lpg_Current_Folio

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2016

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

For the transition period from __________ to __________

Commission File Number: 001-36437

Dorian LPG Ltd.

(Exact name of registrant as specified in its charter)


Marshall Islands		66-0818228
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
c/o Dorian LPG (USA) LLC		06902
27 Signal Road, Stamford, CT
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (203) 674-9900

Former name, former address and former fiscal year, if changed since last report: Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐		Accelerated filer ☒		Non-accelerated filer ☐		Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No ☒

As of July 26, 2016, there were 54,963,013 shares of the registrant’s Common Stock outstanding.

FORWARD‑LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including analyses and other information based on forecasts of future results and estimates of amounts not yet determinable and statements relating to our future prospects, developments and business strategies. Forward-looking statements are generally identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions. Forward-looking statements involve risks and uncertainties that may cause actual future activities and results of operations to be materially different from those suggested or described in this quarterly report.

These risks include the risks that are identified in the “Risk Factors” section of this quarterly report and of our Annual Report on Form 10-K for the fiscal year ended March 31, 2016, and also include, among others, risks associated with the following:

our future operating or financial results;

our acquisitions, business strategy and expected capital spending or operating expenses;

shipping trends, including changes in charter rates, scrapping rates and vessel and other asset values;

factors affecting supply of and demand for liquefied petroleum gas, or LPG, shipping;

changes in trading patterns that impact tonnage requirements

general economic conditions and specific economic conditions in the oil and natural gas industry and the countries and regions where LPG is produced and consumed;

the supply of and demand for LPG, which is affected by the production levels and price of oil, refined petroleum products and natural gas, including production from U.S. shale fields;

completion of infrastructure projects to support marine transportation of LPG, including export terminals and pipelines;

changes to the supply and demand for LPG vessels as a result of the expansion of the Panama Canal;

oversupply of or limited demand for LPG vessels comparable to ours or higher specification vessels;

competition in the LPG shipping industry;

our ability to profitably employ our vessels, including vessels participating in the Helios Pool (defined below);

the failure of our or the Helios Pool’s significant customers to perform their obligations to us or to the Helios Pool;

the performance of the Helios Pool;

the loss or reduction in business from our or the Helios Pool’s significant customers;

our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate purposes, the terms of such financing and our ability to comply with covenants set forth in our existing and future financing arrangements;

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Dorian LPG Ltd.

Unaudited Condensed Consolidated Balance Sheets

(Expressed in United States Dollars, except for share data)


	As of		As of
	June 30, 2016		March 31, 2016
Assets
Current assets
Cash and cash equivalents	$	47,321,200	$	46,411,962
Trade receivables, net and accrued revenues		88,835		107,317
Prepaid expenses and other receivables		2,283,533		2,247,706
Due from related parties		44,573,756		54,504,359
Inventories		2,132,043		2,288,073
Total current assets		96,399,367		105,559,417
Fixed assets
Vessels, net		1,651,418,843		1,667,224,476
Other fixed assets, net		521,710		591,288
Total fixed assets		1,651,940,553		1,667,815,764
Other non-current assets
Deferred charges, net		265,015		294,935
Due from related parties—non-current		18,700,000		17,600,000
Restricted cash		50,812,789		50,812,789
Other non-current assets		94,663		95,271
Total assets	$	1,818,212,387	$	1,842,178,176
Liabilities and shareholders’ equity
Current liabilities
Trade accounts payable	$	6,018,390	$	6,826,503
Accrued expenses		7,479,144		9,721,477
Due to related parties		592,284		708,210
Deferred income		5,984,104		4,606,540
Current portion of long-term debt		65,978,785		66,265,643
Total current liabilities		86,052,707		88,128,373
Long-term liabilities
Long-term debt—net of current portion and deferred financing fees		731,833,039		746,354,613
Derivative instruments		26,017,824		21,647,965
Other long-term liabilities		433,048		447,988
Total long-term liabilities		758,283,911		768,450,566
Total liabilities		844,336,618		856,578,939
Commitments and contingencies
Shareholders’ equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued nor outstanding		—		—
Common stock, $0.01 par value, 450,000,000 shares authorized, 58,314,443 and 58,057,493 shares issued, 55,101,413 and 56,125,028 shares outstanding (net of treasury stock), as of June 30, 2016 and March 31, 2016, respectively		583,145		580,575
Additional paid-in-capital		849,598,537		848,179,471
Treasury stock, at cost; 3,213,030 and 1,932,465 shares as of June 30, 2016 and March 31, 2016, respectively		(32,797,799)		(20,943,816)
Retained earnings		156,491,886		157,783,007
Total shareholders’ equity		973,875,769		985,599,237
Total liabilities and shareholders’ equity	$	1,818,212,387	$	1,842,178,176

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Dorian LPG Ltd.

Unaudited Condensed Consolidated Statements of Operations

(Expressed in United States Dollars)


	Three months ended
	June 30, 2016		June 30, 2015
Revenues
Net pool revenues—related party	$	37,659,385	$	15,310,559
Voyage charter revenues		—		14,864,184
Time charter revenues		12,532,351		5,372,203
Other revenues		324,040		95,514
Total revenues		50,515,776		35,642,460
Expenses
Voyage expenses		755,804		3,523,073
Vessel operating expenses		16,095,552		6,754,086
Depreciation and amortization		16,192,745		4,857,427
General and administrative expenses		5,611,310		7,214,280
Loss on disposal of assets		—		105,549
Total expenses		38,655,411		22,454,415
Other income—related parties		552,901		383,642
Operating income		12,413,266		13,571,687
Other income/(expenses)
Interest and finance costs		(7,038,209)		(135,800)
Interest income		23,178		65,585
Unrealized gain/(loss) on derivatives		(4,369,859)		1,386,886
Realized loss on derivatives		(2,256,788)		(1,244,491)
Foreign currency gain/(loss), net		(62,709)		9,016
Total other income/(expenses), net		(13,704,387)		81,196
Net income/(loss)	$	(1,291,121)	$	13,652,883
Earnings/(loss) per common share—basic and diluted	$	(0.02)	$	0.24

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Dorian LPG Ltd.

Unaudited Condensed Consolidated Statements of Shareholders’ Equity

(Expressed in United States Dollars, except for number of shares)


	Number of					Additional
	common	Common		Treasury		paid-in		Retained
	shares	stock		stock		capital		Earnings		Total
Balance, April 1, 2015	58,057,493		580,575		—		844,539,059		28,094,625		873,214,259
Net income for the period	—		—		—		—		13,652,883		13,652,883
Stock-based compensation	—		—		—		896,539		—		896,539
Balance, June 30, 2015	58,057,493	$	580,575	$	—	$	845,435,598	$	41,747,508	$	887,763,681


	Number of					Additional
	common	Common		Treasury		paid-in		Retained
	shares	stock		stock		capital		Earnings		Total
Balance, April 1, 2016	58,057,493	$	580,575	$	(20,943,816)	$	848,179,471	$	157,783,007	$	985,599,237
Net loss for the period	—		—		—		—		(1,291,121)		(1,291,121)
Restricted share award issuances	256,950		2,570		—		(2,570)		—		—
Stock-based compensation	—		—		—		1,421,636		—		1,421,636
Purchase of treasury stock	—		—		(11,853,983)		—		—		(11,853,983)
Balance, June 30, 2016	58,314,443	$	583,145	$	(32,797,799)	$	849,598,537	$	156,491,886	$	973,875,769

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Dorian LPG Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

(Expressed in United States Dollars)



