Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited Fourth Quarter 2012 Earnings Conference Call and Presentation. Before we begin, please note that there will be a slide presentation accompanying today's conference call. That presentation can be obtained from Genco's website at www.gencoshipping.com. To inform everyone, today's conference is being recorded and is now being webcast at the company's website at www.gencoshipping.com. We will conduct a question-and-answer session after the opening remarks. Instructions will follow at that time. A replay of the conference will be accessible at any time during the next 2 weeks by dialing (888) 203-1112 or (719) 457-0820 and entering the passcode 2603843. At this time, I will turn the conference over to the company. Please go ahead.

Good morning. Before we begin our presentation, I note that in this conference call, we will be making certain forward-looking statements pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as anticipate, budget, estimate, expect, project, intend, plan, believe and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance. These forward-looking statements are based on management's current expectations and observations. For a discussion of factors that could cause results to differ, please see the company's press release that was issued yesterday, the materials relating to this call posted on the company's website and the company's filings with the Securities and Exchange Commission, including without limitation, the company's annual report on Form 10-K for the year ended December 31, 2011, and the company's subsequent reports filed with the SEC. At this time, I would like to introduce, Gerry Buchanan, the President of Genco Shipping & Trading.

Good morning, and welcome to Genco's Fourth Quarter 2012 Conference Call. With me today is John Wobensmith, our Chief Financial Officer. I will begin today's call by discussing our fourth quarter highlights as outlined on Slide 3 of the presentation. I will then turn the call over to John to review our financial results for the 3-month period ended December 31, 2012. Following this, I'll discuss the industry current fundamentals. John and I will then be happy to take your questions. During the fourth quarter, Genco continued to operate a large more than drybulk fleet in a cost effective manner continuing to meet the needs of multi-national charters, while preserving the ability to take advantage of the positive long-term industry fundamentals. Turning to Slide 5. Genco recorded a net loss of $45.7 million or $1.06 basic and diluted loss per share for the 3 months ended December 12, 2012. Genco's cash position, excluding Baltic Trading limited, was $79.5 million. During the fourth quarter, we continue to employ the majority of our vessels with short-term or spot market-related contracts with creditworthy third-parties such as Cargo International, Pacific Basin Chartering, Lauritzen Bulkers A/S and others. This opportunistic plain charter approach positions Genco to capitalize on future rate increases and, combined with our efficient cost structure, expand the company's future earnings potential when market conditions improve. Moving to Slide 6. We provide a summary of our fleet. Genco's more than diverse fleet bodes well for Genco to continue to provide its leading customers with service that adheres to the highest operational standards and take advantage of the positive long-term demand for the global transportation of iron ore, steel and other core commodities. Excluding Baltic Trading's fleet, we currently own a fleet of 53 drybulk vessels consisting of 9 Capesize, 8 Panamax, 17 Supramax, and 6 Handymax and 13 Handysize vessels, with a total carrying capacity of approximately 3,810,000 deadweight. Importantly, the average age of our fleet is 7.5 years below the industry average of approximately 10. I'll now turn the call over to John.

Thank you, Gerry. Turning to Slide 8, I will begin by providing an overview of our financial results for the fourth quarter and year ended December 31, 2012. Please note that we are reporting our financials on a consolidated basis as a result of our 25% equity ownership in Baltic Trading. For the 3 months and year ended December 31, 2012, we recorded total revenues of $49.2 million and $226.5 million, respectively. This compares with revenues for the fourth quarter of 2011 and year ended December 31, 2011 of $97.1 million and $392.2 million, respectively. The decrease in total revenues for the fourth quarter of 2012 compared to the prior year period is primarily due to lower charter rates achieved by the majority of our vessels. The operating loss for the fourth quarter and year ended December 31, 2012 was $26.2 million and $69.3 million, respectively. This compares with operating income for the fourth quarter and year ended December 31, 2011 of $24 million and $112.6 million, respectively. Interest expense for the fourth quarter of 2012 was $22.4 million and $87.6 million for the year ended December 31, 2012. This compares to interest expense of $22.1 million for the fourth quarter of 2011 and $86.7 million for the year ended December 31, 2011. The company recorded a net loss for the fourth quarter of 2012 of $45.7 million or $1.06 basic and diluted loss per share. The net loss attributable to Genco for the year ended December 31, 2012 was $144.9 million or $3.47 basic and diluted loss per share. This compares to net income attributable to Genco of $0.3 million or $0.01 basic and diluted earnings per share for the fourth quarter of 2011 and net income attributable to Genco of $25.4 million or $0.72 basic and diluted earnings…

