UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
 
(Mark One)
o
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
 
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 
For the fiscal year ended December 31, 2022
OR
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 
OR
 
o
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 
Date of event requiring this shell company report  _______________________________
For the transition period from ____ to ____.
Commission file number
000-29106
 
 
Golden Ocean Group Limited
(Exact name of Registrant as specified in its charter)
 
(Translation of Registrant's name into English)
 
Bermuda
(Jurisdiction of incorporation or organization)
 
Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, Bermuda, HM 08
(Address of principal executive offices)
 
James Ayers, Telephone: (1) 441 2956935, Facsimile: (1) 441 295 3494,
Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Shares, Par Value $0.05 Per Share
GOGL
NASDAQ Global Select Market
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period
covered by the annual report.
200,485,621 Common Shares, Par Value $0.05 Per Share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes x
No o
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes o
No x
Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x
No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files).
Yes  x
No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an
emerging growth company. See definition of "large accelerated filer", "accelerated filer", and "emerging growth company" in
Rule 12b-2 of the Exchange Act.:
Large accelerated filer  x
Accelerated filer  o
Non-accelerated filer  o
Emerging growth company  ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if
the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term ''new or revised financial accounting standard'' refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements.
                                                                                                                                               o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b).                                                                                                                        o
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this
filing:
U.S. GAAP x
International Financial Reporting Standards as issued by the
International Accounting Standards Board o
Other o
If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow:
Item 17 o
Item 18 o
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
Yes ☐
No ☒
INDEX TO REPORT ON FORM 20-F
 
 
PAGE
 
 
 
 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters discussed in this annual report and the documents incorporated by reference may constitute forward-looking statements.
The Private Securities Litigation Reform Act of 1995 (the "PSLRA"), provides safe harbor protections for forward-looking
statements in order to encourage companies to provide prospective information about their business. Forward-looking
statements include, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or
performance, underlying assumptions and other statements, which are other than statements of historical facts.
We are taking advantage of the safe harbor provisions of the PSLRA and are including this cautionary statement in connection
with this safe harbor legislation. This annual report 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.
This annual report includes assumptions, expectations, projections, intentions and beliefs about future events. These statements
are intended as "forward-looking statements." We caution that assumptions, expectations, projections, intentions and beliefs
about future events may and often do vary from actual results and the differences can be material. When used in this document,
the words "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "projects," "likely," "will," "would," "could,"
"seeks," "potential," "continue," "contemplate," "possible," "might," "forecasts," "may," "should" and similar expressions or
phrases may identify forward-looking statements.
The forward-looking statements in this annual report are based upon various assumptions, including without limitation,
management's examination of historical operating trends, data contained in our records and 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. As a result, you are cautioned not to
rely on any forward-looking statements.
In addition to these important factors and matters discussed elsewhere herein, and in the documents incorporated by reference
herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-
looking statements include among other things:
•general market trends in the dry bulk industry, which is cyclical and volatile, including fluctuations in charter hire rates
and vessel values;
•a decrease in the market value of our vessels;
•changes in supply and demand in the dry bulk shipping industry, including the market for our vessels and the number
of newbuildings under construction;
•delays or defaults in the construction of our newbuildings could increase our expenses and diminish our net income
and cash flows;
•an oversupply of dry bulk vessels, which may depress charter rates and profitability;
•our future operating or financial results;
•our continued borrowing availability under our debt agreements and compliance with the covenants contained therein;
•our ability to procure or have access to financing, our liquidity and the adequacy of cash flows for our operations;
•the failure of our contract counterparties to meet their obligations, including changes in credit risk with respect to our
counterparties on contracts;
•the loss of a large customer or significant business relationship;
•the strength of world economies;
•the volatility of prevailing spot market and charter-hire charter rates, which may negatively affect our earnings;
•our ability to successfully employ our dry bulk vessels and replace our operating leases on favorable terms, or at all;
•changes in our operating expenses and voyage costs, including bunker prices, fuel prices (including increased costs for
low sulfur fuel), drydocking, crewing and insurance costs;
•the adequacy of our insurance to cover our losses, including in the case of a vessel collision;
•vessel breakdowns and instances of offhire;
•our ability to fund future capital expenditures and investments in the construction, acquisition and refurbishment of our
vessels (including the amount and nature thereof and the timing of completion of vessels under construction, the
delivery and commencement of operation dates, expected downtime and lost revenue);
•risks associated with any future vessel construction or the purchase of second-hand vessels;
•effects of new products and new technology in our industry, including the potential for technological innovation to
reduce the value of our vessels and charter income derived therefrom;
•the impact of an interruption or failure of our information technology and communications systems, including the
impact of cyber-attacks, upon our ability to operate;
i
•potential liability from safety, environmental, governmental and other requirements and potential significant additional
expenditures (by us and our customers) related to complying with such regulations;
•changes in governmental rules and regulations or actions taken by regulatory authorities and the impact of government
inquiries and investigations;
•the arrest of our vessels by maritime claimants;
•government requisition of our vessels during a period of war or emergency;
•our compliance with complex laws, regulations, including environmental laws and regulations and the U.S. Foreign
Corrupt Practices Act of 1977;
•potential difference in interests between or among certain members of our board of directors ("Board"), executive
officers, senior management and shareholders;
•our ability to attract, retain and motivate key employees;
•work stoppages or other labor disruptions by our employees or the employees of other companies in related industries;
•potential exposure or loss from investment in derivative instruments;
•stability of Europe and the Euro or the inability of countries to refinance their debts;
•the central bank policies intended to combat overall inflation and rising interest rates and foreign exchange rates;
•fluctuations in currencies;
•acts of piracy on ocean-going vessels, public health threats, terrorist attacks and international hostilities and political
instability;
•potential physical disruption of shipping routes due to accidents, climate-related (acute and chronic), political
instability, terrorist attacks, piracy, international sanctions or international hostilities, including the ongoing
developments in the Ukraine region;
•general domestic and international political and geopolitical conditions or events, including any further changes in
U.S. trade policy that could trigger retaliatory actions by affected countries;
•the impact of adverse weather and natural disasters;
•the impact of increasing scrutiny and changing expectations from investors, lenders and other market participants with
respect to our Environmental, Social and Governance ("ESG") policies;
•changes in seaborne and other transportation;
•the length and severity of epidemics and pandemics, including the ongoing global outbreak of COVID-19
("COVID-19") and governmental responses thereto and the impact on the demand for seaborne transportation in the
dry bulk sector;
•impacts of supply chain disruptions that began during the COVID-19 pandemic and the resulting inflationary
environment;
•fluctuations in the contributions of our joint ventures to our profits and losses;
•the potential for shareholders to not be able to bring a suit against us or enforce a judgement obtained against us in the
United States;
•our treatment as a “passive foreign investment company” by U.S. tax authorities;
•being required to pay taxes on U.S. source income;
•our operations being subject to economic substance requirements;
•the volatility of the stock price for our common shares, from which investors could incur substantial losses, and the
future sale of our common shares, which could cause the market price of our common shares to decline; and
•other factors discussed in "Item 3. Key Information D. Risk Factors." in this annual report.
