General

We are a Marshall Islands company that transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes through the ownership and operation of drybulk carrier vessels. Excluding Baltic Trading, our fleet currently consists of nine Capesize, eight Panamax, 17 Supramax, six Handymax and 13 Handysize drybulk carriers, with an

aggregate carrying capacity of approximately 3,810,000 dwt, and the average age of our fleet is currently 7.8 years, as compared to the average age for the world fleet of approximately 10 years for the drybulk shipping segments in which we compete. Most of the vessels in our fleet are on time charters to well-known charterers, including Lauritzen Bulkers, Cargill, Pacbasin, Trafigura, Klaveness and Swissmarine. As of February 27, 2012, all of the vessels in our fleet, excluding Baltic Trading, are presently engaged under spot market-related and time charter contracts that expire (assuming the option periods in the time charters are not exercised) between March 2013 and May 2015, and five of our vessels are currently operating in vessel pools. See pages 7-11 for a table indicating the built dates of all vessels currently in our fleet.

In addition, Baltic Trading's fleet currently consists of two Capesize, four Supramax and three Handysize drybulk carriers with an aggregate carrying capacity of approximately 672,000 dwt.

If market conditions improve, we may acquire additional modern, high-quality drybulk carriers through timely and selective acquisitions of vessels in a manner that is accretive to our cash flow. In connection with the acquisitions made during 2007 through 2011 and our growth strategy, we negotiated the 2007 Credit Facility, $100 Million Term Loan Facility, $253 Million Term Loan Facility and the 2010 Baltic Trading Credit Facility (each as defined herein) that we have used to acquire vessels. As we have used our remaining availability under these facilities, if we make acquisitions of additional vessels we may consider additional debt and equity financing alternatives from time to time.

On June 3, 2010, we entered into an agreement to purchase a total of eight Handysize drybulk vessels, including five newbuildings, from companies within the Metrostar Management Corporation group of companies ("Metrostar") for an aggregate purchase price of $266.0 million. Five of these vessels are owned by us and three are owned by Baltic Trading. Additionally, on June 24, 2010, we entered into a Master Agreement with Bourbon SA ("Bourbon") to purchase 16 drybulk vessels, including two newbuildings, for an aggregate purchase price of $545.0 million. We retained 13 of the 16 vessels, including one newbuilding, and the remaining three vessels were immediately resold to Maritime Equity Partners LLC ("MEP"), a company managed by a Company owned by our Chairman, Peter C. Georgiopoulos. All eight vessels have been delivered from Metrostar and all 16 vessels have been delivered from Bourbon, three of which were sold to MEP.

In order to fund the acquisition of these vessels, we entered into two senior secured term loan facilities. On August 12, 2010, we entered into a $100 million senior secured term loan facility (the "$100 Million Term Loan Facility") to be utilized to fund or refund to us a portion of the purchase price of the acquisition of five vessels from Metrostar. On August 20, 2010, we entered into a $253 million senior secured term loan facility (the "$253 Million Term Loan Facility") to fund a portion of the purchase price of the acquisition of 13 vessels from Bourbon. The Baltic Trading vessels have been funded utilizing its $150 million senior secured revolving credit facility (the "2010 Baltic Trading Credit Facility") for bridge financing.

Our management team and our other employees are responsible for the commercial and strategic management of our fleet. Commercial management includes the negotiation of charters for vessels, managing the mix of various types of charters, such as time charters, voyage charters and spot market-related time charters, and monitoring the performance of our vessels under their charters. Strategic management includes locating, purchasing, financing and selling vessels. We currently contract with three independent technical managers to provide technical management of our fleet at a lower cost than we believe would be possible in-house. Technical management involves the day-to-day management of vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies. Members of our New York City-based management team oversee the activities of our independent technical managers.

We hold an investment in the capital stock of Jinhui Shipping and Transportation Limited ("Jinhui"). Jinhui is a drybulk shipping owner and operator focused on the Supramax segment of drybulk shipping.

Baltic Trading, formerly our wholly-owned subsidiary, completed its initial public offering, or IPO, on March 15, 2010. As of December 31, 2012, our wholly-owned subsidiary Genco Investments LLC owned 5,699,088 shares of Baltic Trading's Class B Stock, which represents a 24.78% ownership interest in Baltic Trading at December 31, 2012 and 83.17% of the aggregate voting power of Baltic Trading's outstanding shares of voting stock. Baltic Trading is consolidated as we control a majority of the voting interest in Baltic Trading. Management's discussion and analysis of our results of operations and financial condition in this section includes the results of Baltic Trading.

