Corporate Profile
Diana Shipping Inc. (NYSE: DSX) is a global provider of shipping transportation services.
We specialize in the ownership of dry bulk vessels. As of May 6, 2019 our fleet consists of
45 dry bulk vessels (4 Newcastlemax, 14 Capesize, 5 Post-Panamax, 5 Kamsarmax and
17 Panamax), as well as one Panamax dry bulk vessel, the “Erato”, that has been sold and
expected to be delivered to her new owners at the latest by June 10, 2019. As of the same
date, the combined carrying capacity of our fleet, including the m/v Erato, is approximately 5.5
million dwt with a weighted average age of 9.24 years.
Our fleet is managed by our wholly-owned subsidiary Diana Shipping Services S.A., or DSS
and our established 50/50 joint venture with Wilhelmsen Ship Management named Diana
Wilhelmsen Management Limited, or DWM.
Among the distinguishing strengths that we believe provide us with a competitive advantage
in the dry bulk shipping industry are the following:
•
•
•
•
•
•
We own a modern, high quality fleet of dry bulk carriers.
Our fleet includes groups of sister ships, providing operational and scheduling flexibility,
as well as cost efficiencies.
We have an experienced management team.
We benefit from the experience and reputation of Diana Shipping Services S.A. and the
relationship with Wilhelmsen Ship Management through the Diana Wilhelmsen
Management Limited joint venture.
We benefit from strong relationships with members of the shipping and financial
industries.
We have a strong balance sheet and a low level of indebtedness.
Our main objective is to manage and expand our fleet in a manner that will enable us to enhance
shareholder value. To accomplish this objective, we intend to pursue highly focused business
strategies, including: maintaining a high quality fleet; strategically expanding the size of our
fleet; pursuing an appropriate balance of short-term and long-term time charters; maintaining
a strong balance sheet; and maintaining low cost, highly efficient operations. In addition, we
intend to capitalize on our reputation for high standards of performance, reliability and safety to
establish and maintain relationships with major international charterers and financial institutions.
2 ■ ANNUAL REPORT 2018
2018 ANNUAL REPORT
OF DIANA SHIPPING INC.
ANNUAL REPORT 2018 ■ 5
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DIANA SHIPPING INC.
TABLE OF CONTENTS
Letter to Shareholders
Operating and Financial Review
and Prospects
Directors, Senior Management
and Employees
6
11
31
Financial Statements
F pages
ANNUAL REPORT 2018 ■ 9
LETTER TO
SHAREHOLDERS
To Our Shareholders:
The operating and financial performance of Diana Shipping Inc. strengthened significantly in 2018, as we
benefited from strategic decisions that positioned the Company to benefit from the reasonably positive industry
environment that prevailed for much of the year. Time charter revenues increased and we generated a significant
turnaround in profitability. We also continued to actively manage our fleet profile to optimize our mix of vessels and
maintain our operational and financial flexibility. In addition, we took steps to fortify our balance sheet, while also
demonstrating our commitment to shareholder value by conducting a self-tender offer in 2018, and commencing
another self-tender in early 2019. These actions – and our solid results for 2018 – reflect the patient and focused
strategies we have consistently followed over many years, which positioned the Company to take advantage of
improving industry conditions.
Financial Performance Highlights. Time charter revenues rose to $226.2 million for 2018, a sharp increase
from $161.9 million for 2017. This was largely due to increased average time charter rates achieved for our
vessels during the year. For the year 2018, net income was $16.6 million and net income attributed to common
stockholders was $10.8 million. This was a significant improvement compared with a net loss of $511.7 million
and a net loss attributed to common stockholders of $517.5 million, which included an impairment loss of $442.3
million, for 2017.
Solid Balance Sheet We have continued to focus on maintaining a strong balance sheet. Our cash, cash
equivalents and restricted cash totaled $151.4 million at December 31, 2018. Long-term debt net of deferred
financing costs, including the current portion, was $530.5 million at 2018 year-end, and stockholders’ equity was
$627.7 million.
Among the actions taken to strengthen the balance sheet during the past year, we obtained a term loan facility
with BNP Paribas for up to $75 million, with a maturity date on July 16, 2023, and completed a drawdown of $75
million under this facility. The facility is secured by seven of the Company’s vessels. The proceeds from the loan
facility, together with available cash, were used to voluntarily prepay in full the balance of $130 million under the
existing credit facility with BNP Paribas. It is important to note that 15 of our vessels are now unencumbered.
10 ■ ANNUAL REPORT 2018
The Company received the full and final repayment of its loan to Performance Shipping Inc. in July 2018. It is
important to note that this loan was repaid in full and ahead of schedule, and provided an attractive return on the
Company’s available cash during the downturn in the dry bulk sector.
Other financing initiatives during 2018 included a $100 million placement of senior unsecured bonds maturing
in September 2023. This financing enabled us to redeem all of the outstanding 8.50% Senior Notes due 2020, in
the aggregate principal amount of approximately $63.25 million, in late October. We are pleased to note that the
financing initiatives completed during the year have enabled the Company to extend the duration of its financing
and have increased our financial flexibility.
Returning Capital to Shareholders Reflecting our commitment to return value to shareholders, at the end of
December 2018, the Company completed a self-tender offer to purchase up to 4,166,666 shares of our outstanding
common stock at a price of $3.60 per share, returning approximately $15 million to shareholders. In February 2019,
we commenced another self-tender offer to purchase up to 5,178,571 shares, or about 4.9%, of our outstanding
common stock at a price of $2.80 per share. The Board of Directors determined that repurchasing our shares via
the tender offers was in the Company’s best interest, given our cash position and stock price.
Fleet Management Strategy In 2018, we continued our active management of the Company’s fleet, in order
to maintain a modern and diversified range of vessels. In the 2018 fourth quarter we agreed to sell two vessels:
the “Alcyon”, for a sale price of $7.45 million before commissions, and the “Triton”, for a sale price of $7.35 million
before commissions. In early 2019, we announced agreements to sell the vessels “Danae” and “Dione” at a sale
price of $7.2 million each. All four of these vessels were 2001-built, and were among the oldest vessels in the fleet.
We will continue to manage our fleet of 46 vessels in a responsible manner that promotes a balance of time charter
maturities and produces a predictable revenue stream.
Steering a Steady Course At this writing, the outlook for the global economy is muted. GDP growth in
many established and developing economies is expected to be modest in the coming year. Uncertainties about
trade policy, and political movements that are opposed to globalization, may create headwinds. While this implies
somewhat weak prospects for the world economy and for the dry bulk market, the impact may be mitigated by an
improving balance in the demand for and supply of tonnage.
As we have in the past, we will focus on maintaining our financial strength and managing our business in a
prudent manner in response to market conditions. We deeply appreciate your interest and support of Diana
Shipping Inc., and we remain committed to building enduring shareholder value.
Sincerely,
Simeon Palios
Chairman and Chief Executive Officer
ANNUAL REPORT 2018 ■ 11
12 ■ ANNUAL REPORT 2018
This 2018 Annual Report of Diana Shipping Inc. (the “Company”) is substantially derived from the Company’s
2018 Annual Report filed on Form 20-F with the U.S. Securities and Exchange Commission (the “SEC”)
on March 12, 2019, which is available on the SEC’s website at www.sec.gov. Additional information,
including documents filed as exhibits to the Company’s Form 20-F, is also available on the SEC’s website.
FORWARD-LOOKING STATEMENTS
Diana Shipping Inc., or the Company, desires to take advantage of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe
harbor legislation. This document and any other written or oral statements made by us or on our behalf may include
forward-looking statements, which reflect our current views with respect to future events and financial performance.
The words “believe”, “except,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,”
“should,” “expect” and similar expressions identify forward-looking statements.
Please note in this annual report, “we”, “us”, “our” and “the Company” all refer to Diana Shipping Inc. and its
subsidiaries, unless otherwise indicated.
The forward-looking statements in this document are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without limitation, management’s examination of historical
operating trends, data contained in our records and other data available from third parties. Although we believe that
these assumptions were reasonable when made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot
assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors and matters discussed elsewhere herein, important factors that, in
our view, could cause actual results to differ materially from those discussed in the forward-looking statements
include the strength of world economies, fluctuations in currencies and interest rates, general market conditions,
including fluctuations in charter hire rates and vessel values, changes in demand in the dry-bulk shipping industry,
changes in the supply of vessels, changes in the Company’s operating expenses, including bunker prices, crew
costs, drydocking and insurance costs, changes in governmental rules and regulations or actions taken by
regulatory authorities, potential liability from pending or future litigation, general domestic and international political
conditions or labor disruptions, potential disruption of shipping routes due to accidents or political events, and
other important factors described from time to time in the reports filed by the Company with the Securities and
Exchange Commission, or the SEC, and the New York Stock Exchange, or the NYSE. We caution readers of this
annual report not to place undue reliance on these forward-looking statements, which speak only as of their dates.
We undertake no obligation to update or revise any forward-looking statements.
ANNUAL REPORT 2018 ■ 13
14 ■ ANNUAL REPORT 2018
Operating and Financial Review and Prospects
The following management’s discussion and analysis should be read in conjunction with our historical
consolidated financial statements and their notes included elsewhere in this annual report. This discussion contains
forward-looking statements that reflect our current views with respect to future events and financial performance.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of
certain factors, such as those set forth in the section entitled “Risk Factors”discussed in of our Form 20-F filed with
the U.S. Securities and Exchange Commission (the “SEC”) on March 12, 2019, and elsewhere in this annual report.
A. Operating results
We charter our vessels to customers pursuant to short-term, medium-term and long-term time charters.
Currently, the majority of our vessels are employed on short-term and medium-term time charters. Under our time
charters, the charterer typically pays us a fixed daily charter hire rate and bears all voyage expenses, including the
cost of bunkers (fuel oil) and port and canal charges. However, our voyage results may be affected by differences
in bunker prices. We remain responsible for paying the chartered vessel’s operating expenses, including the cost of
crewing, insuring, repairing and maintaining the vessel, the costs of spares and consumable stores, tonnage taxes
and other miscellaneous expenses, and we also pay commissions to one or more unaffiliated ship brokers and to
in-house brokers associated with the charterer for the arrangement of the relevant charter.
Factors Affecting Our Results of Operations
We believe that the important measures for analyzing trends in our results of operations consist of the following:
> Ownership days. We define ownership days as the aggregate number of days in a period during which each
vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period
and affect both the amount of revenues and the amount of expenses that we record during a period.
> Available days. We define available days as the number of our ownership days less the aggregate number
of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or
special surveys and the aggregate amount of time that we spend positioning our vessels for such events. The
shipping industry uses available days to measure the number of days in a period during which vessels should
be capable of generating revenues.
> Operating days. We define operating days as the number of our available days in a period less the aggregate
number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. The
shipping industry uses operating days to measure the aggregate number of days in a period during which
vessels actually generate revenues.
> Fleet utilization. We calculate fleet utilization by dividing the number of our operating days during a period by
the number of our available days during the period. The shipping industry uses fleet utilization to measure a
company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that
its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades,
special surveys or vessel positioning for such events.
> TCE rates. We define Time Charter Equivalent, or TCE rates as our time charter revenues less voyage expenses
during a period divided by the number of our available days during the period, which is consistent with industry
standards. TCE rate is a non-GAAP measure and is a standard shipping industry performance measure used
primarily to compare daily earnings generated by vessels on time charters with daily earnings generated
by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not
expressed in per day amounts while charter hire rates for vessels on time charters generally are expressed in
such amounts.
ANNUAL REPORT 2018 ■ 15
The following table reflects our ownership days, available days, operating days, fleet utilization and TCE rates
for the periods indicated.
Ownership days
Available days
Operating days
Fleet utilization
Year Ended December 31,
2018
2017
2016
18,204
18,119
16,542
17,964
17,890
16,447
17,799
17,566
16,354
99.1%
98.2%
99.4%
Time charter equivalent (TCE) rate (1)
$ 12,179 $
8,568 $
6,106
(1) Please see “Item 3. Key Information—A. Selected Financial Data” in our Form 20-F filed with the U.S. Securities and Exchange
Commission (the “SEC”) on March 12, 2019, for a reconciliation of TCE to GAAP measures.
Lack of Historical Operating Data for Vessels before Their Acquisition
Although vessels are generally acquired free of charter, we have acquired (and may in the future acquire) some
vessels with time charters. Where a vessel has been under a voyage charter, the vessel is usually delivered to the
buyer free of charter. It is rare in the shipping industry for the last charterer of the vessel in the hands of the seller
to continue as the first charterer of the vessel in the hands of the buyer. In most cases, when a vessel is under
time charter and the buyer wishes to assume that charter, the vessel cannot be acquired without the charterer’s
consent and the buyer entering into a separate direct agreement (called a “novation agreement”) with the charterer
to assume the charter. The purchase of a vessel itself does not transfer the charter because it is a separate service
agreement between the vessel owner and the charterer.
Where we identify any intangible assets or liabilities associated with the acquisition of a vessel, we record all
identified assets or liabilities at fair value. Fair value is determined by reference to market data. We value any asset
or liability arising from the market value of the time charters assumed when a vessel is acquired. The amount to
be recorded as an asset or liability at the date of vessel delivery is based on the difference between the current fair
market value of the charter and the net present value of future contractual cash flows. When the present value of
the time charter assumed is greater than the current fair market value of such charter, the difference is recorded as
prepaid charter revenue. When the opposite situation occurs, any difference, capped to the vessel’s fair value on
a charter-free basis, is recorded as deferred revenue. Such assets and liabilities, respectively, are amortized as a
reduction of, or an increase in, revenue over the period of the time charter assumed.
When we purchase a vessel and assume or renegotiate a related time charter, among others, we must take the
following steps before the vessel will be ready to commence operations:
> obtain the charterer’s consent to us as the new owner;
> obtain the charterer’s consent to a new technical manager;
>
in some cases, obtain the charterer’s consent to a new flag for the vessel;
> arrange for a new crew for the vessel, and where the vessel is on charter, in some cases,
the crew must be approved by the charterer;
16 ■ ANNUAL REPORT 2018
> replace all hired equipment on board, such as gas cylinders and communication equipment;
> negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;
> register the vessel under a flag state and perform the related inspections in order to obtain new
trading certificates from the flag state;
>
implement a new planned maintenance program for the vessel; and
> ensure that the new technical manager obtains new certificates for compliance with the safety and
vessel security regulations of the flag state.
When we charter a vessel pursuant to a long-term time charter agreement with varying rates, we recognize
revenue on a straight line basis, equal to the average revenue during the term of the charter.
The following discussion is intended to help you understand how acquisitions of vessels affect our business
and results of operations.
Our business is mainly comprised of the following elements:
> employment and operation of our vessels; and
> management of the financial, general and administrative elements involved in the conduct
of our business and ownership of our vessels.
The employment and operation of our vessels mainly require the following components:
> vessel maintenance and repair;
> crew selection and training;
> vessel spares and stores supply;
> contingency response planning;
> onboard safety procedures auditing;
> accounting;
> vessel insurance arrangement;
> vessel chartering;
> vessel security training and security response plans (ISPS);
> obtaining of ISM certification and audit for each vessel within the six months of taking over a vessel;
> vessel hiring management;
> vessel surveying; and
> vessel performance monitoring.
ANNUAL REPORT 2018 ■ 17
The management of financial, general and administrative elements involved in the conduct of our business and
ownership of our vessels mainly requires the following components:
> management of our financial resources, including banking relationships, i.e., administration of bank
loans and bank accounts;
> management of our accounting system and records and financial reporting;
> administration of the legal and regulatory requirements affecting our business and assets; and
> management of the relationships with our service providers and customers.
The principal factors that affect our profitability, cash flows and shareholders’ return on investment include:
> rates and periods of charter hire;
>
levels of vessel operating expenses;
> depreciation expenses;
> financing costs; and
> fluctuations in foreign exchange rates.
Time Charter Revenues
Our revenues are driven primarily by the number of vessels in our fleet, the number of days during which our
vessels operate and the amount of daily charter hire rates that our vessels earn under charters, which, in turn,
are affected by a number of factors, including:
> the duration of our charters;
> our decisions relating to vessel acquisitions and disposals;
> the amount of time that we spend positioning our vessels;
> the amount of time that our vessels spend in drydock undergoing repairs;
> maintenance and upgrade work;
> the age, condition and specifications of our vessels;
>
levels of supply and demand in the dry bulk shipping industry; and
> other factors affecting spot market charter rates for dry bulk carriers.
Vessels operating on time charters for a certain period of time provide more predictable cash flows over that
period of time, but can yield lower profit margins than vessels operating in the spot charter market during periods
characterized by favorable market conditions. Vessels operating in the spot charter market generate revenues that
are less predictable but may enable their owners to capture increased profit margins during periods of improvements
in charter rates although their owners would be exposed to the risk of declining charter rates, which may have a
18 ■ ANNUAL REPORT 2018
materially adverse impact on financial performance. As we employ vessels on period charters, future spot charter
rates may be higher or lower than the rates at which we have employed our vessels on period charters. Our time
charter agreements subject us to counterparty risk. In depressed market conditions, charterers may seek to
renegotiate the terms of their existing charter parties or avoid their obligations under those contracts. Should a
counterparty fail to honor their obligations under agreements with us, we could sustain significant losses which
could have a material adverse effect on our business, financial condition, results of operations and cash flows. For
2019, we expect our revenues to remain at the same levels compared to 2018. Although we have already obtained
in 2018 charter rates covering part of 2019, the market rates have since been declining. Additionally, we have sold
four vessels, two in December 2018 and two in 2019, which are expected to be delivered to their new buyers by
April and by June 2019.
Voyage Expenses
We incur voyage expenses that mainly include commissions because all of our vessels are employed under
time charters that require the charterer to bear voyage expenses such as bunkers (fuel oil), port and canal charges.
Although the charterer bears the cost of bunkers, we also have bunker gain or loss deriving from the price differences
of bunkers. When a vessel is delivered to a charterer, bunkers are purchased by the charterer and sold back to us on
the redelivery of the vessel. Bunker gain, or loss, result when a vessel is redelivered by her charterer and delivered
to the next charterer at different bunker prices, or quantities.
We currently pay commissions ranging from 3.75% to 5.00% of the total daily charter hire rate of each charter
to unaffiliated ship brokers, in-house brokers associated with the charterers, depending on the number of brokers
involved with arranging the charter. In addition we pay a commission to DWM and to DSS for those vessels for
which they provide commercial management services. The commissions paid to DSS are eliminated from our
consolidated financial statements as intercompany transactions. For 2019, we expect our voyage expenses to
remain at the same levels compared to 2018, or increase, depending on the change in revenues and the gain, or
loss from bunkers.
Vessel Operating Expenses
Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to
repairs and maintenance, the cost of spares and consumable stores, tonnage taxes, environmental plan costs and
HSQ and vetting. Our vessel operating expenses, which generally represent fixed costs, have historically increased
as a result of the enlargement of our fleet with the exception of 2016 when operating expenses decreased despite
the enlargement of our fleet, as a result of our efforts to decrease costs without compromising the quality and
seaworthiness of our vessels. For 2019, we expect our operating expenses to remain at the same levels as in 2018
or decrease as a result of the sale of four vessels, two in December 2018 and two in 2019 which are expected to
be delivered to their new buyers by April and by June 2019.
Vessel Depreciation
The cost of our vessels is depreciated on a straight-line basis over the estimated useful life of each vessel.
Depreciation is based on the cost of the vessel less its estimated salvage value. We estimate the useful life of our
dry bulk vessels to be 25 years from the date of initial delivery from the shipyard, which we believe is common
in the dry bulk shipping industry. Furthermore, we estimate the salvage values of our vessels based on historical
average prices of the cost of the light-weight ton of vessels being scrapped. Our depreciation charges decreased
rapidly in 2018 due to the vessel cost impairment we recorded in 2017. For 2019, we expect depreciation expense
to decrease as a result of the sale of four vessels, two in December 2018 and two in 2019 with expected deliveries
to their new buyers in April and June 2019.
ANNUAL REPORT 2018 ■ 19
General and Administrative Expenses
We incur general and administrative expenses which include our onshore related expenses such as payroll
expenses of employees, executive officers, directors and consultants, compensation cost of restricted stock
awarded to senior management and non-executive directors, traveling, promotional and other expenses of the
public company, such as legal and professional expenses and other general expenses. For 2019, we expect our
general and administrative expenses to remain at the same levels.
Interest and Finance Costs
We have historically incurred interest expense and financing costs in connection with vessel-specific debt, since
May 2015 until October 2018 in connection with senior unsecured Notes and since September 2018 in connection
with our Bond. As at December 31, 2018 our debt amounted to $534.9 million, including our Bond. We expect to
manage any exposure in interest rates through our regular operating and financing activities and, when deemed
appropriate, through the use of derivative financial instruments. For 2019, we expect interest and finance expenses
to decrease due to decreased average debt.