We caution readers of this report not to place undue reliance on these forward-looking statements, which speak only as of their
dates. Except to the extent required by applicable law or regulation, we undertake no obligation to release publicly any revisions
to these forward-looking statements to reflect events or circumstances after the date of this annual report or to reflect the
occurrence of unanticipated events. These forward-looking statements are not guarantees of our future performance, and actual
results and future developments may vary materially from those projected in the forward-looking statements.
ii
PART I
ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3.  KEY INFORMATION
On October 7, 2014, Knightsbridge Shipping Limited, (''Knightsbridge''), and Golden Ocean Group Limited, (''Former Golden
Ocean''), entered into an agreement and plan of merger ("the Merger Agreement"), pursuant to which the two companies
agreed to merge ("the Merger"), with Knightsbridge serving as the surviving legal entity. The Merger was completed on March
31, 2015, and the name of Knightsbridge was changed to Golden Ocean Group Limited. The Merger has been accounted for as
a business combination using the acquisition method of accounting, with us selected as the accounting acquirer. See "Item 4.
Information on the Company - A. History and Development of the Company" for more information.
Throughout this report, unless the context otherwise requires, "Golden Ocean," the "Company," "we," "us" and "our" refer to
Golden Ocean Group Limited and its subsidiaries.
The term deadweight ton ("dwt"), is used in describing the capacity or size of vessels. Dwt, expressed in metric tons, each of
which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.
We own and operate dry bulk vessels of the following sizes:
•Newcastlemax, which are vessels with carrying capacities of between 200,000 dwt and 210,000 dwt;
•Capesize, which are vessels with carrying capacities of between 105,000 dwt and 200,000 dwt;
•Panamax (including Kamsarmax), which are vessels with carrying capacities of between 65,000 and 105,000 dwt; and
•Ultramax, which are vessels with carrying capacities of between 55,000 and 65,000 dwt.
Unless otherwise indicated, all references to "USD", "US$" and "$" in this report are to, and amounts are presented in U.S.
dollars.
A.  [RESERVED]
B.  CAPITALIZATION AND INDEBTEDNESS
Not applicable.
C.  REASONS FOR THE OFFER AND USE OF PROCEEDS
Not applicable.
D. RISK FACTORS
Our assets are primarily engaged in international dry bulk shipping. The risk factors summarized in the Cautionary Statement
Regarding Forward Looking Statements and Summary of Risk Factors and detailed below, summarize certain risks that may
materially affect our business, financial condition or results of operations. Unless otherwise indicated in this annual report on
Form 20-F, all information concerning our business and our assets is as of March 16, 2023.
Risk Factors Summary
The principal risks that could adversely affect, or have adversely affected, our Company’s business, operation results and
financial conditions are categorized and detailed below.
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•Risk Related to Our Industry
Our assets operate worldwide within the dry bulk shipping sector which is volatile and unpredictable. Several risk factors
including but not limited to our global and local market presence will impact our widespread operations. We are exposed to
regulatory, statutory, operational, technical, counterpart, environmental, and political risks, developments and regulations that
may impact and or disrupt our business. Details of specific risks relating to our industry are described below.
•Risks Related to our Business
Our Company is subject to a significant number of external and internal risks. We are a company with operations in many
different jurisdictions, markets and industries and with numerous employees, shareholders, customers and other stakeholders
having varying interests, and this broad exposure subjects us to significant risks. We also engage in activities, operations and
actions that could result in harm to our Company, and adversely affect our financial performance, position and our business.
Details of specific risks relating to our Company are described below.
•Risk Related to an Investment in Our Securities
Our common shares are subject to a significant number of external and internal risks. The market price of our common shares
has historically been unpredictable and volatile. As a holding company, we depend on the ability of our subsidiaries to
distribute funds to satisfy our financial and other obligations. As we are a foreign corporation, our shareholders may not have
the same rights as a shareholder in a U.S. corporation may have. In addition, our shareholders may not be able to bring suit
against us or enforce a judgement obtained in the U.S. against us since our offices and the majority of our assets are located
outside of the U.S. Furthermore, sales of our common shares or conversions of our convertible notes could cause the market
price of our common shares to decline. Details of specific risks relating to our common shares are described below.
Some risks are static while other risks may change and will vary depending on global and corporate developments that may
occur now or in the future. The risk factors below identify risks relating to our industry, Company and common shares. These
risks may not cover all risk factors applicable to the Company.
Risks Related to Our Industry
Charter hire rates for dry bulk vessels are volatile, have fluctuated significantly the past years and may decrease below our
break-even rates in the future, which may adversely affect our earnings, revenues and profitability and our ability to comply
with our loan covenants.
Substantially all of our revenues are derived from a single market, the dry bulk segment, and therefore our financial results are
subject to the cyclicality of the dry bulk shipping industry and any attendant volatility in charter hire rates and profitability. The
degree of charter hire rate volatility among different types of dry bulk vessels has varied widely, and time charter and spot
market rates for dry bulk vessels have in the recent past declined below operating costs of vessels.
Dry bulk market conditions remained volatile in 2022, reflecting the impact of a broad economic slowdown, easing of port
congestion, and the war in Ukraine. With the exception of a temporary sharp increase in rates in the immediate aftermath of
Russia’s invasion of Ukraine, rates generally trended downwards during the course of the year. In January 2023, we saw spot
rates fall to extremely low levels, following normal seasonal patterns as well as Chinese New Year, which has reduced
industrial activity in the region. Market conditions are expected to gradually improve over the course of 2023 as China’s re-
opening takes hold, however we cannot guarantee a trend towards recovery.
Charter rate fluctuations result from changes in the supply and demand for vessel capacity for the major commodities carried on
water internationally. Because the factors affecting the supply and demand for vessels are outside of our control and are
unpredictable, the nature, timing, direction and degree of changes in charter rates are also unpredictable. Since we charter our
vessels principally in the spot market, we are exposed to the cyclicality and volatility of the spot market. Please refer to risk
factor "We are dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our
earnings and ability to pay our dividends."
Furthermore, a significant decrease in charter rates would cause asset values to decline which may require us to record an
impairment charge in our consolidated financial statements, which in turn could adversely affect our financial results. In 2022
or 2021, we have not had any impairment losses on our leased assets. In 2020, we recorded an impairment loss of $94.2 million
2
on our leased vessels equal to the difference between the asset's carrying value and fair value, which was recorded as a result of
an impairment review performed on an asset by asset basis. Further, because the market value of our vessels may fluctuate
significantly, we may also incur losses when we sell vessels, which may adversely affect our earnings. If we sell vessels at a
time when vessel prices have fallen and before we have recorded an impairment adjustment to our financial statements, the sale
may be at less than the vessel's carrying amount in our financial statements, resulting in a loss and a reduction in earnings. For
instance, during the years ended December 31, 2021 and 2020, we recorded impairment losses of $4.2 million and $0.7 million,
respectively, related to sales of vessels. No impairment loss was recorded during the year ended December 31, 2022.