Thanks, John. I'll start with Slide 14, which points to the drybulk indices. Represented on this slide is the overall Baltic Dry Index. The BDI started the quarter off near the previous quarter's lows, but rebounded significantly, trading above the 1000 mark in October and November, primarily due to the restocking of iron ore and a considerable slowdown in vessel deliveries during the second half of 2012. The year ended with the BDI retracting to 699 points as iron ore prices rebounded on a slowdown in anticipation of the Chinese new year began. While 2012 was a particularly hard year for drybulk freight rates, preliminary data show that seaborne transportation of commodities continued growing at healthy rates, suggesting that the main hindrance to a turnaround lies in the supply side of the equation. On Slide 15, we summarize recent developments in the drybulk freight market beginning with the supply side fundamentals. As a result of prolonged low freight rates, scrapping has continued at record pace, increasing by 45% year-on-year for 2012 to reach 33.7 million tons or 1/3 of the total 2012 deliveries. Although the majority of vessels scrapped have been Handysize and Supramax vessels due to the older age of those fleets, we also observed younger vessel demolitions, especially in the Capesize sector. The depressed rate environment during the past year also resulted in a 43% decrease of newbuilding orders year-over-year, pushing the order book to its lowest level in 8 years or 19% of the fleet. Existing order deliveries peaked in June 2012 and have since considerably decelerated with the second half of 2012 deliveries being the fewest in any half year period since 2009. Moreover, average net additions per month slowed from 76 vessels during the first half of 2012 to 26 for the second half. The…

[Operator Instructions] In our first question, we'll hear from Doug Mavrinac with Jefferies & Company. Douglas J. Mavrinac - Jefferies & Company, Inc., Research Division: I just had a handful of follow-up questions. First, stating the obvious, current charter rates remain weak. But as you guys pointed out, Panamax-bought charter rates have started to move in the right direction with those increases in chartering activity. My question is, when we look at Capesize spot charter rates, which haven't moved yet, is the current weakness, relative to where rates were just a few months ago, more a function of the lack of Chinese drybulk buying in recent weeks or is there something else that is contributing to that incremental recent weakness that would keep Cape rates where they are, but yet allow Panamax rates to increase?

Yes. I mean, on the Capes for a second, Doug, what's happening is the fixture volumes are off for iron ore, and -- which we see every year. Part of it is our supply issues due to weather in Australia and Brazil, though it's not to the same degree that we saw in 2010 and -- or sorry, 2011, 2012. The good news on that is unlike last year, the inventory levels at both the ports around 69 million tons are low, and then you've got somewhere between 10 to 15 days versus the normal 20 to 30 days that the actual steel mills themselves. So that part of the fundamental is positive. The other thing that's going on is obviously, there is a coal strike going on in Colombia and that has definitely softened things up in the Capesize sector as well. On the Panamax side, they're starting to benefit from the Latin American grain season. So that's where we see things. So we expect Cape rates to firm back up. But, yes, you've got a higher price of iron ore right now, which has to do with again the weather issues in China and -- or sorry, in Brazil and Australia. But then you also have cold weather in China, so you're not having as much domestic ore being produced, which also has an effect of driving things up. Anyway, so that's probably a long answer to your question. Douglas J. Mavrinac - Jefferies & Company, Inc., Research Division: No, no. That's perfect, John, because it gets to the crux of it. So it's not this whole perpetually oversupply deal, but is simply a decrease in charter activity because it makes sense since every time we see an increase in chartering activity last fall, the previous fall even the Panamax rates most recently, you do see an increase in charter rates. So that actually gets to the point of the question. My second question is...

Yes, yes. Let me just -- Doug, let me just -- just to be clear. I mean, look, there are obviously still supply issues. And the good news there is that during the month of January, you had 9.5 million deadweight ton delivered. But if you go back to January of last year, it was 12.5 million. So we really are starting to see a trail off in deliveries. Douglas J. Mavrinac - Jefferies & Company, Inc., Research Division: Right. And that makes sense, too, John. I'm just getting to the point that you read sometimes about how chartering activity's picked up, but yet rates haven't. I was just trying to clarify that, that is not the case. That it's not low. It's a rate -- the activity's picking up and rates aren't. It's just that activity isn't to the level where we saw late last year.

I agree. Douglas J. Mavrinac - Jefferies & Company, Inc., Research Division: Okay, perfect. And then kind of getting to the second question is, when we look at the current state of the market, I mean, rates are one thing. But when we look at utilization levels and idle, capacity and whatnot, I mean, you guys are still seeing utilization levels at very high levels obviously. But just as an update, are you seeing any significant numbers of viable drybulk ships out there that would prevent charter rates from going up once chartering activity did improve?