Our Fleet – Illustrative Comparison of Possible Excess of Carrying Value
Over Estimated Charter-Free Market Value of Certain Vessels
In “Critical Accounting Policies – Impairment of long-lived assets,” we discuss our policy for impairing the carrying
values of our vessels. Historically, the market values of vessels have experienced volatility, which from time to time
may be substantial. As a result, the charter-free market value of certain of our vessels may have declined below
those vessels’ carrying value, even though we would not impair those vessels’ carrying value under our accounting
impairment policy. In 2017, we recorded impairment charges for 20 vessels in our fleet, as our impairment test
exercise indicated that their carrying values were not recoverable.
Based on: (i) the carrying value of each of our vessels as of December 31, 2018 and 2017, consisting of the net
book value of the vessels and the unamortized value of deferred dry-dock and special surveys cost and (ii) what we
believe the charter-free market value of each of our vessels was as of December 31, 2018 and 2017, the aggregate
carrying value of 23 and 22 of the vessels in our fleet as of December 31, 2018 and 2017, respectively, exceeded
their aggregate charter-free market value by approximately $92 million and $114 million, respectively, as noted in
the table below. This aggregate difference represents the approximate analysis of the amount by which we believe
we would have to increase our loss or reduce our net income if we sold all of such vessels at December 31, 2018
and 2017, on a charter-free basis, on industry standard terms, in cash transactions, and to a willing buyer where we
were not under any compulsion to sell, and where the buyer was not under any compulsion to buy. For purposes of
this calculation, we have assumed that these 23 and 22 vessels would be sold at a price that reflects our estimate
of their charter-free market values as of December 31, 2018 and 2017, respectively.
Our estimates of charter-free market value assume that our vessels were 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:
20 ■ ANNUAL REPORT 2018
>
>
>
>
>
>
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;
news and industry reports of sales of vessels that are not similar to our vessels where we have made
certain adjustments in an attempt to derive information that can be used as part of our estimates;
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 charter-free 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 charter-free market value of our vessels or prices that we could achieve if we were to sell
them. We also refer you to the risk factor discussed in our Form 20-F filed with the U.S. Securities and Exchange
Commission (the “SEC”) on March 12, 2019, in “Item 3. Key Information—D. Risk Factors” entitled “The market
values of our vessels have declined and may further decline, which could limit the amount of funds that we can
borrow and could trigger breaches of certain financial covenants contained in our current and future loan facilities,
which could adversely affect our operating results, and we may incur a loss if we sell vessels following a decline
in their market values” and the discussion under the heading “Item 4. Information on the Company—B. Business
Overview–Vessel Prices.”
Carrying Value
(in millions of US dollars)
Vessel
1 Alcmene
2 Alcyon**
3 Aliki
4 Amphitrite
5 Arethusa
6 Artemis
7 Astarte
8 Atalandi
9 Baltimore
10 Boston
11 Calipso
12 Clio
13 Coronis
14 Crystalia
15 Danae
Dwt
93,193
75,247
180,235
98,697
73,593
76,942
81,513
77,529
177,243
177,828
73,691
73,691
74,381
77,525
75,106
Year Built
2010
2001
2005
2012
2007
2006
2013
2014
2005
2007
2005
2005
2006
2014
2001
2018
14.8
-
16.2
18.8
11.0 *
15.2 *
21.6 *
20.0
20.5 *
19.4
11.0 *
11.2 *
10.1
19.7
9.7 *
2017
15.5
8.3
17.1
19.6
11.4
16.2 *
22.7 *
20.8
21.8 *
20.4
11.6 *
11.9 *
10.6
20.5
9.6 *
ANNUAL REPORT 2018 ■ 21
Vessel
16 Dione
17 Electra
18 Erato
19 G.P. Zafirakis
20 Houston
21 Ismene
22 Leto
23 Los Angeles
24 Maera
25 Maia
26 Medusa
27 Melia
28 Myrsini
29 Myrto
30 Naias
31 New Orleans
32 New York
33 Newport News
34 Nirefs
35 Norfolk
36 Oceanis
37 P.S. Palios
38 Phaidra
39 Philadelphia
40 Polymnia
41 Protefs
42 Salt Lake City
43 San Francisco
44 Santa Barbara
45 Seattle
46 Selina
47 Semirio
48 Sideris GS
49 Thetis
50 Triton**
Dwt
75,172
87,150
74,444
179,492
177,729
77,901
81,297
206,104
75,403
82,193
82,194
76,225
82,117
82,131
73,546
180,960
177,773
208,021
75,311
164,218
75,211
179,134
87,146
206,040
98,704
73,630
171,810
208,006
179,426
179,362
75,700
174,261
174,186
73,583
75,336
Year Built
2001
2013
2004
2014
2009
2013
2010
2012
2013
2009
2010
2005
2010
2013
2006
2015
2010
2017
2001
2002
2001
2013
2013
2012
2012
2004
2005
2017
2015
2011
2010
2007
2006
2004
2001
Total
5,837,330
(**) Triton and Alcyon were sold to unrelated third parties in December 2018
Carrying Value
(in millions of US dollars)
2018
9.4 *
17.8
9.0
49.3 *
23.1
13.2
16.6
45.5 *
12.6
15.7
15.5
14.0 *
18.1 *
21.5 *
10.3
38.8 *
42.7 *
48.8
7.7 *
11.4
7.9 *
42.7 *
19.2 *
46.2 *
19.1
10.7 *
16.5
48.9
43.3 *
25.2
10.6
18.4
17.4
9.4 *
-
996
2017
9.5 *
18.6
9.6
51.4 *
24.1
13.2
17.4
47.7 *
13.3
16.6
16.3
15.0 *
19.0 *
22.2 *
10.9
40.2 *
45.0 *
50.6 *
8.3
12.0
8.7 *
44.7 *
18.3
48.5 *
19.9
11.5 *
17.3
50.7 *
45.0 *
26.4
11.1
19.3
18.3
9.5
8.5 *
1,056
(*) Indicates dry bulk vessels for which we believe, as of December 31, 2018 and 2017, the charter-free market value was lower than the
vessel’s carrying value. We believe that the aggregate carrying value of these vessels exceeded their aggregate charter-free market
value by approximately $92 million and $114 million, respectively.
22 ■ ANNUAL REPORT 2018
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our consolidated
financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of those financial
statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities,
revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements.
Actual results may differ from these estimates under different assumptions and conditions.
Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in
materially different results under different assumptions and conditions. We have described below what we believe
are our most critical accounting policies, because they generally involve a comparatively higher degree of judgment
in their application. For a description of all our significant accounting policies, see Note 2 to our consolidated financial
statements included in this annual report.
Accounting for Revenues and Expenses
Revenues are generated from time charter agreements which contain a lease as they meet the criteria of a lease
under ASC 842. Agreements with the same charterer are accounted for as separate agreements according to their
specific terms and conditions. All agreements contain a minimum non-cancellable period and an extension period at
the option of the charterer. Each lease term is assessed at the inception of that lease. Under a time charter agreement,
the charterer pays a daily hire for the use of the vessel and reimburses the owner for hold cleanings, extra insurance
premiums for navigating in restricted areas and damages caused by the charterers. Additionally, the charterer pays
to third parties port, canal and bunkers consumed during the term of the time charter agreement. Such costs are
considered direct costs and are not recorded as they are directly paid by charterers, unless they are for the account
of the owner, in which case they are included in voyage expenses. Additionally, the owner pays commissions on
the hire revenue, to both the charterer and to brokers, which are direct costs and are recorded in voyage expenses.
Under a time charter agreement, the owner pays for the operation and the maintenance of the vessel, including crew,
insurance, spares and repairs, which are recognized in operating expenses. The Company, as lessor, has elected
not to allocate the consideration in the agreement to the separate lease and non-lease components (operation and
maintenance of the vessel) as their timing and pattern of transfer to the charterer, as the lessee, are the same and
the lease component, if accounted for separately, would be classified as an operating lease. Additionally, the lease
component is considered the predominant component as the Company has assessed that more value is ascribed to
the vessel rather than to the services provided under the time charter contracts.
Voyage expenses, primarily consisting of commissions, are expensed over the related voyage charter period to the
extent revenue has been recognized since commissions are due as the Company’s revenues are earned. All vessel
operating expenses are expensed as incurred.
Impairment of Long-lived Assets
Long-lived assets (vessels, land, and building) held and used by an entity are reviewed for impairment whenever
events or changes in circumstances (such as market conditions, obsolesce or damage to the asset, potential sales
and other business plans) indicate that the carrying amount of the assets plus unamortized dry-docking costs may
not be recoverable or that their useful lives require modification. When the estimate of undiscounted projected net
operating cash flows, excluding interest charges, expected to be generated by the use of the asset over its remaining
useful life and its eventual disposition is less than its carrying amount, we should evaluate the asset for an impairment
loss. Measurement of the impairment loss is based on the fair value of the asset. We determine the fair value of our
assets based on management estimates and assumptions and by making use of available market data and taking
into consideration third party valuations.
ANNUAL REPORT 2018 ■ 23
With respect to our vessels, the current conditions in the dry bulk market with low charter rates and vessel market
values are conditions that the Company considers indicators of a potential impairment. We determine undiscounted
projected net operating cash flows for each vessel and compare it to the vessel’s carrying amount. The projected
net operating cash flows are determined by considering the historical and estimated vessels’ performance and
utilization, by considering future revenues, expected outflows for scheduled vessels’ maintenance, vessel operating
expenses and fleet utilization. The average annual inflation rate applied on vessels’ maintenance and operating
costs approximates current projections for global inflation rate for the remaining useful life of our vessels. Effective
fleet utilization assumed is in line with the Company’s historical performance and our expectations for future fleet
utilization under our current fleet deployment strategy. We calculate future revenues for the fixed days, using the
fixed charter rate of each vessel from existing time charters. With respect to the unfixed days, we calculate the
estimated revenues by reference to the most recent ten-year blended average one-year time charter rates available
for each type of vessel over the remaining estimated life of each vessel, net of commissions. Historical ten-year
blended average one-year time charter rates used in our impairment test exercise are in line with our overall
chartering strategy, especially in periods/years of depressed charter rates; they reflect the full operating history
of vessels of the same type and particulars with our operating fleet (Panamax/Post-Panamax/Kamsarmax and
Capesize/Newcastlemax vessels) and they cover at least a full business cycle, where applicable. During the fourth
quarter of 2017, we reassessed our method to estimate future revenues for the unfixed days and decided to exclude
from the ten-year blended average one-year time charter rates three years for which the rates were well above the
average. We determined that the expectations, following positive signs and gradual increase in charter rates since
the second quarter of 2017, for recovery of the market in the last quarter of 2017 at levels close to the ten-year
blended average one-year time charter rates, were not eventually verified and that the market had stabilized to lower
levels. We estimated that factors such as worldwide demand for drybulk products, supply of tonnage and order
book indicated that the charter rates for the years 2008-2010, which were removed from the calculation following
our reassessment, were considered exceptional. Following this reassessment, our test of cash flows resulted in an
impairment of $422.5 million recorded in the fourth quarter of 2017. Our 2018 test (by excluding similarly to 2017
the charter rates for the years 2009-2010) did not result to impairment.
A comparison of the average estimated daily time charter equivalent rate used in our impairment analysis with
the average “break even rate” for each major class of vessels is presented below:
Average
estimated
daily time
charter
equivalent
rate used
Average break
even rate
Panamax/Kamsarmax/Post-Panamax
Capesize/Newcastlemax
$
$
10,504 $
14,715 $
9,491
12,236
Our impairment test exercise is sensitive to variances in the time charter rates and fleet effective utilization. Our
current analysis, which also involved a sensitivity analysis by assigning possible alternative values to these two
significant inputs, indicated that with only a 1% reduction in time charter rates or a 2% increase of off hire days (other
than for dry docking and special surveys) would result to an impairment of individual long lived assets. However,
there can be no assurance as to how long charter rates and vessel values will remain at their current low levels or
whether they will improve by any significant degree. Charter rates may remain at depressed levels for some time
which could adversely affect our revenue and profitability, and future assessments of vessel impairment.
24 ■ ANNUAL REPORT 2018
For the purpose of presenting our investors with additional information to determine how the Company’s future
results of operations may be impacted in the event that daily time charter rates do not improve from their current
levels in future periods, we set forth below an analysis that shows the 1-year, 3-year and 5-year average blended
rates and the effect of the use of each of these rates would have on the Company’s impairment analysis.
Impairment
charge
(in USD
million)
3-year
(period)
Impairment
charge
(in USD
million)
5-year
(period)
Impairment
charge
(in USD
million)
1-year
(period)
Panamax /
Kamsarmax /
Post-Panamax
Capesize/
Newcastlemax
$
$
13,029
18,139
Results of Operations
- $
9,986 $
6 $
9,897 $
- $
13,159 $
70 $
14,255 $
6
32
Year ended December 31, 2018 compared to the year ended December 31, 2017
Time Charter Revenues. Time charter revenues increased by $64.3 million, or 40%, to $226.2 million in 2018,
compared to $161.9 million in 2017. The increase was mainly due to increased time charter rates which resulted in
a 42% increase in our average charter rates from $8,568 in 2017 to $12,179 in 2018. This increase was also due
to increased operating days resulting from the delivery of the Electra, Phaidra and Astarte in May 2017 and was
also due to decreased drydock and off hire days in 2018 compared to 2017, for which our vessels did not earn
revenue. In 2018 we had total operating days of 17,799 and fleet utilization of 99.1%, compared to 17,566 total
operating days and a fleet utilization of 98.2% in 2017. This increase was partly offset by decreased revenues due
to the sale of the Melite in October 2017 and the Triton and Alcyon in December 2018.
Voyage Expenses. Voyage expenses decreased by $1.2 million, or 14%, to $7.4 million in 2018 compared to
$8.6 million in 2017. This decrease in voyage expenses is primarily attributable to bunkers which resulted in gain of
$4.8 million compared to gain of $0.2 million in 2017. This decrease was partly offset by increased commissions
in 2018 compared to 2017 due to the increase in revenues.
Vessel Operating Expenses. Vessel operating expenses increased by $5.1 million, or 6%, to $95.5 million in 2018
compared to $90.4 million in 2017. The increase in operating expenses is attributable to increased expenses in all
expense categories but primarily due to increased vessels’ maintenance. Daily operating expenses were $5,247 in
2018 compared to $4,987 in 2017, representing a 5% increase.
Depreciation and Amortization of Deferred Charges. Depreciation and amortization of deferred charges
decreased by $34.8 million, or 40%, to $52.2 million in 2018, compared to $87.0 million in 2017. This decrease
was due to the impairment loss recorded last year, decreasing the vessel’s cost. Similarly, a significant part of the
deferred cost relating to dry-dockings was written off in 2017 resulting to decreased amortization in 2018. Finally,
depreciation was also reduced due to the sale of the Triton and the Alcyon in December 2018 and of the Melite in
October 2017.
General and Administrative Expenses. General and Administrative Expenses increased by $3.2 million, or 12%,
to $29.5 million in 2018 compared to $26.3 million in 2017. The increase is mainly attributable to increased payroll
and training cost, legal fees, board of directors’ fees and expenses and the exchange rate of Euro to U.S. Dollars.
ANNUAL REPORT 2018 ■ 25
Management fees to related party. Management fees to a related party amounted to $2.4 million in 2018
compared to $1.9 million in 2017. The increase is attributable to the increased average number of vessels managed
by DWM in 2018 compared to 2017.
Loss from sale of vessels. Loss from sale of vessels is the result from the sale of the vessels Triton and Alcyon,
delivered to their new owners in December 2018.
Interest and finance costs. Interest and finance costs increased by $3.9 million, or 15%, to $30.5 million in 2018
compared to $26.6 million in 2017. The increase is primarily attributable to higher average interest rates to, however,
decreased average long term debt outstanding during 2018 compared to 2017. Interest expense in 2018 amounted
to $28.3 million compared to $25.0 million 2017.
Interest and other income. Interest and other income increased by $4.3 million, or 96%, to $8.8 million in 2018
compared to $4.5 million in 2017. The increase is attributable to increased interest income from our loan agreement
with Performance Shipping, which was fully collected in July 2018, and resulted from the increase in interest rates,
average debt and the $5 million discount premium which had not been recorded until its payment.
Gain/(loss) from equity method investments. Gain from equity method investments relates to the gain from our
50% interest in DWM compared to $49,382 last year. Last year this amount also included a loss from our investment
in Performance Shipping including an impairment charge of $3.1 million and $0.8 million loss from the sale of the
investment.
Year ended December 31, 2017 compared to the year ended December 31, 2016
Time Charter Revenues. Time charter revenues increased by $47.6 million, or 42%, to $161.9 million in 2017,
compared to $114.3 million in 2016. The increase was due to increased time charter rates which resulted in a
40% increase in our average charter rates from $6,106 in 2016 to $8,568 in 2017. This increase was also due to
increased revenues due to a 10% increase of our ownership days resulting from the delivery of the Ismene and the
Selina in March 2016; the Maera in May 2016; the San Francisco and Newport News in January 2017; and the
Electra, Phaidra and Astarte in May 2017. This increase was partly offset by decreased revenues due to increased
drydock and off hire days in 2017 compared to 2016, for which our vessels did not earn revenue. In 2017 we had
total operating days of 17,566 and fleet utilization of 98.2%, compared to 16,354 total operating days and a fleet
utilization of 99.4% in 2016.
Voyage Expenses. Voyage expenses decreased by $5.2 million, or 38%, to $8.6 million in 2017 compared to
$13.8 million in 2016. This decrease in voyage expenses is primarily attributable to bunkers which resulted in gain
of $0.2 million compared to loss of $7.5 million in 2016. This decrease was partly offset by increased commissions
in 2017 compared to 2016 due to the increase in revenues.
Vessel Operating Expenses. Vessel operating expenses increased by $4.4 million, or 5%, to $90.4 million in
2017 compared to $86.0 million in 2016. The increase in operating expenses is primarily attributable to the 10%
increase in ownership days resulting from the delivery of the new vessels to our fleet in 2017 and to increased
expenses for repairs and maintenance. This increase was partly offset by decreased costs in all other operating
expense categories. Daily operating expenses were $4,987 in 2017 compared to $5,196 in 2016, representing a
4% decrease.
26 ■ ANNUAL REPORT 2018
Depreciation and Amortization of Deferred Charges. Depreciation and amortization of deferred charges
increased by $5.4 million, or 7%, to $87.0 million in 2017, compared to $81.6 million in 2016. This increase was
due to the enlargement of our fleet. Additionally, the increase in depreciation and amortization was due to increased
amortization of deferred drydocking costs in 2017 compared to 2016.
General and Administrative Expenses. General and Administrative Expenses increased by $0.8 million, or 3%,
to $26.3 million in 2017 compared to $25.5 million in 2016. The increase is mainly attributable to increased payroll
cost and was partly offset by decreased legal fees and board of directors’ expenses.
Management fees to related party. Management fees to a related party amounted to $1.9 million in 2017
compared to $1.5 million in 2016. The increase is attributable to the increased average number of vessels managed
by DWM in 2017 compared to 2016.
Impairment loss. Impairment loss includes $422.5 million non-cash impairment recorded for 20 vessels in our
fleet whose carrying value was written down to their market value. Impairment loss also includes $19.8 million non-
cash impairment in the cost of the Melite, which was grounded in July 2017, resulting in the total loss of the vessel.
Insurance recoveries, net of other loss. Insurance recoveries, net of other loss includes the proceeds received by
the Hull and Machinery insurers of the Melite, after her grounding in July 2017, decreased by other costs incurred
due to the grounding of the vessel and sale expenses.
Interest and finance costs. Interest and finance costs increased by $4.7 million, or 21%, to $26.6 million in 2017
compared to $21.9 million in 2016. The increase is primarily attributable to higher average interest rates, and to
increased average long-term debt outstanding during 2017 compared to 2016. Interest expense in 2017 amounted
to $25.0 million compared to $19.5 million 2016.
Interest and other income. Interest and other income increased by $2.1 million, or 88%, to $4.5 million in 2017
compared to $2.4 million in 2016. The increase is attributable to increased interest income from our loan agreement
with Performance Shipping, resulting from the increase in interest rates and average debt.
Loss from equity method investments. Loss from equity method investments is mainly attributable to loss from
our investment in Performance Shipping, amounting to $5.7 million in 2017. This amount included an impairment
charge of $3.1 million and $0.8 million loss from the sale of the investment. This compared to a loss of $56.5 million
in 2016, which included a $17.6 million impairment. This loss also includes a minor gain in 2017 from DWM, our
50% owned joint venture established in 2015, and a $0.1 million gain in 2016.
Inflation
Inflation does not have a material effect on our expenses given current economic conditions. In the event that
significant global inflationary pressures appear, these pressures would increase our operating, voyage, administrative
and financing costs.
B. Liquidity and Capital Resources
We have historically financed our capital requirements with cash flow from operations, equity contributions
from shareholders, long-term bank debt, Senior Notes and, since September 2018, our Bond. Our main uses of
funds have been capital expenditures for the acquisition and construction of new vessels, expenditures incurred in
ANNUAL REPORT 2018 ■ 27
connection with ensuring that our vessels comply with international and regulatory standards and repayments of
bank loans. We will require capital to fund ongoing operations, vessel improvements to meet requirements under
new regulations, debt service and the payment of our preferred dividends. As at December 31, 2018 and 2017,
working capital, which is current assets minus current liabilities, including the current portion of long-term debt,
amounted to $16.8 million and $58.3 million, respectively. The decrease in working capital is mainly due to increased
liabilities relating to long term debt. For 2019, we believe that anticipated revenues will result in internally generated
cash flows along with cash on hand which will be sufficient to fund our capital requirements. We also plan to incur
additional debt and we may issue additional equity, if deemed necessary to fund our capital requirements in the
next twelve months.