	Three months ended
	June 30, 2016		June 30, 2015
Cash flows from operating activities:
Net income/(loss)	$	(1,291,121)	$	13,652,883
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Depreciation and amortization		16,192,745		4,857,427
Amortization of financing costs		948,407		223,740
Unrealized loss/(gain) on derivatives		4,369,859		(1,386,886)
Stock-based compensation expense		1,009,798		896,539
Loss on disposal of assets		—		105,549
Unrealized exchange differences		88,067		(106,399)
Other non-cash items		20,953		21,182
Changes in operating assets and liabilities
Trade receivables, net and accrued revenue		18,482		15,552,080
Prepaid expenses and other receivables		(35,827)		(46,305)
Due from related parties		8,830,603		(19,890,974)
Inventories		156,030		1,005,092
Other non-current assets		608		—
Trade accounts payable		(212,475)		505,911
Accrued expenses and other liabilities		(198,144)		1,409,214
Due to related parties		(115,926)		93,754
Net cash provided by operating activities		29,782,059		16,892,807
Cash flows from investing activities:
Payments for vessels and vessels under construction		(1,241,220)		(204,076,675)
Restricted cash deposits		—		(3,302,789)
Proceeds from disposal of assets		—		136,660
Payments to acquire other fixed assets		(606)		(191,254)
Net cash used in investing activities		(1,241,826)		(207,434,058)
Cash flows from financing activities:
Proceeds from long-term debt borrowings		—		127,378,019
Repayment of long-term debt borrowings		(15,657,054)		(2,818,562)
Purchase of treasury stock		(11,853,983)		—
Financing costs paid		(42,047)		(4,218,263)
Net cash provided by/(used in) financing activities		(27,553,084)		120,341,194
Effects of exchange rates on cash and cash equivalents		(77,911)		94,657
Net increase/(decrease) in cash and cash equivalents		909,238		(70,105,400)
Cash and cash equivalents at the beginning of the period		46,411,962		204,821,183
Cash and cash equivalents at the end of the period	$	47,321,200	$	134,715,783

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Vessel Owning Subsidiaries


	Type of
Subsidiary	vessel	Vessel’s name	Built	CBM(1)
CMNL LPG Transport LLC	VLGC	Captain Markos NL	2006	82,000
CJNP LPG Transport LLC	VLGC	Captain John NP	2007	82,000
CNML LPG Transport LLC	VLGC	Captain Nicholas ML	2008	82,000
Comet LPG Transport LLC	VLGC	Comet	2014	84,000
Corsair LPG Transport LLC	VLGC	Corsair	2014	84,000
Corvette LPG Transport LLC	VLGC	Corvette	2015	84,000
Dorian Shanghai LPG Transport LLC	VLGC	Cougar	2015	84,000
Concorde LPG Transport LLC	VLGC	Concorde	2015	84,000
Dorian Houston LPG Transport LLC	VLGC	Cobra	2015	84,000
Dorian Sao Paulo LPG Transport LLC	VLGC	Continental	2015	84,000
Dorian Ulsan LPG Transport LLC	VLGC	Constitution	2015	84,000
Dorian Amsterdam LPG Transport LLC	VLGC	Commodore	2015	84,000
Dorian Dubai LPG Transport LLC	VLGC	Cresques	2015	84,000
Constellation LPG Transport LLC	VLGC	Constellation	2015	84,000
Dorian Monaco LPG Transport LLC	VLGC	Cheyenne	2015	84,000
Dorian Barcelona LPG Transport LLC	VLGC	Clermont	2015	84,000
Dorian Geneva LPG Transport LLC	VLGC	Cratis	2015	84,000
Dorian Cape Town LPG Transport LLC	VLGC	Chaparral	2015	84,000
Dorian Tokyo LPG Transport LLC	VLGC	Copernicus	2015	84,000
Commander LPG Transport LLC	VLGC	Commander	2015	84,000
Dorian Explorer LPG Transport LLC	VLGC	Challenger	2015	84,000
Dorian Exporter LPG Transport LLC	VLGC	Caravelle	2016	84,000

Management Subsidiaries



Subsidiary
Dorian LPG Management Corp
Dorian LPG (USA) LLC (incorporated in USA)
Dorian LPG (UK) Ltd. (incorporated in UK)
Dorian LPG Finance LLC
Occident River Trading Limited (incorporated in UK)

Dormant Subsidiaries



Subsidiary
SeaCor LPG I LLC
SeaCor LPG II LLC
Capricorn LPG Transport LLC
Constitution LPG Transport LLC
Grendon Tanker LLC(2)

⁽¹⁾

CBM: Cubic meters, a standard measure for LPG tanker capacity

⁽²⁾

Owner of the Pressurized Gas Carrier (“PGC”) Grendon until it was sold in February 2016

2. Significant Accounting Policies

The same accounting policies have been followed in these unaudited interim condensed consolidated financial statements as were applied in the preparation of our audited financial statements for the year ended March 31, 2016 (see Note 2 of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2016).

In March 2016, the FASB issued accounting guidance to simplify the requirements of accounting for share-based payment transactions. The guidance simplifies the accounting for taxes related to stock-based compensation, including adjustments to how excess tax benefits and an entity’s payments for tax withholdings should be classified. Additionally, an entity may make an entity-wide policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The pronouncement is effective for annual periods beginning after December 15, 2016, and interim periods within that reporting period with early adoption permitted in any interim or annual period. We have early adopted this pronouncement and have made the entity-wide policy election to account for forfeitures when they occur. The amended guidance had no significant impact on our financial statements for the three months ended June 30, 2016.

In February 2016, the FASB issued accounting guidance to update the requirements of financial accounting and reporting for lessees and lessors. The updated guidance, for lease terms of more than 12 months, will require a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize a straight-line total lease expense. Lessor accounting remains largely unchanged. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The pronouncement is effective prospectively for public business entities for annual periods beginning after December 15, 2018, and interim periods within that reporting period. Early adoption is permitted for all entities. We are currently assessing the impact the amended guidance will have on our financial statements.

In July 2015, the FASB issued accounting guidance requiring entities to measure most inventory at the lower of cost and net realizable value. The pronouncement is effective prospectively for annual periods beginning after December 15, 2016, and interim periods within that reporting period. We are currently assessing the impact the amended guidance will have on our financial statements.

In April 2015, an accounting pronouncement was issued by the FASB to update the guidance related to the presentation of debt issuance costs, which we adopted in April 2016. This guidance requires debt issuance costs, related to a recognized debt liability, be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability rather than being presented as an asset. The reclassification does not impact net income as previously reported or any prior amounts reported on the consolidated statements of comprehensive income, or the consolidated statements of cash flows. The effect of the retrospective application of this change in accounting principle on our consolidated balance sheets as of March 31, 2016 resulted in a reduction of “Deferred charges, net” and “Total assets” in the amount of $23.7 million with a corresponding reduction of “Long-term debt—net of current portion” and “Total long-term liabilities.”

In May 2014, the FASB amended its accounting guidance for revenue recognition. The fundamental principles of the new guidance are that companies should recognize revenue in a manner that reflects the timing of the transfer of services to customers and consideration that a company expects to receive for the services provided. It also requires additional disclosures necessary for the financial statement users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB voted to defer the effective date by one year for fiscal years beginning on or after December 15, 2017 and interim periods within that reporting period and permit early adoption of the standard, but not before the beginning of 2017. We are currently assessing the impact the amended guidance will have on our financial statements.

3. Transactions with Related Parties

Dorian (Hellas), S.A.