In terms of layups, no. There is no -- there's really no layups going on in drybulk. Douglas J. Mavrinac - Jefferies & Company, Inc., Research Division: Okay, perfect. Perfect. Now so just big picture, I'm not asking for a forecast or whatnot, just intuitively. When you look at 2011, you look at 2012 Gerry alluded to at how drybulk shipping trade growth has remained strong. We estimate it's increased 6% per year during those 2 years, and that's 7 of 8 quarters during that period when China's GDP growth was decelerating. So if we grew 6% in 2011 and 2012, when we look at 2013, is there any reason we should grow less than 6% or the 6% plus sound like a decent number if that was the backdrop over the last 2 years and we know that things are getting better in 2013?

Look, I think it sounds like a fair number. More importantly, you -- iron ore imports in the China last year were up 12%, which is obviously one of the fundamental drivers to drybulk. And the other thing that I think is interesting this year, you're finally starting to see meaningful numbers of new mining capacity coming on. It was 113, 114 million tons this year. And this is the first time. We've been talking about that part of it for a couple of years now, but now all of a sudden we're here now. A lot of that capacity comes on in the second half of the year, but those are projects that are there, funded and moving forward. Douglas J. Mavrinac - Jefferies & Company, Inc., Research Division: Right, right. Right, perfect. And then just finally, switching over to the supply side of the equation, and Gerry alluded to also how we saw a significant drop off in new shipyard deliveries in the second half of the year. We estimate that the average monthly deliveries were about 5 million deadweight tons per month in the second half of the year. So once again, does it just intuitively make sense that even though we know the trajectory of the order book would suggest that shipyard delivery should continue to slow 5 million deadweight tons per month, 12 months in 2013, that's about 60 million deadweight tons. Is there any reason why that isn't an unreasonable expectation for '13?

I think -- most analyst numbers that I've seen show a gross fleet number of around 7% for this year. And I do think deliveries are going to be more loaded on the front end of this year. I think they'll go down even further on the back end. But if you apply 30 million deadweight tons of scrapping, which is slightly less than what we did in 2012 and even a 20% slippage rate even though we've been running at sort of 30%, 35%. In fact, I think it was 37% for January, 37%. But even if you apply those numbers, then you get down into 4.5% to 5% fleet growth. Does that answer your question? Douglas J. Mavrinac - Jefferies & Company, Inc., Research Division: It does. It does. Because, I mean, I know what the other guys are saying. But what I'm saying is if we see 5 million deadweight tons per month, simple math will tell you that's going to be less than what people are expecting, and 5 times 12 is simply 60. So anyhow, that's all the questions I had.

And next we'll move to Michael Webber with Wells Fargo.

I want to shift gears a little bit and talk a little bit about the lending environment. And obviously, you guys went in and secured a restructuring last year and it seem like that's probably going to need to happen again at some point this year. But sentiment seems to be improving at least towards the back half of the year and 2014. So I guess, John, I'm just curious, are you finding the banks easier or more difficult to deal with right now? I mean, obviously, you guys are -- you can't get a huge level of detail on what you guys are working on right now, but are you noticing a difference in terms of their attitude towards the space?

No. I don't think it's changed all that much. I mean, we've been fortunate that we've had support from our banks from day one. We obviously got the amortization release done last year and that goes through all the way through first quarter of 2014. I mean, I agree with you, I think the sentiment, overall, is at least starting to shift, even though we haven't seen it necessarily in the freight rates yet. But I don't -- we talk to our banks quite often, and I don't -- I haven't seen any shift.

I mean, in terms of what you guys are talking about now, I mean, if you just kind of leave that -- the run rate to Q1 '14, I believe, if you don't see a pickup in rates, you got a kind of a cash burn that brings that kind of deadline up into '13. I mean, are you guys involved in more significant negotiations earlier in the year right now than you say than you were kind of the last go around? Is that something you guys are actively working on right now?

Yes. I mean, Michael, obviously, I can't -- I mean, I just can't talk about what we are or not doing. The only thing I can say is, you know us and we've -- we're proactive on these things. We don't wait for the last minute. But beyond that, I just -- I don't have any comments.

No, no. That's fair. That's fair. On a bit of, I guess, of a worthier note around Baltic, I mean, I think given that current market scenario and its corporate setup, I mean, and I think most can agree, it should be valued more higher than it is right now. They should be trading better than it is. It's kind of an equity proxy for the drybulk market. Have you guys -- are you guys thinking about strategic options to maybe increase the liquidity there? Do you think there's anything you can do to kind of increase that value? I mean, it would be a nice positive for you guys and I think you guys would probably agree that it should be trading better than it is right now.