Cash Flow
Cash and cash equivalents, including restricted cash, was $151.4 million as at December 31, 2018 and $65.8
million as at December 31, 2017. Restricted cash mainly consists of the amount kept against the Company’s
loan facilities. As at December 31, 2018 and 2017, restricted cash amounted to $24.6 million and $25.6 million,
respectively and also includes $0.6 million of pledged cash provided as guarantee to third parties. We consider
highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months
or less to be cash equivalents. Cash and cash equivalents are primarily held in U.S. dollars.
Net Cash Provided By/(Used In) Operating Activities
Net cash provided by operating activities increased by $56.5 million to $79.9 million in 2018 compared to $23.4
million net cash used in operating activities in 2017. This increase in cash from operating activities was mainly
attributable to the increase in charter rates during the year and less drydocking costs.
Net cash used in operating activities was $23.4 million in 2017 compared to net cash provided by operating
activities of $21.0 million in 2016. This increase in cash from operating activities was mainly attributable to the
increase in charter rates during the year, partly offset by increased drydocking costs.
Net Cash Used In Investing Activities
Net cash provided by investing activities was $99.4 million for 2018, which consists of $2.6 million paid for
vessel improvements due to new regulations; $14.6 million of proceeds from the sale of the Triton and the Alcyon;
$87.6 million of proceeds received from Performance Shipping, and $0.2 million relating to the acquisition of office
equipment.
Net cash used in investing activities was $152.3 million for 2017, which consists of $125.8 million paid for
delivery of our vessels under construction and the acquisition of three vessels during the year; $2.0 million of
proceeds from the sale of the Melite and $11.4 million of additional proceeds received by the H&M insurers of the
vessel, net of other expenses; $0.2 million of proceeds received from the sale of Performance Shipping’s shares;
$40.0 million loan provided to Performance Shipping, and $0.1 million relating to the acquisition of property and
equipment.
Net cash used in investing activities was $41.6 million for 2016, which consists of $50.9 million paid for
predelivery installments for our vessels under construction and the acquisition of three vessels during the year; $9.4
million of proceeds received due to the cancellation of a shipbuilding contract consisting of predelivery installments
paid until then and interest; $0.1 million of dividends received from Performance Shipping, during the year; and
$0.2 million relating to the acquisition of property and equipment.
28 ■ ANNUAL REPORT 2018
Net Cash Provided By / (Used In) Financing Activities
Net cash used in financing activities was $93.7 million for 2018, which consists of $100.0 million of proceeds
from our Bond; $169.9 million of indebtedness that we repaid; $5.8 million of dividends paid on our Series B
Preferred Shares; $15.2 million for repurchase of common stock and $2.8 million of loan fees relating to the Bond
and our refinancing agreement with BNP.
Net cash provided by financing activities was $73.6 million for 2017, which consists of $57.2 million of proceeds
drawn under our new loan facility with CEXIM Bank; $55.2 million of indebtedness that we repaid; $5.8 million of
dividends paid on our Series B Preferred Shares; and $77.3 million of proceeds from the issuance of 20,125,000
of additional common stock in 2017.
Net cash used in financing activities was $9.5 million for 2016, which consists of $39.3 million of proceeds
drawn under new loan facilities; $42.5 million of indebtedness that we repaid; $0.5 million of financing costs we
paid relating to our new loan agreements; $5.8 million of dividends paid on our Series B Preferred Shares.
Net cash provided by/used in financing activities for the year ended December 31, 2016 has been adjusted
to reflect the change in presentation of cash, cash equivalents and restricted cash, following our adoption of ASU
2016-18 Statements of cash flows – Restricted cash.
Loan Facilities, Senior Unsecured Notes and Senior Bond
As at December 31, 2018, we had $534.9 million of long term debt outstanding under our facilities and Bond,
which as of the date of this annual report was $495.6 million, and consists of the agreements described below.
Secured Term Loans:
On October 22, 2009, our wholly-owned subsidiary Gala Properties Inc. entered into a $40.0 million loan
agreement with Bremer Landesbank (“Bremer”) to partly finance the acquisition cost of the Houston. The loan is
repayable in 40 quarterly installments of $0.9 million plus one balloon installment of $4.0 million to be paid together
with the last installment on November 12, 2019. The loan bears interest at LIBOR plus a margin of 2.15% per
annum.
On October 2, 2010, our wholly-owned subsidiaries Lae Shipping Company Inc. (“Lae”) and Namu Shipping
Company Inc., (“Namu”) entered into a loan agreement with Export-Import Bank of China (“CEXIM Bank”) and
DnB NOR Bank ASA (“DnB”) to finance part of the construction cost of the Los Angeles, and the Philadelphia, for
an amount of up to $82.6 million, of which $72.1 million was drawn. The Lae advance is repayable in 40 quarterly
installments of approximately $0.6 million and a balloon of $12.3 million payable together with the last installment on
February 15, 2022. The Namu advance is repayable in 40 quarterly installments of approximately $0.6 million and
a balloon of $11.4 million payable together with the last installment on May 18, 2022. Pursuant to an amendment
of the loan agreement dated May 18, 2017, each of the individual banks are allowed to demand repayment in full
of such bank’s contribution in any or all advances on August 16, 2019. On March 1, 2019, the banks waived their
right to exercise the prepayment option. The loan bears interest at LIBOR plus a margin of 2.50% per annum.
On September 13, 2011, our wholly-owned subsidiary Bikar Shipping Company Inc. (“Bikar”) entered into a loan
agreement with Emporiki Bank of Greece S.A. (“Emporiki”) for a loan of up to $15.0 million to refinance part of the
acquisition cost of the Arethusa. On December 13, 2012, Bikar, the Company, DSS and Credit Agricole Corporate
ANNUAL REPORT 2018 ■ 29
and Investment Bank (“Credit Agricole”) entered into a supplemental loan agreement to transfer the outstanding loan
balance, the ISDA master swap agreement and the existing security documents from Emporiki to Credit Agricole.
The loan is repayable in 20 equal semiannual installments of $0.5 million each and a balloon payment of $5.0 million
to be paid together with the last installment on September 15, 2021. The loan bears interest at LIBOR plus a margin
of 2.5% per annum, or 1% for such loan amount that is equivalently secured by cash pledge in favor of the bank.
On May 24, 2013, our wholly-owned subsidiaries Erikub Shipping Company Inc. (“Erikub”) and Wotho Shipping
Company Inc. (“Wotho”) entered into a loan agreement with CEXIM Bank and DnB to finance part of the construction
cost of Crystalia and Atalandi for an amount of up to $15.0 million for each vessel, drawn on May 22, 2014. Each
advance was repayable in 19 quarterly installments of $250,000 and a balloon of $10.3 million payable together
with the last installment on February 22, 2019, which has been paid. The loan bore interest at LIBOR plus a margin
of 3.0% per annum.
On January 9, 2014, our wholly-owned subsidiaries Taka Shipping Company Inc. and Fayo Shipping Company
Inc. entered into a loan agreement with Commonwealth Bank of Australia, London Branch, for a loan facility of up
to $18.0 million to finance part of the acquisition cost of the Melite and Artemis. The loan bears interest at LIBOR
plus a margin of 2.25%. The loan was drawn in two tranches, one of $8.5 million assigned to Melite and one of
$9.5 million assigned to Artemis. Tranche A is repayable in 24 equal consecutive quarterly installments of $195,833
each; and a balloon of $3.8 million payable on January 13, 2020. Tranche B is repayable in 32 equal consecutive
quarterly installments of $156,250 each and a balloon of $4.5 million payable on January 13, 2022. As a result of the
grounding incident of the Melite and the subsequent sale of the vessel, Tranche A was repaid in full in October 2017.
On December 18, 2014, our wholly-owned subsidiaries Weno Shipping Company Inc. (“Weno”) and Pulap
Shipping Company Inc. (“Pulap”) entered into a loan agreement with BNP Paribas (“BNP”), for a loan facility of up
to $55.0 million to finance part of the acquisition cost of the G. P. Zafirakis and the P. S. Palios, of which $53.5
million was drawn. The loan bears interest at LIBOR plus a margin of 2%, and is repayable in 14 equal semi-annual
installments of approximately $1.6 million and a balloon of $31.5 million, payable on November 30, 2021.
On March 17, 2015, eight of our wholly-owned subsidiaries entered into a loan facility with Nordea to refinance
the existing agreements with the bank and to add additional vessels. On March 19, 2015, after repaying in full
all outstanding indebtedness with the bank, we drew down the amount of $93.1 million. The loan is repayable in
24 equal consecutive quarterly installments of approximately $1.9 million and a balloon of $48.4 million payable
together with the last installment on March 19, 2021. The loan bears interest plus a margin of 2.1% of LIBOR.
On March 26, 2015, three of our wholly-owned subsidiaries entered into a loan agreement with ABN AMRO
Bank N.V. for a secured term loan facility of up to $53.0 million, to refinance part of the acquisition cost of the vessels
New York, Myrto and Maia of which $50.2 million was drawn on March 30, 2015. The loan is repayable in 24 equal
consecutive quarterly installments of about $1.0 million and a balloon of $26.3 million payable together with the last
installment on March 30, 2021. The loan bears interest at LIBOR plus a margin of 2.0%.
On April 29, 2015, our wholly-owned subsidiary Lelu Shipping Company Inc. (“Lelu”) entered into a term loan
agreement with Danish Ship Finance A/S for a loan facility of $30.0 million, drawn on April 30, 2015 to partly finance
the acquisition cost of the Santa Barbara, which was delivered in January 2015. The loan is repayable in 28 equal
consecutive quarterly installments of $0.5 million each and a balloon of $16.0 million payable together with the last
installment on April 30, 2022. The loan bears interest at LIBOR plus a margin of 2.15%.
On July 22, 2015, we entered into a term loan agreement with BNP Paribas for a loan of $165.0 million drawn
on July 24, 2015. The loan was repayable in 20 consecutive quarterly installments, the first eight installments in an
30 ■ ANNUAL REPORT 2018
amount of $2.5 million, followed by four installments in an amount of $5.0 million; eight installments in an amount of
$7.0 million; and a balloon installment of $69.0 million payable together with the last installment on July 24, 2020.
The loan bore interest at LIBOR plus a margin of 2.35% per annum for the first two years; 2.3% per annum for the
third year and 2.25% per annum until the final maturity of the loan. The loan, having a balance of $130 million on
July 16, 2018, was repaid in full with $75 million of proceeds under a new loan agreement entered into with BNP
Paribas on July 13, 2018 and with cash on hand. The new loan has a term of five years and is repayable in 20
consecutive quarterly installments of $1.56 million and a balloon installment of $43.75 million payable together with
the last installment on July 16, 2023. The loan bears interest at LIBOR plus a margin of 2.3%.
On September 30, 2015, our wholly-owned subsidiaries, Ujae Shipping Company Inc. (“Ujae”) and Rairok
Shipping Company Inc. (“Rairok”) entered into a term loan agreement with ING Bank N.V. for a loan of up to $39.7
million, available in two advances to finance part of the acquisition cost of the New Orleans and the Medusa.
Advance A of about $28.0 million was drawn on November 19, 2015 and is repayable in 28 consecutive quarterly
installments of about $0.5 million and a balloon installment of about $15.0 million payable together with the last
installment on November 19, 2022. Advance B of about $11.7 million was drawn on October 6, 2015 and is
repayable in 28 consecutive quarterly installments of about $0.3 million and a balloon installment of about $3.5
million payable together with the last installment on October 6, 2022. The loan bears interest at LIBOR plus a
margin of 1.65%.
On January 7, 2016, three of our wholly-owned subsidiaries entered into a secured loan agreement with the
CEXIM Bank for a loan of up to $75.7 million in order to finance part of the construction cost of three vessels.
On January 4, 2017, we drew down $57.24 million to finance part of the construction cost of San Francisco and
Newport News, both delivered on January 4, 2017. The balance of the committed loan amount, including the
tranche for Hull DY6006 whose shipbuilding contract was cancelled on October 31, 2016, was cancelled. On
February 6, 2017, we also entered into a Deed of Release with the CEXIM Bank in order to release the owner of
Hull DY6006 of all of its obligations under the loan agreement as borrower. The loan is payable in 60 equal quarterly
installments of $954,000 each, the last of which is payable by January 4, 2032, and bears interest at LIBOR plus
a margin of 2.3%.
On March 29, 2016, two of our wholly-owned subsidiaries entered into a term loan agreement with ABN
AMRO Bank N.V. for a loan of $25.755 million, drawn on March 30, 2016, to finance the acquisition cost of the
Selina and the Ismene. The loan is payable in eight consecutive quarterly installments of $855,000 each and a
balloon installment of $18.9 million payable together with the last installment by June 30, 2019. The first repayment
installment was repaid on September 30, 2017. The loan bears interest at LIBOR plus a margin of 3%.
On May 10, 2016, one of our wholly-owned subsidiaries entered into a term loan agreement with DNB Bank
ASA and the CEXIM Bank for a loan of $13.51 million, drawn on the same date, being the purchase price of
the Maera. The loan was payable in seven equal consecutive quarterly installments of $19,775 each, four equal
consecutive quarterly installments of $282,500 each and a balloon of about $12.2 million payable together with the
last installment on January 4, 2019. The loan bore interest at LIBOR plus a margin of 3% per annum. In 2018 and
according to the terms of the loan agreement, we prepaid an additional amount of $360,417 which was deducted
from the balloon which was fully paid in January 2019.
Under the secured term loans outstanding as of December 31, 2018, 33 vessels of the Company’s fleet were
mortgaged with first preferred or priority ship mortgages. Additional securities required by the banks include first
priority assignment of all earnings, insurances, first assignment of time charter contracts with duration that exceeds
a certain period, pledge over the shares of the borrowers, manager’s undertaking and subordination and requisition
compensation and either a corporate guarantee by Diana Shipping Inc. (the “Guarantor”) or a guarantee by the ship
ANNUAL REPORT 2018 ■ 31
owning companies (where applicable), financial covenants, as well as operating account assignments. The lenders
may also require additional security in the future in the event the borrowers breach certain covenants under the loan
agreements. The secured term loans generally include restrictions as to changes in management and ownership
of the vessels, additional indebtedness, as well as minimum requirements regarding hull cover ratio and minimum
liquidity per vessel owned by the borrowers, or the guarantor, maintained in the bank accounts of the borrowers, or
the guarantor. Furthermore, the secured term loans contain cross default provisions and additionally the Company
is not permitted to pay any dividends following the occurrence of an event of default.
As of December 31, 2017, 2018 and the date of this report, we were in compliance with all of our loan
covenants.
Currently, 32 vessels have been provided as collateral to secure our loan facilities.
Senior Notes due 2020
On May 28, 2015, we issued $55.0 million aggregate principal amount of our 8.5% senior unsecured notes
due 2020, or our Notes, in a registered public offering and on June 5, 2015, we issued an additional $8.25 million
aggregate principal amount of the Notes, pursuant to the underwriters’ option to purchase additional Notes. The
Notes were redeemed on October 29, 2018 at a redemption price equal to 100% of the principal amount to be
redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Notes bore interest at
a rate of 8.500% per annum, payable quarterly on each February 15, May 15, August 15 and November 15,
commencing on August 15, 2015. The Notes traded on the NYSE from May 29, 2015 until redemption under the
symbol “DSXN.”
Senior Unsecured Bond due 2023
On September 27, 2018, the Company issued a $100 million senior unsecured bond (the “Bond”) maturing in
September 2023 and may issue up to an additional $25 million of the Bond on one or more occasions. Entities
affiliated with the Company’s chief executive officer, Mr. Simeon Palios, and other executive officers and directors
of the Company purchased $16.2 million aggregate principal amount of the Bond. The Bond bears interest from
September 27, 2018 at a US Dollar fixed-rate coupon of 9.50% and is payable semi-annually in arrears in March
and September of each year. The Bond is callable in three years and includes financial and other covenants. The
Bond is trading on the Oslo Stock Exchange.
As of December 31, 2018, 2017 and 2016 and as of the date of this annual report, we did not and have not
designated any financial instruments as accounting hedging instruments.
Capital Expenditures
We make capital expenditures from time to time in connection with vessel acquisitions and constructions, which
we finance with cash from operations, debt under loan facilities at terms acceptable to us, with funds from equity
issuances and we have also issued senior notes and a bond. Currently, we do not have capital expenditures for
vessel acquisitions or constructions, but we incur capital expenditures when our vessels undergo surveys. This
process of recertification may require us to reposition these vessels from a discharging port to shipyard facilities,
which will reduce our operating days during the period. We also incur capital expenditures for vessel improvements
to meet new regulations. The loss of earnings associated with the decrease in operating days together with the
capital needs for repairs and upgrades result in increased cash flow needs. We expect to cover such capital
expenditures and cash flow needs with cash from operations and cash on hand.
32 ■ ANNUAL REPORT 2018
C. Research and development, patents and licenses
We incur from time to time expenditures relating to inspections for acquiring new vessels that meet our
standards. Such expenditures are insignificant and they are expensed as they incur.
D. Trend information
Our results of operations depend primarily on the charter hire rates that we are able to realize, and the demand
for dry bulk vessel services. The Baltic Dry Index, or the BDI, has long been viewed as the main benchmark to
monitor the movements of the dry bulk vessel charter market and the performance of the entire dry bulk shipping
market. The BDI declined 94% in 2008 from a peak of 11,793 in May 2008 to a low of 663 in December 2008 and
has remained volatile since then. In 2016, the BDI ranged from a record low of 290 in February to a high of 1,257
in November. In 2017, the BDI ranged from a low of 685 in February to a high of 1,743 in December. In 2018, the
BDI ranged from a low of 948 in April to a high of 1,774 in July.
The decline and volatility in charter rates in the dry bulk market reflects in part the fact that the supply of dry
bulk vessels in the market has been increasing, and the number of newbuilding dry bulk vessels on order is high.
Demand for dry bulk vessel services is influenced by global financial conditions. The recovery in China and India
positively influenced the charter rates; however, global financial conditions remain volatile and demand for dry bulk
services may decrease in the future. The combination of increasing dry bulk capacity (both current and expected)
and decreasing demand or demand which is not offset by the increase in dry bulk capacity may result in reductions
in charter hire rates and, as a consequence, adversely affect our operating results.
Additionally, we believe we have structured our capital expenditure requirements, debt commitments and
liquidity resources in a way that will provide us with financial flexibility (see “Operating and Financial Review and
Prospects—B. Liquidity and Capital Resources” for more information).
E. Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
ANNUAL REPORT 2018 ■ 33
F. Tabular Disclosure of Contractual Obligations
The following table sets forth our contractual obligations, in thousands of U.S. dollars, and their maturity dates
as of December 31, 2018:
Payments due by period
Contractual Obligations
Total
Amount
Less than 1
year
2-3 years
4-5 years
More than
5 years
Loan Agreements and Bond (1)
$
534,850 $
97,521 $
174,876 $
230,971 $
31,482
Estimated Interest Payments on
Loan Agreements and Bond (1)
103,890
28,300
45,800
23,027
6,763
Broker services agreement (2)
500
500
Preferred dividends (3)
1,923
1,923
-
-
-
-
-
-
Total
$
641,163 $
128,244 $
220,676 $
253,998 $
38,245
(1) As of December 31, 2018, we had an aggregate principal amount of $534.9 million of indebtedness outstanding
under our loan facilities and our Bond. Estimated interest payments represent projected interest payments on
our long-term debt, which are based on the weighted average LIBOR rate in 2018 plus the margin of our loan
agreements in 2018 and the fixed interest rate of our Bond.
(2) Our agreement with Steamship (formerly Diana Enterprises Inc.) dated April 1, 2018, as amended on November
21, 2018 expires on March 31, 2019.
(3) On February 24, 2014 we completed an offering of 2,600,000 shares of Series B Perpetual Preferred Stock, at
the price of $25.0 per share, and dividends are payable at a rate equal to 8.875% per annum. At any time on or
after February 14, 2019, the Series B Preferred Shares may be redeemed, in whole or in part, at a redemption
price of $25.00 per share, plus an amount equal to all accumulated and unpaid dividends thereon to the date
of redemption, whether or not declared. The table above presents our obligations for dividend payments until
February 14, 2019, which was the optional redemption date of the preferred stock.
G. Safe Harbour
See the section entitled “Forward-Looking Statements” at the beginning of this annual report.
34 ■ ANNUAL REPORT 2018
Directors, Senior Management and Employees
A. Directors and Senior Management
Set forth below are the names, ages and positions of our directors and executive officers. Effective August
2018, our Board of Directors increased its size from nine to eleven members and Mr. Andreas Michalopoulos and
Mr. Christos Glavanis were appointed to fill the resulting vacancies. Our board of directors is elected annually on
a staggered basis, and each director elected holds office for a three-year term and until his or her successor is
elected and has qualified, except in the event of such director’s death, resignation, removal or the earlier termination
of his or her term of office. Officers are appointed from time to time by our board of directors and hold office until a
successor is appointed or their employment is terminated.