As of July 1, 2014, vessel management services and the associated agreements for our fleet were transferred from Dorian (Hellas), S.A. (“Dorian Hellas,” “DHSA” or the “Manager”) and are now provided through our wholly-owned subsidiaries Dorian LPG (USA) LLC, Dorian LPG (UK) Ltd. and Dorian LPG Management Corp. Subsequent to the transition agreements, Eagle Ocean Transport, Inc. (“Eagle Ocean Transport”) continues to incur related travel costs for certain transitioned employees as well as office-related costs, for which we reimbursed Eagle Ocean Transport $0.1 million and $0.3 million for the three months ended June 30, 2016 and 2015, respectively. Such expenses are reimbursed based on their actual cost.

Dorian LPG (USA) LLC and its subsidiaries entered into an agreement with DHSA, retroactive to July 2014 and superseding an agreement between Dorian LPG (UK) Ltd. and DHSA, for the provision by Dorian LPG (USA) LLC and its subsidiaries of certain chartering and marine operation services to DHSA, for which income totaling $0.1 million was earned and included in “Other income-related parties” for both the three months ended June 30, 2016 and 2015, respectively.

As of June 30, 2016, $1.0 million was due from DHSA and included in “Due from related parties” in the unaudited condensed consolidated balance sheets and $0.5 million was due to DHSA and included in “Due to related parties” in the unaudited condensed consolidated balance sheets. As of March 31, 2016, $0.9 million was due from DHSA and included in “Due from related parties” in the unaudited condensed consolidated balance sheets and $0.5 million was due to DHSA and included in “Due to related parties” in the unaudited condensed consolidated balance sheets.

Helios LPG Pool LLC

On April 1, 2015, Dorian and Phoenix began operations of the Helios Pool, which entered into pool participation agreements for the purpose of establishing and operating, as charterer, under variable rate time charters to be entered into with owners or disponent owners of VLGCs, a commercial pool of VLGCs whereby revenues and expenses are shared. We hold a 50% interest in the Helios Pool as a joint venture with Phoenix and all significant rights and obligations are equally shared by both parties. All profits of the Helios Pool are distributed to the pool participants based on pool points assigned to each vessel as variable charter hire and, as a result, there are no profits available to the equity investors as a share of equity. We have determined that the Helios Pool is a VIE as it does not have sufficient equity at risk. We do not consolidate the Helios Pool because we are not the primary beneficiary and do not have a controlling financial interest. In consideration of Accounting Standards Codification (“ASC”) 810-10-50-4e, the significant factors considered and judgments made in determining that the power to direct the activities of the Helios Pool that most significantly impact the entity’s economic performance are shared, in that all significant performance activities which relate to approval of pool policies and strategies related to pool customers and the marketing of the pool for the procurement of customers for the pool vessels, addition of new pool vessels and the pool cost management, require unanimous board consent from a board consisting of two members from each joint venture investor. Further, in accordance with the guidance in ASC 810-10-25-38D, the Company and Phoenix are not related parties as defined in ASC 850 nor are they de facto agents pursuant to ASC 810-10, the power over the significant activities of the Helios Pool is shared, and no party is the primary beneficiary in the Helios Pool, or has a controlling financial interest. In March 2016, the Helios Pool reached an agreement with Oriental Energy Company Ltd. ("Oriental Energy"). When fully delivered, the Helios Pool will operate eight VLGCs for Oriental Energy, some of which will be time chartered-in at a fixed time charter hire rate. In addition, the Helios Pool has entered into a multi-year contract of affreightment with Oriental Energy covering Oriental Energy’s shipments from the United States Gulf. The agreement with Oriental Energy had no impact on the ownership structure or the power to direct significant activities of the Helios Pool.

As of June 30, 2016, we had receivables from the Helios Pool of $62.3 million, including $18.7 million of working capital contributed for the operation of our vessels in the pool. As of March 31, 2016, we had receivables from the Helios Pool of $71.0 million, including $17.6 million of working capital contributed for the operation of our vessels in the pool. Our maximum exposure to losses from the pool as of June 30, 2016 is limited to the receivables from the pool. The Helios Pool does not have any third-party debt obligations. The Helios Pool has entered into commercial management

agreements with each of Dorian LPG (UK) Ltd. and Phoenix as commercial managers and has appointed both commercial managers as the exclusive commercial managers of pool vessels. Fees for commercial management services provided by Dorian LPG (UK) Ltd. are included in “Other income-related parties” in the unaudited condensed consolidated statement of operations and were $0.5 million and $0.4 million for the three months ended June 30, 2016 and 2015, respectively. Additionally, we received a fixed reimbursement of expenses such as costs for security guards and war risk insurance for voyages operating in high risk areas from the Helios Pool, for which we earned $0.3 million for the three months ended June 30, 2016 and are included in “Other revenues” in the unaudited condensed consolidated statement of operations. There was no fixed reimbursement of expenses from the Helios Pool for the three months ended June 30, 2015.

Through our vessel owning subsidiaries, we have chartered vessels to the Helios Pool during the three months ended June 30, 2016. The time charter revenue from the Helios Pool is variable depending upon the net results of the pool, operating days and pool points for each vessel. The Helios Pool enters into voyage and time charters with external parties and receives freight and related revenue and incurs voyage costs such as bunkers, port costs and commissions. At the end of each month, the Helios Pool calculates net pool revenues using gross revenues, less voyage expenses of all the pool vessels, less fixed time charter hire for any chartered-in vessels, less the general and administrative expenses of the pool. Net pool revenues, less any amounts required for working capital of the Helios Pool, are distributed as variable rate time charter hire for the relevant vessel to participants based on pool points (vessel attributes such as cargo carrying capacity, fuel consumption, and speed are taken into consideration) and number of days the vessel participated in the pool in the period. We recognize net pool revenues on a monthly basis, when the vessel has participated in the pool during the period and the amount of net pool revenues for the month can be estimated reliably. Revenue earned is presented in Note 8.

Artwork

During the three months ended June 30, 2015, we purchased $0.1 million of artwork for newbuilding vessels, which have been capitalized and presented in “Vessels, net.” The artist is a relative of one of our executive officers. No artwork was purchased during three months ended June 30, 2016.

4. Deferred Charges, Net

The analysis and movement of deferred charges is presented in the table below:


	Drydocking
	costs
Balance, April 1, 2016	$	294,935
Amortization		(29,920)
Balance, June 30, 2016	$	265,015

There were no drydockings during the three months ended June 30, 2016.

5. Vessels, Net


			Accumulated
	Cost		depreciation		Net book Value
Balance, April 1, 2016	$	1,727,979,929	$	(60,755,453)	$	1,667,224,476
Additions		287,008		—		287,008
Depreciation		—		(16,092,641)		(16,092,641)
Balance, June 30, 2016	$	1,728,266,937	$	(76,848,094)	$	1,651,418,843

Vessels, with a total carrying value of $1,651.4 million and $1,667.2 million as of June 30, 2016 and March 31, 2016, respectively, are first‑priority mortgaged as collateral for our long-term debt facilities (refer to Note 6 below). No impairment loss was recorded for the periods presented.

6. Long-term Debt

RBS Loan Facility - refer to Note 11 of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2016 for information on the RBS Loan Facility.

2015 Debt Facility – refer to Note 11 of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2016 for information on the 2015 Debt Facility.

