations under capital leases | 15,168 |
(in thousands of $) | Purchase option exercise date | Purchase option amount | |||
Golden Eclipse | December 2017 | 38,000 | |||
Golden Eclipse | December 2018 | 36,250 | |||
Golden Eclipse | December 2019 | 33,550 |
(% of ownership) | 2017 | 2016 | ||||
United Freight Carriers LLC ("UFC") | 50.00 | % | 50.00 | % | ||
Golden Opus Inc. ("G. Opus") | 50.00 | % | 50.00 | % | ||
Seateam Management Pte. Ltd ("Seateam") | 22.19 | % | 22.19 | % | ||
Capesize Chartering Ltd ("CCL") | 25.00 | % | 25.00 | % |
(in thousands of $) | CCL | UFC | G.Opus | Seateam | Total | ||||||||||
At December 31, 2016 | — | 621 | 2,872 | 731 | 4,224 | ||||||||||
Dividend received from associated companies | — | — | — | (256 | ) | (256 | ) | ||||||||
Purchase of additional capital | — | — | 1,000 | — | 1,000 | ||||||||||
Share of (loss) income | — | (58 | ) | 203 | 98 | 243 | |||||||||
At June 30, 2017 | — | 563 | 4,075 | 573 | 5,211 |
(in thousands of $) | Other long term asset | Prepaid charter hire expenses | Deferred tax asset | Total | ||||||||
Balance at December 31, 2016 | 2,000 | 5,184 | 343 | 7,527 | ||||||||
Repayments | (250 | ) | — | — | (250 | ) | ||||||
Transfer to current assets | (250 | ) | — | — | (250 | ) | ||||||
Additions credited to income | — | 1,836 | (57 | ) | 1,779 | |||||||
Balance at June 30, 2017 | 1,500 | 7,020 | 286 | 8,806 |
(in thousands of $) | 2017 | 2016 | ||||
$33.93 million term loan | 26,013 | 28,275 | ||||
$82.5 million term loan | 39,433 | 44,367 | ||||
$284.0 million term loan | 242,523 | 258,538 | ||||
$420.0 million term loan | 367,909 | 388,545 | ||||
$425.0 million term loan | 206,545 | 166,743 | ||||
$109.2 million term loan | 88,140 | — | ||||
$73.4 million term loan | 53,448 | — | ||||
$80.2 million term loan | 63,360 | — | ||||
U.S. dollar denominated floating rate debt | 1,087,371 | 886,468 | ||||
U.S. dollar denominated fixed rate debt | 182,286 | 177,300 | ||||
Related party seller's credit | 22,500 | — | ||||
Deferred charges | (4,659 | ) | (5,350 | ) | ||
Total debt | 1,287,498 | 1,058,418 | ||||
Less: current portion | — | — | ||||
1,287,498 | 1,058,418 |
(in thousands of $) | Floating rate debt | Fixed rate debt | Related party seller's credit | Deferred charges | Total | ||||||||||
Balance at December 31, 2016 | 886,468 | 177,300 | — | (5,350 | ) | 1,058,418 | |||||||||
Loan repayments | (68,531 | ) | — | — | — | (68,531 | ) | ||||||||
Loan draw downs | 50,000 | — | — | — | 50,000 | ||||||||||
Debt assumed as a result of the Acquisition | 219,434 | — | 22,500 | — | 241,934 | ||||||||||
Amortization of purchase price adjustment | — | 4,986 | — | — | 4,986 | ||||||||||
Capitalized financing fees and expenses | — | — | — | — | — | ||||||||||
Amortization of capitalized fees and expenses | — | — | — | 691 | 691 | ||||||||||
Balance at June 30, 2017 | 1,087,371 | 182,286 | 22,500 | (4,659 | ) | 1,287,498 |
• | the installments that had fallen due and payable under the agreements during that period had not such installments been suspended in accordance; over |
• | all regular installments that had fallen due and payable under all existing credit facilities during that period had not such installments been suspended. |
(in thousands of $) | |||||
2017 (remaining six months) | — | ||||
2018 | 78,038 | ||||
2019 | 561,810 | ||||
2020 | 379,338 | ||||
2021 | 269,085 | ||||
Thereafter | 21,600 | ||||
1,309,871 | |||||
Fair value purchase price adjustment of convertible bond debt | (17,714 | ) | |||
1,292,157 |
(in thousands of $) | 2017 | 2016 | ||||
Interest rate swaps | 908 | 1,502 | ||||
Currency swaps | 143 | 92 | ||||
Bunker derivatives | 35 | — | ||||
Asset - Derivatives fair value | 1,086 | 1,594 |
(in thousands of $) | 2017 | 2016 | ||||
Interest rate swaps | 4,438 | 1,777 | ||||
Currency swaps | 41 | 213 | ||||
Bunker derivatives | 60 | — | ||||
Liability - Derivatives fair value | 4,539 | 1,990 |
(in thousands of $) | 2017 | 2016 | |||||
Interest rate swaps | Interest expense | 749 | 991 | ||||
Unrealized fair value loss | 3,254 | 18,721 | |||||
Foreign currency swaps | Unrealized fair value gain | (80 | ) | (974 | ) | ||
Realized gain | (126 | ) | (35 | ) | |||
Forward freight agreements | Realized loss | (7 | ) | 38 | |||
Bunker derivatives | Realized loss (gain) | (3 | ) | 624 | |||
Unrealized fair value gain | 9 | (1,544 | ) | ||||
3,796 | 17,821 |
(in thousands of $) | 2017 | 2016 | ||||
Contractual charter hire payments | 15,826 | 15,372 | ||||
Expensed charter hire payments | 13,990 | 12,055 | ||||
Prepaid charter hire payments (Note 11) | 1,836 | 3,317 |
2017 | 2016 | |||||||
Number of dry bulk vessels managed | 14 | 14 | ||||||
Daily commercial management fee per dry bulk vessel | $ | 125 | $ | 125 | ||||
Number of container vessels managed | 9 | 9 | ||||||
Daily commercial management fee per container vessel | $ | 75 | $ | 75 |
2017 | 2016 | |||||||
Number of dry bulk vessels managed | 22 | 21 | ||||||
Daily commercial management fee per dry bulk vessel | $ | 125 | $ | 125 |
(in thousands of $) | 2017 | 2016 | ||||||
Golden Opus Inc | 482 | 266 | ||||||
Frontline Management (Bermuda) Ltd | 1,796 | 3,765 | ||||||
Ship Finance International Limited | 13,990 | 12,055 | ||||||
Seateam Management Pte Ltd | 1,407 | 954 | ||||||
Seatankers Management Co., Ltd | 1,945 | 700 | ||||||
Capesize Chartering Ltd | 20 | 35 |
(in thousands of $) | 2017 | 2016 | ||||||
Ship Finance International Limited | 370 | 404 | ||||||
Seatankers Management Co Ltd | 478 | 474 | ||||||
United Freight Carriers LLC | — | 150 | ||||||
Capesize Chartering Ltd | 2,794 | 330 |
(in thousands of $) | 2017 | 2016 | ||||
Frontline Ltd. | 2,356 | 1,523 | ||||
Ship Finance International Limited | 369 | 2 | ||||
United Freight Carriers | — | — | ||||
Seatankers Management Co Ltd | 471 | 77 | ||||
Golden Opus Inc | 89 | 3 | ||||
Capesize Chartering Ltd | 185 | 322 | ||||
3,470 | 1,927 |
(in thousands of $) | 2017 | 2016 | |||||
Golden Opus Inc | — | 73 | |||||
Frontline Ltd. | 906 | 1,044 | |||||
Seateam Management Pte Ltd | — | — | — | ||||
Seatankers Management Co Ltd | — | 270 | |||||
Capesize Chartering Ltd | — | — | |||||
Sterna Finance Ltd | 22,500 | — | |||||
23,406 | 1,387 |
2017 | 2017 | 2016 | 2016 | ||||||||||
(in thousands of $) | Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||
Assets | |||||||||||||
Cash and cash equivalents | 122,699 | 122,699 | 212,942 | 212,942 | |||||||||
Restricted cash | 68,529 | 68,529 | 54,112 | 54,112 | |||||||||
Liabilities | |||||||||||||
Long term debt - floating | 1,087,371 | 1,087,371 | 886,468 | 886,468 | |||||||||
Long term debt - convertible bond | 179,914 | 182,286 | 162,122 | 177,300 | |||||||||
Long term debt - related party seller's credit | 22,500 | 22,500 | — | — |
(in thousands of $) | 2017 Fair Value | Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||||
Cash and cash equivalents | 122,699 | 122,699 | — | — | |||||||||
Restricted cash | 68,529 | 68,529 | — | — | |||||||||
Liabilities | |||||||||||||
Long term debt - floating | 1,087,371 | — | 1,087,371 | — | |||||||||
Long term debt - convertible bond | 179,914 | — | 179,914 | — | |||||||||
Long term debt - related party seller's credit | 22,500 | — | 22,500 | — |
(in thousands of $) | 2016 Fair Value | Level 1 | Level 2 | Level 3 | |||||||||
Assets | |||||||||||||
Cash and cash equivalents | 212,942 | 212,942 | — | — | |||||||||
Restricted cash | 54,112 | 54,112 | — | — | |||||||||
Liabilities | |||||||||||||
Long term debt - floating | 886,468 | — | 886,468 | — | |||||||||
Long term debt - convertible bond | 162,122 | — | 162,122 | — |
• | The carrying value of cash and cash equivalents, which are highly liquid, approximate fair value. |
• | Restricted cash and investments – the balances relate entirely to restricted cash and the carrying values in the balance sheet approximate their fair value. |
• | Floating rate debt - the carrying value in the balance sheet approximates the fair value since it bears a variable interest rate, which is reset on a quarterly basis. |
• | Convertible bond – quoted market prices are not available, however the bonds are traded "over the counter" and the fair value of bonds is based on the market price on offer at the balance sheet date. |
• | The investment in Golden Opus Inc was measured at fair value; the fair value was based on level three inputs, the expected market values of the underlying assets and liabilities. |