Name
Simeon Palios
Age
Position
77 Class I Director, Chief Executive Officer and Chairman
Anastasios Margaronis
63 Class I Director and President
Ioannis Zafirakis
47 Class I Director, Chief Strategy Officer and Secretary
Andreas Michalopoulos
47 Class III Director, Chief Financial Officer and Treasurer
Semiramis Paliou
44 Class III Director, Chief Operating Officer
Maria Dede
46 Chief Accounting Officer
William (Bill) Lawes
75 Class II Director
Konstantinos Psaltis
80 Class II Director
Kyriacos Riris
69 Class II Director
Apostolos Kontoyannis
70 Class III Director
Konstantinos Fotiadis
68 Class III Director
Christos Glavanis
65 Class I Director
The term of our Class I directors expires in 2021, the term of our Class II directors expires in 2022, and the term
of our Class III directors expires in 2020.
The business address of each officer and director is the address of our principal executive offices, which are
located at Pendelis 16, 175 64 Palaio Faliro, Athens, Greece.
Biographical information with respect to each of our directors and executive officers is set forth below.
ANNUAL REPORT 2018 ■ 35
Simeon P. Palios has served as the Chief Executive Officer and Chairman of Diana Shipping Inc. since February
21, 2005 and as a Director since March 9, 1999 and has served as the Chief Executive Officer and Chairman of
Performance Shipping Inc. since January 13, 2010. Mr. Palios also serves currently as the President of Diana
Shipping Services S.A., our management company. Prior to November 12, 2004, Mr. Palios was the Managing
Director of Diana Shipping Agencies S.A. Since 1972, when he formed Diana Shipping Agencies S.A., Mr. Palios
has had overall responsibility for its activities. Mr. Palios has experience in the shipping industry since 1969 and
expertise in technical and operational issues. He has served as an ensign in the Greek Navy for the inspection of
passenger boats on behalf of Ministry of Merchant Marine and is qualified as a naval architect and marine engineer.
Mr. Palios is a member of various leading classification societies worldwide and he is a member of the board of
directors of the United Kingdom Freight Demurrage and Defense Association Limited. Since October 7, 2015, Mr.
Palios has served as President of the Association “Friends of Biomedical Research Foundation, Academy of Athens”.
He holds a bachelor’s degree in Marine Engineering from Durham University.
Anastasios C. Margaronis has served as our President and as a Director since February 21, 2005 and
has served as the Director and President of Performance Shipping Inc. since January 13, 2010. Mr. Margaronis
is a Deputy President of Diana Shipping Services S.A., where he also serves as a Director and Secretary. Prior
to February 21, 2005, Mr. Margaronis was employed by Diana Shipping Agencies S.A. and performed on our
behalf the services he now performs as President. He joined Diana Shipping Agencies S.A. in 1979 and has been
responsible for overseeing our vessels’ insurance matters, including hull and machinery, protection and indemnity
and war risks insurances. Mr. Margaronis has experience in the shipping industry, including in ship finance and
insurance, since 1980. He is a member of the Greek National Committee of the American Bureau of Shipping and
a member of the board of directors of the United Kingdom Mutual Steam Ship Assurance Association (Europe)
Limited. He holds a bachelor’s degree in Economics from the University of Warwick and a master’s of science
degree in Maritime Law from the Wales Institute of Science and Technology.
Ioannis G. Zafirakis has served as our Director, Chief Strategy Officer and Secretary since August 2018. Under
his capacity as Chief Strategy Officer, Mr. Zafirakis is responsible for establishing and reviewing key strategic priorities
and translating them into a comprehensive strategic plan, monitoring the execution of the plan, facilitating and
driving key strategic initiatives through inception phase. He is also responsible for communicating the Company’s
strategy and overall goals internally and externally. In addition, Mr. Zafirakis is the Chief Strategy Officer of Diana
Shipping Services S.A., where he also serves as Director and Treasurer. Since February 2005, Mr. Zafirakis served
for the same companies in various positions such as Chief Operating Officer, Executive Vice-President and Vice-
President. From June 1997 to February 2005, Mr. Zafirakis was employed by Diana Shipping Agencies S.A. where
he held a number of positions in its finance and accounting department. He currently also serves as Director, Chief
Strategy Officer and Secretary of Performance Shipping Inc. Mr. Zafirakis is a member of the Business Advisory
Committee of the Shipping Programs of ALBA Graduate Business School at The American College of Greece. He
holds a bachelor’s degree in Business Studies from City University Business School in London and a master’s
degree in International Transport from the University of Wales in Cardiff.
Andreas Michalopoulos has served as the Company’s Chief Financial Officer and Treasurer since March
8, 2006 and also has served in these positions with Performance Shipping Inc. since January 13, 2010. Mr.
Michalopoulos started his career in 1993 when he joined Merrill Lynch Private Banking in Paris. In 1995, he became
an International Corporate Auditor with Nestle SA based in Vevey, Switzerland and moved in 1998 to the position of
Trade Marketing and Merchandising Manager. From 2000 to 2002, he worked for McKinsey and Company in Paris,
France, as an Associate Generalist Consultant before joining a major Greek Pharmaceutical Group with U.S. R&D
activity as a Vice President of International Business Development and Member of the Executive Committee in 2002
where he remained until 2005. From 2005 to 2006, he joined Diana Shipping Agencies S.A. as a Project Manager.
36 ■ ANNUAL REPORT 2018
Mr. Michalopoulos graduated from Paris IX Dauphine University with Honors in 1993 obtaining an MSc in Economics
and a master’s degree in Management Sciences specialized in Finance. In 1995, he also obtained a master’s degree
in Business Administration from Imperial College, University of London. Mr. Andreas Michalopoulos is married to the
youngest daughter of Mr. Simeon Palios, the Company’s Chief Executive Officer and Chairman.
Semiramis Paliou has served as a Director of Diana Shipping Inc. since March 2015. Mrs. Paliou has 20 years
of experience in shipping operations, technical management and crewing. Mrs. Paliou began her career at Lloyd’s
Register of Shipping from 1996 to 1998 as a trainee ship surveyor. She was then employed by Diana Shipping
Agencies S.A. From 2007 to 2010 she was employed as a Director and President of Alpha Sigma Shipping Corp.
From February 2010 to November 2015 she was the Head of the Operations, Technical and Crew department of
Diana Shipping Services S.A. From November 2015 to October 2016 she served as Vice President of the same
company. From November 2016 to the end of July 2018, she served as Managing Director and Head of the Technical,
Operations, Crew and Supply department of Unitized Ocean Transport Limited. As of August 2018, she is the Chief
Operating Officer of Diana Shipping Inc. and Diana Shipping Services S.A. As of November 2018, Mrs. Paliou serves
as Chief Operating Officer of Performance Shipping Inc. Mrs. Paliou obtained her BSc in Mechanical Engineering from
Imperial College, London and her MSc in Naval Architecture from University College, London. In 2016 she completed a
course in Finance for Senior Executives at Harvard Business School. She is the daughter of Simeon Palios, our Chief
Executive Officer and Chairman, and is a member of the Greek committee of Det Norske Veritas - Germanischer Lloyd,
a member of the Greek committee of Nippon Kaiji Kyokai and a member of the Greek committee of Bureau Veritas.
Since March 2018, Mrs. Paliou is on the board of directors of the Hellenic Marine Environment Protection Association.
Maria Dede has served as our Chief Accounting Officer since September 1, 2005 during which time she has
been responsible for all financial reporting requirements. Mrs. Dede has also served as an employee of Diana Shipping
Services S.A. since March 2005. In 2000 Mrs. Dede joined the Athens branch of Arthur Andersen, which merged with
Ernst and Young (Hellas) in 2002, where she served as an external auditor of shipping companies until 2005. From
1996 to 2000 Mrs. Dede was employed by Venus Enterprises S.A., a ship-management company, where she held a
number of positions primarily in accounting and supplies. Mrs. Dede holds a Bachelor’s degree in Maritime Studies
from the University of Piraeus, a Master’s degree in Business Administration from the ALBA Graduate Business School
and a Master’s degree in Auditing and Accounting from the Greek Institute of Chartered Accountants.
William (Bill) Lawes has served as a Director and the Chairman of our Audit Committee since March 2005.
Mr. Lawes served as a Managing Director and a member of the Regional Senior Management Board of JPMorgan
Chase and its predecessor banks from 1987 until 2002. Prior to joining JPMorgan Chase, he was Global Head of
Shipping Finance at Grindlays Bank. Since December 2007, he has served as an independent member of the Board
of Directors and Chairman of the Audit Committee of Teekay Tankers Ltd. Mr. Lawes joined Seafarers UK, a maritime
charity, as Trustee and Finance Committee member in 2016. Mr. Lawes is qualified as a member of the Institute of
Chartered Accountants of Scotland.
Konstantinos Psaltis has served as a Director since March 2005 and as the Chairman of our Nominating
Committee since May 2015 and a member of our Compensation Committee since May 2017. From 1981 to 2006,
Mr. Psaltis served as Managing Director of Ormos Compania Naviera S.A., a company that specializes in operating
and managing multipurpose container vessels and from 2006 until today as a President of the same company. Prior
to joining Ormos Compania Naviera S.A., Mr. Psaltis simultaneously served as a technical manager in the textile
manufacturing industry and as a shareholder of shipping companies managed by M.J. Lemos. From 1961 to 1964,
he served as ensign in the Royal Hellenic Navy. He holds a degree in Mechanical Engineering from Technische
Hochschule Reutlingen & Wuppertal and a bachelor’s degree in Business Administration from Tubingen University in
Germany.
ANNUAL REPORT 2018 ■ 37
Kyriacos Riris has served as a Director since March 2015 and as a member of our Nominating Committee
since May 2015. Commencing in 1998, Mr. Riris served in a series of positions in PricewaterhouseCoopers (PwC),
Greece, including Senior Partner, Managing Partner of the Audit and the Advisory/Consulting Lines of Service.
From 2009 to 2014, Mr. Riris served as Chairman of the Board of Directors of PricewaterhouseCoopers (PwC),
Greece. Prior to its merger with PwC, Mr. Riris was employed at Grant Thornton, Greece, where in 1984 he became
a Partner. From 1976 to 1982, Mr. Riris was employed at Arthur Young, Greece. Since November 2018, Mr Riris
has served as Chairman of Titan Cement International S.A., a Belgian corporation. Mr. Riris holds a degree from
Birmingham Polytechnic (presently Birmingham City University) and completed his professional qualifications with
the Association of Certified Chartered Accountants (ACCA) in the UK in 1975, becoming a Fellow of the Association
of Certified Accountants in 1985.
Apostolos Kontoyannis has served as a Director and as the Chairman of our Compensation Committee and
a member of our Audit Committee since March 2005. Mr. Kontoyannis has over 40 years of experience in shipping
finance and currently serves as financial consultant to various shipping companies. He was employed by Chase
Manhattan Bank N.A. in Frankfurt (Corporate Bank), London (Head of Shipping Finance South Western European
Region) and Piraeus (Manager, Ship Finance Group) from 1975 to 1987. Mr. Kontoyannis holds a bachelor’s degree
in Finance and Marketing and a master’s degree in business administration in Finance from Boston University.
Konstantinos Fotiadis has served as a Director since 2017. Mr. Fotiadis served as an independent Director and
as the Chairman of the Audit Committee of Performance Shipping Inc. since the completion of the private offering
and until February 8, 2011. From 1990 until 1994 Mr. Fotiadis served as the President and Managing Director of
Reckitt & Colman (Greece), part of the British multinational Reckitt & Colman plc, manufacturers of household,
cosmetics and health care products. From 1981 until its acquisition in 1989 by Reckitt & Colman plc, Mr. Fotiadis
was a General Manager at Dr. Michalis S.A., a Greek company manufacturing and marketing cosmetics and health
care products. From 1978 until 1981 Mr. Fotiadis held positions with Esso Chemicals Ltd. and Avrassoglou S.A.
Mr. Fotiadis has also been active as a business consultant and real estate developer. Mr. Fotiadis holds a degree
in Economics from Technische Universitaet Berlin and in Business Administration from Freie Universitaet Berlin.
Christos Glavanis has served as a Director since August 2018. Mr. Glavanis has over 30 years of experience in
the audit profession, serving in several senior roles at Ernst & Young, including as Chairman and Managing Partner of
EY Greece from 1987 to 2010 and Managing Partner of EY South East Europe from 1996 to 2010. Mr. Glavanis was
also a main Board Member of EY EMEIA Regional and a member of EY Global Council. Currently, Mr. Glavanis is a
non-executive board member of W S Karoulias S.A., a beverage distribution company based in Athens, Greece and
BuyaPowa Ltd., a London, England based online platform allowing users to design, launch, and analyze social sales
campaigns. He is also the trustee of Phase Worldwide, a United Kingdom charity. He previously served as a non-
executive board member and chairman of the Audit Committee of Korres S.A, a Greece based cosmetics company,
chairman of the Audit Committee of the Hellenic Financial Stability Fund, board member and audit committee member
of Eurobank SA and a non-executive board member of Pharmaten S.A. Greece based pharmaceutical company.
B. Compensation
Aggregate executive compensation (including amounts paid to Steamship (formerly Diana Enterprises Inc.)
pursuant to the Brokerage Services Agreements) for 2018 was $5.3 million. Since June 1, 2010, Steamship (formerly
Diana Enterprises Inc.), a related party, as described in our Form 20-F filed with the U.S. Securities and Exchange
Commission (the “SEC”) on March 12, 2019, in “Item 7. Major Shareholders and Related Party Transactions—B.
Related Party Transactions” has provided to us brokerage services. Under the Brokerage Services Agreements in
effect during 2018, fees for 2018 amounted to $1.85 million. We consider fees under these agreements to be part of
our executive compensation due to the affiliation with Steamship. We expect such fees to remain the same in 2019.
38 ■ ANNUAL REPORT 2018
Non-employee directors receive annual compensation in the amount of $52,000 plus reimbursement of out-
of-pocket expenses. In addition, until July 2018, each non-executive director serving as chairman of a committee
received additional annual compensation of $26,000, plus reimbursement for out-of-pocket expenses; and each
non-executive serving as member of a committee received additional annual compensation of $13,000, plus
reimbursement for out-of-pocket expenses. Since July 2018, each non-executive director serving as chairman
of the audit and compensation committee receives additional annual compensation of $40,000; and each non-
executive director serving as chairman of the nominating committee receives additional annual compensation
of $26,000. Each non-executive director serving as member of the audit committee receives additional annual
compensation of $26,000 and all other members receive $13,000, plus reimbursement for out-of-pocket expenses.
For 2018, 2017 and 2016 fees and expenses of our non-executive directors amounted to $0.5 million, $0.4 million
and $0.4 million, respectively.
Since 2008 and until the date of this annual report, our board of directors has awarded an aggregate amount of
13,675,241 shares of restricted common stock, of which 11,354,657 shares were awarded to senior management
and 2,320,584 shares were awarded to non-employee directors. All restricted shares vest ratably over three
years, except for 600,000 shares awarded in 2008 which vested ratably over a period of six years until 2014 and
1,314,000 shares awarded in 2014 which will vest ratably over a period of six years until 2022. The restricted shares
are subject to forfeiture until they become vested. Unless they forfeit their shares, grantees have the right to vote,
to receive and retain all dividends paid and to exercise all other rights, powers and privileges of a holder of shares.
In 2018, compensation costs relating to the aggregate amount of restricted stock awards amounted to $7.3
million.
We do not have a retirement plan for our officers or directors.
Equity Incentive Plan
In November 2014, our board of directors approved, and the Company adopted the 2014 Equity Incentive Plan,
or the 2014 Plan, for 5,000,000 common shares, which on May 31, 2018 was amended to increase the common
shares to 13,000,000. Currently, 7,124,759 shares remain reserved for issuance.
Under the 2014 Plan and as amended, the Company’s employees, officers and directors are entitled to receive
options to acquire the Company’s common stock. The 2014 Plan is administered by the Compensation Committee
of the Company’s Board of Directors or such other committee of the Board as may be designated by the Board.
Under the terms of the 2014 Plan, the Company’s Board of Directors is able to grant a) incentive stock options,
b) non-qualified stock options, c) stock appreciation rights, d) dividend equivalent rights, e) restricted stock, f)
unrestricted stock, g) restricted stock units, and h) performance shares. No options, stock appreciation rights or
restricted stock units can be exercisable prior to the first anniversary or subsequent to the tenth anniversary of the
date on which such award was granted. Under the 2014 Plan, the Administrator may waive or modify the application
of forfeiture of awards of restricted stock and performance shares in connection with cessation of service with the
Company.
C. Board Practices
We have established an Audit Committee, comprised of two board members, which is responsible for reviewing
our accounting controls, recommending to the board of directors the engagement of our independent auditors,
and pre-approving audit and audit-related services and fees. Each member has been determined by our board of
ANNUAL REPORT 2018 ■ 39
directors to be “independent” under the rules of the NYSE and the rules and regulations of the SEC. As directed by
its written charter, the Audit Committee is responsible for appointing, and overseeing the work of the independent
auditors, including reviewing and approving their engagement letter and all fees paid to our auditors, reviewing
the adequacy and effectiveness of the Company’s accounting and internal control procedures and reading and
discussing with management and the independent auditors the annual audited financial statements. The members
of the Audit Committee are Mr. William Lawes (chairman and financial expert) and Mr. Apostolos Kontoyannis
(member and financial expert).
We have established a Compensation Committee comprised of two members, which, as directed by its written
charter, is responsible for setting the compensation of executive officers of the Company, reviewing the Company’s
incentive and equity-based compensation plans, and reviewing and approving employment and severance
agreements. The members of the Compensation Committee are Mr. Apostolos Kontoyannis (chairman) and Mr.
Konstantinos Psaltis (member).
We have established a Nominating Committee comprised of two members, which, as directed by its written
charter, is responsible for identifying, evaluating and making recommendations to the board of directors concerning
individuals for selections as director nominees for the next annual meeting of stockholders or to otherwise fill board
of director vacancies. The members of the Nominating Committee are Mr. Konstantinos Psaltis (chairman) and Mr.
Kyriacos Riris (member).
We have established an Executive Committee comprised of the five executive directors, Mr. Simeon Palios
(chairman), Mr. Anastasios Margaronis (member), Mr. Ioannis Zafirakis (member), Mr. Andreas Michalopoulos
(member) and Mrs. Semiramis Paliou (member). The Executive Committee has, to the extent permitted by law, the
powers of the Board of Directors in the management of the business and affairs of the Company.
We also maintain directors’ and officers’ insurance, pursuant to which we provide insurance coverage against
certain liabilities to which our directors and officers may be subject, including liability incurred under U.S. securities
law. Our executive directors have employment agreements, which, if terminated without cause, entitle them to
continue receiving their basic salary through the date of the agreement’s expiration.
D. Employees
We crew our vessels primarily with Greek officers and Filipino officers and seamen and may also employ
seamen from Poland, Romania and Ukraine. DSS and DWM are responsible for identifying the appropriate officers
and seamen mainly through crewing agencies. The crewing agencies handle each seaman’s training, travel and
payroll. The management companies ensure that all our seamen have the qualifications and licenses required to
comply with international regulations and shipping conventions. Additionally, our seafaring employees perform
most commissioning work and supervise work at shipyards and drydock facilities. We typically man our vessels
with more crew members than are required by the country of the vessel’s flag in order to allow for the performance
of routine maintenance duties.
40 ■ ANNUAL REPORT 2018
The following table presents the number of shoreside personnel employed by DSS and the number of seafaring
personnel employed by our vessel-owning subsidiaries as at December 31, 2018, 2017 and 2016.
Shoreside
Seafaring
Total
E. Share Ownership
Year Ended December 31,
2016
2018
2017
115
926
1,041
93
1,006
1,099
95
923
1,018
With respect to the total amount of common shares and Series B Preferred Shares owned by our officers and
directors, individually and as a group, see “Item 7. Major Shareholders and Related Party Transactions—A. Major
Shareholders” in our Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”) on March
12, 2019.
ANNUAL REPORT 2018 ■ 41
42 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS
Report of Independent Registered
Public Accounting Firm
Report of Independent Registered
Public Accounting Firm
Consolidated Balance Sheets as
of December 31, 2018 and 2017
Consolidated Statements of Operations
for the years ended December 31,
2018, 2017 and 2016
Consolidated Statements of Comprehensive
Income/(Loss) for the years ended
December 31, 2018, 2017 and 2016
Consolidated Statements of Stockholders’
Equity for the years ended December 31,
2018, 2017 and 2016
Consolidated Statements of Cash Flows
for the years ended December 31, 2018,
2017 and 2016
F-2
F-3
F-5
F-6
F-6
F-7
F-8
Notes to Consolidated Financial Statements F-10
Report of Independent Registered Public
Accounting Firm
To the Stockholders and the Board of Directors of Diana Shipping Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Diana Shipping Inc. (the Company) as of
December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income/loss,
stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2018, and the
related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company at December 31,
2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended
December 31, 2018, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 framework) and our report dated March 12, 2019, expressed an unqualified
opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.