Debt Obligations

The table below presents our debt obligations:


RBS secured bank debt	June 30, 2016		March 31, 2016
Tranche A	$	37,400,000	$	37,400,000
Tranche B		26,848,500		28,127,000
Tranche C		43,967,500		43,967,500
Total RBS secured bank debt	$	108,216,000	$	109,494,500

2015 Debt Facility
Commercial Financing	$	237,906,927	$	241,442,384
KEXIM Direct Financing		190,475,726		194,827,596
KEXIM Guaranteed		188,431,597		192,736,763
K-sure Insured		95,681,068		97,867,129
Total 2015 Debt Facility	$	712,495,318	$	726,873,872

Total debt obligations	$	820,711,318	$	836,368,372
Less: deferred financing fees		22,899,494		23,748,116
Debt obligations—net of deferred financing fees	$	797,811,824	$	812,620,256

Presented as follows:
Current portion of long-term debt	$	65,978,785	$	66,265,643
Long-term debt—net of current portion and deferred financing fees		731,833,039		746,354,613
Total	$	797,811,824	$	812,620,256

Deferred Financing Fees

The analysis and movement of deferred financing fees is presented in the table below:


	Financing
	costs
Balance, April 1, 2016	$	23,748,116
Additions		99,785
Amortization		(948,407)
Balance, June 30, 2016	$	22,899,494

7. Stock-Based Compensation Plans

Our stock-based compensation expense was $1.0 million and $0.9 million for the three months ended June 30, 2016 and 2015, respectively, and is included within general and administrative expenses in the unaudited condensed consolidated statements of operations. Unrecognized compensation cost was $12.6 million as of June 30, 2016 and will be recognized over the remaining weighted average life of 2.16 years. For more information on our equity

incentive plan, see Note 13 of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2016.

In June 2016, we granted 250,000 shares of restricted stock to certain of our officers and employees. One-fourth of these restricted shares vest immediately on the grant date, one-fourth vest one year after grant date, one-fourth vest two years after grant date, and one-fourth vest three years after grant date. The restricted shares were valued at their grant date fair market value and expensed on a straight-line basis over the vesting periods.

In June 2016, we granted 6,950 shares of stock to our non-executive directors, which were valued at their grant date fair market value and were expensed when granted.

A summary of the activity of restricted shares awarded under our equity incentive plan as of June 30, 2016 and changes during the three months ended June 30, 2016, is as follows:


		Weighted-Average
		Grant-Date
Incentive Share Awards	Numbers of Shares	Fair Value
Unvested as of March 31, 2016	929,000	$	19.70
Granted	256,950		7.80
Vested	(69,450)		7.74
Forfeited	(1,500)		7.82
Unvested as of June 30, 2016	1,115,000	$	17.72

8. Revenues

Revenues comprise the following:


	Three months ended
	June 30, 2016		June 30, 2015
Net pool revenues—related party	$	37,659,385	$	15,310,559
Voyage charter revenues		—		14,864,184
Time charter revenues		12,532,351		5,372,203
Other revenues		324,040		95,514
Total	$	50,515,776	$	35,642,460

Net pool revenues—related party depend upon the net results of the Helios Pool, operating days and pool points for each vessel. Refer to Note 2 of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2016.

Other revenues represent income from charterers relating to reimbursement of voyage expenses such as costs for security guards and war risk insurance.

9. Financial Instruments and Fair Value Disclosures

Our principal financial assets consist of cash and cash equivalents, amounts due from related parties and trade accounts receivable. Our principal financial liabilities consist of long‑term bank loan, interest rate swaps, accounts payable, amounts due to related parties and accrued liabilities.

(a) Concentration of credit risk: Financial instruments, which may subject us to significant concentrations of credit risk, consist principally of amounts due from our charterers, including the receivable from Helios Pool, and cash and cash equivalents. We limit our credit risk with amounts due from our charterers, including those through the Helios Pool, by performing ongoing credit evaluations of our charterers’ financial condition and generally do not require collateral from our charterers. We limit our credit risk with our cash and cash equivalents by placing it with highly-rated financial institutions.

(b) Interest rate risk: Our long‑term bank loans are based on LIBOR and hence we are exposed to movements thereto. We entered into interest rate swap agreements in order to hedge a majority of our variable interest rate exposure related to the RBS Loan Facility and our 2015 Debt Facility. The interest rate swaps related to the RBS Loan Facility effectively convert substantially all of our RBS Loan Facility from a floating to a fixed rate. To hedge our exposure to changes in interest rates we are a party to five floating‑to‑fixed interest rate swaps with RBS. In September 2015, we entered into interest rate swaps with Citibank N.A. (“Citibank”) and ING Bank N.V. (“ING”) to effectively convert a notional amount of $200 million and $50 million, respectively, of debt related to our 2015 Debt Facility from a floating rate to a fixed rate of 1.93% and 2.00%, respectively, each with a termination date of March 23, 2022. In October 2015, we entered into interest rate swaps with the Commonwealth Bank of Australia (“CBA”) and Citibank to effectively convert amortizing notional amounts of $85.7 million and $128.6 million, respectively, of debt related to our 2015 Debt Facility from a floating rate to a fixed rate of 1.43% and 1.38%, respectively, each with a termination date of March 23, 2022. In June 2016, we entered into two interest rate swaps with Citibank to effectively convert amortizing notional amounts of $73.0 million and $30.0 million, respectively, of debt related to our 2015 Debt Facility from a floating rate to a fixed rate of 1.21% and 1.16%, respectively, each with a termination date of March 23, 2022.

(c) Fair value measurements: Interest rate swaps are stated at fair value, which is determined using a discounted cash flow approach based on market‑based LIBOR swap yield rates. LIBOR swap rates are observable at commonly quoted intervals for the full terms of the swaps and therefore are considered Level 2 items in accordance with the fair value hierarchy. The fair value of the interest rate swap agreements approximates the amount that we would have to pay for the early termination of the agreements.The following table summarizes the location on the balance sheet of the financial assets and liabilities that are carried at fair value on a recurring basis, which comprise our financial derivatives all of which are considered Level 2 items in accordance with the fair value hierarchy:


		June 30, 2016				March 31, 2016
	Other non-current assets		Long-term liabilities		Other non-current assets		Long-term liabilities
Derivatives not designated as hedging instruments	Derivative instruments		Derivative instruments		Derivative instruments		Derivative instruments
Interest rate swap agreements	$	—	$	26,017,824	$	—	$	21,647,965

The effect of derivative instruments within the unaudited condensed consolidated statement of operations for the periods presented is as follows:


		Three months ended
Derivatives not designated as hedging instruments	Location of gain/(loss) recognized	June 30, 2016		June 30, 2015
Interest Rate Swap—Change in fair value	Unrealized gain/(loss) on derivatives	$	(4,369,859)	$	1,386,886
Interest Rate Swap—Realized loss	Realized loss on derivatives		(2,256,788)		(1,244,491)
Gain/(loss) on derivatives, net		$	(6,626,647)	$	142,395

As of June 30, 2016 and March 31, 2016, no fair value measurements for assets or liabilities under Level 1 or Level 3 were recognized in the accompanying consolidated balance sheets. We did not have any other assets or liabilities measured at fair value on a non-recurring basis during the three months ended June 30, 2016 and 2015.

(d) Book values and fair values of financial instruments: In addition to the derivatives that we are required to record at fair value on our balance sheet (see (c) above), we have other financial instruments that are carried at historical cost. These financial instruments include trade accounts receivable, amounts due from related parties, cash and cash equivalents, accounts payable, amounts due to related parties and accrued liabilities for which the historical carrying value approximates the fair value due to the short‑term nature of these financial instruments. We also have long term bank debt for which we believe the historical carrying value approximates their fair value as the loans bear interest at variable interest rates, being LIBOR, which is observable at commonly quoted intervals for the full terms of the loans, and hence are considered as Level 2 items in accordance with the fair value hierarchy. Cash and cash equivalents and restricted cash are considered Level 1 items.