• | The Golden Lyderhorn, a vessel held under capital lease was measured at fair value; the fair value was based on level three inputs, was determined using discounted expected future cash flows for the vessel. |
• | The other long term asset acquired on completion of the Merger was measured at fair value; the fair value was based on level three inputs, the recoverable principal amount from the counterparty. |
(in thousands of $) | |||
2017 (six months to December 31) | 17,451 | ||
2018 | 37,006 | ||
2019 | 35,367 | ||
2020 | 35,472 | ||
2021 | 35,066 | ||
Thereafter | 169,205 | ||
329,567 |
Document And Entity Information |
6 Months Ended |
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Jun. 30, 2017
shares
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Document and Entity Information [Abstract] | |
Entity Registrant Name | Golden Ocean Group Ltd |
Entity Central Index Key | 0001029145 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Accelerated Filer |
Document Type | 6-K |
Document Period End Date | Jun. 30, 2017 |
Document Fiscal Year Focus | 2017 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 529,728,928 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
6 Months Ended | |
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Jun. 30, 2017 |
Jun. 30, 2016 |
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Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (29,840) | $ (107,452) |
Unrealized gain (loss) | 2,648 | (10,683) |
Reclassification of loss to the statement of operations | 0 | 10,050 |
Other comprehensive income (loss) | 2,648 | (633) |
Comprehensive loss, net | $ (27,192) | $ (108,085) |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2017 |
Dec. 31, 2016 |
Jun. 30, 2016 |
Jan. 08, 2016 |
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Equity | ||||
Share capital, shares outstanding (in shares) | 129,522,992 | 105,965,192 | 129,522,992 | |
Share capital, par value (in dollars per share) | $ 0.05 | $ 0.05 | $ 0.01 |
INTERIM FINANCIAL DATA |
6 Months Ended |
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Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
INTERIM FINANCIAL DATA | INTERIM FINANCIAL DATA The unaudited interim condensed consolidated financial statements of Golden Ocean Group Ltd. (“Golden Ocean,” the “Company,” "we," or "our") have been prepared on the same basis as the Company’s audited consolidated financial statements and, in the opinion of management, include all material adjustments, consisting only of normal recurring adjustments considered necessary for a fair statement of the Company's consolidated financial statements, in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The unaudited interim condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and notes included in the Annual Report on Form 20-F for the year ended December 31, 2016, filed with the Securities and Exchange Commission on April 5, 2017. The unaudited interim condensed consolidated financial statements do not include all the disclosures required in an Annual Report on Form 20-F. The results of operations for the interim period ended June 30, 2017 are not necessarily indicative of the results for the year ending December 31, 2017. In the first quarter of 2017 the Company entered into agreements to acquire 16 modern dry bulk vessels in transactions where the Company would issue in aggregate 17.8 million consideration shares and assume debt of $285.2 million (the "Acquisition"). Of the 16 acquired vessels, 14 were acquired from subsidiaries of Quintana Shipping Ltd. ("Quintana") and two ice-class Panamax vessels acquired from affiliates of Hemen Holding Ltd. ("Hemen"), the Company's largest shareholder. The vessels acquired from Quintana consist of one Newcastlemax, five Capesizes and eight Panamaxes, mainly built in Japan and Korea. 11 of the 14 Quintana vessels were delivered to the Company in the second quarter of 2017. For the two 2017-built ice-class Panamax vessels acquired from affiliates of Hemen, the Company agreed a consideration of 3.3 million shares of the Company and a seller's credit of $22.5 million that matures in June 2019. The vessels were delivered to the Company in June 2017. As of June 30, 2017, the Company capitalized $343.3 million under vessel and equipment related to the acquisitions of 13 vessels. The consideration for the acquired vessels primarily comprised 14,950,000 shares of the Company, which were valued based on the Company's share price at the time of each vessel's delivery and $219.4 million in assumed debt financing. Reverse stock split On August 1, 2016, the Company effected a one-for-five reverse stock split. All share and per share information has been retroactively adjusted to reflect the reverse stock split. The common share par value was adjusted as a result of the reverse stock split as disclosed in these unaudited interim condensed consolidated financial statements. |
ACCOUNTING POLCIES |
6 Months Ended |
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Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | ACCOUNTING POLICIES Basis of accounting These unaudited interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. These unaudited interim condensed consolidated financial statements include the assets and liabilities of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated on consolidation. Accounting Policies Preparation of these unaudited interim condensed consolidated financial statements requires management to make judgments and estimates. Some accounting policies have a significant impact on amounts reported in these unaudited interim condensed consolidated financial statements. Our accounting policies have not changed from those reported in our 2016 Annual Report on Form 20-F. Net income as a result of the revenue sharing agreement for the Capesize vessels is presented as other operating income (expenses). Comparative numbers have been revised to conform with the current presentation. |
RECENTLY ISSUED ACCOUNTING STANDARDS |
6 Months Ended |
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Jun. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS | RECENTLY ISSUED ACCOUNTING STANDARDS Accounting Standards Updates, not yet adopted In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under US GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU No. 2014-09 along with related amendments ASU Nos. 2016-20, 2016-12, 2016-10, 2016-08, and 2015-14 comprise ASC Topic 606, Revenue from Contracts with Customers, and provide guidance that is applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. The update establishes a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing US GAAP. The new standard and its related updates are effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2017. On the effective date, the Company will apply the new guidance retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The Company is in the process of considering the impact of the standard on its consolidated financial statements. For vessels operating on voyage charters, we expect to continue recognizing revenue over time. The time period over which revenue will be recognized is still being determined and, depending on the final conclusion, each period’s voyage results could differ materially from the same period’s voyage results recognized based on the present revenue recognition guidance. However, the total voyage results recognized over all periods would not change. The adoption of the standard is not expected to have a material impact on other income, primarily income earned from the commercial management of related party vessels. In January 2016, the FASB issued ASU 2016-01 Financial instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement for to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments in this update will affect us for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We are currently considering the impact of these amendments on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842), which requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase in required disclosures. Management is analyzing the impact of the adoption of this guidance on the Company’s consolidated financial statements, including assessing changes that might be necessary to information technology systems, processes and internal controls to capture new data and address changes in financial reporting. Management expects that we will recognize increases in reported amounts for property, plant and equipment and related lease liabilities upon adoption of the new standard. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The guidance will be effective January 1, 2020, with early adoption permitted. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of cash flows (Topic 230): Classification of certain cash receipts and cash payments. This ASU addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The amendments in this Update are effective for the Company for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this Update should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of cash flows (Topic 230): Restricted Cash. The new standard requires that the statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The amendments in this Update are effective for the Company for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in this Update should be applied using a retrospective transition method to each period presented. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures. In December 2016, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this Update are effective for the Company for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for reporting periods for which financial statements have not yet been issued. The amendments in this Update should be applied prospectively to an award modified on or after the adoption date. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures. Accounting Standards Updates, recently adopted In July 2015, the FASB issued ASU 2015-11-Inventory (Topic 330)-Simplifying the Measurement of Inventory, which applies to inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure inventory within the scope of this update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this update more closely align the measurement of inventory in GAAP with the measurement of inventory in IFRS. The adoption of ASU 2015-11 has not had a material impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-07, Investments-Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. The update eliminates the requirement that an investor retrospectively apply equity method accounting when an investment that it had accounted for by another method initially qualifies for use of the equity method. The adoption of ASU 2016-07 has not had a material impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update simplifies the accounting for share based payment transactions. The adoption of ASU 2016-09 has not had a material impact on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017- 01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update introduces a screen to determine when an integrated set of assets and activities does not constitute a business. As under the screening mechanisms of the update, future transactions in relation to an integrated set of assets and activities are more likely to qualify as asset acquisitions as opposed to business combinations. The adoption of ASU 2017-01 has not had a material impact on our consolidated financial statements and related disclosures. |
EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE The components of the numerator and the denominator in the calculation of basic and diluted earnings per share for the six months ended June 30, 2017 and 2016 are as follows:
The exercise of vested share options using the treasury stock method was anti-dilutive as of June 30, 2017 and 2016, as the Company reports a net loss for the periods then ended. Therefore, as of June 30, 2017 and 2016, 84,000 and 88,000 shares, respectively, were excluded from the denominator in each calculation. The conversion of the convertible bonds using the if-converted method was anti-dilutive as of June 30, 2017 and 2016, as the Company reports a net loss for the periods then ended. Therefore, as of June 30, 2017 and 2016, 2,268,860 and 2,268,860 shares, respectively, were excluded from the denominator in each calculation. In July 2017, the Company issued 2,850,000 compensation shares to Quintana following delivery of the remaining three purchased vessels. The issuance of shares that occurred after June 30, 2017 would have changed materially the number of common shares outstanding at June 30, 2017, had this issuance occurred prior to the end of the period. On August 1, 2016, the Company completed a 1-for-5 reverse share split of the Company's common shares, whereby every five of the Company's issued and outstanding common shares with par value $0.01 per share were automatically combined into one issued and outstanding common share with par value $0.05 per share. The weighted average number of shares outstanding, the number of restricted stock units and the number of shares of the anti-dilutive instruments were retroactively adjusted in the calculations of the basic and diluted earnings per share. |
SEGMENT INFORMATION |
6 Months Ended |
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Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The chief operating decision maker, or the CODM, measures performance based on the overall return to shareholders based on consolidated net income. The CODM does not review a measure of operating result at a lower level than the consolidated group and the Company only has one reportable segment. The vessels operate worldwide and therefore management does not evaluate performance by geographical region as this information is not meaningful. |
MARKETABLE SECURITIES |
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Marketable Securities [Abstract] | |||||||||||||||||||||||||
MARKETABLE SECURITIES | MARKETABLE SECURITIES Our marketable securities are equity securities considered to be available-for-sale securities.
Our marketable securities comprise of an investment in a U.S. listed company and an investment in a company listed on the Norwegian 'Over the Counter' market. The fair value of the investment in the U.S. listed company as at June 30, 2017 and December 31, 2016 was $9.2 million and $6.5 million, respectively. During the period ended June 30, 2017, the Company recorded an unrealized gain of $2.6 million on this investment. The fair value of the investment in a company listed on the Norwegian 'Over the Counter' market as at June 30, 2017 and December 31, 2016 was nil. The unrealized gain is presented as such in the statement of other comprehensive income. The cost of available for sale securities is calculated on an average cost basis. |
VESSELS AND EQUIPMENT, NET |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VESSELS AND EQUIPMENT, NET | VESSELS AND EQUIPMENT, NET
At June 30, 2017, we owned three Newcastlemaxes, 27 Capesizes, 12 ice-class Panamaxes, 13 Panamaxes and eight Ultramaxes (At December 31, 2016: two Newcastlemaxes, 20 Capesizes, ten ice-class Panamaxes, eight Panamaxes and six Ultramaxes). In January 2017, the Company took delivery of Golden Virgo and Golden Libra, both Ultramax newbuildings. The total construction cost transferred from newbuildings was $48.5 million. In February 2017, the Company took delivery of Golden Surabaya and Golden Savannah, both Capesize newbuildings. The total construction cost transferred from newbuildings was $128.1 million. In March 2017, the Company entered into an agreement to acquire 14 dry bulk vessels from Quintana and two ice -class Panamaxes from Hemen. The vessel acquisition was financed by issuance of common share capital and assumption of debt. Pursuant to the agreements, between April 2017 and June 2017, the Company took delivery of one Newcastlemax, five Capesizes, two ice-class Panamaxes and five Panamaxes at a total cost of $343.3 million. Total depreciation expense was $36.0 million for the period ended June 30, 2017. |
NEWBUILDINGS |
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Newbuildings [Abstract] | |||||||||||||||||||||||||||||||||
Newbuildings | NEWBUILDINGS The carrying value of newbuildings represents the accumulated costs we have paid by way of purchase installments and other capital expenditures together with capitalized loan interest. The carrying value of newbuildings at June 30, 2017 relates to six Capesize (December 31, 2016: eight Capesize and two Ultramax newbuildings).