We have served as the Company’s auditor since 2004.
Athens, Greece
March 12, 2019
ANNUAL REPORT 2018 ■ F-2
Report of Independent Registered Public
Accounting Firm
To the Stockholders and the Board of Directors of Diana Shipping Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Diana Shipping Inc.’s internal control over financial reporting as of December 31, 2018,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Diana Shipping
Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2018, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets of Diana Shipping Inc. as of December 31, 2018 and
2017, and the related consolidated statements of operations, comprehensive income/loss, stockholders’ equity
and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and our
report dated March 12, 2019, expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an
opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that
a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
F-3 ■ ANNUAL REPORT 2018
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.
Athens, Greece
March 12, 2019
ANNUAL REPORT 2018 ■ F-4
DIANA SHIPPING INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2018 and 2017
(Expressed in thousands of U.S. Dollars – except for share and per share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 2(e))
Accounts receivable, trade (Note 2(f))
Due from related parties (Notes 2(g) and 4(b))
Inventories (Note 2(h))
Prepaid expenses and other assets
Total current assets
FIXED ASSETS:
Vessels' net book value (Note 5)
Property and equipment, net (Note 6)
Total fixed assets
OTHER NON-CURRENT ASSETS:
Restricted cash (Notes 2(e) and 7)
Investments in related parties (Notes 2(v) and 3)
Deferred charges, net (Notes 2(m), 2(n) and 5)
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt, net of deferred financing costs, current (Note 7)
Accounts payable, trade and other
Due to related parties (Note 4(a) and 4(d))
Accrued liabilities
Deferred revenue
Total current liabilities
Long-term debt, net of current portion and deferred financing costs, non-current (Note 7)
Other non-current liabilities
Commitments and contingencies (Note 8)
STOCKHOLDERS' EQUITY:
Preferred stock (Note 9(a))
Common stock, $0.01 par value; 200,000,000 shares authorized and 103,764,351
and 106,131,017 issued and outstanding at December 31, 2018 and 2017,
respectively (Note 9(b))
Additional paid-in capital
Accumulated other comprehensive income
Accumulated deficit
Total stockholders' equity
$
$
$
2018
2017
126,825 $
2,948
-
5,835
6,364
141,972
40,227
4,937
82,660
5,770
5,167
138,761
991,403
22,425
1,013,828
1,053,578
22,650
1,076,228
24,582
3,263
4,151
1,187,796 $
25,582
3,249
2,902
1,246,722
96,434 $
11,073
182
13,377
4,090
125,156
434,113
843
-
60,763
7,954
271
8,246
3,207
80,441
540,621
902
-
26
26
1,038
1,061
1,062,645
287
(436,312)
627,684
1,070,500
294
(447,123)
624,758
Total liabilities and stockholders' equity
$
1,187,796 $
1,246,722
The accompanying notes are an integral part of these consolidated financial statements.
F-5 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2018, 2017 and 2016
(Expressed in thousands of U.S. Dollars – except for share and per share data)
2018
2017
2016
REVENUES:
Time charter revenues
EXPENSES:
Voyage expenses
Vessel operating expenses
Depreciation and amortization of deferred charges
General and administrative expenses
Management fees to related party (Notes 3(b) and 4(d))
Impairment loss (Note 5)
Loss from sale of vessels (Note 5)
Insurance recoveries, net of other loss (Note 5)
Gain on contract termination
Other loss/(gain)
Operating income/(loss)
OTHER INCOME / (EXPENSES):
Interest and finance costs (Note 10)
Interest and other income (Note 4(b))
Gain/(loss) from equity method investments (Note 3)
Total other expenses, net
Net income/(loss)
Dividends on series B preferred shares (Notes 9(a) and 11)
Net income/(loss) attributed to common stockholders
$
226,189 $
161,897 $
114,259
7,405
95,510
52,206
29,518
2,394
-
1,448
-
-
(542)
38,250 $
8,617
90,358
87,003
26,332
1,883
442,274
-
(10,879)
-
296
(483,987) $
13,826
85,955
81,578
25,510
1,464
-
-
-
(5,500)
(253)
(88,321)
(30,506)
8,822
14
(21,670) $
(26,628)
4,508
(5,607)
(27,727) $
(21,949)
2,410
(56,377)
(75,916)
16,580 $
(511,714) $
(164,237)
(5,769)
(5,769)
(5,769)
10,811 $
(517,483) $
(170,006)
$
$
$
$
Earnings/(loss) per common share, basic and diluted (Note 11) $
0.10 $
(5.41) $
(2.11)
Weighted average number of common shares, basic (Note 11)
103,736,742
95,731,093
80,441,517
Weighted average number of common shares, diluted (Note 11)
104,715,883
95,731,093
80,441,517
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
For the years ended December 31, 2018, 2017 and 2016
(Expressed in thousands of U.S. Dollars)
Net income/(loss)
Other comprehensive income/(loss) (Actuarial gain/(loss))
Comprehensive income/(loss)
2018
16,580 $
(7)
16,573 $
2017
(511,714 ) $
109
(511,605) $
2016
(164,237)
(84)
(164,321)
$
$
The accompanying notes are an integral part of these consolidated financial statements.
ANNUAL REPORT 2018 ■ F-6
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the years ended December 31, 2018, 2017 and 2016
(Expressed in thousands of U.S. Dollars – except for share data)
Preferred Stock
Common Stock
# of
Shares
Par
Value
# of
Shares
Par
Value
Additional
Paid-in Capital
Other
Comprehensive
Income /
(Loss)
Retained
Earnings/
(Accumulated
Deficit)
Total
Equity
2,600,000 $
26
82,546,017 $
825 $
976,880 $
269 $
240,366 $
1,218,366
- $
-
-
-
-
-
-
-
- $
-
- $
- $
(164,237) $
(164,237)
2,150,000
22
8,291
-
-
8,313
-
-
-
-
-
-
-
(5,769)
(5,769)
(84)
-
(84)
2,600,000 $
26
84,696,017 $
847 $
985,171 $
185 $
70,360 $
1,056,589
- $
-
-
-
-
-
-
-
-
-
- $
-
- $
- $
(511,714) $
(511,714)
20,125,000
201
77,110
1,310,000
13
8,219
-
-
-
77,311
-
8,232
-
-
-
-
-
-
-
(5,769)
(5,769)
109
-
109
2,600,000 $
26 106,131,017 $
1,061 $
1,070,500 $
294 $
(447,123) $
624,758
- $
-
-
-
-
-
-
-
-
-
- $
- $
- $
(4,166,666)
(41)
(15,116)
- $
-
16,580 $
16,580
-
(15,157)
1,800,000
18
7,261
-
-
7,279
-
-
-
-
-
-
-
(5,769)
(5,769)
(7)
-
(7)
2,600,000 $
26 103,764,351 $
1,038 $
1,062,645 $
287 $
(436,312) $
627,684
BALANCE,
December 31, 2015
Net loss
Issuance of
restricted stock and
compensation cost
(Note 9(e))
Dividends on series B
preferred stock (Note
9(a))
Other comprehensive
loss
BALANCE,
December 31, 2016
Net loss
Issuance of common
stock (Note 9(c))
Issuance of
restricted stock and
compensation cost
(Note 9(e))
Dividends on series B
preferred stock (Note
9(a))
Other comprehensive
income
BALANCE,
December 31, 2017
Net income/(loss)
Stock repurchased and
retired (Note 9(d))
Issuance of
restricted stock and
compensation cost
(Note 9(e))
Dividends on series B
preferred stock (Note
9(a))
Other comprehensive
loss
BALANCE,
December 31, 2018
The accompanying notes are an integral part of these consolidated financial statements.
F-7 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2018, 2017 and 2016
(Expressed in thousands of U.S. Dollars)
Cash Flows from Operating Activities:
Net income/(loss)
2018
2017
2016
$
16,580 $ (511,714) $
(164,237)
Adjustments to reconcile net income/(loss) to net cash from operating activities:
Depreciation and amortization of deferred charges
52,206
87,003
81,578
Impairment loss (Note 5)
Amortization of financing costs (Note 10)
Amortization of free lubricants benefit
Compensation cost on restricted stock (Note 9(c))
Actuarial loss/(gain)
Loss from sale of vessels (Note 5)
Gain from loan to a related party (Note 4 (b))
Gain from insurance recoveries, net of other loss (Note 5)
Gain on shipbuilding contract termination
Loss/(gain) from equity method investments (Note 3)
(Increase) / Decrease in:
Accounts receivable, trade
Due from related parties
Inventories
Prepaid expenses and other assets
Increase / (Decrease) in:
Accounts payable, trade and other
Due to related parties
Accrued liabilities, net of accrued preferred dividends
Deferred revenue
Other non-current liabilities
Drydock costs
-
442,274
1,939
1,455
-
7,279
(7)
1,448
(5,000)
-
8,232
109
-
-
-
-
(14)
(10,879)
-
5,607
1,989
43
(65)
(1,197)
3,119
(89)
5,131
883
(59)
966
(141)
90
142
1,382
246
2,512
2,385
162
(4,256)
(6,418)
-
1,503
(15)
8,313
(84)
-
-
-
(278)
56,377
(1,391)
3,334
391
620
(2,391)
(39)
(715)
(1,592)
117
(2,489)
Net cash provided by/(used in) Operating Activities
$
79,930 $
23,413 $
(20,998)
Cash Flows from Investing Activities:
Payments for vessel acquisitions, improvements and construction (Note 5)
(2,573)
(125,781)
(50,911)
Proceeds from vessel sales, net of expenses (Note 5)
14,578
Proceeds from insurance contract, net of expenses (Note 5)
Proceeds from sale of investment (Note 3(a))
Proceeds from shipbuilding contract termination (Notes 5)
Cash dividends from investment in a related party (Note 3(a))
Loan to a related party (Note 4(b))
Proceeds from loan to a related party (Note 4(b))
Payments for plant, property and equipment (Note 6)
-
-
-
-
-
87,617
(252)
2,032
11,362
158
-
-
(40,000)
-
(104)
-
-
-
9,413
96
-
-
(217)
Net cash provided by/(used in) Investing Activities
$
99,370 $ (152,333) $
(41,619)
ANNUAL REPORT 2018 ■ F-8
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2018, 2017 and 2016
(Expressed in thousands of U.S. Dollars)
Cash Flows from Financing Activities:
Proceeds from long-term debt (Note 7)
Proceeds from issuance of common stock, net of expenses (Note 9(c))
Cash dividends on preferred stock
Payments for repurchase of common stock (Note 9(d))
Financing costs
Loan payments (Note 7)
100,000
-
(5,769)
(15,157)
(2,833)
57,240
77,311
(5,769)
-
(31)
39,265
-
(5,769)
-
(466)
(169,943)
(55,164)
(42,489)
Net cash provided by/(used in) Financing Activities
$
(93,702) $
73,587 $
(9,459)
Net increase / (decrease) in cash, cash equivalents
and restricted cash
85,598
(55,333)
(72,076)
Cash, cash equivalents and restricted cash at beginning
of the year
65,809
121,142
193,218
Cash, cash equivalents and restricted cash at end of the year
$
151,407 $
65,809 $
121,142
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents
Restricted cash
Cash, cash equivalents and restricted cash
SUPPLEMENTAL CASH FLOW INFORMATION
Related party loan reduction in exchange for preferred shares (Note 3(a))
Interest, net of amounts capitalized
$
$
$
$
126,825 $
40,227 $
24,582
25,582
98,142
23,000
151,407 $
65,809 $
121,142
- $
3,000 $
-
25,683 $
24,503 $
19,265
The accompanying notes are an integral part of these consolidated financial statements.
F-9 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
1.Basis of Presentation and General Information
The accompanying consolidated financial statements include the accounts of Diana Shipping Inc., or DSI, and its
wholly-owned and beneficially-owned subsidiaries (collectively, the “Company”). DSI was formed on March 8, 1999
as Diana Shipping Investment Corp. under the laws of the Republic of Liberia. In February 2005, the Company’s
articles of incorporation were amended. Under the amended articles of incorporation, the Company was renamed
Diana Shipping Inc. and was re-domiciled from the Republic of Liberia to the Republic of the Marshall Islands.
The Company is engaged in the ocean transportation of dry bulk cargoes worldwide mainly through the
ownership of dry bulk carrier vessels. The Company also operates the majority of its own fleet through Diana
Shipping Services S.A., or DSS, a wholly-owned subsidiary and a limited number of vessels through a 50% owned
joint venture (Notes 3 and 4).
Diana Shipping Services S.A., or DSS, provides the Company and its vessels with management services
since November 12, 2004, pursuant to management agreements and since October 1, 2013 administrative services
with regards to services related to DSI’s operations and its subsidiaries. Such costs are eliminated in consolidation.
As at December 31, 2018, DSS does not provide management services to eight vessels in the Company’s fleet
whose management has been transferred progressively since August 2015 to Diana Wilhelmsen Management
Limited, or DWM, (Notes 3(b) and 4(d)).
During 2018, 2017 and 2016 charterers that individually accounted for 10% or more of the Company’s time
charter revenues were as follows:
Charterer
A
B
C
D
E
2018
16%
15%
14%
10%
2017
14%
17%
12%
2016
15%
10%
19%
10%
2. Significant Accounting Policies
a) Principles of Consolidation: The accompanying consolidated financial statements have been prepared
in accordance with U.S. generally accepted accounting principles, and include the accounts of Diana Shipping
Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon
consolidation. Under Accounting Standards Codification (“ASC”) 810 “Consolidation”, the Company consolidates
entities in which it has a controlling financial interest, by first considering if an entity meets the definition of a variable
interest entity (“VIE”) for which the Company is deemed to be the primary beneficiary under the VIE model, or if the
Company controls an entity through a majority of voting interest based on the voting interest model. The Company
evaluates financial instruments, service contracts, and other arrangements to determine if any variable interests
relating to an entity exist. For entities in which the Company has a variable interest, the Company determines if the
entity is a VIE by considering whether the entity’s equity investment at risk is sufficient to finance its activities without
ANNUAL REPORT 2018 ■ F-10
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
additional subordinated financial support and whether the entity’s at-risk equity holders have the characteristics of a
controlling financial interest. In performing the analysis of whether the Company is the primary beneficiary of a VIE,
the Company considers whether it individually has the power to direct the activities of the VIE that most significantly
affect the entity’s performance and also has the obligation to absorb losses or the right to receive benefits of the
VIE that could potentially be significant to the VIE. The Company reconsiders the initial determination of whether
an entity is a VIE if certain types of events (“reconsideration events”) occur. If the Company holds a variable interest
in an entity that previously was not a VIE, it reconsiders whether the entity has become a VIE. The Company
has identified that it has variable interests in Diana Containerships Inc. (renamed to Performance Shipping Inc. in
February 2019), or Diana Containerships, and Diana Wilhelmsen Management Limited. The Company has assessed
that Diana Containerships is a VIE since 2017 but the Company is not the primary beneficiary (Notes 3(a) and 4(b)).
b) Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
c) Other Comprehensive Income / (Loss): The Company separately presents certain transactions, which are
recorded directly as components of stockholders’ equity. Other Comprehensive Income / (Loss) is presented in a
separate statement.
d) Foreign Currency Translation: The functional currency of the Company is the U.S. dollar because the
Company’s vessels operate in international shipping markets, and therefore primarily transact business in U.S.
dollars. The Company’s accounting records are maintained in U.S. dollars. Transactions involving other currencies
during the year are converted into U.S. dollars using the exchange rates in effect at the time of the transactions. At
the balance sheet dates, monetary assets and liabilities which are denominated in other currencies are translated into
U.S. dollars at the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying
consolidated statements of operations.
e) Cash and Cash Equivalents and Restricted Cash: The Company considers highly liquid investments such
as time deposits, certificates of deposit and their equivalents with an original maturity of three months or less to
be cash equivalents. Restricted cash consists mainly of cash deposits required to be maintained at all times under
the Company’s loan facilities (Note 7). As of December 31, 2018 and 2017, restricted cash also included $582 of
cash guarantee which was restricted to withdrawal or usage.
f) Accounts Receivable, Trade: The amount shown as accounts receivable, trade, at each balance sheet date,
includes receivables from charterers for hire, net of any provision for doubtful accounts. At each balance sheet date,
all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision
for doubtful accounts. No provision for doubtful accounts was established as of December 31, 2018 and 2017.
g) Loan Receivable from Related Party: The amount shown as Due from related parties in the consolidated
balance sheet as at December 31, 2017, represents a receivable from Diana Containerships with respect to a loan
agreement, net of any provision for credit losses and does not include the $5,000 discount premium which was
F-11 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
received in 2018 when the loan was fully collected (Note 4(b)). Interest income and fees, deriving from the agreement
were recorded in the accounts as incurred. At each balance sheet date, amounts due under the aforementioned
loan agreement were assessed for purposes of determining the appropriate provision for credit losses. As at
December 31, 2017, the Company assessed the ability of Diana Containerships to meet its obligations under
the loan agreement by taking into consideration existing economic conditions, the current financial condition of
Diana Containerships, equity offerings, sale plans, historical losses, and other risks/factors that could affect Diana
Containerships’ future financial condition and its ability to meet its obligations. As a result of this assessment, the
Company did not record any provision for credit losses, as it determined that Diana Containerships would be able
to meet its obligations under the loan in the near future.
h) Inventories: Inventories consist of lubricants and victualling which are stated at the lower of cost or net
realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably
predictable costs of completion, disposal, and transportation. When evidence exists that the net realizable value
of inventory is lower than its cost, the difference is recognized as a loss in earnings in the period in which it occurs.
Cost is determined by the first in, first out method. Inventories may also consist of bunkers when on the balance
sheet date a vessel remains idle. Bunkers, if any, are also stated at the lower of cost or net realizable value and cost
is determined by the first in, first out method.
i) Vessel Cost: Vessels are stated at cost which consists of the contract price and any material expenses
incurred upon acquisition or during construction. Expenditures for conversions and major improvements are also
capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of
the vessels; otherwise these amounts are charged to expense as incurred. Interest cost incurred during the assets’
construction periods that theoretically could have been avoided if expenditure for the assets had not been made
is also capitalized. The capitalization rate, applied on accumulated expenditures for the vessel, is based on interest
rates applicable to outstanding borrowings of the period.
j) Property and equipment: The Company owns the land and building where its offices are located. Land
is presented in its fair value on the date of acquisition and it is not subject to depreciation. The building has an
estimated useful life of 55 years with no residual value. Depreciation is calculated on a straight-line basis. Equipment
consists of office furniture and equipment, computer software and hardware and vehicles which consist of motor
scooters and a car. The useful life of the car is 10 years, of the office furniture, equipment and the scooters is 5
years; and of the computer software and hardware is 3 years. Depreciation is calculated on a straight-line basis.
k) Impairment of Long-Lived Assets: Long-lived assets (vessels, land, and building) and certain identifiable
intangibles held and used by an entity are reviewed for impairment whenever events or changes in circumstances
(such as market conditions, obsolesce or damage to the asset, potential sales and other business plans) indicate
that the carrying amount of the assets, plus unamortized dry-docking costs, may not be recoverable. When the
estimate of undiscounted projected net operating cash flows, excluding interest charges, expected to be generated
by the use of the asset over its remaining useful life and its eventual disposition is less than its carrying amount, the
Company should evaluate the asset for an impairment loss. Measurement of the impairment loss is based on the
fair value of the asset. The Company determines the fair value of its assets based on management estimates and
assumptions, by making use of available market data and taking into consideration third party valuations.
ANNUAL REPORT 2018 ■ F-12
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
With respect to the vessels, the Company determines undiscounted projected net operating cash flows for each
vessel by considering the historical and estimated vessels’ performance and utilization, assuming (i) future revenues
calculated for the fixed days, using the fixed charter rate of each vessel from existing time charters and for the
unfixed days, the most recent 10 year average of historical 1 year time charter rates available for each type of vessel
over the remaining estimated life of each vessel, net of commissions. Historical ten-year blended average one-year
time charter rates are in line with the Company’s overall chartering strategy, they reflect the full operating history of
vessels of the same type and particulars with the Company’s operating fleet and they cover at least a full business
cycle, where applicable; (ii) expected outflows for scheduled vessels’ maintenance; (iii) vessel operating expenses;
and (iv) fleet utilization; assumptions in line with the Company’s historical performance and its expectations for future
fleet utilization under its current fleet deployment strategy.
During the last quarter of 2017, the Company’s management considered various factors, including the recovery
of the market, the worldwide demand for dry-bulk products, supply of tonnage and order book and concluded that
the charter rates for the years 2008-2010 were exceptional. In this respect the Company’s management decided
to exclude from the 10-year average of 1 year time charters these three years for which the rates were well above
the average and which were not considered sustainable for the foreseeable future. The Company performed the
exercise discussed above which resulted to recording an impairment on certain vessels’ carrying value (Note 5). No
impairment loss was identified or recorded for 2018 (by excluding similarly to 2017 the charter rates for the years
2009-2010) and 2016.