10. Earnings/(Loss) Per Share (“EPS”)

Basic EPS represents net income/(loss) attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Our restricted stock shares include rights to receive dividends that are subject to the risk of forfeiture if service requirements are not satisfied, and as a result, these shares are not considered participating securities and are excluded from the basic weighted-average shares outstanding calculation. Diluted EPS represent net income/(loss) attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period.

The calculations of basic and diluted EPS for the periods presented are as follows:


	Three months ended
(In U.S. dollars except share data)	June 30, 2016		June 30, 2015
Numerator:
Net income/(loss)	$	(1,291,121)	$	13,652,883
Denominator:
Basic and diluted weighted average number of common shares outstanding		54,740,984		57,128,493
EPS:
Basic and diluted	$	(0.02)	$	0.24

For the three months ended June 30, 2016 and 2015, there were 655,000 and 929,000 shares of unvested restricted stock, respectively, excluded from the calculation of diluted EPS because the effect of their inclusion would be anti-dilutive.

11. Commitments and Contingencies

Commitments under Operating Leases

As of June 30, 2016, we had the following commitments as a lessee under operating leases relating to our United States, Greece and United Kingdom offices:


	June 30, 2016
Less than one year	$	348,436
One to three years		252,793
Three to five years		8,227
Total	$	609,456

Fixed Time Charter Contracts

As of June 30, 2016, we had the following future minimum fixed time charter hire receipts based on non-cancelable long-term fixed time charter contracts:


	June 30, 2016
Less than one year	$	51,973,113
One to three years		80,186,227
Three to five years		18,812,333
Total	$	150,971,673

Other

From time to time we expect to be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. Such claims, even if lacking in merit, could result in the expenditure of significant financial and managerial resources. We are not aware of any claim that is reasonably possible

Selected Financial Data

The following table presents our selected financial data and other information for the three months ended June 30, 2016 and 2015, and as of June 30, 2016 and March 31, 2016 and should be read in conjunction with our unaudited interim condensed consolidated financial statements and other financial information included in this quarterly report.


	Three months ended
(in U.S. dollars, except fleet data)	June 30, 2016			June 30, 2015
Statement of Operations Data
Revenues	$	50,515,776		$	35,642,460
Expenses
Voyage expenses		755,804			3,523,073
Vessel operating expenses		16,095,552			6,754,086
Depreciation and amortization		16,192,745			4,857,427
General and administrative expenses		5,611,310			7,214,280
Loss on disposal of assets		—			105,549
Total expenses		38,655,411			22,454,415
Other income—related parties		552,901			383,642
Operating income		12,413,266			13,571,687
Other income/(expenses)
Interest and finance costs		(7,038,209)			(135,800)
Interest income		23,178			65,585
Unrealized gain/(loss) on derivatives		(4,369,859)			1,386,886
Realized loss on derivatives		(2,256,788)			(1,244,491)
Foreign currency gain/(loss), net		(62,709)			9,016
Total other income/(expenses), net		(13,704,387)			81,196
Net income/(loss)	$	(1,291,121)		$	13,652,883
Earnings/(loss) per common share—basic and diluted	$	(0.02)		$	0.24
Other Financial Data
Adjusted EBITDA(1)	$	29,576,278		$	19,400,254
Fleet Data
Calendar days(2)		2,002			662
Available days(3)		2,002			648
Operating days(4)(7)		1,885			579
Fleet utilization(5)(7)		94.2	%		89.4	%
Average Daily Results
Time charter equivalent rate(6)(7)	$	26,398		$	55,474
Daily vessel operating expenses(8)	$	8,040		$	10,203


	Dorian LPG Ltd.
	As of		As of
(in U.S. dollars)	June 30, 2016		March 31, 2016
Balance Sheet Data
Cash and cash equivalents	$	47,321,200	$	46,411,962
Restricted cash, non – current		50,812,789		50,812,789
Total assets		1,818,212,387		1,842,178,176
Current portion of long-term debt		65,978,785		66,265,643
Long-term debt—net of current portion and deferred financing fees		731,833,039		746,354,613
Total liabilities		844,336,618		856,578,939
Total shareholders’ equity	$	973,875,769	$	985,599,237

(1)

Adjusted EBITDA is a non-GAAP financial measure and represents net income/(loss) before interest and finance costs, unrealized (gain)/loss on derivatives, realized loss on derivatives, stock-based compensation expense, impairment, loss on disposal of assets and depreciation and amortization and is used as a supplemental financial measure by management to assess our financial and operating performance. We believe that adjusted EBITDA assists our management and investors by increasing the comparability of our performance from period to period. This increased comparability is achieved by excluding the potentially disparate effects between periods of derivatives, interest and finance costs, stock-based compensation expense, impairment, loss on disposal of assets and depreciation and amortization expense, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income/(loss) between periods. We believe that including adjusted EBITDA as a financial and operating measure benefits investors in selecting between investing in us and other investment alternatives.

Adjusted EBITDA has certain limitations in use and should not be considered an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income. Adjusted EBITDA as presented below may not be computed consistently with similarly titled measures of other companies and, therefore might not be comparable with other companies.

The following table sets forth a reconciliation of net income/(loss) to Adjusted EBITDA (unaudited) for the periods presented:


	Three months ended
	June 30, 2016		June 30, 2015
(in U.S. dollars)
Net income/(loss)	$	(1,291,121)	$	13,652,883
Interest and finance costs		7,038,209		135,800
Unrealized gain/(loss) on derivatives		4,369,859		(1,386,886)
Realized loss on derivatives		2,256,788		1,244,491
Stock-based compensation expense		1,009,798		896,539
Depreciation and amortization		16,192,745		4,857,427
Adjusted EBITDA	$	29,576,278	$	19,400,254

(2)

We define calendar days as the total number of days in a period during which each vessel in our fleet was owned. Calendar days are an indicator of the size of the fleet over a period and affect both the amount of revenues and the amount of expenses that are recorded during that period.

(3)

We define available days as calendar days less aggregate off‑hire days associated with scheduled maintenance, which include major repairs, drydockings, vessel upgrades or special or intermediate surveys. We use available days to measure the aggregate number of days in a period that our vessels should be capable of generating revenues.

(4)

We define operating days as available days less the aggregate number of days that our vessels are off‑hire for any reason other than scheduled maintenance. We use operating days to measure the number of days in a period that our operating vessels are on hire (refer to 7 below).

(5)

We calculate fleet utilization by dividing the number of operating days during a period by the number of available days during that period. An increase in non‑scheduled off‑hire days would reduce our operating days, and therefore, our fleet utilization. We use fleet utilization to measure our ability to efficiently find suitable employment for our vessels.

(6)

Time charter equivalent rate, or TCE rate, is a non-GAAP measure of the average daily revenue performance of a vessel. TCE rate is a shipping industry performance measure used primarily to compare period‑to‑period changes in a shipping company’s performance despite changes in the mix of charter types (such as time charters, voyage charters) under which the vessels may be employed between the periods. Our method of calculating TCE rate is to divide revenue net of voyage expenses by operating days for the relevant time period, which may not be calculated the same by other companies.