In January 2017, the Company took delivery of Golden Virgo and Golden Libra, both Ultramax newbuildings. Upon delivery, aggregate final installments were paid, including agreed extras of $31.3 million. In February 2017, the Company took delivery of Golden Surabaya and Golden Savannah, both Capesize newbuildings. Upon delivery, aggregate final installments were paid, including agreed extras of $67.7 million. During the six months ended June 30, 2017, we paid and capitalized in aggregate pre-delivery installments of $19.5 million and other capitalized costs of $4.0 million. |
VESSELS HELD UNDER CAPITAL LEASES |
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Vessels Under Capital Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VESSELS HELD UNDER CAPITAL LEASES | VESSELS UNDER CAPITAL LEASES
The outstanding obligations under capital leases at June 30, 2017 are payable as follows:
As of June 30, 2017, we held one vessel under capital lease (December 31, 2016: one vessel). The lease is for an initial term of 10 years. The remaining period on the lease at June 30, 2017 is three years (December 31, 2016: four years). As of June 30, 2017, we had the following purchase option for the vessel:
Our lease obligation is secured by the lessor's title to the leased asset and by a guarantee issued to the lessor. |
INVESTMENTS IN ASSOCIATED COMPANIES |
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Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS IN ASSOCIATED COMPANIES | INVESTMENTS IN ASSOCIATED COMPANIES As at June 30, 2017 and December 31, 2016, the Company had the following participation in investments that are recorded using the equity method:
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OTHER LONG TERM ASSETS |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LONG TERM ASSETS | OTHER LONG TERM ASSETS
The other long term asset is a seller's credit receivable that is due on December 31, 2019. The amount owed bears interest of 1%. During the six months ended June 30, 2017, the Company recognized interest income of $10.7 thousand. In the third quarter of 2015, eight vessels were sold and leased back from Ship Finance International Limited ("Ship Finance") for a period of ten years. The daily time charter rate is $17,600 during the first seven years and $14,900 in the remaining three years, of which $7,000 is for operating expenses (including dry docking costs). We have a purchase option of $112 million en-bloc after ten years and, if such option is not exercised, Ship Finance will have the option to extend the charters by three years at $14,900 per day. Since the daily time charter rate is not constant over the extended lease term, we have straight lined the total expense over the term, and an amount of $1.8 million was credited to charter hire expenses for the six months ended June 30, 2017 (six months ended June 30, 2016: $3.3 million) with the corresponding asset presented as part of other long term asset. We will begin to amortize this asset when the daily charter hire rate reduces in the third quarter of 2022. |
DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Debt at June 30, 2017 and December 31, 2016 is summarized as follows:
Movements during the six months ended June 30, 2017 are summarized as follows:
Loan Amendments and Cash Sweep Mechanism In February 2016, the Company agreed with its lenders to amend certain of the terms on the $420.0 million term loan facility, $425.0 million senior secured post-delivery term facility,$33.93 million credit facility, $82.5 million credit facility and the $284.0 million credit facility, or the Loan Facilities. For the period from April 1, 2016 to September 30, 2018, there will be no repayments on these facilities, subject to a cash sweep mechanism as described below. The minimum value covenant is set at 100% with a subsequent increase to 125% or 135% (depending on the facility) on October 1, 2018 and the market adjusted equity ratio is waived up until the same date. The Company has also agreed that for the nine (six as of the date of this report) remaining newbuilding contracts where the Company has financing in the $425.0 million term loan facility, there will be a fixed draw down of $25.0 million per vessel subject to compliance with the minimum value covenant of 100% for the period. The margins on the loans are unchanged, however, the Company will pay an increased margin of 4.25% for the deferred repayments under the loan facilities. The Company will resume repayment of each loan on October 1, 2018 based on the repayment model as if October 1, 2018 was April 1, 2016 regardless of any repayment made during the period in accordance with the cash sweep mechanism described below and without affecting the final maturity date. A cash sweep mechanism is in place whereby the Company will pay down on the deferred repayment amount should the cash position improve. The Company will report and furnish our lenders at the end of each first and third quarter a calculation of free projected cash anticipated at September 30, 2018, or the Free Projected Cash. All Free Projected Cash above a threshold of $25 million will be used to repay the loans on the cash sweep repayment date, which is when the compliance certificates fall due. The first cash sweep repayment date was due at the end of the third quarter of 2016. The cash sweep that the Company will pay to each lender will be based on a relative value of the deferred amount in each facility as calculated as per end of that half year period equal to:
Existing credit facilities include the Loan Facilities and the $22 million senior secured term loan agreement made between Golden Opus Inc and the Company as guarantor of 50% of the facility. Any repayments made under the cash sweep will be applied against balloon payments due on the loans. Due to the operation of the cash sweep mechanism, the Company will not be permitted to make any cash dividend payments without the prior approval of the Company's lenders in the period to September 30, 2018. The impact of these loan amendments was to defer $113.9 million of loan repayments due in the period from April, 1 2016 to September 30, 2018 and to postpone repayments on future drawings on the delivery of newbuilding vessels and Golden Opus Inc in this period. In the six months ended June 30, 2017, the Company drew down $50.0 million from its $425 million term loan facility in connection with the two Capesize newbuildings delivered during the period and repaid floating rate debt of $54.0 million in accumulated deferred debt repayments through the cash sweep mechanism set in place as part of the amended terms under the loan agreements entered into in the first quarter 2016. As of June 30, 2017, the deferred repayments under the loan facilities amounted to $14.5 million. Based on the improved cash position and amended terms on the outstanding newbuildings, but subject to market development and working capital changes in the third quarter of 2017, the Company expects to prepay a significant part of the deferred debt repayments during the fourth quarter of 2017 through the cash sweep mechanism. The movement of $5.0 million on the U.S dollar denominated fixed rate debt in 2017 represents the amortization of purchase price adjustments arising from the Merger. The Company has recorded deferred charges of $4.7 million at June 30, 2017 as a direct deduction from the carrying amount of the related debt. During the six months ended June 30, 2017, $0.7 million amortization in total was recognized. The Company presents the amortization expense of deferred charges under interest expense. Comparative numbers have been revised to conform with current presentation. New loan facilities In the six months ended June 30, 2017, as part of the Acquisition, the Company assumed debt of $219.4 million ($109.2 million term loan, $73.4 million term loan and $80.2 million term loan) in relation to 11 delivered vessels from Quintana and $22.5 million seller's credits in relation to two delivered vessels from Hemen. According to the loan agreements entered into with the lenders with respect to the acquired vessels from Quintana, the Company down paid $14.5 million of the debt, covering three regular quarterly repayments, in exchange for no mandatory debt repayment until July 2019. In the period prior to July 2019, a cash sweep mechanism is put in place whereby if certain conditions are met, the Company will pay down on the deferred repayment amount of $40.6 million. The cash sweep is calculated semi-annually with first potential payment following the end of the first quarter of 2018. The average interest rate of the debt in connection with the acquisition of the vessels from Quintana is LIBOR plus 3.1% margin. Ordinary debt repayments, following the end of the waiver period in July 2019, will amount to $5.8 million per quarter. Pursuant to the loan agreements, our wholly-owned non-recourse subsidiary which indirectly owns the vessels acquired from Quintana is prohibited from paying dividends to the parent company. During the waiver period through June 2019, the Company will be required under the loan agreements to satisfy financial covenants including $10 million in minimum cash and 105% minimum asset value. Following this waiver period, the financial covenants under these loans will include 25% market adjusted equity, $10 million in minimum cash and 125% to 135% minimum asset value. The outstanding debt at June 30, 2017 is repayable as follows;