We entered into a long-term management agreement (the "Management Agreement") with Baltic Trading pursuant to which we apply our expertise and experience in the drybulk industry to provide Baltic Trading with commercial, technical, administrative and strategic services. The Management Agreement is for an initial term of approximately 15 years and will automatically renew for additional five-year periods unless terminated in accordance with its terms. Baltic Trading will pay us for the services we provide it as well as reimburse us for our costs and expenses incurred in providing certain of these services. Management fee income we earn from the Management Agreement net of any allocated shared expenses, such as salary, office expenses and other general and administrative fees, will be taxable to us. Upon consolidation with Baltic Trading, any management fee income earned will be eliminated for financial reporting purposes.

We provide technical services for drybulk vessels purchased by MEP under an agency agreement between us and MEP. These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services. The services are provided for a fee of $750 per ship per day plus reimbursement of out-of-pocket costs and will be provided for an initial term of one year. MEP will have the right to cancel provision of services on 60 days' notice with payment of a one-year termination fee or without a fee upon a change of our control. We may terminate provision of the services at any time on 60 days' notice. Mr. Georgiopoulos controls and has a minority interest in MEP. This arrangement was approved by an independent committee of our Board of Directors.

During the beginning of 2009, the Genco Cavalier, a 2007-built Supramax vessel, was on charter to Samsun Logix Corporation ("Samsun"), when Samsun filed for the equivalent of bankruptcy protection in South Korea, otherwise referred to as a rehabilitation application. On February 5, 2010, the rehabilitation plan submitted by Samsun was approved by the South Korean courts. As part of the rehabilitation process, our claim of approximately $17.2 million will be settled in the following manner: 34%, or approximately $5.9 million, will be paid in cash in annual installments on December 30 of each year from 2010 through 2019 ranging in percentages from eight to 17; the remaining 66%, or approximately $11.3 million, converted to Samsun shares at a specified value per share. During the year ended December 31, 2012, we recorded $0.3 million as other operating income which represents 50% of the portion (9%) of the cash settlement that was due on December 30, 2012 as this was the only amount remitted by Samsun. During the year ended December 31, 2011, we recorded $0.5 million as other operating income which represents the portion (9%) of the cash settlement that was due on December 30, 2011. During the year ended December 31, 2010, we recorded $0.6 million as other operating income which represents the portion (10%) of the cash settlement which was due on December 30, 2010.

During January 2011, the Genco Success, a 1997-built Handymax vessel, was on charter to Korea Line Corporation ("KLC") when KLC filed for a rehabilitation application. On July 3, 2012, the rehabilitation plan submitted by KLC was approved by the South Korean courts. As part of the rehabilitation process, our claim of approximately $0.8 million will be settled in the following manner:
37%, or approximately $0.3 million, will be paid in cash in annual installments on December 30 of each year from 2012 through 2021 ranging in percentages from 0.5 to 43; the remaining 63%, or approximately $0.5 million, converted to KLC shares at a specified value per share. During the year ended December 31, 2012, we recorded two-thousand dollars as other operating income which represents the portion (0.5%) of the cash settlement that was due on December 30, 2012.

Year ended December 31, 2012 compared to the year ended December 31, 2011

Factors Affecting Our Results of Operations

We believe that the following table reflects important measures for analyzing trends in our results of operations. The table reflects our ownership days, available days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the years ended December 31, 2012 and 2011 on a consolidated basis, which includes the operations of Baltic Trading.

                          For the Years Ended December 31,      Increase
                              2012                2011         (Decrease)    % Change
Fleet Data:
Ownership days (1)
Capesize                         4,026.0             4,015.0         11.0         0.3 %
Panamax                          2,928.0             2,920.0          8.0         0.3 %
Supramax                         7,686.0             7,577.6        108.4         1.4 %
Handymax                         2,196.0             2,190.0          6.0         0.3 %
Handysize                        5,856.0             5,194.9        661.1        12.7 %
Total                           22,692.0            21,897.5        794.5         3.6 %
Available days (2)
Capesize                         3,995.9             3,984.9         11.0         0.3 %
Panamax                          2,800.4             2,901.7       (101.3 )      (3.5 )%
Supramax                         7,505.5             7,575.7        (70.2 )      (0.9 )%
Handymax                         2,112.5             2,140.3        (27.8 )      (1.3 )%
Handysize                        5,856.0             5,188.4        667.6        12.9 %
Total                           22,270.3            21,791.0        479.3         2.2 %
Operating days (3)
Capesize                         3,989.8             3,983.6          6.2         0.2 %
Panamax                          2,785.8             2,880.2        (94.4 )      (3.3 )%
Supramax                         7,380.9             7,500.2       (119.3 )      (1.6 )%
Handymax                         2,091.6             2,119.5        (27.9 )      (1.3 )%
Handysize                        5,841.4             5,143.8        697.6        13.6 %
Total                           22,089.5            21,627.3        462.2         2.1 %
Fleet utilization (4)
Capesize                            99.8 %             100.0 %       (0.2 )%     (0.2 )%
Panamax                             99.5 %              99.3 %        0.2 %       0.2 %
Supramax                            98.3 %              99.0 %       (0.7 )%     (0.7 )%
Handymax                            99.0 %              99.0 %          -           -
Handysize                           99.8 %              99.1 %        0.7 %       0.7 %
Fleet average                       99.2 %              99.2 %          -           -