The following table sets forth a reconciliation of revenues to TCE rate (unaudited) for the periods presented:


	Three months ended
(in U.S. dollars, except operating days)	June 30, 2016		June 30, 2015
Numerator:
Revenues	$	50,515,776	$	35,642,460
Voyage expenses		(755,804)		(3,523,073)
Time charter equivalent	$	49,759,972	$	32,119,387
Denominator:
Operating days		1,885		579
TCE rate:
Time charter equivalent rate	$	26,398	$	55,474

(7)

We determine operating days for each vessel based on the underlying vessel employment, including our vessels in the Helios Pool, which resulted in 1,885 operating days, fleet utilization of 94.2%, and a TCE rate of $26,398 for the three months ended June 30, 2016 and 579 operating days, fleet utilization of 89.4%, and a TCE rate of $55,474, for the three months ended June 30, 2015. If we were to calculate operating days for each vessel within the Helios Pool as a variable rate time charter for the three months ended June 30, 2016 and 2015, our operating days would be increased to 2,002 and 609, respectively, fleet utilization would be increased to 100.0% and 94.0%, respectively, and TCE rate would be reduced to $24,855 and $52,741, respectively. We believe that our methodology using the underlying vessel employment provides more meaningful insight into market conditions and the performance of our vessels.

(8)

Daily vessel operating expenses are calculated by dividing vessel operating expenses by calendar days for the relevant time period.

Our Fleet

The following table sets forth certain information regarding our fleet as of July 26, 2016:

Capacity

Sister

ECO

Charter

(Cbm)

Shipyard

Ships

Year Built

Vessel(1)

Employment(2)

Expiration(3)

VLGCs

Captain Markos NL(4)

82,000

Hyundai

2006

—

Time Charter

Q4 2019

Captain John NP

82,000

Hyundai

2007

—

Pool

—

Captain Nicholas ML

82,000

Hyundai

2008

—

Pool

—

Comet(5)

84,000

Hyundai

2014

Time Charter

Q3 2019

Corsair(6)

84,000

Hyundai

2014

Time Charter

Q3 2018

Corvette

84,000

Hyundai

2015

Pool

—

Cougar

84,000

Hyundai

2015

Pool

—

Concorde

84,000

Hyundai

2015

Pool

—

Cobra

84,000

Hyundai

2015

Pool

—

Continental

84,000

Hyundai

2015

Pool

—

Constitution

84,000

Hyundai

2015

Pool

—

Commodore

84,000

Hyundai

2015

Pool

—

Cresques

84,000

Daewoo

2015

Pool

—

Constellation

84,000

Hyundai

2015

Pool

—

Cheyenne

84,000

Hyundai

2015

Pool

—

Clermont

84,000

Hyundai

2015

Pool

—

Cratis

84,000

Daewoo

2015

Pool

—

Chaparral

84,000

Hyundai

2015

Pool

—

Copernicus

84,000

Daewoo

2015

Pool

—

Commander(7)

84,000

Hyundai

2015

Time Charter

Q4 2020

Challenger(8)

84,000

Hyundai

2015

Pool

Q2 2017

Caravelle

84,000

Hyundai

2016

Pool

—

Total

1,842,000

(1)

Represents vessels with very low revolutions per minute, long‑stroke, electronically controlled engines, larger propellers, advanced hull design, and low friction paint.

(2)

“Pool” indicates that the vessel is operated in the Helios Pool and receives as charter hire a portion of the net revenues of the pool calculated according to a formula based on the vessel’s pro rata performance in the pool.

(3)

Represents calendar year quarters.

(4)

Currently on time charter with an oil major that began in December 2014.

(5)

Currently on a time charter with an oil major that began in July 2014.

(6)

Currently on time charter with an oil major that began in July 2015.

(7)

Currently on a time charter with a major oil company that began in November 2015.

(8)

Currently on time charter with a trader within the Helios Pool that began in May 2016.

Results of Operations – For the three months ended June 30, 2016 as compared to the three months ended June 30, 2015

Revenues

The following table compares our Revenues for the three months ended June 30:


					Increase /		Percent
	2016		2015		(Decrease)		Change

Net pool revenues—related party	$	37,659,385	$	15,310,559	$	22,348,826	146.0	%
Voyage charter revenues		—		14,864,184		(14,864,184)	NM
Time charter revenues		12,532,351		5,372,203		7,160,148	133.3	%
Other revenues		324,040		95,514		228,526	239.3	%
Total	$	50,515,776	$	35,642,460	$	14,873,316	41.7	%

Revenues, which represent net pool revenues—related party, voyage charters, time charters and other revenues earned by our VLGCs, were $50.5 million for the three months ended June 30, 2016, an increase of $14.9 million, or 41.7%, from $35.6 million for the three months ended June 30, 2015. The increase is primarily attributable to $30.4 million of revenues contributed by fourteen of our newbuilding VLGCs that began operations subsequent to June 30, 2015. This increase was partially offset by a decrease in revenues of $14.6 million, primarily due to a decrease in VLGC rates for vessels that were operating in our fleet during both three month periods, and a decrease of $0.9 million in revenues contributed by a pressurized gas carrier operating in our fleet during the three months ended June 30, 2015 that was sold prior to the three months ended June 30, 2016.

Voyage Expenses

Voyage expenses were $0.8 million during the three months ended June 30, 2016, a decrease of $2.7 million, from $3.5 million for the three months ended June 30, 2015. Voyage expenses are all expenses unique to a particular voyage, including bunker fuel consumption, port expenses, canal fees, charter hire commissions, war risk insurance and security costs. Voyage expenses are typically paid by us under voyage charters and by the charterer under time charters, including pooling arrangements. Accordingly, we mainly incur voyage expenses for voyage charters or during repositioning voyages between time charters for which no cargo is available or travelling to or from drydocking. The decrease for the three months ended June 30, 2016, when compared to the three months ended June 30, 2015, was mainly attributable to the fact that none of our VLGCs operated on voyage charters outside of the Helios Pool during the three months ended June 30, 2016 resulting in decreases in VLGC bunker costs of $2.0 million and port expenses of $0.5 million, partially offset by an increase in other voyage expenses of $0.2 million. In addition, a pressurized gas carrier operating in our fleet during the three months ended June 30, 2015 incurred voyage expenses of $0.4 million for the three months ended June 30, 2015 that did not recur during the three months ended June 30, 2016 as it was sold prior to the period.

Vessel Operating Expenses

Vessel operating expenses were $16.1 million during the three months ended June 30, 2016, or $8,040 per vessel per calendar day, which is calculated by dividing vessel operating expenses by calendar days for the relevant time period for the vessels that were in our fleet. This was an increase of $9.3 million from $6.8 million for the three months ended June 30, 2015. The gross increase was primarily the result of an increase in the number of vessels operating in our fleet during the three months ended June 30, 2016 compared to the three months ended June 30, 2015. Vessel operating expenses per calendar day decreased $2,163 from $10,203 for the three months ended June 30, 2015 to $8,040 for the three months ended June 30, 2016. The decrease in vessel operating expenses per day of $2,163 was largely due to a $1.1 million, or $1,689 per vessel per calendar day, reduction in costs relating to the training of additional crew along with the addition of newer vessels, which incur lower operating costs.

Depreciation and Amortization

Depreciation and amortization was $16.2 million for the three months ended June 30, 2016, an increase of $11.3 million, or 233.4%, from $4.9 million for the three months ended June 30, 2015 that mainly relates to depreciation expense for our additional operating vessels.