Factors that influence demand for vessel capacity include:
•supply of and demand for energy resources, commodities, and semi-finished and finished consumer and industrial
products;
•changes in the exploration or production of energy resources, commodities, and semi-finished and finished consumer
and industrial products;
•the location of regional and global exploration, production and manufacturing facilities;
•the location of consuming regions for energy resources, commodities, and semi-finished and finished consumer and
industrial products;
•the globalization of production and manufacturing;
•global and regional economic and political conditions, armed conflicts, including the ongoing conflict between Russia
and Ukraine and fluctuations in industrial and agricultural production;
•disruptions and developments in international trade;
•changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;
•international sanctions, embargoes, import and export restrictions, nationalizations, piracy and terrorist attacks;
•legal and regulatory changes including regulations adopted by supranational authorities and/or industry bodies, such as
safety and environmental regulations and requirements;
•weather and natural disasters;
•currency exchange rates, most importantly versus USD; and
•economic slowdowns caused by public health events such as the COVID-19 outbreak
Demand for our dry bulk oceangoing vessels is dependent upon economic growth in the world's economies, seasonal and
regional changes in demand and changes to the capacity of the global dry bulk fleet and the sources and supply of dry bulk
cargo transported by sea. Continued adverse economic, political or social conditions or other developments could further
negatively impact charter rates and therefore have a material adverse effect on our business results, results of operations and
ability to pay dividends.
Factors that influence the supply of vessel capacity include:
•the number of newbuilding orders and deliveries, including delays in vessel deliveries;
•the number of shipyards and ability of shipyards to deliver vessels;
•port or canal congestion;
•potential disruption, including supply chain disruptions, of shipping routes due to accidents or political events;
•scrapping of older vessels;
•speed of vessel operation;
•vessel casualties;
•technological advances in vessel design and capacity;
•the degree of scrapping or recycling of older vessels, depending, among other things, on scrapping or recycling rates
and international scrapping or recycling regulations;
•the price of steel and vessel equipment;
•product imbalances (affecting the level of trading activity) and developments in international trade;
•number of vessels that are out of service, namely those that are laid-up, drydocked, awaiting repairs or otherwise not
available for hire;
•availability of financing for new vessels and shipping activity;
•changes in national or international regulations that may effectively cause reductions in the carrying capacity of
vessels or early obsolescence of tonnage; and
•changes in environmental and other regulations that may limit the useful lives of vessels.
In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up
include newbuilding prices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating costs,
3
costs associated with classification society surveys, normal maintenance costs, insurance coverage costs, the efficiency and age
profile of the existing dry bulk fleet in the market, and government and industry regulation of maritime transportation practices,
particularly environmental protection laws and regulations. These factors influencing the supply of and demand for shipping
capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in
industry conditions.
Further, the market may fluctuate widely based on a variety of factors including changes in overall market movements, political
and economic events, wars, including the ongoing conflict between Russia and Ukraine, acts of terrorism, natural disasters
(including disease, epidemics and pandemics) and changes in interest rates or inflation rates.
Global economic conditions may negatively impact the dry bulk shipping industry and we face risks attendant in economic
and regulatory conditions around the world.
Major market disruptions and adverse changes in market conditions and regulatory climate in China, the United States, the
European Union and worldwide may adversely affect our business or impair our ability to borrow amounts under credit
facilities or any future financial arrangements.
Chinese dry bulk imports have accounted for the majority of global dry bulk transportation growth annually over the last
decade. Accordingly, our financial condition and results of operations, as well as our future prospects, would likely be hindered
by an economic downturn in any of these countries or geographic regions. While global economic activity levels, led by China,
are expected to improve following China relaxing its COVID-19 related restrictions, the outlook for China and the rest of the
world remains uncertain and dependent on the pace of post-COVID normalization of Chinese demand. Global vaccination rates
and effectiveness, together with the development of COVID-19 variants, could impact sustainability of this recovery, in
addition to dry-bulk-specific seasonality described in further detail below. In addition, the International Monetary Fund has
warned that continuing trade tensions, including significant tariff increases, between the United States and China could derail
recovery from the impacts of COVID-19. It is unknown whether and to what extent tariffs (or other laws or regulations) will be
adopted, or the effect that any such actions would have on us or our industry. If any new tariffs, legislation and/or regulations
are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade
actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business, financial
condition, and results of operations.
Broader economic slowdown, high energy prices and accelerating inflation, together with the concurrent volatility in charter
rates and vessel values, may have a material adverse effect on our results of operations, financial condition and cash flows and
could cause the price of our common shares to decline. An extended period of deterioration in the outlook for the world
economy could reduce the overall demand for our services and could also adversely affect our ability to obtain financing on
acceptable terms or at all.
Continuing concerns over COVID-19, inflation, rising interest rates, energy costs, geopolitical issues, including acts of war and
the availability and cost of credit have contributed to increased volatility and diminished expectations for the economy and the
markets going forward. These factors, combined with volatile oil prices, declining business and consumer confidence, have
precipitated fears of a possible economic recession. Domestic and international equity markets continue to experience
heightened volatility and turmoil. The weakness in the global economy has caused, and may continue to cause, a decrease in
worldwide demand for certain goods and, thus, shipping.
An over-supply of dry bulk vessel capacity may lead to reductions in charter hire rates, vessel values and profitability.
In the past, the supply of dry bulk vessels has outpaced vessel demand growth over the past few years, thereby causing
downward pressure on charter rates. In such cases, if the supply of dry bulk vessels is not fully absorbed by the market, charter
rates and value of the vessels may have a material adverse effect on our results of operations, our ability to pay dividends and
our compliance with current or future covenants in any of our agreements.
Risks involved with operating ocean-going vessels could result in the loss of life or harm to our seafarers, environmental
accidents or otherwise affect our business and reputation, which could have a material adverse effect on our results of
operations and financial condition.
The operation of an ocean-going vessel carries inherent risks. These risks include the possibility of:
•loss of life or harm to seafarers;
•a marine accident or disaster;
4
•terrorism;
•piracy or robbery;
•environmental accidents and pollution;
•cargo and property losses and damage; and
•business interruptions caused by mechanical failure, human error, war, political action in various countries, labor
strikes, or adverse weather conditions.
Any of these circumstances or events could increase our costs or lower our revenues. The involvement of our vessels in an
environmental disaster may harm our reputation as a safe and reliable dry bulk operator.
Our operations outside the United States expose us to global risks, such as political instability, terrorist or other attacks, war,
international hostilities and global public health concerns, which may affect the seaborne transportation industry and
adversely affect our business.
We are an international shipping company and primarily conduct most of our operations outside the United States, and our
business, results of operations, cash flows, financial condition and ability to pay dividends, if any, in the future may be
adversely affected by changing economic, political and government conditions in the countries and regions where our vessels
are employed or registered. Moreover, we operate in a sector of the economy that is likely to be adversely impacted by the
effects of political conflicts.
Currently, the world economy faces a number of challenges, including trade tensions between the United States and China,
stabilizing growth in China, continuing threat of terrorist attacks around the world, continuing instability and conflicts and other
ongoing occurrences in the Middle East, Ukraine, and in other geographic areas and countries, as well as the public health
concerns stemming from the ongoing COVID-19 outbreak.
In the past, political instability has also resulted in attacks on vessels, mining of waterways and other efforts to disrupt
international shipping, particularly in the Arabian Gulf region and most recently in the Black Sea in connection with the recent
conflicts between Russia and Ukraine. Acts of terrorism and piracy have also affected vessels trading in regions such as the
South China Sea and the Gulf of Aden off the coast of Somalia. Any of these occurrences could have a material adverse impact
on our future performance, results of operation, cash flows and financial position.