With respect to the land and building, the Company determines undiscounted projected net operating cash
flows by considering an estimated monthly rent the Company would have to pay in order to lease a similar property,
during the useful life of the building. No impairment loss was identified or recorded for 2018, 2017 and 2016 and
the Company has not identified any other facts or circumstances that would require the write down of the value of
its land or building in the near future.
l) Vessel Depreciation: Depreciation is computed using the straight-line method over the estimated useful life
of the vessels, after considering the estimated salvage (scrap) value. Each vessel’s salvage value is equal to the
product of its lightweight tonnage and estimated scrap rate. Management estimates the useful life of the Company’s
vessels to be 25 years from the date of initial delivery from the shipyard. Second hand vessels are depreciated from
the date of their acquisition through their remaining estimated useful life. When regulations place limitations over
the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations
are adopted.
m) Accounting for Dry-Docking Costs: The Company follows the deferral method of accounting for dry-
docking costs whereby actual costs incurred are deferred and are amortized on a straight-line basis over the period
through the date the next dry-docking is scheduled to become due. Unamortized dry-docking costs of vessels
that are sold or impaired are written off and included in the calculation of the resulting gain or loss in the year of the
vessel’s sale or impairment.
F-13 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
n) Financing Costs: Fees paid to lenders for obtaining new loans or refinancing existing ones are deferred and
recorded as a contra to debt. Other fees paid for obtaining loan facilities not used at the balance sheet date are
capitalized as deferred financing costs. Fees relating to drawn loan facilities are amortized to interest and finance
costs over the life of the related debt using the effective interest method and fees incurred for loan facilities not
used at the balance sheet date are amortized using the straight line method according to their availability terms.
Unamortized fees relating to loans repaid or refinanced as debt extinguishment are expensed as interest and finance
costs in the period the repayment or extinguishment is made. Loan commitment fees are charged to expense in
the period incurred, unless they relate to loans obtained to finance vessels under construction, in which case they
are capitalized to the vessels’ cost.
o) Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant
concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company places its
temporary cash investments, consisting mostly of deposits, with various qualified financial institutions and performs
periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s
investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit
evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable
and does not have any agreements to mitigate credit risk.
p) Accounting for Revenues and Expenses: Revenues are generated from time charter agreements which
contain a lease as they meet the criteria of a lease under ASC 842. Agreements with the same charterer are
accounted for as separate agreements according to their specific terms and conditions. All agreements contain a
minimum non-cancellable period and an extension period at the option of the charterer. Each lease term is assessed
at the inception of that lease. Under a time charter agreement, the charterer pays a daily hire for the use of the
vessel and reimburses the owner for hold cleanings, extra insurance premiums for navigating in restricted areas
and damages caused by the charterers. Additionally, the charterer pays to third parties port, canal and bunkers
consumed during the term of the time charter agreement. Such costs are considered direct costs and are not
recorded as they are directly paid by charterers, unless they are for the account of the owner, in which case they are
included in voyage expenses. Additionally, the owner pays commissions on the hire revenue, to both the charterer
and to brokers, which are direct costs and are recorded in voyage expenses. Under a time charter agreement, the
owner pays for the operation and the maintenance of the vessel, including crew, insurance, spares and repairs,
which are recognized in operating expenses. The Company, as lessor, has elected not to allocate the consideration
in the agreement to the separate lease and non-lease components (operation and maintenance of the vessel)
as their timing and pattern of transfer to the charterer, as the lessee, are the same and the lease component, if
accounted for separately, would be classified as an operating lease. Additionally, the lease component is considered
the predominant component as the Company has assessed that more value is ascribed to the vessel rather than
to the services provided under the time charter contracts.
q) Repairs and Maintenance: All repair and maintenance expenses including underwater inspection expenses
are expensed in the year incurred. Such costs are included in vessel operating expenses in the accompanying
consolidated statements of operations.
r) Earnings / (loss) per Common Share: Basic earnings / (loss) per common share are computed by dividing
net income / (loss) available to common stockholders by the weighted average number of common shares
ANNUAL REPORT 2018 ■ F-14
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
outstanding during the year. Diluted earnings per common share, reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised.
s) Segmental Reporting: The Company has determined that it operates under one reportable segment, relating
to its operations of the dry-bulk vessels. The Company reports financial information and evaluates the operations
of the segment by charter revenues and not by the length of ship employment for its customers, i.e. spot or time
charters. The Company does not use discrete financial information to evaluate the operating results for each such
type of charter. Although revenue can be identified for these types of charters, management cannot and does not
identify expenses, profitability or other financial information for these charters. As a result, management, including
the chief operating decision maker, reviews operating results solely by revenue per day and operating results of
the fleet. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel
worldwide and, as a result, the disclosure of geographic information is impracticable.
t) Fair Value Measurements: The Company classifies and discloses its assets and liabilities carried at the fair
value in one of the following categories: Level 1: Quoted market prices in active markets for identical assets or
liabilities; Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data;
Level 3: Unobservable inputs that are not corroborated by market data.
u) Share Based Payments: The Company issues restricted share awards which are measured at their grant
date fair value and are not subsequently re-measured. That cost is recognized over the period during which an
employee is required to provide service in exchange for the award—the requisite service period (usually the vesting
period). No compensation cost is recognized for equity instruments for which employees do not render the requisite
service. Forfeitures of awards are accounted for when and if they occur. If an equity award is modified after the
grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of
the modified award over the fair value of the original award immediately before the modification.
v) Equity method investments: Investments in common stock in entities over which the Company exercises
significant influence, but does not exercise control are accounted for by the equity method of accounting. Under
this method, the Company records such an investment at cost and adjusts the carrying amount for its share of
the earnings or losses of the entity subsequent to the date of investment and reports the recognized earnings or
losses in income. Dividends received, if any, reduce the carrying amount of the investment. When the Company’s
share of losses in an entity accounted for by the equity method equals or exceeds its interest in the entity, the
Company does not recognize further losses, unless the Company has made advances, incurred obligations and
made payments on behalf of the entity. The Company also evaluates whether a loss in value of an investment that
is other than a temporary decline should be recognized. Evidence of a loss in value might include absence of an
ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity
that would justify the carrying amount of the investment. The Company assessed the financial condition of Diana
Containerships (Note 3(a)), the market conditions that could affect its operations in the near future and historical
losses of its investment and as a result the Company recorded impairment in 2017 and 2016, which is included in
Gain/(loss) from equity method investments in the accompanying statements of operations.
w) Going concern: Management evaluates, at each reporting period, whether there are conditions or events
that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the
date the financial statements are issued.
F-15 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
x) Financial Instruments, Recognition and Measurement: Equity securities with no determinable value,
such as the Company’s investment in Diana Containerships (Note 3) are recorded at their cost and they are
assessed for impairment, in accordance with ASU 2016-01 Financial Instruments-Overall, Recognition and
Measurement of Financial Assets and Financial Liabilities. The Company will continue to account its investment at
cost minus impairment, if any, unless it determines that an observable transaction for a similar security took place,
as determined in ASU 2018-03 Technical Corrections and Improvements to Financial Instruments – Overall. As at
December 31, 2018 and 2017, based on the Company’s qualitative assessment as of these dates, no impairment
has been recognized.
y) Shares repurchased and retired: Company’s shares repurchased for retirement, are immediately cancelled
and the Company’s share capital is accordingly reduced. Any excess of the cost of the shares over their par value
is allocated in additional paid-in capital, in accordance with ASC 505-30-30, Treasury Stock.
Recent Accounting Pronouncements adopted
On January 1, 2018, the Company adopted ASU No. 2016-13 “Financial Instruments – Credit Losses (Topic
326): Measurement of Credit Losses on Financial Instruments” which amends guidance on reporting credit losses
for assets held at amortized cost basis and available for sale debt securities. On the same date, the Company
adopted ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses”. The
amendments in this update clarify that receivables arising from operating leases are not within the scope of Subtopic
326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance
with Topic 842, Leases. The adoption of ASU No. 2016-13 and ASU No. 2018-19 did not have any effect in the
Company’s financial statements and disclosures.
On January 1, 2018, the Company adopted the ASU No. 2017-09, “Compensation — Stock Compensation
(Topic 718), Scope of Modification Accounting”, which clarifies and reduces both (1) diversity in practice and (2) cost
and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to
the terms or conditions of a share-based payment award. The adoption of ASU 2017-09 did not have a material
effect in the Company’s financial statements.
On January 1, 2018, the Company adopted the provisions of ASU 2014-09 (Topic 606 – Revenue from Contracts
with Customers), as amended from time to time, using the modified retrospective method to contracts that were
in effect at January 1, 2018. The standard, outlines a single comprehensive model for entities to use in accounting
for revenue from contracts with customers, supersedes most legacy revenue recognition guidance, and expands
disclosure requirements. The core principle of the guidance in Topic 606 is that an entity should recognize revenue
to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services by applying the following five step
method: (1) identify the contract(s) with a customer; (2) identify the performance obligations in each contract; (3)
determine the transaction price; (4) allocate the transaction price to the performance obligations in each contract;
and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company’s time charter
agreements were determined to contain a lease and were accounted for under ASC 842 as discussed below.
ANNUAL REPORT 2018 ■ F-16
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
The prior period comparative information has not been restated for Topic 606 and continues to be reported
under the accounting guidance in effect for those periods. Implementation of the new revenue standard did not
have any impact on revenue recognition. There was no cumulative effect from the adoption of the new revenue
standard to opening accumulated deficit as at January 1, 2018, and no impact on any of the line items reported in
the Company’s consolidated financial statements.
In the fourth quarter of 2018, the Company early adopted the ASU No. 2016-02, Leases (ASC 842), as
amended from time to time, with adoption reflected as of January 1, 2018, the beginning of the Company’s annual
period in accordance with ASC 250, using the modified retrospective transition method. The Company elected
to apply the additional and optional transition method to existing leases at the beginning of the period of adoption
through a cumulative effect adjustment to the opening accumulated deficit as of January 1, 2018. The prior period
comparative information has not been restated and continues to be reported under the accounting guidance in
effect for those periods (ASC 840), including the disclosure requirements. Also, the Company elected to apply a
package of practical expedients under ASC 842 which allowed the Company, as lessor, not to reassess (i) whether
any existing contracts, on the date of adoption, contained a lease, (ii) lease classification of existing leases classified
as operating leases in accordance with ASC 840 and (iii) initial direct costs for any existing leases. As all existing
contracts with charterers, at January 1, 2018, are operating leases and as the Company did not account for initial
direct costs related to existing leases at January 1, 2018, there were no amounts to be recorded as a cumulative
effect adjustment to opening accumulated deficit on January 1, 2018. The Company did not have any material
lease arrangements in which it was a lessee at the adoption date.
Additionally, the Company, as lessor, elected to apply the practical expedient, to not separate lease and
associated non-lease components, and instead to account for each separate lease component and the associated
non-lease components as a single component, as the criteria of the paragraphs ASC 842-10-15-42A through 42B
are met (Note 2(p)). There was no cumulative effect from the adoption of the standard to opening accumulated
deficit as at January 1, 2018, and no impact on any of the line items reported in the Company’s consolidated
financial statements.
Recent Accounting Pronouncements not yet adopted
On August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820)—Disclosure
Framework—Changes to the Disclosure Requirements for Fair Value Measurement”, which improves the
effectiveness of fair value measurement disclosures. In particular, the amendments in this Update modify the
disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts
in FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial
Statements, including the consideration of costs and benefits. The amendments in the Update apply to all
entities that are required under existing GAAP, to make disclosures about recurring and non-recurring fair value
measurements. ASU No. 2018-13 is effective for annual periods, including interim periods within those annual
periods, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the
range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements,
and the narrative description of measurement uncertainty should be applied prospectively for only the most recent
interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied
F-17 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this
Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update
and delay adoption of the additional disclosures until their effective date. The Company is currently assessing the
impact that adopting this new accounting guidance will have on its consolidated financial statements and related
disclosures.
On October 2018, the FASB issued ASU No. 2018-17, “Consolidation (Topic 810)—Targeted Improvements to
Related Party Guidance for Variable Interest Entities”. The Board is issuing this Update in response to stakeholders’
observations that Topic 810, Consolidation, could be improved in the following areas: i) applying the variable interest
entity (VIE) guidance to private companies under common control, ii) considering indirect interests held through
related parties under common control for determining whether fees paid to decision makers and service providers
are variable interests. The amendments in this Update improve the accounting for those areas, thereby improving
general purpose financial reporting. ASU No. 2018-17 is effective for annual periods, including interim periods within
those annual periods, beginning after December 15, 2019. All entities are required to apply the amendments in
this Update retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest
period presented. Early adoption is permitted. The Company is currently assessing the impact that adopting this
new accounting guidance will have on its consolidated financial statements and related disclosures.
3. Investments in related parties
a) Diana Containerships Inc. (renamed to Performance Shipping Inc. in February 2019), or Diana
Containerships: In 2017, the Company gradually sold all shares owned in the common stock of Diana
Containerships, realizing an aggregate loss of $757 from the sale of such shares. For 2017 and 2016, the
investment in Diana Containerships resulted in loss of $5,656 (including the loss from the sale of shares) and
$56,465, respectively, of which $3,124 and $17,568, respectively was impairment, which was recorded based
on Diana Containerships’ market value on Nasdaq at the date of each impairment charge recognition. The loss
and impairment are included in “Gain/(loss) from equity method investments” in the accompanying consolidated
statements of operations. In 2016, DSI received dividends from Diana Containerships amounting to $96.
On May 30, 2017, the company acquired 100 shares of newly-designated Series C Preferred Stock, par
value $0.01 per share, of Diana Containerships for $3,000 in exchange for a reduction of an equal amount in the
principal amount of the Company’s outstanding loan to Diana Containerships at that date (Note 4(b)). The Series C
Preferred Stock has no dividend or liquidation rights and votes with the common shares of Diana Containerships,
if any. Each share of the Series C Preferred Stock entitles the holder thereof to up to 250,000 votes, subject to a
cap such that the aggregate voting power of any holder of Series C Preferred Stock together with its affiliates does
not exceed 49.0%, on all matters submitted to a vote of the stockholders of Diana Containerships. The acquisition
of shares of Series C Preferred Stock was approved by an independent committee of the Board of Directors of
the Company. As at December 31, 2018 and 2017, the investment amounted to $3,000 for both periods and is
included in “Investments in related parties”.
b) Diana Wilhelmsen Management Limited, or DWM: DWM is a joint venture which was established on May
7, 2015 by Diana Ship Management Inc., a wholly owned subsidiary of DSI, and Wilhelmsen Ship Management
ANNUAL REPORT 2018 ■ F-18
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
Holding Limited, an unaffiliated third party, each holding 50% of DWM. As at December 31, 2018, DWM provided
management services to eight vessels of the Company’s fleet (Note 4(d)) following the sale of the m/v Triton and
m/v Alcyon in December 2018 (Note 5). The DWM office is located in Limassol, Cyprus. As at December 31, 2018
and 2017, the equity method investment in DWM amounted to $263 and $249, respectively, and is included in
“Investments in related parties” in the accompanying consolidated balance sheets. For 2018, 2017 and 2016, the
investment in DWM resulted in gain of $14, $49, and $88, respectively, and is included in “Gain/(loss) from equity
method investments” in the accompanying consolidated statements of operations.
4. Transactions with related parties
a) Altair Travel Agency S.A. (“Altair”): The Company uses the services of an affiliated travel agent, Altair,
which is controlled by the Company’s CEO and Chairman of the Board. Travel expenses for 2018, 2017 and
2016 amounted to $2,253, $2,096 and $2,320, respectively, and are mainly included in “Vessels, net book value”,
“Vessel operating expenses” and “General and administrative expenses” in the accompanying consolidated financial
statements. At December 31, 2018 and 2017, an amount of $63 and $162, respectively, was payable to Altair and
is included in “Due to related parties” in the accompanying consolidated balance sheets.
b) Diana Containerships Inc. (renamed to Performance Shipping Inc. in February 2019), or Diana
Containerships: On May 20, 2013, the Company entered into a five year unsecured loan of $50,000 with a
subsidiary of Diana Containerships, drawn on August 20, 2013, for general corporate purposes and working
capital. Following an amendment on September 9, 2015, the interest was set to LIBOR plus a margin of 3% per
annum and a fixed fee of $200 would be payable on the maturity date. In addition, the borrower agreed to repay
the principal amount of the loan on the last day of each interest period in amounts totalling $5,000 per annum, but
not to exceed $32,500 in the aggregate. Following another amendment on August 24, 2016, the repayment of all
outstanding principal amounts was deferred until a later date, the borrower was changed to another wholly-owned
subsidiary of Diana Containerships and the interest rate of the deferral period increased to 3.35% per annum over
LIBOR. On May 30, 2017, as discussed in Note 3(a), the loan was decreased by $3,000, in order to acquire the
Series C Preferred Stock issued by Diana Containerships.
On June 30, 2017, DSI entered into a loan facility of $82,617 with Diana Containerships to refinance the existing
loan amounting to $42,617 at that date (including the above mentioned fixed fee). The loan also provided for an
additional $5,000 interest-bearing discount premium payable on the termination date, unless waived according
to certain terms of the loan agreement. The loan was collected in full in July 2018, including the additional $5,000
interest-bearing discount premium. The loan bore interest at the rate of 6% per annum for the first twelve months,
scaled to 9% until full repayment. The loan facility was secured by first preferred mortgages on Diana Containerships’
vessels and included financial and other covenants. As at December 31, 2017 the loan had an outstanding balance
of $82,660, including accrued interest and is separately presented in “Due from related parties” in the accompanying
consolidated balance sheet.
F-19 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
For the years ended December 31, 2018, 2017 and 2016, interest and other income amounted to $7,055
(including the $5,000 additional discount premium), $3,855 and $1,692, respectively, and is included in “Interest
and other income” in the accompanying consolidated statements of operations.
c) Steamship Shipbroking Enterprises Inc. or Steamship: Steamship is a company controlled by the
Company’s CEO and Chairman of the Board which provides brokerage services to DSI pursuant to a Brokerage
Services Agreement for a fixed fee amended annually on each anniversary of the agreement. The agreement was
amended in November 21, 2018, to increase the fee from October 1, 2018 until expiration of the agreement in
March 2019. For 2018, 2017 and 2016, brokerage fees amounted to $1,850, $1,800 and $1,680, respectively, and
are included in “General and administrative expenses” in the accompanying consolidated statements of operations.
As of December 31, 2018 and 2017, there was no amount due to Steamship, included in “Due to related parties”
in the accompanying consolidated balance sheets.
d) Diana Wilhelmsen Management Limited: As of December 31, 2018, DWM provided management services
to eight vessels of the Company’s fleet for a fixed monthly fee and commercial services charged as a percentage of
the vessels’ gross revenues. Management fees for 2018, 2017 and 2016 amounted to $2,394, $1,883 and $1,464,
respectively, and are separately presented as “Management fees to related party” in the accompanying consolidated
statements of operations, whereas commercial fees amounted to $453, $260 and $124, respectively, and are
included in “Voyage expenses” in the accompanying consolidated statements of operations. As at December 31,
2018 and 2017, there was an amount of $119 and $109, respectively, due to DWM, included in “Due to related
parties” in the accompanying consolidated balance sheets.
5. Vessels, net book value
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
Vessel Cost
Accumulated
Depreciation
Balance, December 31, 2016
$
1,987,419 $
(583,507) $
- Transfer from advances for vessels under construction
and acquisition and other vessel costs
- Acquisitions, improvements and other vessel costs
- Vessel disposal
- Impairment charges
- Depreciation for the year
Balance, December 31, 2017
- Improvements and other vessel costs
- Vessel disposal
- Depreciation for the year
Balance, December 31, 2018
104,858
67,787
(15,349)
(877,484)
-
1,267,231 $
2,573
(41,213)
-
1,228,591 $
$
$
-
-
12,834
438,573
(81,553)
(213,653) $
-
25,630
(49,165)
(237,188) $
Net Book
Value
1,403,912
104,858
67,787
(2,515)
(438,911)
(81,553)
1,053,578
2,573
(15,583)
(49,165)
991,403
ANNUAL REPORT 2018 ■ F-20
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
On January 4, 2017, the Company took delivery of Hull H2548 named San Francisco, and Hull H2549 named
Newport News, which were under construction until then for an aggregate contract price of $95,400.
In April 2017, the Company acquired the vessels Astarte, Electra and Phaidra from unaffiliated third party sellers
for an aggregate purchase price of $67,250. All three vessels were delivered in May 2017.
On July 25, 2017, the Melite run aground at Pulau Laut, Indonesia. Following this incident, on September 21,
2017, the owners served a notice of frustration of the voyage to the time-charterers and a notice of abandonment
to the H&M and IV insurers as it was considered that the extent of damages and the estimated cost of repairs were
such that the vessel constituted a constructive total loss. As of September 30, 2017, the vessel’s net book value
was reduced to its scrap value of $2,515 resulting in an impairment of $19,807 which is included in “Impairment
loss”, in the 2017 accompanying consolidated statement of operations. The vessel, which was insured for a value
of $14,000 to H&M insurers, was sold to an unrelated third party at the recorded price in October 2017, and in
November 2017, the Company received the balance of the insured value of the vessel amounting to $11,528, which
is included in “Insurance recoveries, net of other loss” in the accompanying statement of operations.
