Unconsolidated Entities

6 Months Ended

Jun. 30, 2012

Unconsolidated Entities [Abstract]

Unconsolidated Entities

Note 3.  Unconsolidated Entities

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.  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. 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.  We contributed $750,000 to Oslo Bulk in the first quarter of 2012 and $250,000 in July, 2012 for working capital purposes. Our portion of the aggregate earnings of Oslo Bulk and Tony Bulkers, was $660,000 for the six months ended June 30, 2012. Included in the second quarter 2012 results of unconsolidated entities was an out of period adjustment of $716,000. See Note 17 for further disclosure of this adjustment. Our portion of the aggregate earnings of Oslo Bulk and Tony bulkers, which included final 2010 income adjustments of $143,000 for Oslo Bulk, were losses of $399,000 and $108,000, respectively, for the six months ended June 30, 2011, largely due to initial positioning of the newly delivered vessels.

Our 2011 second quarter results also included our portion of earnings of Dry Bulk Cape Holding Inc. ("Dry Bulk"). In 2003, we acquired for $3,479,000 a 50% investment in Dry Bulk. 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 income, 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 4 below.

Our portion of earnings of Dry Bulk for the first six months of 2011, recorded under the equity method, was a profit of $1.3 million.  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.

Our portion of the earnings of our remaining investments in unconsolidated entities for the six months ended June 30, 2012 and 2011 were losses of $79,000 and $62,000, respectively.