Beginning in February of 2022, President Biden and several European leaders announced various economic sanctions against
Russia in connection with the aforementioned conflicts in the Ukraine region, which may adversely impact our business.
The United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers and enforces multiple
authorities under which sanctions have been imposed on Russia, including: the Russian Harmful Foreign Activities sanctions
program, established by the Russia-related national emergency declared in Executive Order (E.O.) 14024 and subsequently
expanded and addressed through certain additional authorities, and the Ukraine-Russia-related sanctions program, established
with the Ukraine-related national emergency declared in E.O. 13660 and subsequently expanded and addressed through certain
additional authorities. The United States has also issued several Executive Orders that prohibit certain transactions related to
Russia, including the importation of certain energy products of Russian Federation origin, and investments in the Russian
energy sector by U.S. persons, among other prohibitions and export controls. The ongoing conflict could result in the
imposition of further economic sanctions or new categories of export restrictions against persons in or connected to Russia.
While in general much uncertainty remains regarding the global impact of the conflict in Ukraine, it is possible that such
tensions could adversely affect the Company’s business, financial condition, results of operation and cash flows.
Our business could also be adversely impacted by trade tariffs, trade embargoes or other economic sanctions that limit trading
activities by the United States or other countries against countries in the Middle East, Asia or elsewhere as a result of terrorist
attacks, hostilities or diplomatic or political pressures.
In addition, public health threats, such as COVID-19, influenza and other highly communicable diseases or viruses, outbreaks
of which have from time to time occurred in various parts of the world in which we operate, including China, Japan and South
Korea, which may even become pandemics, such as the COVID-19 virus, could lead to a significant decrease of demand for the
transportation of dry bulk cargoes. Such events may also adversely impact our operations, including timely rotation of our
crews, the timing of completion of any outstanding or future newbuilding projects or repair works in drydock as well as the
operations of our customers. Delayed rotation of crew may adversely affect the mental and physical health of our crew and the
safe operation of our vessels as a consequence.
Our financial results and operations have been and may continue to be adversely affected by the ongoing outbreak of
COVID-19, and related governmental responses thereto.
5
The COVID-19 pandemic and variants that have emerged have led a number of countries, ports and organizations to take
measures against its spread, including travel bans, quarantines, and other emergency public health measures, including
lockdown measures, which resulted in a significant reduction in global economic activity and extreme volatility in the global
financial markets. These measures have and  may continue to cause severe trade disruptions due to, among other things, the
unavailability of personnel, supply chain disruption, interruptions of production, delays in planned strategic projects and closure
of businesses and facilities. In 2022, a resurgence of COVID-19 cases led to China’s government to impose quarantine
regulations in certain provinces of China under China’s zero-COVID policy. However, by the end of 2022, many of these
measures, including China’s zero-COVID policy, many of these measures were relaxed. Nonetheless, we cannot predict
whether and to what degree emergency public health and other measures will be reinstituted in the event of any resurgence in
the COVID-19 virus or any variants thereof. If the COVID-19 pandemic continues on a prolonged basis or becomes more
severe, the adverse impact on the global economy and the rate environment for dry bulk and other cargo vessels may deteriorate
further and our operations and cash flows may be negatively impacted. Relatively weak global economic conditions during
periods of volatility have and may continue to have a number of adverse consequences for dry bulk and other shipping sectors,
as we experienced in 2020 and we may experience in the future including, among other things:
•low charter rates, particularly for vessels employed on short-term time charters or in the spot market;
•decreases in the market value of dry bulk vessels and limited second-hand market for the sale of vessels;
•limited financing for vessels;
•loan covenant defaults; and
•declaration of bankruptcy by certain vessel operators, vessel owners, shipyards and charterers.
Travel restrictions imposed on a global level also caused disruptions in scheduled crew changes on our vessels and delays in
carrying out of certain ship repairs and maintenance during 2022, which could also continue to affect our operations. Our
business and the shipping industry as a whole may continue to be impacted by a reduced workforce and delays of crew changes
as a result of quarantines applicable in several countries and ports, as well as delays in the construction of newbuild vessels,
scheduled drydockings, intermediate or special surveys of vessels and scheduled and unscheduled ship repairs and upgrades. In
addition, any case of COVID-19 amongst crew, could result in a quarantine period for that vessel and, in turn, loss of charter
hire and additional costs.
In 2022, we experienced and may continue to experience disruptions to our normal vessel operations caused by increased
deviation time associated with positioning our vessels to countries in which we can undertake a crew rotation in compliance
with measures to mitigate the spread of COVID-19. Delays in crew rotations have led to issues with crew fatigue and may
continue to do so, which may result in delays or other operational issues. We have had and expect to continue to have increased
expenses due to incremental fuel consumption and days in which our vessels are unable to earn revenue in order to deviate to
certain ports on which we would ordinarily not call during a typical voyage. We may also incur additional expenses associated
with testing, personal protective equipment, quarantines, and travel expenses such as airfare costs in order to perform crew
rotations in the current environment. In 2022, delays in crew rotations have also caused us to incur additional costs related to
crew bonuses paid to retain the existing crew members on board and may continue to do so.
Recently, Chinese authorities have removed a ban on crew changes in Chinese ports which may allow crewing operations to
return to more normal conditions. However, we cannot predict whether and when, if ever, the removal of such measures will
result in a timely return to more normal conditions. Additionally, we cannot predict whether and to what degree such measures
will be reinstituted in the event of any resurgence in the COVID-19 virus or any variants thereof. Following the relaxation of
many of China’s quarantine and travel restrictions in December 2022, significant COVID-19 surges were reported. Such surges
and potential continuing surges may affect our ability to return to more normal crewing conditions.
This and future epidemics may affect personnel operating payment systems through which we receive revenues from the
chartering of our vessels or pay for our expenses, resulting in delays in payments. We continue to focus on our employees well-
being, whilst making sure that our operations continue undisrupted and at the same time, adapting to the new ways of operating.
As such employees are encouraged and in certain cases required to operate remotely which significantly increases the risk of
cyber security attacks.
Prolongment of the COVID-19 pandemic could also impact credit markets and financial institutions and result in increased
interest rate spreads and other costs of, and difficulty in obtaining, bank financing and our ability to finance the purchase price
of vessel acquisitions, which could limit our ability to grow our business in line with our strategy.
Failure to control spread of the COVID-19 virus, including due to the emergence of new variants, could significantly impact
economic activity and demand for our drybulk products, which could further negatively affect our business, financial condition,
results of operations and cashflows.
6
Changes in the economic and political environment in China and policies adopted by the government to regulate its
economy may have a material adverse effect on our business, financial condition and results of operations.