                                    For the Years Ended December 31,          Increase
(U.S. dollars)                         2012                  2011            (Decrease)       % Change

Average Daily Results:
Time Charter Equivalent (5)
Capesize                         $          14,137     $          28,945    $     (14,808 )       (51.2 )%
Panamax                                      8,909                21,293          (12,384 )       (58.2 )%
Supramax                                     9,298                15,312           (6,014 )       (39.3 )%
Handymax                                     8,032                15,676           (7,644 )       (48.8 )%
Handysize                                    8,189                11,139           (2,950 )       (26.5 )%

Fleet average                                9,706                17,644           (7,938 )       (45.0 )%

Daily vessel operating
expenses (6)
Capesize                         $           5,448     $           5,477              (29 )        (0.5 )%
Panamax                                      5,385                 4,910              475           9.7 %
Supramax                                     4,878                 4,626              252           5.4 %
Handymax                                     5,339                 4,968              371           7.5 %
Handysize                                    4,678                 4,475              203           4.5 %

Fleet average                                5,038                 4,819              219           4.5 %

(2) 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. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.

(3) 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 unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.

(4) 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 number 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.

(5) We define TCE rates as net voyage revenue (voyage revenues less voyage expenses) divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a common 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 charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts.

                                    For the Years Ended December 31,
                                       2012                 2011

Voyage revenues (in thousands)   $         223,159    $         388,929
Voyage expenses (in thousands)               7,009                4,457
                                           216,150              384,472
Total available days                      22,270.3             21,791.0
Total TCE rate                   $           9,706    $          17,644

(6) We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period.

Operating Data



The following compares the components of our operating (loss) income and net
(loss) income for the years ended December 31, 2012 and 2011 and certain balance
sheet data as of December 31, 2012 and 2011.



                                      For the Years Ended December
                                                  31,                     Increase
                                         2012               2011         (Decrease)     % Change
Income Statement Data:
(U.S. dollars in thousands
except for per share amounts)
Revenues:
Voyage revenue                     $        223,159    $      388,929    $  (165,770 )      (42.6 )%
Service revenue                               3,294             3,285              9          0.3 %
Revenues                                    226,453           392,214       (165,761 )      (42.3 )%

Operating Expenses:
Voyage expenses                               7,009             4,457          2,552         57.3 %
Vessel operating expenses                   114,318           105,514          8,804          8.3 %
General, administrative and
management fees                              35,673            33,928          1,745          5.1 %
Depreciation and amortization               139,063           136,203          2,860          2.1 %
Other operating income                         (265 )            (527 )          262        (49.7 )%

Total operating expenses                    295,798           279,575         16,223          5.8 %

Operating (loss) income                     (69,345 )         112,639       (181,894 )     (161.6 )%
Other expense                               (87,209 )         (86,186 )       (1,023 )        1.2 %
(Loss) income before income
taxes                                      (156,554 )          26,453       (183,007 )     (691.8 )%
Income tax expense                           (1,222 )          (1,385 )          163        (11.8 )%

Net (loss) income                  $       (157,776 )  $       25,068       (182,844 )     (729.4 )%
Less: Net (loss) income
attributable to noncontrolling
interest                                    (12,848 )            (318 )      (12,530 )    3,940.3 %
Net (loss) income attributable
to Genco shipping & Trading
Limited                            $       (144,928 )  $       25,386       (170,314 )     (670.9 )%

Net (loss) income per share -
basic                              $          (3.47 )  $         0.72    $     (4.19 )     (581.9 )%
Net (loss) income per share -
diluted                            $          (3.47 )  $         0.72    $     (4.19 )     (581.9 )%
Dividends declared per share       $              -    $            -    $         -            -
Weighted average common shares
outstanding - Basic                      41,727,075        35,179,244      6,547,831         18.6 %
Weighted average common shares
outstanding - Diluted                    41,727,075        35,258,205      6,468,870         18.3 %
Balance Sheet Data:
(U.S. dollars in thousands, at
end of period)
Cash and cash equivalents          $         72,600    $      227,968    $  (155,368 )      (68.2 )%
Total assets                              2,843,371         3,119,277       (275,906 )       (8.8 )%
Total debt (current and
long-term, including
notes payable)                            1,524,357         1,694,393       (170,036 )      (10.0 )%
Total shareholders' equity                1,261,207         1,361,618       (100,411 )       (7.4 )%