As at December 31, 2017, the Company’s estimated undiscounted projected net operating cash flows,
excluding interest charges, expected to be generated by the use of certain vessels over their remaining useful lives
and their eventual disposition was less than their carrying amount plus any unamortized dry-docking costs. The
Company performed the exercise discussed above which resulted to recording an impairment on certain vessels’
carrying value (Note 2). Accordingly, the Company recognized an aggregate impairment loss of $422,466, which is
included in “Impairment loss” in the 2017 accompanying consolidated statement of operations of which $3,362 was
written down from unamortized deferred drydocking costs. The fair value of the vessels was determined through
Level 2 inputs of the fair value hierarchy by taking into consideration third party valuations which were based on
last done deals of sale of vessels with similar characteristics, such as type, size and age.
In November 2018, the Company entered into two Memoranda of Agreement with two unrelated third party
companies to sell the vessel Triton, for a total consideration of $7,350 and the vessel Alcyon, for a total consideration
of $7,450. Both vessels were delivered to their new owners in December 2018. The vessels’ total net book value at
the date of sale amounted to $15,583. The aggregate loss from the vessels’ sale, including unamortized deferred
drydocking costs, amounted to $1,448 and is reflected in “Loss from sale of vessels” in the accompanying 2018
consolidated statement of operations.
F-21 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
6. Property and equipment, net
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
Balance, December 31, 2016
- Additions in property and equipment
- Depreciation for the year
- Disposal of assets
Balance, December 31, 2017
- Additions in property and equipment
- Depreciation for the year
Balance, December 31, 2018
Property and
Equipment
Accumulated
Depreciation
Net Book Value
$
$
$
26,582 $
104
-
(3)
26,683 $
252
-
26,935 $
(3,468) $
-
(568)
3
(4,033) $
-
(477)
(4,510) $
23,114
104
(568)
-
22,650
252
(477)
22,425
7. Long-term debt, current and non-current
The amount of long-term debt shown in the accompanying consolidated balance sheets is analyzed as follows:
8.5% Senior Unsecured Notes
9.5% Senior Unsecured Bond
Secured Term Loans
Total debt outstanding
Less related deferred financing costs
Total debt, net of deferred financing costs
Less: Current portion of long term debt, net of deferred financing costs current
Long-term debt, net of current portion and deferred
financing costs, non-current
$
$
$
2018
2017
-
100,000
434,850
534,850 $
(4,303)
530,547 $
(96,434)
434,113 $
63,250
-
541,543
604,793
(3,409)
601,384
(60,763)
540,621
8.5% Unsecured Senior Notes: On May 20, 2015, the Company offered $63,250 aggregate principal amount
of 8.5% Senior Notes due 2020 (the “Notes”), including an overallotment, at the price of $25.0 per Note, pursuant
to an approval obtained by a special committee of the Board of Directors. As part of the offering, the underwriters
sold $12,750 aggregate principal amount of the Notes to, or to entities affiliated with, the Company’s chief executive
officer, Mr. Simeon Palios, and other executive officers and certain directors of the Company at the public offering
price. On October 29, 2018, the Company completed the redemption of all of its outstanding 8.50% Senior Notes
due 2020 which until then had traded on the NYSE under the ticker symbol “DSXN”. The redemption price was
equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the date
of redemption. The Notes bore interest at a rate of 8.5% per year, payable quarterly in arrears on the 15th day of
February, May, August and November of each year. The Notes included financial and other covenants, including
maximum net borrowings and minimum tangible net worth.
ANNUAL REPORT 2018 ■ F-22
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
9.5% Senior Unsecured Bond: On September 27, 2018, the Company issued a $100,000 senior unsecured
bond (the “Bond”) maturing in September 2023 and may issue up to an additional $25,000 of the Bond on one or
more occasions. Entities affiliated with the Company’s chief executive officer, Mr. Simeon Palios, and other executive
officers and directors of the Company purchased $16,200 aggregate principal amount of the Bond. The Bond
bears interest from September 27, 2018 at a US Dollar fixed-rate coupon of 9.50% and is payable semi-annually in
arrears in March and September of each year. The Bond is callable in three years and includes financial and other
covenants. The Bond is trading on the Oslo Stock Exchange under the ticker symbol “DIASH01”.
Secured Term Loans: The Company, through its subsidiaries, has entered into various long term loan
agreements with bank institutions to partly finance or, as the case may be, refinance part of the acquisition cost
of certain of its fleet vessels. The loan agreements are repayable in quarterly or semi-annual installments plus one
balloon installment per loan agreement to be paid together with the last installment and bear interest at LIBOR plus
margin ranging from 1% to 3%. Their maturities range from January 2019 to January 2032. For 2018 and 2017,
the weighted average interest rates of the secured term loans were 4.31% and 3.38%, respectively.
As at December 31, 2018, the Company had the following agreements with banks:
On October 22, 2009, the Company, through a wholly-owned subsidiary, entered into a $40,000 loan agreement
with Bremer Landesbank (“Bremer”) to partly finance the acquisition cost of the Houston. The loan is repayable
in 40 quarterly installments of $900 each plus one balloon installment of $4,000 to be paid together with the last
installment on November 12, 2019. The loan bears interest at LIBOR plus a margin of 2.15% per annum.
On October 2, 2010, the Company, through two wholly-owned subsidiaries, entered into a loan agreement with
Export-Import Bank of China (“CEXIM Bank”) and DnB NOR Bank ASA (“DnB”) to finance part of the construction
cost of the Los Angeles and the Philadelphia, for an amount of up to $82,600, of which $72,100 was drawn on
delivery. The Los Angeles advance is repayable in 40 quarterly installments of approximately $628 each and a
balloon of $12,332 payable together with the last installment on February 15, 2022. The Philadelphia advance
is repayable in 40 quarterly installments of approximately $581 each and a balloon of $11,410 payable together
with the last installment on May 18, 2022. The loan bears interest at LIBOR plus a margin of 2.50% per annum.
Pursuant to an amendment of the loan agreement dated May 18, 2017, each of the individual banks were allowed
to demand repayment in full of such bank’s contribution in any or all advances on August 16, 2019. On March 1,
2019, the banks waived their right to exercise such a prepayment option.
On September 13, 2011, the Company through one wholly-owned subsidiary entered into a loan agreement
with Emporiki Bank of Greece S.A. (“Emporiki”) for a loan of up to $15,000 to refinance part of the acquisition cost
of the Arethusa. On December 13, 2012, Bikar, the Company, DSS and Credit Agricole Corporate and Investment
Bank (“Credit Agricole”) entered into a supplemental loan agreement to transfer the outstanding loan balance, the
ISDA master swap agreement and the existing security documents from Emporiki to Credit Agricole. The loan is
repayable in 20 equal semiannual installments of $500 each and a balloon payment of $5,000 to be paid together
with the last installment on September 15, 2021. The loan bears interest at LIBOR plus a margin of 2.5% per annum,
or 1% for such loan amount that is equivalently secured by cash pledge in favor of the bank.
F-23 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
On May 24, 2013, the Company through two wholly-owned subsidiaries entered into a loan agreement with
CEXIM Bank and DnB to finance part of the construction cost of Crystalia and Atalandi for an amount of up to
$15,000 for each vessel, drawn on May 22, 2014. Each advance is repayable in 19 quarterly installments of $250
each and a balloon of $10,250 payable together with the last installment on February 22, 2019. The loan bears
interest at LIBOR plus a margin of 3.0% per annum. In February 2019, the loan was repaid in full.
On January 9, 2014, the Company through two wholly-owned subsidiaries entered into a loan agreement
with Commonwealth Bank of Australia, London Branch, for a loan facility of up to $18,000 to finance part of the
acquisition cost of the Melite and Artemis. The loan bears interest at LIBOR plus a margin of 2.25%. The loan was
drawn in two tranches, one of $8,500 assigned to Melite and one of $9,500 assigned to Artemis. Tranche A was
repaid in full in October 2017, as a result of the sale of the vessel following its grounding incident (Note 5). Tranche
B is repayable in 32 equal consecutive quarterly installments of $156 each and a balloon of $4,500 payable on
January 13, 2022.
On December 18, 2014, the Company through two wholly-owned subsidiaries entered into a loan agreement
with BNP Paribas (“BNP”), for a loan facility of up to $55,000 to finance part of the acquisition cost of the G. P.
Zafirakis and the P. S. Palios, of which $53,500 was drawn. The loan bears interest at LIBOR plus a margin of 2%,
and is repayable in 14 equal semi-annual installments of approximately $1,574 and a balloon of $31,466 payable
on November 30, 2021.
On March 17, 2015, the Company, through eight separate wholly-owned subsidiaries, entered into a loan
agreement with Nordea Bank AB, London Branch, for a secured term loan facility of up to $110,000 of which on
March 19, 2015, the Company drew down $93,080 and repaid the then existing indebtedness with the bank.
The loan is repayable in 24 equal consecutive quarterly installments of about $1,862 each and a balloon of about
$48,402 payable together with the last installment on March 19, 2021. The loan bears interest at LIBOR plus a
margin of 2.1%.
On March 26, 2015, the Company, through three wholly-owned subsidiaries, entered into a loan agreement
with ABN AMRO Bank N.V. for a secured term loan facility of up to $53,000, to refinance part of the acquisition cost
of the vessels New York, Myrto and Maia. On March 30, 2015, the Company drew down the amount of $50,160
under the loan facility, which is repayable in 24 equal consecutive quarterly installments of about $994 each and a
balloon of $26,310 payable together with the last installment on March 30, 2021. The loan bears interest at LIBOR
plus a margin of 2.0%.
On April 29, 2015, the Company, through one wholly-owned subsidiary, entered into a term loan agreement
with Danish Ship Finance A/S for a loan facility of $30,000, drawn on April 30, 2015 to partly finance the acquisition
cost of the Santa Barbara, which was delivered in January 2015. The loan is repayable in 28 equal consecutive
quarterly installments of $500 each and a balloon of $16,000 payable together with the last installment on April 30,
2022. The loan bears interest at LIBOR plus a margin of 2.15%.
On July 22, 2015, the Company entered into a term loan agreement with BNP Paribas for a loan of $165,000
drawn on July 24, 2015. This loan, having a balance of $130,000 on July 16, 2018, was repaid in full with $75,000
ANNUAL REPORT 2018 ■ F-24
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
of proceeds under a new loan agreement entered into with BNP Paribas on July 13, 2018 and with cash on hand.
The original loan of $165,000 was repayable in 20 consecutive quarterly installments, the first eight installments
in an amount of $2,500 each, followed by four installments in an amount of $5,000 each; eight installments in an
amount of $7,000 each; and a balloon installment of $69,000 payable together with the last installment on July 24,
2020.The loan bore interest at LIBOR plus a margin of 2.35% per annum for the first two years; 2.3% per annum
for the third year and 2.25% per annum until the final maturity of the loan. The new loan of $75,000, dated July 13,
2018, has a term of five years and is repayable in 20 consecutive quarterly installments of $1,562.5 and a balloon
installment of $43,750 payable together with the last installment on July 16, 2023. The loan bears interest at LIBOR
plus a margin of 2.3%.
On September 30, 2015, the Company, through two wholly-owned subsidiaries, entered into a term loan
agreement with ING Bank N.V. for a loan of up to $39,683, available in two advances to finance part of the
acquisition cost of the New Orleans and the Medusa. Advance A of $27,950 was drawn on November 19, 2015
and is repayable in 28 consecutive quarterly installments of about $466 each and a balloon installment of about
$14,907 payable together with the last installment on November 19, 2022. Advance B of $11,733 was drawn
on October 6, 2015 and is repayable in 28 consecutive quarterly installments of about $293 each and a balloon
installment of about $3,520 payable together with the last installment on October 6, 2022. The loan bears interest
at LIBOR plus a margin of 1.65%.
On January 7, 2016, the Company, through three wholly-owned subsidiaries, entered into a secured loan
agreement with the Export-Import Bank of China for a loan of up to $75,735 in order to finance part of the
construction cost of Newport News, San Francisco (Note 5) and Hull DY6006. The tranche for Hull DY6006 was
cancelled pursuant to a Deed of Release dated February 6, 2017, as a result of the cancelation of its shipbuilding
contract on October 31, 2016. On January 4, 2017, the Company drew down $57,240. The loan is repayable in 60
equal quarterly instalments of $954 each by January 4, 2032 and bears interest at LIBOR plus a margin of 2.3%.
On March 29, 2016, the Company, through two wholly-owned subsidiaries, entered into a term loan agreement
with ABN AMRO Bank N.V. for a loan of $25,755, drawn on March 30, 2016, to finance the acquisition cost of the
Selina and the Ismene. The loan is payable in eight consecutive quarterly installments of $855 each and a balloon
installment of $18,915 payable together with the last installment by June 30, 2019. The first repayment installment
was repaid on September 30, 2017. The loan bears interest at LIBOR plus a margin of 3%.
On May 10, 2016, the Company, through one wholly-owned subsidiary, entered into a term loan agreement
with DNB Bank ASA and the Export-Import Bank of China for a loan of $13,510, drawn on the same date, being
the purchase price of the Maera. The loan is payable in seven equal consecutive quarterly installments of about $20
each, four equal consecutive quarterly installments of about $283 and a balloon of about $12,242 payable together
with the last installment on January 4, 2019. The loan bears interest at LIBOR plus a margin of 3% per annum.
According to the terms of the loan agreement, the Company prepaid an amount of $360 during 2018 which was
deducted from the final balloon payment. In January 2019, the loan was repaid in full.
Under the secured term loans outstanding as of December 31, 2018, 33 vessels of the Company’s fleet are
mortgaged with first preferred or priority ship mortgages, having an aggregate carrying value of $813,387. Additional
F-25 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
securities required by the banks include first priority assignment of all earnings, insurances, first assignment of time
charter contracts that exceed a certain period, pledge over the shares of the borrowers, manager’s undertaking
and subordination and requisition compensation and either a corporate guarantee by DSI (the “Guarantor”) or a
guarantee by the ship owning companies (where applicable), financial covenants, as well as operating account
assignments. The lenders may also require additional security in the future in the event the borrowers breach
certain covenants under the loan agreements. The secured term loans generally include restrictions as to changes
in management and ownership of the vessels, additional indebtedness, as well as minimum requirements regarding
hull cover ratio and minimum liquidity per vessel owned by the borrowers, or the guarantor, maintained in the bank
accounts of the borrowers, or the guarantor. As at December 31, 2018 and 2017, the minimum cash deposits
required to be maintained at all times under the Company’s loan facilities, amounted to $24,000 and $25,000,
respectively and is included in “Restricted cash” in the accompanying consolidated balance sheets. Furthermore,
the secured term loans contain cross default provisions and additionally the Company is not permitted to pay any
dividends following the occurrence of an event of default.
As at December 31, 2018 and 2017, the Company was in compliance with all of its loan covenants.
The maturities of the Company’s debt facilities described above, as at December 31, 2018, and throughout
their term, are shown in the table below:
Period
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6 and thereafter
Total
Principal
Repayment
97,521
36,132
138,744
78,717
152,254
31,482
534,850
$
$
8. Commitments and Contingencies
a) Various claims, suits, and complaints, including those involving government regulations and product liability,
arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers,
agents, insurance and other claims with suppliers relating to the operations of the Company’s vessels. The
Company accrues for the cost of environmental and other liabilities when management becomes aware that a
liability is probable and is able to reasonably estimate the probable exposure.
The Company’s vessels are covered for pollution in the amount of $1 billion per vessel per incident, by the P&I
Association in which the Company’s vessels are entered. The Company’s vessels are subject to calls payable to
their P&I Association and may be subject to supplemental calls which are based on estimates of premium income
and anticipated and paid claims. Such estimates are adjusted each year by the Board of Directors of the P&I
ANNUAL REPORT 2018 ■ F-26
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
Association until the closing of the relevant policy year, which generally occurs within three years from the end of
the policy year. Supplemental calls, if any, are expensed when they are announced and according to the period
they relate to.
b) As at December 31, 2018, all of the Company’s vessels were fixed under time charter agreements. The
minimum contractual gross charter revenue expected to be generated from fixed and non-cancelable time charter
contracts existing as at December 31, 2018 and until their expiration was as follows:
Period
Year 1
Year 2
Total
Amount
131,917
5,211
137,128
$
$
9. Capital Stock and Changes in Capital Accounts
a) Preferred stock: As at December 31, 2018 and 2017, the Company’s authorized preferred stock consists
of 25,000,000 shares (all in registered form) of preferred stock, par value $0.01 per share, of which 1,000,000 are
designated as Series A Participating Preferred Shares and 5,000,000 are designated as Series B Preferred Shares.
As at December 31, 2018 and 2017, the Company had 2,600,000 Series B Preferred Shares issued and
outstanding with par value $0.01 per share, at $25.00 per share and with liquidation preference at $25.00 per
share and zero Series A Participating Preferred Shares issued and outstanding. Holders of series B preferred
shares have no voting rights other than the ability, subject to certain exceptions, to elect one director if dividends
for six quarterly dividend periods (whether or not consecutive) are in arrears and certain other limited protective
voting rights. Also, holders of series B preferred shares, rank prior to the holders of common shares with respect
to dividends, distributions and payments upon liquidation.
Dividends on the Series B preferred shares are cumulative from the date of original issue and are payable on the
15th day of January, April, July and October of each year at the dividend rate of 8.875% per annum, or $2.21875
per share per annum. For 2018, 2017, and 2016, dividends on Series B preferred shares amounted to $5,769.
At any time on or after February 14, 2019, the Company may redeem, in whole or in part, the series B preferred
shares at a redemption price of $25.00 per share plus an amount equal to all accumulated and unpaid dividends
thereon to the date of redemption, whether or not declared.
b) Common Stock: The Company’s authorized capital stock consists of 200,000,000 shares (all in registered
form) of common stock, par value $0.01 per share. The holders of the common shares are entitled to one vote on
all matters submitted to a vote of stockholders and to receive all dividends, if any.
c) Offering of common shares: On April 26, 2017, the Company issued a total 20,125,000 common shares,
at a price of $4.00 per share, in a public offering. As part of the offering, entities affiliated with Simeon Palios, the
Company’s Chief Executive Officer and Chairman, executive officers and certain directors, purchased an aggregate
F-27 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
of 5,500,000 common shares at the public offering price. The net proceeds from the offering after underwriting
discounts and other offering expenses were $77,311.
d) Repurchase of common shares: In December 2018, the Company repurchased a total of 4,166,666
common shares, at a price of $3.60 per share, in a tender offer which commenced in November 2018. The total
cost from the tender offer amounted to $15,157.
e) Incentive plan: In November 2014, the Company adopted the 2014 Equity Incentive Plan to issue awards
to Key Persons in the form of (a) non-qualified stock, (b) stock appreciation rights, (c) restricted stock, (d) restricted
stock units, (e) dividend equivalents, (f) unrestricted stock and (g) other equity-based or equity-related Awards for
a maximum number of 5,000,000 shares of common stock. This number was increased to 13,000,000 on May
31, 2018, after an amendment of the plan. As at December 31, 2018, 9,124,759 remained reserved for issuance.
Restricted stock during 2018, 2017 and 2016 is analysed as follows:
Outstanding at December 31, 2015
Granted
Vested
Outstanding at December 31, 2016
Granted
Vested
Outstanding at December 31, 2017
Granted
Vested
Outstanding at December 31, 2018
Weighted
Average
Grant Date
Price
8.27
2.26
8.67
4.89
3.95
5.46
4.30
3.82
4.38
4.04
Number of
Shares
2,764,312 $
2,150,000
(971,646)
3,942,666 $
1,310,000
(1,611,549)
3,641,117 $
1,800,000
(1,679,484)
3,761,633 $
The fair value of the restricted shares has been determined with reference to the closing price of the Company’s
stock on the date the agreements were signed. The aggregate compensation cost is being recognized ratably in the
consolidated statement of operations over the respective vesting periods. For 2018, 2017 and 2016, an amount
of $7,279, $8,232, and $8,313, respectively, was recognized in “General and administrative expenses” presented
in the accompanying consolidated statements of operations.
At December 31, 2018 and 2017, the total unrecognized cost relating to restricted share awards was $10,106
and $10,509, respectively. At December 31, 2018, the weighted-average period over which the total compensation
cost related to non-vested awards not yet recognized is expected to be recognized is 0.86 years.
ANNUAL REPORT 2018 ■ F-28
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
f) Share Repurchase Agreement: On May 22, 2014, the Company’s Board of Directors authorized a share
repurchase plan for up to $100,000 worth of shares of the Company’s common stock. During the years ended
December 31, 2018 and 2017, the Company did not repurchase any shares.
10. Interest and Finance Costs
The amounts in the accompanying consolidated statements of operations are analyzed as follows:
2018
2017
2016
Interest expense
Amortization of financing costs
Loan expenses
Total
$
$
28,299 $
1,939
268
30,506 $
24,978 $
1,455
195
26,628 $
19,523
1,503
923
21,949
Total interest on long-term debt for 2018, 2017 and 2016 amounted to $28,299, $24,991 and $21,009,
respectively, of which $0, $13 and $1,486, respectively, were capitalized and included “Vessels, net book value”,
in the accompanying consolidated balance sheets.