The Chinese economy differs from the economies of western countries in such respects as structure, government involvement,
level of development, growth rate, capital reinvestment, allocation of resources, bank regulation, currency and monetary policy,
rate of inflation and balance of payments position. Since 1978, there has been an increasing level of freedom and autonomy in
areas such as allocation of resources, production, pricing and management and a gradual shift in emphasis to a ''market
economy'' and enterprise reform. The Chinese government adopts annual and five-year State Plans in connection with the
development of the economy. Although state-owned enterprises still account for a substantial portion of the Chinese industrial
output, in general, the Chinese government is reducing the level of direct control that it exercises over the economy through
State Plans and other measures. Many of the reforms are unprecedented or experimental and may be subject to revision, change
or abolition based upon the outcome of such experiments. The Chinese government may not continue to pursue a policy of
economic reform, and the level of imports to and exports from China could be adversely affected by the failure to continue
market reforms or changes to existing pro-export economic policies. For example, China imposes a tax for non-resident
international transportation enterprises engaged in the provision of services of passengers or cargo, among other items, in and
out of China using their own, chartered or leased vessels. The regulation may subject international transportation companies to
Chinese enterprise income tax on profits generated from international transportation services passing through Chinese ports.
This tax or similar regulations, such as the recently promoted environmental taxes on coal, by China may result in an increase in
the cost of raw materials imported to China and the risks associated with importing raw materials to China, as well as a decrease
in any raw materials shipped from our charterers to China. This could have an adverse impact on our charterers’ business,
operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to
renew and increase the number of their time charters with us. The level of imports to and exports from China may also be
adversely affected by changes in political, economic and social conditions (including a slowing of economic growth) or other
relevant policies of the Chinese government, such as changes in laws, regulations or export and import restrictions, internal
political instability, changes in currency policies, changes in trade policies and territorial or trade disputes. In recent years,
China and the United States have implemented certain increasingly protective trade measures with continuing trade tensions,
including significant tariff increases, between these countries. Although the United States and China successfully reached an
interim trade deal in January 2020 that de-escalated the trade tensions with both sides rolling back tariffs, the extent to which
the trade deal will be successfully implemented is unpredictable. A decrease in the level of imports to and exports from China
could adversely affect our business, operating results and financial condition.
In addition, in September 2020, President Xi Jinping committed his country to achieving carbon neutrality by 2060 at the UN
General Assembly. Carbon emissions are currently a prominent part of China’s economic and industrial structure as it relies
heavily on nonrenewable energy sources, generally lacks energy efficiency, and has a rapidly growing energy demand.
Depending on how China attempts to achieve carbon neutrality by 2060, including through the reduction in the use of coal, an
overall increase in the use of nonrenewable energy as part of the energy consumption mix and through other means and any
reduction in the demand for coal and related products could have a material adverse effect on our business, cash flows and
results of operations.
We conduct a substantial amount of business in China, which means the uncertainties in China’s legal system could have a
material adverse effect on our business, financial condition and results of operations.
Chinese administrative and court authorities have significant discretion in interpreting and implementing statutory and
contractual terms. Accordingly, it may be more difficult to evaluate the outcome of administrative and court proceedings than
in more developed legal systems and to ensure the level of legal protection we enjoy elsewhere. For example, we enter into
charters with Chinese customers, which charters may be subject to new regulations in China. We may, therefore, be required to
incur new or additional compliance or other administrative costs, and pay new taxes or other fees to the Chinese government.
Although the charters we enter into with Chinese counterparties are not governed by Chinese law, we may have difficulties
enforcing a judgment rendered by an arbitration tribunal or by an English or U.S. court (or other non-Chinese court) in China.
Changes in laws and regulations, including with regards to tax matters, and their implementation by local authorities could
affect our vessels that are either chartered to Chinese customers or that call to Chinese ports and our vessels that undergo
drydocking, or to which we install scrubbers, at Chinese shipyards, and the financial institutions with whom we have entered
into financing agreements, could have a material adverse effect on our business, results of operations and financial condition.
7
If our vessels call at ports located in countries or territories that are the subject of sanctions or embargoes imposed by the
U.S. government, the European Union, the United Nations or other governmental authorities, it could lead to monetary fines
or penalties and adversely affect our reputation and the market for our shares of common stock and its trading price.
None of our vessels called on ports located in countries or territories that are the subject of country-wide or territory-wide
sanctions or embargoes imposed by the U.S. government or other applicable governmental authorities (“Sanctioned
Jurisdictions”) in 2022 in violation of applicable sanctions or embargo laws. Although we intend to maintain compliance with
all applicable sanctions and embargo laws , and we endeavor to take precautions reasonably designed to mitigate such risks, it is
possible that in the future our vessels may call on ports located in Sanctioned Jurisdictions on charterers’ instructions and/or
without our consent. If such activities result in a violation of sanctions or embargo laws, we could be subject to monetary fines,
penalties, or other sanctions, and our reputation and the market for our common shares could be adversely affected.
The laws and regulations of these different jurisdictions vary in their application and do not all apply to the same covered
persons or proscribe the same activities. In addition, the sanctions and embargo laws and regulations of each jurisdiction may
be amended to increase or reduce the restrictions they impose over time, and the lists of persons and entities designated under
these laws and regulations are amended frequently. Moreover, most sanctions regimes provide that entities owned or controlled
by the persons or entities designated in such lists are also subject to sanctions. The U.S. and EU have both enacted new
sanctions programs in recent years. Additional countries or territories, as well as additional persons or entities within or
affiliated with those countries or territories, have, and in the future will, become the target of sanctions. These require us to be
diligent in ensuring our compliance with sanctions laws. Further, the U.S. has increased its focus on sanctions enforcement with
respect to the shipping sector. Current or future counterparties of ours may be affiliated with persons or entities that are or may
be in the future become the subject of sanctions imposed by the United States, EU and and/or other international bodies. If we
determine that such sanctions require us to terminate existing or future contracts to which we, or our subsidiaries, are party or if
we are found to be in violation of such applicable sanctions, our results of operations may be adversely affected, or we may
suffer reputational harm.
As a result of Russia’s actions in Ukraine, the U.S., EU and United Kingdom, together with numerous other countries, have
imposed significant sanctions on persons and entities associated with Russia and Belarus, as well as comprehensive sanctions
on certain areas within the Donbas region of Ukraine, and such sanctions apply to entities owned or controlled by such
designated persons or entities. These sanctions adversely affect our ability to operate in the region and also restrict parties
whose cargo we may carry.
Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations in 2022,
and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as
the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in
fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business,
and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain
institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that
have contracts with countries or territories identified by the U.S. government as state sponsors of terrorism. The determination
by these investors not to invest in, or to divest from, our common shares may adversely affect the price at which our common
shares trade. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions
that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. Investor perception of
the value of our common shares may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and
governmental actions in countries or territories that we operate in.
Compliance with safety and other vessel requirements imposed by classification societies may require additional investments
and could reduce our net cash flows and net income.
A classification society authorized by the country of registry of a commercial vessel must certify such vessel as being "in class"
and safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the
Safety of Life at Sea Convention. Most insurance underwriters make it a condition for insurance coverage and lending that a
vessel be certified “in class” by a classification society which is a member of the International Association of Classification
Societies, the IACS. The IACS has adopted harmonized Common Structural Rules, or “the Rules,” which apply to oil tankers
and bulk carriers contracted for construction on or after July 1, 2015. The Rules attempt to create a level of consistency between
IACS Societies. All of our vessels are certified as being “in class” by all the applicable Classification Societies (e.g., American
Bureau of Shipping, Lloyd's Register of Shipping).
