Note 3. Vessels

a. Vessel and vessel improvements

At December 31, 2011, the Company's operating fleet consisted of 45 dry bulk vessels. In 2011 the Company took delivery of 8 newly constructed vessels. In January, February, May, two in July, August, September and October, the Company took delivery of the Thrush, Nighthawk, Oriole, Owl, Petrel, Puffin, Roadrunner and Sandpiper, respectively. In May 2011, the Company decided to sell the Heron, a 2001-built Supramax, and reached an agreement to sell the vessel for $22,511,226, after brokerage commissions payable to a third party. The Heron was not available for delivery until the third quarter. On July 26, 2011 the Company sold the vessel and realized a net loss of $509,076.

The Company took delivery of 12 newly constructed vessels, in 2010. In April 2010, the Company decided to sell the oldest and smallest vessel in its fleet, the Griffon a 1995-built Handymax. The Company sold the Griffon for $21,070,000, after brokerage commission payable to a third party and realized a net gain of $291,011. The Company took delivery of 4 vessels in 2009, acquired 5 vessels in 2008, 3 vessels in 2007, 3 vessels in 2006, 13 vessels in 2005 and sold a vessel in 2007.

Vessel and vessel improvements consist of the following:

Balance vessels and vessel improvements, at December 31, 2009	$	1,010,609,956
Vessel improvements		5,836,843
Delivery of newbuild vessels		573,091,093
Disposal of vessel		(20,329,604	)
Depreciation expense		(59,410,039	)
Balance vessels and vessel improvements, at December 31, 2010	$	1,509,798,249
Vessel improvements		2,991,995
Delivery of newbuild vessels		368,800,779
Disposal of vessel		(22,494,172	)
Depreciation expense		(69,715,805	)
Balance vessels and vessel improvements, at December 31, 2011	$	1,789,381,046

b. Advances for vessel construction

In 2011 the Company completed its newbuilding program and took delivery of the last eight Chinese-built vessels, the Thrush, Nighthawk, Oriole, Owl, Petrel, Puffin, Roadrunner and Sandpiper. In 2010 the Company took delivery of twelve newly constructed vessels, the last two Japanese-built vessels, the Golden Eagle and Imperial Eagle, and ten Chinese-built vessels the Thrasher, Crane, Egret, Avocet, Gannet Bulker, Grebe Bulker, Ibis Bulker, Jay, Kingfisher, and Martin. In 2009 the Company took delivery of four newly constructed vessels, Crested Eagle and Stellar Eagle from the Japanese shipyard, and Bittern and Canary from the Chinese shipyard. In 2008 the Company took delivery of three vessels, Wren and Woodstar from the Chinese shipyard, and Crowned Eagle, the first of our five Japanese newbuilding vessels.

In 2007, the Company acquired the rights to the construction of the newbuilding vessels in China from Kyrini Shipping Inc., an unrelated privately held Greek shipping company. The acquisition comprised of purchase contracts for the construction of Supramax vessels and time charter employment contracts. The charter rates on the employment contracts acquired were either below or above market rates for equivalent time charters prevailing at the time the foregoing vessel contracts were acquired. The present values of the above and below market charters at the date of acquisition were estimated by the Company at $4,531,115 and $32,867,920, respectively, and were recorded as assets and liabilities in the consolidated balance sheets. These amounts are amortized to revenue over the remaining life of the time charters assumed on these vessels. For the years ended December 31, 2011, 2010 and 2009, net revenues included $5,088,268, $4,754,407, and $2,643,820, respectively, as amortization of the below and above market rate charters. As of December 31, 2011, the unamortized above and below market rate charters was $3,608,811and $18,659,582, respectively. These balances will be amortized to revenue over a weighted average period of 4.7 years.

Advances for Vessel Construction consist of the following:


Advances for Vessel Construction at December 31, 2009	$	464,173,887
Progress Payments		271,994,699
Capitalized Interest		12,020,462
Legal and Technical Supervision Costs		16,379,270
Delivery of Newbuild Vessels		(573,091,093	)
Advances for Vessel Construction at December 31, 2010	$	191,477,225
Progress Payments		164,247,964
Capitalized Interest		2,582,127
Legal and Technical Supervision Costs		10,493,463
Delivery of Newbuild Vessels		(368,800,779	)
Advances for Vessel Construction at December 31, 2011	$	-