General and Administrative Expenses

General and administrative expenses were $5.6 million for the three months ended June 30, 2016, a decrease of $1.6 million, or 22.2%, from $7.2 million for the three months ended June 30, 2015. The decrease was mainly due to a decrease of $1.5 million for salaries, wages and benefits (primarily from $2.1 million in cash bonuses to various employees approved by the Board of Directors in May 2015, partially offset by a $0.6 million increase in salaries, wages and benefits resulting from an increase in the number of employees) and $0.3 million for certain non-capitalizable costs incurred prior to vessel delivery, partially offset by an increase of $0.1 million for stock-based compensation and $0.1 million for other general and administrative expenses.

Other Income —Related Parties

Other income —related parties amounted to $0.6 million for the three months ended June 30, 2016, an increase of $0.2 million, or 44.1%, from $0.4 million for the three months ended June 30, 2015. The increase was primarily attributable to an increase of $0.1 million of fees for commercial management services provided by Dorian LPG (UK) Ltd. to the Helios Pool as well an increase of $0.1 million for certain chartering and marine operation services provided by Dorian LPG (USA) LLC and its subsidiaries to DHSA.

Interest and Finance Costs

Interest and finance costs amounted to $7.0 million for the three months ended June 30, 2016, an increase of $6.9 million, or 5,082.8%, from $0.1 million for the three months ended June 30, 2015. The increase of $6.9 million during this period was mainly due to a $5.5 million increase in interest incurred on our long-term debt, amortization and other financing expenses, including capitalized interest, from $1.5 million in the three months ended June 30, 2015 to $7.0 million in the three month period ended June 30, 2016. Additionally, we had no capitalized interest during the three months ended June 30, 2016 compared to $1.4 million during the three months ended June 30, 2015. The average indebtedness, excluding deferred financing fees, during the three months ended June 30, 2016 was $835.3 million compared to $215.5 million during the three months ended June 30, 2015, reflecting debt drawdowns made under our 2015 Debt Facility. The outstanding balance of our long term debt as of June 30, 2016 was $820.7 million excluding deferred financing fees of $22.9 million.

Unrealized Gain/(Loss) on Derivatives

Unrealized gain/(loss) on derivatives amounted to a loss of approximately $4.4 million for the three months ended June 30, 2016, compared to a gain of $1.4 million for the three months ended June 30, 2015. The $5.8 million change is primarily attributable to changes in the fair value of our interest rate swaps due to changes in forward LIBOR yield curves.

Realized Loss on Derivatives

Realized loss on derivatives amounted to a loss of approximately $2.3 million for the three months ended June 30, 2016, an increase of $1.1 million, or 81.3%, from a loss of $1.2 million for the three months ended June 30, 2015. The increase is primarily attributable to six interest rate swaps we entered into subsequent to June 30, 2015, which increased our notional debt amounts.

Liquidity and Capital Resources

Our business is capital intensive, and our future success depends on our ability to maintain a high‑quality fleet. As of June 30, 2016, we had cash and cash equivalents of $47.3 million and restricted cash of $50.8 million.

Our primary source of capital during the three months ended June 30, 2016 was $29.8 million in cash generated from operations. As of June 30, 2016, we had total outstanding indebtedness of $820.7 million excluding deferred financing fees of $22.9 million. Within the next twelve months, $66.0 million of our long-term debt is scheduled to be repaid.

Operating expenses, including expenses to maintain the quality of our vessels in order to comply with international shipping standards and environmental laws and regulations, the funding of working capital requirements, long-term debt repayments, financing costs, including the repayment of principal and interest under our debt facilities, and repurchases of our own securities represent our short‑term, medium‑term and long‑term liquidity needs as of June 30, 2016. We anticipate satisfying these needs with cash on hand, cash from operations and/or external sources of finance.

Our dividend policy will also impact our future liquidity position. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent by the payment of such a dividend. In addition, under the terms of our credit facilities, we may only declare or pay any dividends from our free cash flow and may not do so if i) an event of default is occurring or ii) the payment of such dividend would result in an event of default. Our vessel owning subsidiaries who are party to the RBS Loan Facility, as described in our Annual Report on Form 10-K for the year ended March 31, 2016, are prohibited from paying dividends without the consent of the lender. However, the loan facility permits the borrowers to make expenditures to fund the administration and operation of Dorian.

As part of our growth strategy, we will continue to consider strategic opportunities, including the acquisition of additional vessels and repurchases of our own securities. We may choose to pursue such opportunities through internal growth or joint ventures or business acquisitions. We expect to finance the purchase price of any future acquisitions either through internally generated funds, public or private debt financings, public or private issuances of additional equity securities or a combination of these forms of financing.

Cash Flows

The following table summarizes our cash and cash equivalents provided by/(used in) operating, financing and investing activities for three months ended June 30:



	2016		2015
Net cash provided by operating activities	$	29,782,059	$	16,892,807
Net cash used in investing activities		(1,241,826)		(207,434,058)
Net cash provided by/(used in) financing activities		(27,553,084)		120,341,194
Net increase/(decrease) in cash and cash equivalents	$	909,238	$	(70,105,400)

Operating Cash Flows. Net cash provided by operating activities for the three months ended June 30, 2016 was $29.8 million, compared to $16.9 million for the three months ended June 30, 2015. The increase of $12.9 million is primarily related to the timing of the changes in working capital.

Net cash flow from operating activities depends upon our overall profitability, market rates for vessels employed on voyage charters, charter rates agreed to for time charters, the timing and amount of payments for drydocking expenditures and unscheduled repairs and maintenance, fluctuations in working capital balances; timing of distributions from the Helios Pool; and bunker costs to the extent we have vessels employed on voyage charters.

Investing Cash Flows. Net cash used in investing activities was $1.2 million for the three months ended June 30, 2016, comprised primarily of $1.2 million of payments for capitalized costs related to our newbuildings. Net cash used in investing activities was $207.4 million for the three months ended June 30, 2015, comprised mainly of $204.1 million of scheduled payments to the shipyards, supervision costs, management fees, and other capitalized costs related to the newbuildings and a $3.3 million increase in restricted cash deposits.

Financing Cash Flows. Net cash used in financing activities was $27.6 million for the three months ended June 30, 2016 and consisted of repayments of long term debt of $15.7 million and repurchase of treasury stock of $11.9 million. Net cash provided by financing activities was $120.3 million for the three months ended June 30, 2015 and consisted of cash proceeds from drawdowns of the 2015 Debt Facility totaling $127.4 million, offset partially by repayments of long term debt of $2.8 million and payment of financing costs of $4.2 million.

Capital Expenditures. LPG transportation is a capital‑intensive business, requiring significant investment to maintain an efficient fleet and to stay in regulatory compliance.

We are required to complete a special survey for a vessel once every five years and an intermediate survey every 2.5 years after the first special survey. Drydocking each vessel takes approximately 10‑20 days. We spend significant amounts for scheduled drydocking (including the cost of classification society surveys) for each of our vessels.

As our vessels age and our fleet expands, our drydocking expenses will increase. We estimate the current cost of a VLGC special survey to be approximately $1,000,000 per vessel and the cost of an intermediate survey to be approximately $100,000 per vessel. Ongoing costs for compliance with environmental regulations are primarily included as part of our drydocking and classification society survey costs. We are not aware of any future regulatory changes or environmental laws that we expect to have a material impact on our current or future results of operations that we have not already considered. Please see “Item 1A. Risk Factors—Risks Relating to Our Company—We may incur substantial costs for the drydocking or replacement of our vessels as they age" in our Annual Report on Form 10-K for the year ended March 31, 2016.

Debt Agreements

For information relating to our secured term loan facilities, please see Note 11 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2016 and Note 6 to our unaudited interim condensed consolidated financial statements for the three months ended June 30, 2016 included herein.