Additionally a vessel must undergo annual surveys, intermediate surveys, drydockings and special surveys. Alternatively, a
vessel's machinery may be placed on a continuous survey cycle, under which the machinery would be surveyed periodically
8
over a five-year period. We expect our vessels to be on special survey cycles for hull inspection and continuous survey cycles
for machinery inspection.
Every vessel is also required to be drydocked every 30 to 36 months for inspection of the underwater parts of the vessel. If any
vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel
will be unable to carry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation
of certain covenants in our loan agreements. Any such inability to carry cargo or be employed, or any such violation of
covenants, could have a material adverse impact on our financial condition and results of operations.
Compliance with the above requirements may require significant additional investments by us, and we may incur significant
additional costs in meeting any new inspection requirements or rules. If any vessel does not maintain its class or fails any
annual, intermediate or special survey or drydocking, the vessel will be unable to trade between ports and will be unemployable
and uninsurable, which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to
carry cargo or be employed, or any such violation of covenants, could have a material adverse effect on our business, results of
operations, cash flows, financial condition and ability to pay dividends.
Further, government regulation of vessels, particularly in the areas of safety and environmental requirements, can be expected
to become stricter in the future and require us to incur significant capital expenditures on our vessels to keep them in
compliance.
Climate change and related legislation or regulations may adversely impact our business, including potential financial,
operational and physical impacts.
Growing concern about the sources and impacts of global climate change has led to the proposal or enactment of a number of
domestic and foreign legislative and administrative measures, as well as international agreements and frameworks, to monitor,
regulate and limit carbon dioxide and other greenhouse gases (“GHG”) emissions. Although the Paris Agreement, which was
adopted under the UN Framework Convention on Climate Change in 2015, does not specifically require controls on GHG
emissions from ships, it is possible that countries seek to impose such controls as they implement the Paris Agreement or any
new treaty that may be adopted in the future. In the European Union, emissions are regulated under the E.U. Emissions Trading
System (the “EU ETS”), an EU-wide trading scheme for industrial GHG emissions. While the shipping industry has not been
subject to the EU ETS in the past, on July 14, 2021, the European Commission formally proposed adding shipping to the list of
industries regulated. Under the proposal, the emissions from all voyages between E.U. ports and 50% of those from voyages
between the E.U. and elsewhere would be covered by the EU ETS. Shipping companies would need to buy allowances that
correspond to the emissions covered by the system. In addition, in June 2021, the IMO adopted amendments to MARPOL
Annex VI that entered into force on November 1, 2022 and require ships to reduce GHG emissions using technological and
operational approaches to improve energy efficiency and that provide important building blocks for future GHG reduction
measures.
These requirements and any passage of additional climate control legislation or other regulatory initiatives by the IMO, the
European Union, the United States or other countries where we operate, or any treaty adopted at the international level, that
restrict  emissions of GHGs could require us to make significant financial expenditures, including the installation of pollution
controls and the purchase of emissions credits, as well as have other impacts on our business or operations, that we cannot
predict with certainty at this time. While we have installed scrubbers on 34 vessels in our fleet pursuant to IMO sulfur cap
regulations, we may be required in the future to expend more capital to modify, upgrade or replace vessels as a result of new
climate GHG related rules and regulations. While IMO has set specific targets for 2030 and 2050 within the scope of its GHG
strategy, currently only short-term measures have been adopted thus far, which we do not believe at this time will require
material capital expenditures. Should additional medium-term measures be adopted and come into force, including market
based measures to put a price on carbon, we may need to incur additional capital expenditures to comply with the relevant GHG
emission regulations. Even in the absence of climate control legislation and regulations, our business and operations may be
materially affected to the extent that climate change results in sea level changes or more intense weather events.
Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our
ESG policies may impose additional costs on us or expose us to additional risks.
Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investor advocacy groups, certain
institutional investors, investment funds, lenders and other market participants are increasingly focused on ESG practices and in
recent years have placed increasing importance on the implications and social cost of their investments. The increased focus and
activism related to ESG and similar matters may hinder access to capital, as investors and lenders may decide to reallocate
capital or to not commit capital as a result of their assessment of a company’s ESG practices. Additionally, we may face
increasing pressures from investors, lenders and other market participants, who are increasingly focused on climate change, to
prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. Certain investors and lenders
may exclude transportation companies, such as us, from their investing portfolios altogether due to environmental, social and
governance factors. Companies which do not adapt to or comply with investor, lender or other industry shareholder
9
expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing
concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage, costs
related to litigation, and the business, financial condition, and/or stock price of such a company could be materially and
adversely affected.
In February 2021, the Acting Chair of the U.S. Securities and Exchange Commission (the “SEC”) issued a statement directing
the Division of Corporation Finance to enhance its focus on climate-related disclosure in public company filings and in March
2021 the SEC announced the creation of a Climate and ESG Task Force in the Division of Enforcement (the “Task Force”). The
Task Force’s goal is to develop initiatives to proactively identify ESG-related misconduct consistent with increased investor
reliance on climate and ESG-related disclosure and investment. To implement the Task Force’s purpose, the SEC has taken
several enforcement actions, with the first enforcement action taking place in May 2022, and proposed new rules. On March 21,
2022, the SEC proposed that all public companies are to include extensive climate-related information in their SEC filings. On
May 25, 2022, SEC proposed a second set of rules aiming to curb the practice of "greenwashing" (i.e., making unfounded
claims about one's ESG efforts) and would add proposed amendments to rules and reporting forms that apply to registered
investment companies and advisers, advisers exempt from registration, and business development companies. As of the date of
this annual report, these proposed rules have not yet taken effect.
Under local, national and foreign laws, as well as international treaties and conventions, we could incur material liabilities,
including clean-up obligations and natural resource damages liability, in the event that there is a release of hazardous materials
from our vessels or otherwise in connection with our operations. Environmental laws often impose strict liability for
remediation of spills and releases of oil and hazardous substances, which could subject us to liability, without regard to whether
we were negligent or at fault.
Many environmental requirements are designed to reduce the risk of pollution and our compliance with these requirements
could be costly. For example, Annex VI of the International Convention for the Prevention of Marine Pollution from Ships
(“MARPOL”), which instituted a global 0.5% (lowered from 3.5% as of January 1, 2020) sulfur cap on marine fuel consumed
by a vessel, unless the vessel is equipped with a scrubber As of March 16, 2023, 34 of our vessels have been equipped with
scrubbers to comply with this change in regulation ("Scrubber Program") and as of January 1, 2020, we have transitioned to
burning IMO compliant fuels in our non-scrubber equipped vessels as necessary.
In addition, regulations relating to ballast water discharge may adversely affect our revenues and profitability. The International
Maritime Organization (the “IMO”) has imposed updated guidelines for ballast water management systems specifying the
maximum amount of viable organisms allowed to be discharged from a vessel's ballast water. Depending on the date of the
International Oil Pollution Prevention (the “IOPP”) renewal survey, existing vessels constructed before September 8, 2017,
must comply with the updated D-2 standard on or after September 8, 2019. For most vessels, compliance with the D-2 standard
will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ships constructed on or after
September 8, 2017 are to comply with the D-2 standards upon delivery. We currently have two vessels in our fleet constructed
prior to September 8, 2017 that do not have ballast water management systems installed and will need such systems installed on
the first upcoming IOPP renewal in order to be D-2 compliant. Costs in order to become D-2 compliant for these vessels is
estimated to be approximately $1.0 million in total.