Assets pledged As of June 30, 2017, 61 vessels (December 31, 2016: forty-five vessels) with an aggregate carrying value of $2,193.8 million (December 31, 2016: $1,733.2 million) were pledged as security for our floating rate debt. |
DERIVATIVE INSTRUMENTS PAYABLE AND RECEIVABLE |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS PAYABLE AND RECEIVABLE | DERIVATIVE INSTRUMENTS PAYABLE AND RECEIVABLE Our derivative instruments are not designated as hedging instruments and the positions at June 30, 2017 and December 31, 2016 is summarized as follows:
During the six months ended June 30, 2017 and June 30, 2016, the following amounts were recognized in the consolidated statement of operations:
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SHARE CAPITAL |
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Equity [Abstract] | |
SHARE CAPITAL | SHARE CAPITAL On March 15, 2017, we completed an equity offering at NOK 60 per share (equaling $6.97 at a NOK/USD exchange rate of 8.6078), raising gross proceeds of NOK516.5 million (approximately $60.0 million) through the issuance of 8,607,800 shares. In connection with the 13 vessel deliveries of the Acquisition, we issued 14,950,000 consideration shares in the first six months of 2017. Following the share issuances, 129,522,992 ordinary shares were outstanding as of June 30, 2017 (December 31, 2016: 105,965,192 ordinary shares), each with a par value of $0.05. Following the delivery of the remaining three vessels of the Acquisition and issuance of 2,850,000 consideration shares to Quintana in July 2017, we have 132,372,992 issued common shares as of the date of this report, each with a par value of $0.05. |
RELATED PARTY TRANSACTIONS |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Ship Finance International Limited Pursuant to the charter party agreements for the eight Capesize vessels with Ship Finance, the daily time charter rate fluctuates during the charter term and the contractual hire payments are straight-lined over the lease term. During the six months ended June 30, 2017 and June 30, 2016, the following amounts were paid and recorded:
We are the commercial manager for vessels owned and operated by Ship Finance. Pursuant to the management agreements, the number of vessels managed and the daily commercial management fee during the six months ended June 30, 2017 and June 30, 2016 were as follows:
Seatankers Management Co, Ltd We are the commercial manager for vessels owned and operated by Seatankers. Pursuant to the management agreements, the number of vessels managed and the daily commercial management fee during the six months ended June 30, 2017 and June 30, 2016 were as follows:
United Freight Carriers LLC Pursuant to the LLC agreement, we received nil in the six months ended June 30, 2017 for management and administration services provided to UFC (six months ended June 30, 2016: $ 0.2 million). Capesize Chartering Ltd In the six months ended June 30, 2017, we recorded revenue sharing of $2.8 million pursuant to the revenue sharing agreement (six months ended June 30, 2016: $0.3 million). Management Agreements Technical Supervision Services The Company receives technical supervision services from Frontline Ltd. Pursuant to the terms of the agreement, Frontline Ltd. receives a management fee of $30,555 per vessel in 2017 ($31,875 per vessel in 2016). This fee is subject to annual review. Frontline Ltd. also manages our newbuilding supervision and charges us for the costs incurred in relation to the supervision. Ship Management The ship management of the Company's vessels is provided by external ship managers, except for 18 vessels (December 31, 2016: 15 vessels), which is provided by Seateam Management Pte. Ltd., a majority owned subsidiary of Frontline Ltd. Other Management Services We aim to operate efficiently through utilizing competence from Frontline Ltd. or other companies with the same main shareholder and these costs are allocated based on a cost plus mark-up model. Specifically, we receive certain services from Frontline Ltd. in relation to Sarbanes Oxley Act compliance. We currently pay a fee of $20,000 (June 30, 2016: $115,000) per quarter for this service. We also receive services in relation to sales and purchase activities, bunker procurement and administrative services in relation to the corporate headquarter. A summary of net amounts charged by related parties in the six months ended June 30, 2017 and June 30, 2016 is as follows:
Net amounts charged by related parties comprise of general management and commercial management fees, newbuilding supervision fees and newbuilding commission fees. A summary of net amounts charged to related parties in the six months ended June 30, 2017 and June 30, 2016 is as follows:
Net amounts charged to related parties mainly comprise of commercial management fees. A summary of balances due from related parties as of June 30, 2017 and December 31, 2016 is as follows:
A summary of balances owed to related parties as of June 30, 2017 and December 31, 2016 is as follows:
As at June 30, 2017 and December 31, 2016, receivables and payables with related parties mainly comprise unpaid fees for services rendered from and to related parties. In addition, certain payables and receivables arise when we pay an invoice on behalf of a related party and vice versa. Hemen, the company's largest shareholder, owns $93.6 million of the Convertible Bond, which is convertible into 1,061,826 of our common shares at an exercise price of $88.15 per share. In the first quarter of 2017, the Company entered into agreements to acquire two ice-class Panamax vessels from affiliates of Hemen. We agreed a consideration of 3.3 million shares of the Company and a seller's credit of $22.5 million that matures in June 2019, with no fixed amortization and with interest rate of LIBOR plus a margin of 3.0%. The agreed purchase price approximates the fair value of the vessels. The vessels were delivered in June 2017 the seller's credit is guaranteed by a non-recourse subsidiary of the parent company. |
FINANCIAL ASSETS AND LIABILITIES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL ASSETS AND LIABILITIES | FINANCIAL ASSETS AND LIABILITIES Interest rate risk management As of June 30, 2017, we had nine (December 31, 2016: seven) interest rate swaps. These swaps are intended to reduce the risk associated with fluctuations in interest rates whereby the floating interest rate on an original principal amount of $500 million (December 31, 2016: $400 million) of the then anticipated debt was switched to fixed rate. Credit risk exists to the extent that the counter parties are unable to perform under the contracts but this risk is considered remote as the counter parties are well established banks, which may also participate in loan facilities to which the interest rate swaps are related. The interest rate swaps are not designated as hedging instruments. Changes in the fair value of the interest rate swap transactions are recorded in "Loss on derivatives" in the consolidated statement of operations, as disclosed in Note 13. Forward freight agreements We take positions from time to time in the freight forward market, either as a hedge to a physical contract or as a speculative position. All such contracts are cleared through clearing houses and the Company uses NasdaqOMX in this respect. Credit risk exists to the extent that NasdaqOMX is unable to perform under the contracts but this risk is considered remote. As of June 30, 2017, we had open positions aggregating to 210 days with maturities in the third quarter of 2017. As of December 31, 2016, we did not have any open positions. The losses on freight forward agreements are recorded in "Loss on derivatives" in the consolidated statement of operations, as disclosed in Note 13. Bunker derivatives We enter into cargo contracts from time to time. We are then exposed to fluctuations in bunker prices, as the cargo contract price is based on an assumed bunker price for the trade. There is no guarantee that the hedge removes all the risk from the bunker exposure, due to possible differences in location and timing of the bunkering between the physical and financial