NOTE M - UNCONSOLIDATED ENTITIES

Bulk Carriers

In 2003, we acquired for $3,479,000 a 50% investment in Dry Bulk Cape Holding Inc. (“Dry Bulk”), which as of December 31, 2010, owned 100% of subsidiary companies owning two Capesize Bulk Carriers and two Handymax Bulk Carrier Newbuildings on order for delivery in 2012. Historically, we have accounted for this investment under the equity method and our share of earnings or losses has been reported in our consolidated statements of operations, net of taxes. On March 25, 2011, we acquired 100% ownership of Dry Bulk. Following the acquisition, Dry Bulk's results are no longer accounted for under the equity method. For further information on this acquisition, see Note N.

Our portion of earnings of Dry Bulk for the first three months of 2011, recorded under the equity method, was $1.3 million, net of taxes of $0. For the year ended December 31, 2010, our portions of earnings of Dry Bulk was $10.8 million. Historically, we did not provide for income taxes related to our earnings from Dry Bulk as a result of the U. S. tax law in effect prior to 2010. This tax law expired effective January 1, 2010, resulting in income taxes being applicable to our earnings from Dry Bulk during the first three quarters of 2010. After Congress eliminated the need for a tax provision on these amounts in late 2010, we reversed our 2010 provision for taxes in the fourth quarter of 2010.

During the first quarter of 2011 we received a $750,000 cash dividend distribution from Dry Bulk prior to acquiring full ownership of it on March 25, 2011 and also received a $3.0 million cash dividend distribution in 2010.

The condensed results of operations of Dry Bulk through March 25, 2011, when we acquired 100% of its stock included operating revenues of $4.8 million, operating income of $2.9 million, and net income of $2.6 million. The condensed financial position for the year ended December 31, 2010 and results of operations of Dry Bulk for the years ended December 31, 2010 and 2009, respectively, are summarized below:

(Amounts in thousands)	December 31, 2010
Current Assets	$ 17,518
Noncurrent Assets	69,477
Current Liabilities	1,438
Noncurrent Liabilities	58,756

	Year Ended December 31,
(Amounts in thousands)	2010	2009
Operating Revenues	$ 28,222	$ 27,417
Operating Income	22,851	17,089
Net Income	21,364	13,760

In December 2009, we acquired for $6.25 million a 25% investment in Oslo Bulk AS (“Oslo Bulk”) which in 2008, contracted to build eight new Mini Bulkers. All of the Mini-Bulkers have been delivered and deployed as of July 2011. During 2010, we invested an additional $3.9 million in Oslo Bulk Holding Pte Ltd. (formerly “Tony Bulkers”), an affiliate of Oslo Bulk, for our 25% share of the installment payments for two additional new Mini-Bulkers, both of which have been delivered and deployed as of July 2011. We paid approximately $1.6 million in January 2011 for our remaining share of installment payments associated with these two Mini-Bulkers. These investments are accounted for under the equity method and our share of earnings or losses is reported in our consolidated statements of operations, net of taxes. All ten of these Mini-Bulkers are managed by an affiliate of Oslo Bulk. Our portion of the aggregate earnings of Oslo Bulk, which included final 2010 income adjustments of $143,000, was a loss of $1.3 million for the year ended December 31, 2011, partially due to initial positioning voyages on the newly delivered vessels and lower than expected average charter rates. Also included in the Oslo Bulk results for 2011 was a negative mark-to-market adjustment of $674,000 on an ineffective interest rate swap contract. Our portion of the earnings of Oslo Bulk for the year ended December 31, 2010 was a $1.1 million loss. Our portion of Tony Bulkers earnings was losses of $40,000 and $196,000 for the years ended December 31, 2011 and 2010, respectively.

Terminal Management Company

In 2000, we acquired a 50% interest in Terminales Transgolfo (“TTG”) for $228,000, which operates a terminal in Coatzacoalcos, Mexico, utilized by our Rail-Ferry Service. During 2005, the other unaffiliated 50% owner of TTG acquired 1% of our 50% interest in TTG. As of December 31, 2011, we have a 49% interest in TTG. In 2006, TTG began making improvements to the terminal in Mexico to accommodate the second decks that were added to our two wholly owned vessels operating in our Rail-Ferry Service during the first half of 2007. We funded 49% of the cost of the terminal improvements, of which 30% is a capital contribution and is reported as an investment in unconsolidated entities. The remaining 70% is a loan to TTG (see Note H-Transactions with Related Parties). No capital contributions were made during the years ended December 31, 2011, 2010, and 2009. The investment is accounted for under the equity method, and our share of earnings or losses, which was immaterial for all periods presented, is reported in our consolidated statements of income, net of taxes. No distributions were made by TTG during 2011, 2010 and 2009. As of December 31, 2011 and 2010, TTG owed us $1,827,000 and $2,113,000, respectively. (See Note H- Transactions with Related Parties).

Transloading and Storage Facility Company

In 2005, we acquired a 50% interest in RTI Logistics L.L.C. (“RTI”), which owns a transloading and storage facility that was used in our Rail-Ferry Service, for $1,587,000. We purchased our shares from a former owner at a premium, which resulted in a difference of approximately $973,000 between our investment in RTI and the underlying equity in net assets of the subsidiary. Additional investments of approximately $386,000 were made in 2006. On December 20, 2011, we sold our 50% interest in RTI Logistics, L.L.C. to the other 50% owner for $526,000 in cash and two promissory notes in the amount of $1,885,000 and $137,500, respectively. The sale of our 50% interest resulted in a loss of $967,000, which is recorded in the line item loss (gain) on sale of investment. Interest income on both notes will be earned at a rate of 6% per year for five years. As we no longer have any ownership interest in RTI after the sale, these two receivables are recorded on our consolidated balance sheets at December 31, 2011 under “Notes Receivable.”