Furthermore, United States regulations are currently changing. Although the 2013 Vessel General Permit (''VGP'') program and
U.S. National Invasive Species Act (''NISA'') are currently in effect to regulate ballast discharge, exchange and installation, the
Vessel Incidental Discharge Act (''VIDA''), which was signed into law on December 4, 2018, requires that the U.S.
Environmental Protection Agency (“EPA”) develop national standards of performance for approximately 30 discharges, similar
to those found in the VPG within two years. On October 26, 2020, the EPA published a Notice of Proposed Rulemaking for
Vessel Incidental Discharge National Standards of Performance under VIDA. Within two years after the EPA publishes its final
Vessel Incidental Discharge National Standards of Performance, the U.S. Coast Guard must develop corresponding
implementation, compliance and enforcement regulations regarding ballast water. The new regulations could require the
installation of new equipment, which may cause us to incur substantial costs.
Please see “Item 4. Information on the Company—B. Business Overview—Environmental and Other Regulations in the
Shipping Industry” for a discussion of the environmental and other regulations applicable to us.
If we fail to comply with international safety regulations, we may be subject to increased liability, which may adversely affect
our insurance coverage and may result in a denial of access to, or detention in, certain ports.
The operation of our vessels is affected by the requirements set forth in the IMO's International Safety Management Code (the
“ISM Code”). The ISM Code requires shipowners, ship managers and bareboat charterers to develop and maintain an extensive
"Safety Management System" that includes the adoption of a safety and environmental protection policy setting forth
10
instructions and procedures for safe operation and describing procedures for dealing with emergencies. If we fail to comply
with the ISM Code, we may be subject to increased liability, or may invalidate existing insurance or decrease available
insurance coverage for our affected vessels, and such failure may result in a denial of access to, or detention in, certain ports.
The U.S. Coast Guard and European Union authorities enforce compliance with the ISM and International Ship and Port
Facility Security Code (the “ISPS Code”), and prohibit non-compliant vessels from trading in U.S. and European Union ports.
This could have a material adverse effect on our future performance, results of operations, cash flows and financial position.
Given that the IMO continues to review and introduce new regulations, it is impossible to predict what additional regulations, if
any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.
Because such conventions, laws, and regulations are often revised, we cannot predict the ultimate cost of complying with such
conventions, laws and regulations or the impact thereof on the resale prices or useful lives of our vessels. Additional
conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing
business and which may materially adversely affect our operations. We are required by various governmental and quasi-
governmental agencies to obtain certain permits, licenses, certificates, and financial assurances with respect to our operations.
Please see “Item 4. Information on the Company - B. Business Overview - Environmental and Other Regulations in the
Shipping Industry” for a discussion of the environmental and other regulations applicable to us.
Developments in safety and environmental requirements relating to the recycling of vessels may result in escalated and
unexpected costs.
The 2009 Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (the "Hong Kong
Convention"), aims to ensure ships, being recycled once they reach the end of their operational lives, do not pose any
unnecessary risks to the environment, human health and safety. The Hong Kong Convention has yet to be ratified by the
required number of countries to enter into force. Upon the Hong Kong Convention's entry into force, each ship sent for
recycling will have to carry an inventory of its hazardous materials. The hazardous materials, whose use or installation are
prohibited in certain circumstances, are listed in an appendix to the Hong Kong Convention. Ships will be required to have
surveys to verify their inventory of hazardous materials initially, throughout their lives and prior to the ship being recycled. The
Hong Kong Convention, which is currently open for accession by IMO member states, will enter into force 24 months after the
date on which 15 IMO member states, representing at least 40% of world merchant shipping by gross tonnage, have ratified or
approved accession. As of the date of this annual report, 20 countries have ratified or approved accession of the Hong Kong
Convention but the requirement of 40% of world merchant shipping by gross tonnage has not yet been satisfied.
On November 20, 2013, the European Parliament and the Council of the EU adopted the Ship Recycling Regulation, which
retains the requirements of the Hong Kong Convention and requires that certain commercial seagoing vessels flying the flag of
an EU member state may be recycled only in facilities included on the European list of permitted ship recycling facilities.
Apart from that, any vessel, including ours, is required to set up and maintain an Inventory of Hazardous Materials from
December 31, 2018 for EU flagged new ships and from December 31, 2020 for EU flagged existing ships and Non-EU flagged
ships calling at a port or anchorage of an EU member state. Such a system includes Information on the hazardous materials with
a quantity above the threshold values specified in relevant EU Resolution and are identified in ship’s structure and equipment.
This inventory should be properly maintained and updated, especially after repairs, conversions or unscheduled maintenance on
board the ship.
These regulatory requirements may lead to cost escalation by shipyards, repair yards and recycling yards. This may then result
in a decrease in the residual recycling value of a vessel, which could potentially not cover the cost to comply with the latest
requirements, which may have an adverse effect on our future performance, results of operations, cash flows and financial
position.
Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our customers' or our cash
flows.
Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime
lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien
by "arresting" or "attaching" a vessel through judicial or foreclosure proceedings. The arrest or attachment of one or more of
our vessels could interrupt the cash flow of the charterer and/or our cash flow and require us to pay a significant amount of
money to have the arrest lifted, which would have an adverse effect on our financial condition and results of operations. In
addition, in jurisdictions where the "sister ship" theory of liability applies, such as South Africa, a claimant may arrest the
vessel that is subject to the claimant's maritime lien and any "associated" vessel, which is any vessel owned or controlled by the
same owner. In countries with "sister ship" liability laws, claims may be asserted against us or any of our vessels for liabilities
11
of other vessels that we own. Under some of our present charters, if the vessel is arrested or detained as a result of a claim
against us, we may be in default of our charter and the charterer may terminate the charter, which will negatively impact our
revenues and cash flows.
Governments could requisition our vessels during a period of war or emergency resulting in a loss of earnings.
A government of a vessel's registry could requisition for title or seize one or more of our vessels. Requisition for title occurs
when a government takes control of a vessel and becomes the owner. Such government could also requisition one or more of
our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the
charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of
one or more of our vessels could have a material adverse effect on our business, results of operations, cash flows, financial
condition and ability to pay dividends.
Risks Related to Our Business
The market values of our vessels may decline, which could limit the amount of funds that we can borrow, cause us to breach
certain financial covenants in our credit facilities, or result in an impairment charge, and cause us to incur a loss if we sell
vessels following a decline in their market value.
The fair market values of dry bulk vessels, including our vessels, have generally experienced high volatility and may decline in
the future. The fair market value of vessels may increase and decrease depending on but not limited to the following factors:
•general economic and market conditions affecting the shipping industry;
•the balance between the supply of and demand for ships of a certain type;
•competition from other shipping companies;
•the availability and cost of ships of the required size and design;
•the availability of other modes of transportations;
•the cost of newbuildings;
•shipyard capacity;
•changes in environmental, governmental or other regulations that may limit the useful life of vessels, require costly
upgrades or limit their efficiency;
•distressed asset sales, including newbuilding contract sales below acquisition costs due to lack of financing;
•the types, sizes and ages of vessels, including as compared to other vessels in the market;
•the prevailing level of charter rates;
•the need to upgrade secondhand and previously owned vessels as a result of environmental, safety, regulatory or
charterer requirements; and
•technological advances in vessel design or equipment or otherwise.