position. The counterparties to such contracts are major banking and financial institutions. Credit risk exists to the extent that the counter parties are unable to perform under the contracts but this risk is considered remote as the counter parties are usually well established banks or other well renowned institutions in the market As of June 30, 2017 and December 31, 2016, we had outstanding bunker swap agreements for about 23.7 thousand metric tonnes and 3.6 thousand metric tonnes, respectively. Losses on bunker derivatives are recorded in "Loss on derivatives" in the consolidated statement of operations, as disclosed in Note 13. Foreign currency risk The majority of our transactions, assets and liabilities are denominated in United States dollars, our functional currency. However, we incur expenditure in currencies other than the functional currency, mainly in Norwegian Kroner and Singapore Dollars. There is a risk that currency fluctuations in transactions incurred in currencies other than the functional currency will have a negative effect of the value of our cash flows. We are then exposed to currency fluctuations and we may enter into foreign currency swaps to mitigate such risk exposures. The counterparties to such contracts are major banking and financial institutions. Credit risk exists to the extent that the counter parties are unable to perform under the contracts but this risk is considered remote as the counter parties are well established banks. As of June 30, 2017 and December 31, 2016, we had contracts to swap USD to NOK for a notional amount of $6.9 million and $7.2 million, respectively. Changes in the fair value of foreign currency swaps are recorded in "Loss on derivatives" in the consolidated statement of operations, as disclosed in Note 13. Fair values The guidance for 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 same guidance requires that assets and liabilities carried at fair value should be classified and disclosed in one of the following three categories based on the inputs used to determine its fair value: 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. In addition, ASC 815, “Derivatives and Hedging” requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. The carrying value and estimated fair value of our financial instruments at June 30, 2017 and December 31, 2016 are as follows:
The fair value hierarchy of our financial instruments at June 30, 2017 is as follows:
The fair value hierarchy of our financial instruments at December 31, 2016 is as follows:
There have been no transfers between different levels in the fair value hierarchy during the six months ended June 30, 2017. The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
Assets Measured at Fair Value on a Nonrecurring Basis During the six months ended June 30, 2017, no assets were measured at fair value on a nonrecurring basis. During the year ended December 31, 2016, the following assets were measured at fair value on a nonrecurring basis:
Assets Measured at Fair Value on a Recurring Basis Marketable securities are listed equity securities considered to be available-for-sale securities for which the fair value as at the balance sheet date is their aggregate market value based on quoted market prices (level 1) for the investment in a company listed on a U.S. stock exchange and level two for the investment in the company listed on the Norwegian 'over the counter' market. The fair value (level 2) of interest rate, currency swap, deposit-swap contract and bunker swap agreements is the present value of the estimated future cash flows that we would receive or pay to terminate the agreements at the balance sheet date, taking into account, as applicable, fixed interest rates on interest rate swaps, current interest rates, forward rate curves, current and future bunker prices and the credit worthiness of both us and the derivative counterparty. Concentrations of risk There is a concentration of credit risk with respect to cash and cash equivalents to the extent that substantially all of the amounts are carried with Skandinaviska Enskilda Banken, DnB ASA and Nordea Bank Norge ASA. However, we believe this risk is remote, as these financial institutions are established and reputable establishments with no prior history of default. We do not require collateral or other security to support financial instruments subject to credit risk. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We insure the legal liability risks for our shipping activities with Assuranceforeningen SKULD, Assuranceforeningen Gard Gjensidig and North of England, all mutual protection and indemnity associations. We are subject to calls payable to the associations based on our claims record in addition to the claims records of all other members of the associations. A contingent liability exists to the extent that the claims records of the members of the associations in the aggregate show significant deterioration, which result in additional calls on the members. We are a party, as plaintiff or defendant, to several lawsuits in various jurisdictions for demurrage, damages, off-hire and other claims and commercial disputes arising from the operation of our vessels, in the ordinary course of business or in connection with our acquisition activities. We believe that the resolution of such claims will not have a material adverse effect on our operations or financial condition. We have one vessel held under capital lease, the Golden Eclipse, which was agreed sold in 2008 and leased back for a period of 10 years upon delivery of the vessel in 2010. We have the right to purchase the vessel at the dates and amounts as disclosed in Note 9. As of June 30, 2017, the joint venture that owns the Golden Opus had total bank debt outstanding of $16.0 million (December 31, 2016: $17.9 million) and we had guaranteed 50% of this amount. Consequently, our maximum potential liability was $8.0 million (December 31, 2016: $9.0 million). We have not recorded any liability in respect of this arrangement. In June 2017, the joint venture entered into an agreement to sell the Golden Opus for $28.9 million to an unrelated party with expected delivery in September 2017. We sold eight vessels to Ship Finance in the third quarter of 2015 and leased them back on charters for an initial period of ten years. We have a purchase option of $112 million en-bloc after ten years and, if such option is not exercised, Ship Finance will have the option to extend the charters by three years at $14,900 per day. At June 30, 2017, we had six newbuildings under construction. Our outstanding commitments at June 30, 2017 and as at the date of this report for these newbuildings amounted to $173.9 million due in 2018. In 2016, an arbitration tribunal assessed a final arbitration award relating to a time charter party for a third-party vessel entered into in March 2006. The claimants were awarded approximately $9.8 million in total. The claim itself was an unsafe port allegation, which falls under our protection and indemnity insurance and will be covered by our insurance company. As of June 30, 2017, 11 of the 14 vessels we agreed to acquire from Quintana were delivered. The three remaining vessels were delivered in July 2017 and as a result all vessels have been delivered at the date of this report. For the remaining three vessels delivered in July 2017, we issued 2,850,000 consideration shares, assumed $43.3 million in bank debt and paid $2.9 million in installments on the bank debt. Charterhire and office rent expense The future minimum rental payments under our non-cancelable operating leases as of June 30, 2017 are as follows:
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SUBSEQUENT EVENTS |
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Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS As of June 30, 2017, 11 of the 14 vessels agreed acquired from Quintana were delivered to us. The three remaining vessels were delivered in July 2017 and as a result all vessels have been delivered at the date of this report. For the remaining three vessels delivered in July, we issued 2,850,000 consideration shares, assumed $43.3 million in bank debt and paid $2.9 million in installments on the bank debt. |
ACCOUNTING POLICIES (Policies) |
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Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of accounting | Basis of accounting These unaudited interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. These unaudited interim condensed consolidated financial statements include the assets and liabilities of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated on consolidation. |