Off-Balance Sheet Arrangements

We currently do not have any off‑balance sheet arrangements.

Critical Accounting Policies and Estimates

The following is an update to the Critical Accounting Estimates set forth in “Item 7. — Management's Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended March 31, 2016.

Impairment of long-lived assets. We review our vessels and other fixed assets for impairment when events or circumstances indicate the carrying amount of the asset may not be recoverable. In addition, we compare independent appraisals to our carrying value for indicators of impairment to our vessels. When such indicators are present, an asset is tested for recoverability by comparing the estimate of future undiscounted net operating cash flows expected to be generated by the use of the asset over its remaining useful life and its eventual disposition to its carrying amount. An impairment charge is recognized if the carrying value is in excess of the estimated future undiscounted net operating cash flows. The impairment loss is measured based on the excess of the carrying amount over the fair market value of the asset. The new lower cost basis would result in a lower annual depreciation than before the impairment.

Our estimates of fair market value assume that our vessels are all in good and seaworthy condition without need for repair and if inspected would be certified in class without notations of any kind. Our estimates are based on information available from various industry sources, including:

reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;

news and industry reports of similar vessel sales;

approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated;

offers that we may have received from potential purchasers of our vessels; and

vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers.

As we obtain information from various industry and other sources, our estimates of fair market value are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future fair market value of our vessels or prices that we could achieve if we were to sell them.

For the three months ended June 30, 2016, independent appraisals of eighteen of our VLGCs had indicators of impairment in accordance with ASC 360 Property, Plant, and Equipment. We determined estimated net operating cash flows for these VLGCs by applying various assumptions regarding future time charter equivalent revenues net of commissions, operating expenses, scheduled drydockings, expected offhire and scrap values. These assumptions were based on historical data as well as future expectations. We estimated spot market rates by obtaining the trailing 10-year historical average spot market rates, as published by maritime industry researchers. Estimated outflows for operating expenses and drydocking expenses were based on historical and budgeted costs and were adjusted for assumed inflation. Utilization was based on our historical levels achieved in the spot market and estimates of a residual value consistent with scrap rates used in management's evaluation of scrap value. Such estimates and assumptions regarding expected net operating cash flows require considerable judgment and were based upon historical experience, financial forecasts and industry trends and conditions. Therefore, based on this analysis, we concluded that no impairment charge was necessary because we believe the vessel carrying values are recoverable. No impairment charges were recognized for the three months ended June 30, 2016.

In addition, we performed a sensitivity analysis as of June 30, 2016, to determine the effect on recoverability of changes in TCE rates. The sensitivity analysis suggests that we would not incur an impairment charge on any of those eighteen VLGCs if daily TCE rates fell by 30% compared to the 10-year historical average spot market rates. An impairment charge of approximately $62.0 million on sixteen of those eighteen VLGCs would be triggered by a reduction of 40% in the 10-year historical average spot market rates. The amount, if any, and timing of any impairment charges we may recognize in the future will depend upon then current and expected future charter rates and vessel values, which may differ materially from those used in our estimates as of June 30, 2016.

Recent Accounting Pronouncements

See Note 2 to our unaudited interim condensed consolidated financial statements included herein for a discussion of recent accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For additional discussion of our exposure to market risk, refer to “Part II—Item 7A—Quantitative and Qualitative Disclosures About Market Risk” included in our Annual Report on Form 10-K for the year ended March 31, 2016.

Interest Rate Risk

The LPG shipping industry is capital intensive, requiring significant amounts of investment. Much of this investment is provided in the form of long-term debt. Our debt agreements contain interest rates that fluctuate with LIBOR. We have entered into interest rate swap agreements to hedge a majority of our exposure to fluctuations of interest rate risk associated with our RBS Debt Facility. For the three months ended June 30, 2016 and 2015, we hedged approximately 99% of our RBS Loan Facility to changes in interest rates and as a result we were not materially exposed to interest rate

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we expect to be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. Such claims, even if lacking in merit, could result in the expenditure of significant financial and managerial resources. We are not aware of any claim that is reasonably possible and should be disclosed or probable and for which a provision should be established in the accompanying unaudited interim condensed consolidated financial statements.

ITEM 1A. RISK FACTORS

Our operations and financial results are subject to various risks and uncertainties that could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. The following is an update to the risk factors that may cause actual results to differ materially from those anticipated set forth in “Item 1A. — Risk Factors” of our Annual Report on Form 10-K for the year ended March 31, 2016.

The expansion of the Panama Canal may have an adverse effect on our results of operations.

In June 2016, the expansion of the Panama Canal, or the Canal, was completed. The new locks allow the Canal to accommodate significantly larger vessels, including VLGCs, which we operate. Transit from the U.S. Gulf to Asia, an important trade route for our customers, can now be shortened by approximately 15 days compared to transiting via the Cape of Good Hope. The decrease in voyage time may increase the number of VLGCs available for cargo lifting and thereby increase industry capacity, which may have an adverse effect on TCE rates.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

On August 5, 2015, we publicly announced that our Board of Directors had authorized the repurchase of up to $100 million of our common stock on or before December 31, 2016. The table below sets forth information regarding our purchases of our common stock during the quarterly period ended June 30, 2016:


				Total
				Number of
				Shares
				Purchased as
				Part of	Maximum Dollar
	Total			Publicly	Value of Shares
	Number	Average		Announced	that May Yet Be
	of Shares	Price Paid		Plans or	Purchased Under the
Period	Purchased	Per Share		Programs	Plan or Programs
April 1 to 30, 2016	50,000	$	10.36	50,000	$	78,538,342
May 1 to 31, 2016	447,900		10.01	447,900		74,056,908
June 1 to 30, 2016	757,400		8.80	757,400		67,388,034
Total	1,255,300	$	9.30	1,255,300	$	67,388,034

ITEM 6. EXHIBITS

See accompanying Exhibit Index included after the signature page of this report for a list of exhibits filed or furnished with this report.

EXHIBIT INDEX


Exhibit Number		Description

10.1		Form of Restricted Stock Award Agreement, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on June 22, 2016

31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1†		Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2†		Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Schema Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Schema Definition Linkbase

101.LAB		XBRL Taxonomy Extension Schema Label Linkbase

101.PRE		XBRL Taxonomy Extension Schema Presentation Linkbase

†This certification is deemed not filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act.


	Dorian LPG Ltd.
	(Registrant)

Date: July 27, 2016	/s/ John Hadjipateras
	John Hadjipateras
	President and Chief Executive Officer
	(Principal Executive Officer)


Date: July 27, 2016	/s/ Theodore B. Young
	Theodore B. Young
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)


PART I.	FINANCIAL INFORMATION

ITEM 1.		FINANCIAL STATEMENTS
		Unaudited Condensed Consolidated Balance Sheets as of June 30, 2016 and March 31, 2016	1
		Unaudited Condensed Consolidated Statements of Operations for the three months ended June 30, 2016 and June 30, 2015	2
		Unaudited Condensed Consolidated Statements of Shareholders' Equity for the three months ended June 30, 2016 and June 30, 2015	3
		Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2016 and June 30, 2015	4
		Notes to Unaudited Condensed Consolidated Financial Statements	5

ITEM 2.		MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
ITEM 4.		CONTROLS AND PROCEDURES	24


PART II.	OTHER INFORMATION

ITEM 1.		LEGAL PROCEEDINGS	25
ITEM 1A.		RISK FACTORS	25
ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	25
ITEM 6.		EXHIBITS	25

SIGNATURES			26
EXHIBIT INDEX			27