Yes, I would agree. It should be trading better, and it's definitely something we're focused on. I mean, Genco, from an economic standpoint, is 25% of it. But again, Baltic is a little different structure. It's a separate company, separate board. But yes, I mean, it's -- we're focused on it.

Okay. So I mean, the 25% discount can maybe probably proclude some sort of secondary offering or something drastic to increase liquidity, or I would assume that's probably off the table at this point?

I mean, look, if there are transactions to do, then you look at the transaction right at the time and decide if it makes sense or not for the company.

All right. Okay. One more around the supply, and Doug mentioned this a little bit earlier, and I think we're coming at -- I think we've got 6.5% of net supply growth this year, so pretty similar numbers. From our perspective and I think you guys would probably agree that the biggest systemic issue around the space is not necessarily the number of ships but the number of shipyards. And you've got a fair amount of readily available swing capacity that they could get ratcheted back up should we see rates return. Are you guys starting to see yards getting shuddered, specifically in China or are you seeing a reduction in the amount of shipyard capacity that's out there, or should we start to see an improvement in the environment?

Yes. I mean, a couple of things. Absolutely, you're seeing shipyard shuddered. Two, you're seeing yards being turned into repair yards and scrap yards. And three, I just don't believe that as the market recovers, that you're going to have this immediate flocks of massive ordering. There's just -- the capital just isn't there to do it. During this cycle, this cycle has been unusual for the banks in that, not only do you have obviously a depressed shipping cycle and obviously, on the website as well. But you have an environment where there's been a financial crisis and a banking crisis. So their own balance sheets are, in some cases, or in a lot of cases, stressed also. I just don't -- you're going to have a couple of year lag between banks coming back in, in a meaningful way funding this industry post a rate recovery. So I just -- I know -- and you look at what the Japanese and Korean yards are doing, and they're building offshore LNG chemical. They're not really building drybulk. And they're fairly full with those more specialized ships for a while.

[Operator Instructions] Next, we'll move to Chris Wetherbee with Citi.

Maybe I just want to make sure kind of we're thinking about all the timeline correctly for 2013 when you come from some of the covenant waivers. Is that the end of first quarter '13 and then you have amortization payments waived until the end of '13? I just want to make sure I'm thinking about the timeline correctly.

We have -- the next measurement of covenants would be March 31, 2014. And our next amortization payments are in that first quarter of 2014.

Okay, so you're clear for the entire year of 2013?

Yes, based on the restructuring we did.

Okay. That's helpful. And then maybe just switching gears to the rate side. So you have a competitor in the market talking about potential rate recovery and maybe the second half of 2013, I mean, that feels like the deliveries are weighted, I think, first half, which is consistent with what you guys have been talking about. How do you think about kind of the second half? Obviously, you have a little bit better seasonality. But is that -- are you kind of thinking that that's inappropriate benchmark to be looking at as far as timing of the potential rate bounce back if you were that optimistic or is it maybe something that looks a little bit better in '14 when you have a little bit better balance of supply and demand?

I think you're going to have a gradual recovery this year, or I should say the beginning of a gradual recovery this year. I think a more meaningful recovery in 2014. As you said, the -- you have the slowdown in the supply more pronounced in the second half of this year. As I mentioned before, you have the additional mining capacity really weighted more towards the end of this year. And I actually think that additional mining capacity is going to drive down the price of iron ore, which is positive because it opens up that arbitrage with domestic ore even wider. I think Fortescue came out yesterday and gave a number of $120 to $130 per ton for the year, which clearly would allow that arbitrage to take place and you've got over 400 million tons of Chinese domestic ore if you true it up to 62% fair content that can be displaced by imported ore, irrespective of, whatever, a 6% or 7% demand growth. So I think there are several things that are -- that look to come together in the second half of the year. I don't expect things to go to the moon or go back to where we were early '08. But yes, we expect a general firming and moving more into '14. I mean, that fleet growth in '14 is 2% to 3% without any scrapping.

Yes, yes. That certainly makes sense. And I guess you guys obviously are basically spot at this point. This is a pretty simple question and I guess you kind of get to wait to see the rate start to move. And then do you start layering out though early in this process kind of the first move? Do you start kind of going out a little bit longer in duration to start once you get better rates kind of and potentially in the back half of this year, I guess, how long do you wait before you start the pulling things a little bit longer term?

I mean, without going into absolute numbers, I mean, I think you layered in. But we have to see where rates are going to be. Again, we firmly believe, obviously, in this business, and we believe in the growth prospects of it and a recovery. So you don't want to jump too early, but you also want to be somewhat conservative about it.

At this time, there are no more questions. This concludes the Genco Shipping & Trading Limited conference call. Thank you and have a nice day.