Recently issued accounting standards | Accounting Standards Updates, not yet adopted In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under US GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU No. 2014-09 along with related amendments ASU Nos. 2016-20, 2016-12, 2016-10, 2016-08, and 2015-14 comprise ASC Topic 606, Revenue from Contracts with Customers, and provide guidance that is applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. The update establishes a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing US GAAP. The new standard and its related updates are effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2017. On the effective date, the Company will apply the new guidance retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The Company is in the process of considering the impact of the standard on its consolidated financial statements. For vessels operating on voyage charters, we expect to continue recognizing revenue over time. The time period over which revenue will be recognized is still being determined and, depending on the final conclusion, each period’s voyage results could differ materially from the same period’s voyage results recognized based on the present revenue recognition guidance. However, the total voyage results recognized over all periods would not change. The adoption of the standard is not expected to have a material impact on other income, primarily income earned from the commercial management of related party vessels. In January 2016, the FASB issued ASU 2016-01 Financial instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement for to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments in this update will affect us for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We are currently considering the impact of these amendments on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842), which requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase in required disclosures. Management is analyzing the impact of the adoption of this guidance on the Company’s consolidated financial statements, including assessing changes that might be necessary to information technology systems, processes and internal controls to capture new data and address changes in financial reporting. Management expects that we will recognize increases in reported amounts for property, plant and equipment and related lease liabilities upon adoption of the new standard. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The guidance will be effective January 1, 2020, with early adoption permitted. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of cash flows (Topic 230): Classification of certain cash receipts and cash payments. This ASU addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The amendments in this Update are effective for the Company for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this Update should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of cash flows (Topic 230): Restricted Cash. The new standard requires that the statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The amendments in this Update are effective for the Company for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in this Update should be applied using a retrospective transition method to each period presented. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures. In December 2016, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this Update are effective for the Company for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for reporting periods for which financial statements have not yet been issued. The amendments in this Update should be applied prospectively to an award modified on or after the adoption date. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures. Accounting Standards Updates, recently adopted In July 2015, the FASB issued ASU 2015-11-Inventory (Topic 330)-Simplifying the Measurement of Inventory, which applies to inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure inventory within the scope of this update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this update more closely align the measurement of inventory in GAAP with the measurement of inventory in IFRS. The adoption of ASU 2015-11 has not had a material impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-07, Investments-Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. The update eliminates the requirement that an investor retrospectively apply equity method accounting when an investment that it had accounted for by another method initially qualifies for use of the equity method. The adoption of ASU 2016-07 has not had a material impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update simplifies the accounting for share based payment transactions. The adoption of ASU 2016-09 has not had a material impact on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017- 01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update introduces a screen to determine when an integrated set of assets and activities does not constitute a business. As under the screening mechanisms of the update, future transactions in relation to an integrated set of assets and activities are more likely to qualify as asset acquisitions as opposed to business combinations. The adoption of ASU 2017-01 has not had a material impact on our consolidated financial statements and related disclosures. |
EARNING PER SHARE (Tables) |
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Basic and Diluted Earnings Per Share Calculation | The components of the numerator and the denominator in the calculation of basic and diluted earnings per share for the six months ended June 30, 2017 and 2016 are as follows:
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MARKETABLE SECURITIES (Tables) |
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Schedule of Available-for-sale Securities Reconciliation | Our marketable securities are equity securities considered to be available-for-sale securities.
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VESSELS AND EQUIPMENT, NET (Table) |
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Summary Rollforward of Vessels and Equipment |
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NEWBUILDINGS (Tables) |
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Newbuilings |
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VESSELS HELD UNDER CAPITAL LEASES (Tables) |
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Schedule of book value of vessels under capital lease |
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Schedule of outstanding obligations under capital leases | The outstanding obligations under capital leases at June 30, 2017 are payable as follows:
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Schedule of purchase options | As of June 30, 2017, we had the following purchase option for the vessel:
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INVESTMENTS IN ASSOCIATED COMPANIES (Tables) |
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Schedule of equity method investments | As at June 30, 2017 and December 31, 2016, the Company had the following participation in investments that are recorded using the equity method:
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OTHER LONG TERM ASSETS (Tables) |
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Schedule of Other Long Term Assets |
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DEBT (Tables) |
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Schedule of Debt |
Debt at June 30, 2017 and December 31, 2016 is summarized as follows:
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Schedule of Maturities of Long-term Debt | The outstanding debt at June 30, 2017 is repayable as follows;
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DERIVATIVE INSTRUMENTS PAYABLE AND RECEIVABLE (Tables) |
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Schedule of Derivative Instruments | Our derivative instruments are not designated as hedging instruments and the positions at June 30, 2017 and December 31, 2016 is summarized as follows:
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Derivative Instruments Loss (Gain) | During the six months ended June 30, 2017 and June 30, 2016, the following amounts were recognized in the consolidated statement of operations:
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RELATED PARTY TRANSACTIONS (Tables) |
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Schedule of Related Party Transactions | A summary of balances due from related parties as of June 30, 2017 and December 31, 2016 is as follows:
A summary of balances owed to related parties as of June 30, 2017 and December 31, 2016 is as follows:
A summary of net amounts charged to related parties in the six months ended June 30, 2017 and June 30, 2016 is as follows:
Seatankers Management Co, Ltd We are the commercial manager for vessels owned and operated by Seatankers. Pursuant to the management agreements, the number of vessels managed and the daily commercial management fee during the six months ended June 30, 2017 and June 30, 2016 were as follows:
A summary of net amounts charged by related parties in the six months ended June 30, 2017 and June 30, 2016 is as follows:
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FINANCIAL ASSETS AND LIABILITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value and Fair Value of Financial Instruments | The carrying value and estimated fair value of our financial instruments at June 30, 2017 and December 31, 2016 are as follows:
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Fair Value Hierarchy of Financial Instruments | The fair value hierarchy of our financial instruments at June 30, 2017 is as follows:
The fair value hierarchy of our financial instruments at December 31, 2016 is as follows:
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COMMITMENTS AND CONTINGENCIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Summary of future minimum rental payments under non-cancelable operating leases | The future minimum rental payments under our non-cancelable operating leases as of June 30, 2017 are as follows:
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RECENTLY ISSUED ACCOUNTING STANDARDS RECENTLY ISSUED ACCOUNTING STANDARDS (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||
Debt issuance costs | $ 4,659 | $ 5,350 |
SEGMENT INFORMATION (Details) |
6 Months Ended |
---|---|
Jun. 30, 2017
reportable_segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
MARKETABLE SECURITIES (Details) |
6 Months Ended |
---|---|
Jun. 30, 2017
USD ($)
| |
Available-for-sale Securities [Roll Forward] | |
Available-for-sale securities, ending balance | $ 9,172,000 |
U.S. Stock Exchange Investment | |
Available-for-sale Securities [Roll Forward] | |
Available-for-sale securities, opening balance | 0 |
Available-for-sale securities, ending balance | 0 |
Norwegian Over the Counter Investment | |
Available-for-sale Securities [Roll Forward] | |
Available-for-sale securities, opening balance | 6,524,000 |
Unrealized gain | 2,648,000 |
Available-for-sale securities, ending balance | $ 9,200,000 |
VESSELS AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Vessels and Equipment, Cost | |||
Transfer from newbuildings | $ 176,598 | ||
Vessels and Equipment, Accumulated Depreciation | |||
Depreciation | (35,984) | $ (30,794) | |
Vessels and Equipment | |||
Vessels and Equipment, Cost | |||
Beginning balance | 1,873,795 | ||
Additions | 343,895 | ||
Disposals | 0 | ||
Transfer from newbuildings | 176,598 | ||
Ending balance | 2,394,288 | ||
Vessels and Equipment, Accumulated Depreciation | |||
Accumulated depreciation beginning balance | (114,856) | ||
Depreciation | (35,984) | ||
Accumulated depreciation ending balance | (150,840) | ||
Vessels and equipment, net | $ 2,243,448 | $ 1,758,939 |
NEWBUILDINGS - Movement in Newbuilding Balance (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2017
USD ($)
| |
Movement In Newbuilding Balance [Roll Forward] | |
Balance at December 31, 2015 | $ 180,562 |
Installments and newbuilding supervision fees | 122,542 |
Interest capitalized | 0 |
Transfers to Vessels and Equipment | (176,598) |
Balance at June 30, 2016 | $ 126,506 |
NEWBUILDINGS (Details) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2017
USD ($)
newbuilding
|
Dec. 31, 2016
newbuilding
|
|
Property, Plant and Equipment [Line Items] | ||
Newbuilding Pre-Delivery Installments | $ 19.5 | |
Newbuilding Other Capitalized Costs | $ 4.0 | |
Capesize Newbuildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Number of Newbuilding Contracts | newbuilding | 6 | 8 |
Ultramax Vessel [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Number of Newbuilding Contracts | newbuilding | 2 | |
Golden Surabaya & Golden Savannah [Domain] | ||
Property, Plant and Equipment [Line Items] | ||
Payments to Acquire Buildings | $ 67.7 | |
Golden Libra & Golden Virgo | ||
Property, Plant and Equipment [Line Items] | ||
Payments to Acquire Buildings | $ 31.3 |
VESSELS HELD UNDER CAPITAL LEASES - Book Value of Vessels Held Under Capital Lease (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2017
USD ($)
| |
Capital Leased Assets [Roll Forward] | |
Balance at December 31, 2016 | $ 2,956 |
Depreciation | (444) |
Balance at June 30, 2017 | $ 2,512 |
VESSELS HELD UNDER CAPITAL LEASES - Additional Information (Details) - vessel |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Capital Leased Assets [Line Items] | ||
Number of vessels under capital lease | 1 | 1 |
Lease term | 10 years | |
Maximum | ||
Capital Leased Assets [Line Items] | ||
Lease term | 3 years | 4 years |
VESSELS HELD UNDER CAPITAL LEASES - Outstanding Obligations Under Capital Leases (Details) $ in Thousands |
Jun. 30, 2017
USD ($)
|
---|---|
Vessels Under Capital Leases [Abstract] | |
2017 (remaining six months) | $ 2,996 |
2018 | 5,944 |
2019 | 5,944 |
2020 | 1,791 |
2021 | 0 |
Thereafter | 0 |
Minimum lease payments | 16,675 |
Less: imputed interest | (1,507) |
Present value of obligations under capital leases | $ 15,168 |
VESSELS HELD UNDER CAPITAL LEASES - Schedule of Purchase Options (Details) - Golden Eclipse $ in Thousands |
Jun. 30, 2017
USD ($)
|
---|---|
Capital Leased Assets [Line Items] | |
Purchase option net of sellers credit, year two | $ 38,000 |
Purchase option net of sellers credit, year three | 36,250 |
Purchase option net of sellers credit, year four | $ 33,550 |
DEBT - Schedule of Debt Maturities (Details) $ in Thousands |
Jun. 30, 2017
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2017 (remaining six months) | $ 0 |
2018 | 78,038 |
2019 | 561,810 |
2020 | 379,338 |
2021 | 269,085 |
Thereafter | 21,600 |
Total debt | 1,309,871 |
Fair value purchase price adjustment of convertible bond debt | (17,714) |
Total debt | $ 1,292,157 |
DEBT - Assets Pledged (Details) $ in Thousands |
Jun. 30, 2017
USD ($)
vessel
|
Dec. 31, 2016
USD ($)
vessel
|
---|---|---|
Debt Instrument [Line Items] | ||
Vessels and equipment, net | $ 2,243,448 | $ 1,758,939 |
Floating Rate Debt [Member] | ||
Debt Instrument [Line Items] | ||
Number of vessels serving as security | vessel | 61 | 45 |
Securities Pledged as Collateral [Member] | Floating Rate Debt [Member] | ||
Debt Instrument [Line Items] | ||
Vessels and equipment, net | $ 2,193,800 | $ 1,733,200 |
RELATED PARTY TRANSACTIONS - Management Agreements (Details) |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2017
USD ($)
$ / vessel
|
Jun. 30, 2016
USD ($)
vessel
$ / vessel
|
Dec. 31, 2015
vessel
|
|
Frontline Management (Bermuda) Ltd | |||
Related Party Transaction [Line Items] | |||
Management Fee to be Paid Per Annum | $ / vessel | 30,555 | 31,875 | |
Seateam | |||
Related Party Transaction [Line Items] | |||
Number of vessels under ship management | vessel | 18 | 15 | |
Frontline Ltd. | |||
Related Party Transaction [Line Items] | |||
Quarterly management fee expenses | $ | $ 20,000 | $ 115,000 |
RELATED PARTY TRANSACTIONS - Summary of Net Amounts Charged by/to Related Parties (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Golden Opus Inc. [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | $ 482 | $ 266 |
Frontline Management (Bermuda) Ltd | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 1,796 | 3,765 |
Ship Finance International Limited | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 13,990 | 12,055 |
Amounts due from related parties | 370 | 404 |
Seateam | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 1,407 | 954 |
Seatankers Management Co., Ltd | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 1,945 | 700 |
Amounts due from related parties | 478 | 474 |
CCL | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 20 | 35 |
Pool Revenues | 2,794 | 330 |
United Freight Carriers LLC | ||
Related Party Transaction [Line Items] | ||
Amounts due from related parties | $ 0 | $ 150 |
FINANCIAL ASSETS AND LIABILITIES - Interest Rate Risk Management (Details) - Interest Rate Swap [Member] $ in Millions |
Jun. 30, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
---|---|---|
Derivative [Line Items] | ||
Derivative, Number of Instruments Held | 9 | 7 |
Derivative, notional amount | $ 500 | $ 400 |
FINANCIAL ASSETS AND LIABILITIES - Forward Freight Agreements (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 500 | $ 400 |
FINANCIAL ASSETS AND LIABILITIES - Bunker Derivatives (Details) - t |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Bunker derivatives [Member] | ||
Derivative [Line Items] | ||
Outstanding bunker swap agreements | 23,700 | 3,600 |
FINANCIAL ASSETS AND LIABILITIES - Foreign Currency Risk (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Currency Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 6.9 | $ 7.2 |
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