11. Earnings/(loss) per Share
All common shares issued (including the restricted shares issued under the Company’s incentive plans) are
the Company’s common stock and have equal rights to vote and participate in dividends. The calculation of
basic earnings/(loss) per share does not treat the non-vested shares (not considered participating securities) as
outstanding until the time/service-based vesting restriction has lapsed. For 2018, the denominator of the diluted
earnings per share calculation includes 979,141 shares, being the number of incremental shares assumed issued
under the treasury stock method weighted for the periods the non-vested shares were outstanding. For 2017 and
2016 and on the basis that the Company incurred losses, the effect of incremental shares would be anti-dilutive
and therefore basic and diluted loss per share was the same.
Profit or loss attributable to common equity holders is adjusted by the amount of dividends on Series B Preferred
Stock as follows:
Net income/(loss)
Less dividends on series B preferred shares
Net income/(loss) attributed to common stockholders
2018
2017
2016
$
$
16,580 $
(511,714) $
(164,237)
(5,769) $
10,811
(5,769) $
(517,483)
(5,769)
(170,006)
Weighted average number of common shares, basic
Incremental shares
Weighted average number of common shares, diluted
103,736,742
95,731,093
80,441,517
979,141
104,715,883
-
95,731,093
-
80,441,517
Earnings/(loss) per share, basic and diluted
$
0.10 $
(5.41) $
(2.11)
F-29 ■ ANNUAL REPORT 2018
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
12. Income Taxes
Under the laws of the countries of the companies’ incorporation and / or vessels’ registration, the companies
are not subject to tax on international shipping income; however, they are subject to registration and tonnage taxes,
which are included in vessel operating expenses in the accompanying consolidated statements of operations.
Pursuant to the Internal Revenue Code of the United States (the “Code”), U.S. source income from the
international operations of ships is generally exempt from U.S. tax if the company operating the ships meets both
of the following requirements, (a) the Company is organized in a foreign country that grants an equivalent exception
to corporations organized in the United States and (b) either (i) more than 50% of the value of the Company’s stock
is owned, directly or indirectly, by individuals who are “residents” of the Company’s country of organization or of
another foreign country that grants an “equivalent exemption” to corporations organized in the United States (50%
Ownership Test) or (ii) the Company’s stock is “primarily and regularly traded on an established securities market” in
its country of organization, in another country that grants an “equivalent exemption” to United States corporations,
or in the United States (Publicly-Traded Test).
Notwithstanding the foregoing, the regulations provide, in pertinent part, that each class of the Company’s stock
will not be considered to be “regularly traded” on an established securities market for any taxable year in which 50%
or more of the vote and value of the outstanding shares of such class are owned, actually or constructively under
specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5%
or more of the value of such class of the Company’s outstanding stock, (“5 Percent Override Rule”).
The Company and each of its subsidiaries expects to qualify for this statutory tax exemption for the 2018, 2017
and 2016 taxable years, and the Company takes this position for United States federal income tax return reporting
purposes. However, there are factual circumstances beyond the Company’s control that could cause it to lose the
benefit of this tax exemption in future years and thereby become subject to United States federal income tax on
its United States source income such as if, for a particular taxable year, other shareholders with a five percent or
greater interest in the Company’s stock were, in combination with the Company’s existing 5% shareholders, to own
50% or more of the Company’s outstanding shares of its stock on more than half the days during the taxable year.
The Company estimates that since no more than the 50% of its shipping income would be treated as being
United States source income, the effective tax rate is expected to be 2% and accordingly it anticipates that the
impact on its results of operations will not be material. The Company believes that it satisfies the Publicly-Traded
Test and all of its United States source shipping income is exempt from U.S. federal income tax. Based on its U.S.
source Shipping Income for 2018, 2017 and 2016, the Company would be subject to U.S. federal income tax of
approximately $172, $136 and $80, respectively, in the absence of an exemption under Section 883.
13. Financial Instruments and Fair Value Disclosures
The carrying values of temporary cash investments, accounts receivable and accounts payable approximate
their fair value due to the short-term nature of these financial instruments. The fair values of long-term bank loans
approximate the recorded values, due to their variable interest rates. The fair value of the Bond (Note 7) having a
ANNUAL REPORT 2018 ■ F-30
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
(Expressed in thousands of U.S. Dollars – expect share, per share data, unless otherwise stated)
fixed interest rate amounted to $97,500 as of December 31, 2018, and was determined through the Level 1 input
of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements based on the quoted price of
the instrument on that date as provided by the selling bank.
The Company is exposed to interest rate fluctuations associated with its variable rate borrowings. Currently, the
company does not have any derivative instruments to manage such fluctuations.
14. Subsequent Events
a) Series B Preferred Stock Dividends: On January 15, 2019, the Company paid a dividend on its series B
preferred stock, amounting to $0.5546875 per share, or $1,442, to its stockholders of record as of January 14,
2019.
b) Series C Preferred Stock: On January 31, 2019, DSI issued 10,675 shares of its newly-designated Series
C Preferred Stock, par value $0.01 per share, to an affiliate of its Chairman and Chief Executive Officer, Mr. Simeon
Palios, for an aggregate purchase price of $1,066. The Series C Preferred Stock will vote with the common shares
of the Company, and each share entitles the holder thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Company. The transaction was approved unanimously by a committee of the Board of Directors
established for the purpose of considering the transaction and consisting of the Company’s independent directors.
The Series C Preferred Stock has no dividend or liquidation rights and cannot be transferred without the consent
of the Company except to the holder’s affiliates and immediate family members.
c) Sale of Vessels: On February 14 and February 15, 2019 the Company through two separate wholly-owned
subsidiaries entered into two Memoranda of Agreement to sell the vessels Danae and Dione to two affiliated
parties controlled by one Director each, for the purchase price of $7,200 each. The transaction was approved
by disinterested directors of the Company and the agreed upon sale price was based, among other factors, on
independent third-party broker valuations obtained by the Company. Danae is expected to be delivered to her new
owners latest by June 28, 2019 and Dione by April 15, 2019.
d) Annual Incentive Bonus: On February 20, 2019 the Company’s Board of Directors approved the grant of
2,000,000 shares of restricted common stock awards to executive management and non-executive directors,
pursuant to the Company’s 2014 equity incentive plan, as amended. The fair value of the restricted shares based
on the closing price on the date of the Board of Directors’ approval was $5,980 and will be recognized in income
ratably over the restricted shares vesting period which will be 3 years.
e) Tender Offer: On February 27, 2019 the Company commenced a tender offer to purchase up to 5,178,571
shares of its outstanding common stock using funds available from cash and cash equivalents at a price of $2.80
per share, net to the seller, in cash, less any applicable withholding taxes and without interest. The tender offer is
scheduled to expire on March 27, 2019.
f) New Loan Agreement: On March 5, 2019, the Company, through two wholly owned subsidiaries, entered
into a $19,000 loan agreement with DNB Bank ASA, for the purpose of providing the borrowers with working
capital. The loan will be available until March 20, 2019 and will be repayable in 20 consecutive quarterly instalments
of $477.3 and a balloon of $9,454, latest by March 20, 2024.
F-31 ■ ANNUAL REPORT 2018
Corporate Directory
Legal Counsel
Seward and Kissel LLP
One Battery Park Plaza
New York, NY 10004
Tel: +1-212-574-1200
Independent Auditors
Ernst & Young (Hellas)
Certified Auditors-Accountants S.A
Chimarras 8B
151 25 Maroussi
Greece
Tel: +30-210-288-6000
Transfer Agent and Registrar
Computershare
P.O. Box 358015
Pittsburgh, PA 15252-8015
or 480 Washington Boulevard
Jersey City, NJ 07310
Toll Free Number: +1-800-231-5469
Outside of US: +1-201-680-6578
Investor &
Media Relations:
Edward Nebb
Comm-Counsellors, LLC
724 Valley Road
New Canaan, Connecticut 06840
Tel: +1-203-972-8350
Email: enebb@optonline.net
Website
Press releases, fleet information, stock
quotes, corporate investor information,
and SEC filings can all be accessed on
the company’s website,
www.dianashippinginc.com.
Directors and Executive Officers
Symeon Palios
Chairman of the Board of Directors
and Chief Executive Officer
Anastasios Margaronis
Director and President
Andreas Michalopoulos
Director, Chief Financial Officer and Treasurer
Ioannis Zafirakis
Director, Chief Strategy Officer and Secretary
Semiramis Paliou
Director and Chief Operating Officer
Maria Dede
Chief Accounting Officer
William Lawes
Non-Executive Director
Apostolos Kontoyannis
Non-Executive Director
Konstantinos Fotiadis
Non-Executive Director
Konstantinos Psaltis
Non-Executive Director
Kyriacos Riris
Non-Executive Director
Christos Sergios Glavanis
Non-Executive Director
Shareholder/Corporate Information
Any shareholder, investor, or analyst seeking further
information may contact:
Corporate Contact:
Ioannis Zafirakis
Director, Chief Strategy Officer and Secretary
Pendelis 16
17564 Palaio Faliro
Athens, Greece
Tel: +30-210-947-01000
Email: info@dianashippinginc.com
Corporate Offices
Diana Shipping Inc.
Pendelis 16
17564 Palaio Faliro
Athens, Greece
Tel: +30-210-947-0100
Email: info@dianashippinginc.com
Stock Listing
Diana Shipping Inc.’s stock is traded on the New York Stock
Exchange under the symbol “DSX”.
Diana Shipping Inc.’s Series B Cumulative Redeemable
Perpetual Preferred Shares are traded on the New York
Stock Exchange under the symbol “DSXPRB”.
Diana Shipping Inc.’s Senior Unsecured Bonds due 2023 are
traded on the Oslo Børs Stock Exchange under the symbol
“DIASH01”.
ANNUAL REPORT 2018 ■ 35
Diana Shipping Inc. Fleet List
Panamax Gearless Bulk Carriers
Name of Vessel
Nirefs
Oceanis
Thetis
Protefs
Calipso
Clio
Naias
Arethusa
Erato*
Coronis
Melia
Artemis
Leto
Selina
Maera
Ismene
Crystalia
Atalandi
Kamsarmax Bulk Carriers
Name of Vessel
Maia
Myrsini
Medusa
Myrto
Astarte
Post-Panamax Bulk Carriers
Name of Vessel
Alcmene
Amphitrite
Polymnia
Electra
Phaidra
Capesize Bulk Carriers
Name of Vessel
Norfolk
Aliki
Baltimore
Salt Lake City
Sideris GS
Semirio
Boston
Houston
New York
Seattle
P. S. Palios
G. P. Zafirakis
Santa Barbara
New Orleans
Newcastlemax Bulk Carriers
Name of Vessel
Los Angeles
Philadelphia
San Francisco
Newport News
Size (deadweight tons)
75.311
75.211
73.583
73.630
73.691
73.691
73.546
73.593
74.444
74.381
76.225
76.942
81.297
75.700
75.403
77.901
77.525
77.529
Size (deadweight tons)
82.193
82.117
82.194
82.131
81.513
Size (deadweight tons)
93.193
98.697
98.704
87.150
87.146
Size (deadweight tons)
164.218
180.235
177.243
171.810
174.186
174.261
177.828
177.729
177.773
179.362
179.134
179.492
179.426
180.960
Size (deadweight tons)
206.104
206.040
208.006
208.021
Classification Society
Lloyd's Register
Bureau Veritas
Det Norske Veritas - Germanischer Lloyd
Det Norske Veritas - Germanischer Lloyd
Det Norske Veritas - Germanischer Lloyd
Bureau Veritas
Bureau Veritas
Bureau Veritas
Bureau Veritas
Bureau Veritas
Nippon Kaiji Kyokai
Nippon Kaiji Kyokai
American Bureau of Shipping
Bureau Veritas
Bureau Veritas
Det Norske Veritas - Germanischer Lloyd
Det Norske Veritas - Germanischer Lloyd /China Classification Society
Det Norske Veritas - Germanischer Lloyd/China Classification Society
Hudong-Zhongua Shipbuilding (Group) Co., Ltd.
Hudong-Zhongua Shipbuilding (Group) Co., Ltd.
Builder
Samho Heavy Industries Co., Ltd.
Samho Heavy Industries Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Tsuneishi Corp., Tadotsu
Namura Shipbuilding Co., Ltd.
Universal Shipbuilding Corp.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Builder
Tsuneishi Shipbuilding Co., Ltd.
Tsuneishi Shipbuilding Co., Ltd.
Tsuneishi Shipbuilding Co., Ltd.
Tsuneishi Shipbuilding Co., Ltd.
Builder
China Shipbuilding Corp., Kaohsiung Yard
Imabari Shipbuilding, Saijo Shipyard
Namura Shipbuilding Co., Ltd.
Daewoo Shipbuilding & Marine Engineering Co. Ltd.
Shanghai Waigaoqiao Shipbuilding Co., Ltd.
Shanghai Waigaoqiao Shipbuilding Co., Ltd.
Shanghai Waigaoqiao Shipbuilding Co., Ltd.
Shanghai Waigaoqiao Shipbuilding Co., Ltd.**
Shanghai Waigaoqiao Shipbuilding Co., Ltd.
Hyundai Heavy Industries Co., Ltd.
Hyundai Heavy Industries Co., Ltd.
Qingdao Beihai Shipbuilding Heavy Industry Co., Ltd.
Qingdao Beihai Shipbuilding Heavy Industry Co., Ltd.
Year Built
2001
2001
2004
2004
2005
2005
2006
2007
2004
2006
2005
2006
2010
2010
2013
2013
2014
2014
Year Built
2009
2010
2010
2013
2013
Year Built
2010
2012
2012
2013
2013
Year Built
2002
2005
2005
2005
2006
2007
2007
2009
2010
2011
2013
2014
2015
2015
Year Built
2012
2012
2017
2017
Classification Society
Nippon Kaiji Kyokai
Bureau Veritas
Nippon Kaiji Kyokai
Nippon Kaiji Kyokai
Classification Society
Bureau Veritas
Nippon Kaiji Kyokai
Nippon Kaiji Kyokai
Classification Society
Bureau Veritas
Nippon Kaiji Kyokai
Nippon Kaiji Kyokai
Bureau Veritas
Bureau Veritas
Bureau Veritas
Bureau Veritas
Bureau Veritas
Bureau Veritas
Nippon Kaiji Kyokai
Bureau Veritas
Lloyd's Register
Lloyd's Register
Daewoo Shipbuilding & Marine Engineering Co. Ltd.
American Bureau of Shipping
Builder
Jiangsu New Yangzi Shipbuilding Co. Ltd.
Tsuneishi Group (Zhoushan) Shipbuilding Inc.
Tsuneishi Group (Zhoushan) Shipbuilding Inc.
Hudong-Zhongua Shipbuilding (Group) Co., Ltd.
China Classification Society
Hudong-Zhongua Shipbuilding (Group) Co., Ltd.
American Bureau of Shipping
Shanghai Waigaoqiao Shipbuilding Co., Ltd.
American Bureau of Shipping
Builder
Classification Society
Shanghai Jiangnan-Changxing Shipbuilding Co., Ltd.
Bureau Veritas/China Classification Society
Shanghai Jiangnan-Changxing Shipbuilding Co., Ltd.
Bureau Veritas/China Classification Society
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Bureau Veritas/China Classification Society
Bureau Veritas/China Classification Society
36 ■ ANNUAL REPORT 2018
Panamax Gearless Bulk Carriers
Name of Vessel
Size (deadweight tons)
Year Built
Kamsarmax Bulk Carriers
Name of Vessel
Size (deadweight tons)
Year Built
Post-Panamax Bulk Carriers
Name of Vessel
Size (deadweight tons)
Year Built
Capesize Bulk Carriers
Name of Vessel
Size (deadweight tons)
Year Built
75.311
75.211
73.583
73.630
73.691
73.691
73.546
73.593
74.444
74.381
76.225
76.942
81.297
75.700
75.403
77.901
77.525
77.529
82.193
82.117
82.194
82.131
81.513
93.193
98.697
98.704
87.150
87.146
164.218
180.235
177.243
171.810
174.186
174.261
177.828
177.729
177.773
179.362
179.134
179.492
179.426
180.960
206.104
206.040
208.006
208.021
2001
2001
2004
2004
2005
2005
2006
2007
2004
2006
2005
2006
2010
2010
2013
2013
2014
2014
2009
2010
2010
2013
2013
2010
2012
2012
2013
2013
2002
2005
2005
2005
2006
2007
2007
2009
2010
2011
2013
2014
2015
2015
2012
2012
2017
2017
Nirefs
Oceanis
Thetis
Protefs
Calipso
Clio
Naias
Arethusa
Erato*
Coronis
Melia
Artemis
Leto
Selina
Maera
Ismene
Crystalia
Atalandi
Maia
Myrsini
Medusa
Myrto
Astarte
Alcmene
Amphitrite
Polymnia
Electra
Phaidra
Norfolk
Aliki
Baltimore
Salt Lake City
Sideris GS
Semirio
Boston
Houston
New York
Seattle
P. S. Palios
G. P. Zafirakis
Santa Barbara
New Orleans
Name of Vessel
Los Angeles
Philadelphia
San Francisco
Newport News
Builder
Samho Heavy Industries Co., Ltd.
Samho Heavy Industries Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Hudong-Zhongua Shipbuilding (Group) Co., Ltd.
Hudong-Zhongua Shipbuilding (Group) Co., Ltd.
Tsuneishi Corp., Tadotsu
Namura Shipbuilding Co., Ltd.
Universal Shipbuilding Corp.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Classification Society
Lloyd's Register
Det Norske Veritas - Germanischer Lloyd
Bureau Veritas
Det Norske Veritas - Germanischer Lloyd
Det Norske Veritas - Germanischer Lloyd
Bureau Veritas
Bureau Veritas
Bureau Veritas
Bureau Veritas
Bureau Veritas
Nippon Kaiji Kyokai
Nippon Kaiji Kyokai
American Bureau of Shipping
Bureau Veritas
Bureau Veritas
Det Norske Veritas - Germanischer Lloyd
Det Norske Veritas - Germanischer Lloyd /China Classification Society
Det Norske Veritas - Germanischer Lloyd/China Classification Society
Builder
Tsuneishi Shipbuilding Co., Ltd.
Tsuneishi Shipbuilding Co., Ltd.
Tsuneishi Shipbuilding Co., Ltd.
Tsuneishi Shipbuilding Co., Ltd.
Daewoo Shipbuilding & Marine Engineering Co. Ltd.
Classification Society
Nippon Kaiji Kyokai
Bureau Veritas
Nippon Kaiji Kyokai
Nippon Kaiji Kyokai
American Bureau of Shipping
Builder
Jiangsu New Yangzi Shipbuilding Co. Ltd.
Tsuneishi Group (Zhoushan) Shipbuilding Inc.
Tsuneishi Group (Zhoushan) Shipbuilding Inc.
Hudong-Zhongua Shipbuilding (Group) Co., Ltd.
Hudong-Zhongua Shipbuilding (Group) Co., Ltd.
Builder
China Shipbuilding Corp., Kaohsiung Yard
Imabari Shipbuilding, Saijo Shipyard
Namura Shipbuilding Co., Ltd.
Daewoo Shipbuilding & Marine Engineering Co. Ltd.
Shanghai Waigaoqiao Shipbuilding Co., Ltd.
Shanghai Waigaoqiao Shipbuilding Co., Ltd.
Shanghai Waigaoqiao Shipbuilding Co., Ltd.
Shanghai Waigaoqiao Shipbuilding Co., Ltd.**
Shanghai Waigaoqiao Shipbuilding Co., Ltd.
Hyundai Heavy Industries Co., Ltd.
Hyundai Heavy Industries Co., Ltd.
Qingdao Beihai Shipbuilding Heavy Industry Co., Ltd.
Qingdao Beihai Shipbuilding Heavy Industry Co., Ltd.
Shanghai Waigaoqiao Shipbuilding Co., Ltd.
Classification Society
Bureau Veritas
Nippon Kaiji Kyokai
Nippon Kaiji Kyokai
China Classification Society
American Bureau of Shipping
Classification Society
Bureau Veritas
Nippon Kaiji Kyokai
Nippon Kaiji Kyokai
Bureau Veritas
Bureau Veritas
Bureau Veritas
Bureau Veritas
Bureau Veritas
Bureau Veritas
Nippon Kaiji Kyokai
Bureau Veritas
Lloyd's Register
Lloyd's Register
American Bureau of Shipping
Newcastlemax Bulk Carriers
Size (deadweight tons)
Year Built
Builder
Shanghai Jiangnan-Changxing Shipbuilding Co., Ltd.
Shanghai Jiangnan-Changxing Shipbuilding Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Jiangnan Shipyard (Group) Co., Ltd.
Classification Society
Bureau Veritas/China Classification Society
Bureau Veritas/China Classification Society
Bureau Veritas/China Classification Society
Bureau Veritas/China Classification Society
.
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DIANA SHIPPING INC.
16, PENDELIS Str
17564 PALAIO FALIRO
ATHENS, GREECE
PHONE: +30 210 9470100
FAX: +30 210 9470101
www.dianashippinginc.com
38 ■ ANNUAL REPORT 2018