Other Data:
(U.S. dollars in thousands)
Net cash (used in) provided by
operating activities               $        (18,834 )  $      158,183    $  (177,017 )     (111.9 )%
Net cash used in investing
activities                                   (3,669 )        (133,367 )      129,698        (97.2 )%
Net cash used in financing
activities                                 (132,865 )         (67,725 )      (65,140 )       96.2 %

EBITDA (1)                         $         82,537    $      249,080    $  (166,543 )      (66.9 )%

Results of Operations

VOYAGE 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 charterhire that our vessels earn, that, 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 drybulk shipping industry; and

† other factors affecting spot market charter rates for drybulk carriers.

During 2012, voyage revenues decreased by $165.8 million, or 42.6%, as compared to 2011. The decrease in revenue was due to lower charter rates achieved by substantially all of our vessels. Additionally, there was a decrease in revenues earned by Baltic Trading's vessels of $16.2 million due to lower spot market rates achieved.

The average TCE rate of our fleet decreased 45.0% to $9,706 a day during 2012 from $17,644 during 2011. The decrease in TCE rates resulted from lower charter rates achieved during 2012 versus 2011 for substantially all of the vessels in our fleet.

During 2012, the Baltic Dry Index, or BDI (a drybulk index) reached a low of 647 on February 3, 2012 and rebounded to yearly high of 1,165 on May 8, 2012. At December 31, 2011, the index was 1,738. In 2013, the index started off at 698 on January 2, 2013 and has since increased to 746 as of February 11, 2013.

The BDI displayed considerable weakness in the beginning of 2012 due to reduced iron ore cargoes recorded through the celebration of the Chinese New Year, as well as a high level of newbuilding vessel deliveries for the first two months of the year. While, the BDI showed a relative rebound from February through May of 2012, adverse market conditions primarily driven by high iron ore inventories and negative sentiment in regards to the growth pace of world economies, maintained the index at relatively low values through September of 2012. A relative rebound was experienced over the next two months with the BDI trading in the 1,000 point range. The year to date in 2013 has exhibited seasonal issues like those of the corresponding period in 2012, with seasonal factors contributing to the most recent downturn in rates, including: order timing issues for iron ore cargoes related to the celebration of the Chinese New Year; increased deliveries of newbuilding vessels for the month of January as compared to the previous three months; and short-term weather-related issues in Brazil and Australia, temporarily reducing iron ore output. Given the fact that approximately 85% of our vessels are chartered at spot market-related rates, including pool agreements, we expect that the recent downturn in rates will adversely impact our first quarter 2013 revenues and results of operation.

For 2012 and 2011, we had ownership days of 22,692.0 days and 21,897.5 days, respectively. The increase in ownership days is primarily a result of the delivery of four vessels during the year ended December 31, 2011. Our fleet utilization remained stable during both periods at 99.2%.

Please see pages 7-11 for table that sets forth information about the current employment of the vessels currently in our fleet as of February 27, 2012.

SERVICE REVENUES-

Service revenues consist of revenues earned from providing technical services to MEP pursuant to the agency agreement between us and MEP. These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services. The services are provided for a fee of $750 per ship per day. During the years ended December 31, 2012 and 2011, total service revenue was $3.3 million during both periods.

VOYAGE EXPENSES-

In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. There are certain other non-specified voyage expenses such as commissions, which are typically borne by us. Voyage expenses include port and canal charges, fuel (bunker) expenses and brokerage commissions payable to unaffiliated third parties. Port and canal charges and bunker expenses primarily increase in periods during which vessels are employed on voyage charters because these expenses are for the account of the vessel owner. At the inception of a time charter, we record the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses. Additionally, voyage expenses include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.

For 2012 and 2011, voyage expenses were $7,009 and $4,457, respectively. The increase is primarily due to $1.6 million of bunkers consumed during short-term time charters during 2012 for our vessels other than Baltic Trading's. Included in the $2.6 million increase in voyage expenses during 2012 as compared to 2011 is a $1.1 million increase in voyage expenses for Baltic Trading's vessels.

VESSEL OPERATING EXPENSES-

Vessel operating expenses increased by $8.8 million from $105.5 million to $114.3 million primarily due to the operation of a larger fleet, including the four vessels delivered during the year ended December 31, 2011. The increase . . .