During the period a vessel is subject to a charter, we might not be permitted to sell it to take advantage of increases in vessel
values without the charterer's consent. If we sell a vessel at a time when ship prices have fallen, the sale may be at less than the
vessel's carrying amount in our financial statements, with the result that we could incur a loss and a reduction in earnings. There
were no impairment losses recorded in 2022. During the year ended December 31, 2021 and 2020, we recorded impairment
losses of $4.2 million and $0.7 million, respectively, related to the sales of vessels. The carrying values of our owned and leased
vessels are reviewed quarterly or whenever events or changes in circumstances indicate that the carrying amount of the vessel
may no longer be recoverable. We assess recoverability of the carrying value by estimating the future net cash flows expected
to result from the vessel, including eventual disposal for owned vessels. If the future net undiscounted cash flows and the
estimated fair market value of the vessel are less than the carrying value, an impairment loss is recorded equal to the difference
between the vessel's carrying value and fair value. There were no impairment losses recorded in 2022 or 2021 for leased
vessels. In 2020, we recorded an impairment loss of $94.2 million on our leased vessels equal to the difference between the
asset's carrying value and fair value, which was recorded as a result of an impairment review performed on an asset by asset
basis. Any impairment charges incurred as a result of declines in charter rates and other market deterioration could negatively
affect our business, financial condition or operating results or the trading price of our common shares.
Conversely, if vessel values are elevated at a time when we wish to acquire additional vessels, the cost of acquisition may
increase and this could adversely affect our business, results of operations, cash flow and financial condition.
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We are dependent on spot charterers and any decrease in spot charter rates in the future may adversely affect our earnings
and ability to pay dividends.
As of December 31, 2022, 79 of the 84 vessels, which are owned, leased or chartered-in by us, were employed in the spot
market or on short-term or variable time rate charters, and we are therefore exposed to fluctuations in spot market charter rates.
We may also employ any additional vessels that we acquire to take delivery of in the spot market.
Although the number of vessels in our fleet that participate in the spot market will vary from time to time, we anticipate that a
significant portion of our fleet will participate in this market. As a result, our financial performance will be significantly
affected by conditions in the dry bulk spot market and only our vessels that operate under fixed-rate time charters may, during
the period such vessels operate under such time charters, provide a fixed source of revenue to us.
Historically, the dry bulk markets have been volatile as a result of the many conditions and factors that can affect the price,
supply of and demand for dry bulk capacity. Weak global economic trends may further reduce demand for transportation of dry
bulk cargoes over longer distances, which may materially affect our revenues, profitability and cash flows. The spot market
may fluctuate significantly based upon supply of and demand for vessels and cargoes. The successful operation of our vessels in
the competitive spot market depends upon, among other things, obtaining profitable spot charters and minimizing, to the extent
possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. The spot market is volatile and there
have been periods when spot rates have declined below the operating cost of vessels. If future spot market rates decline, then
we may be unable to operate our vessels trading in the spot market profitably, or meet our obligations, including payments on
indebtedness, or to pay dividends in the future. Furthermore, as charter rates for spot charters are fixed for a single voyage,
which may last up to several weeks during periods in which spot charter rates are rising, we will generally experience delays in
realizing the benefits from such increases.
Our ability to renew the charters on our vessels on the expiration or termination of our current charters, or on vessels that we
may acquire in the future, or the charter rates payable under any replacement charters and vessel values will depend upon,
among other things, economic conditions in the sectors in which our vessels operate at that time, changes in the supply and
demand for vessel capacity and changes in the supply and demand for the seaborne transportation of energy resources.
Our credit facilities impose operating and financial restrictions, which could significantly limit our ability to execute our
business strategy and increase the risk of default under our debt obligations.
As of December 31, 2022, we had $1,131.5 million of outstanding indebtedness under our credit facilities and debt securities, of
which $92.9 million was classified as current portion of long-term debt. We cannot assure you that we will be able to generate
cash flow in amounts that is sufficient to satisfy these obligations. If we are not able to satisfy these obligations, we may have to
undertake alternative financing plans or sell our assets. In addition, debt service payments under our credit facilities may limit
funds otherwise available for working capital, capital expenditures, payment of cash distributions and other purposes. If we are
unable to meet our debt obligations, or if we otherwise default under our credit facilities, our lenders could declare the debt,
together with accrued interest and fees, to be immediately due and payable and foreclose on our fleet, which could result in the
acceleration of other indebtedness that we may have at such time and the commencement of similar foreclosure proceedings by
other lenders.
Our credit facilities impose operating and financial restrictions on us that limit our ability, or the ability of our subsidiaries party
thereto, as applicable, to:
•pay dividends and make capital expenditures if there is an event of default under our credit facilities;
•incur additional indebtedness, including the issuance of guarantees, or refinance or prepay any indebtedness, unless
certain conditions exist;
•create liens on our assets, unless otherwise permitted under our credit facilities;
•change the flag, class or management of our vessels or terminate or materially amend the management agreement
relating to each vessel;
•merge or consolidate with, or transfer all or substantially all our assets to, another person; or
•enter into a new line of business.
In addition, our loan agreements, which are secured by liens on our vessels, contain various financial covenants. Among those
covenants are requirements that relate to our financial position, operating performance and liquidity. For example, there are
financial covenants that require us to maintain (i) an equity ratio fixing a minimum value of adjusted equity that is based, in
part, upon the market value of the vessels securing the loans, (ii) minimum levels of free cash, (iii) positive working capital, and
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(iv) a minimum value, or loan-to-value, covenant, which could require us to post collateral or prepay a portion of the
outstanding borrowings should the value of the vessels securing borrowings decrease below a required level.
Our ability to comply with the covenants and restrictions contained in our current or future credit facilities may be affected by
events beyond our control, including prevailing economic, financial and industry conditions, interest rate developments,
changes in the funding costs of our banks and changes in vessel earnings and asset valuations. If market or other economic
conditions deteriorate, our ability to comply with these covenants may be impaired. For example, the market value of dry bulk
vessels is likewise sensitive to, among other things, changes in the dry bulk market, with vessel values deteriorating in times
when dry bulk rates are falling or anticipated to fall and improving when charter rates are rising or anticipated to rise. Such
conditions may result in us not being in compliance with our loan covenants. In such a situation, unless our lenders are willing
to provide further waivers of covenant compliance or modifications to our covenants, or would be willing to refinance our
indebtedness, we may have to sell vessels in our fleet and/or seek to raise additional capital in the equity markets in order to
comply with our loan covenants. Furthermore, if the value of our vessels deteriorates significantly, we may have to record an
impairment adjustment in our financial statements, which would adversely affect our financial results and further hinder our
ability to raise capital. The fair market values of our vessels may decline, which could limit the amount of funds that we can
borrow, cause us to breach certain financial covenants in our credit facilities, or result in an impairment charge, and cause us to
incur a loss if we sell vessels following a decline in their market value.
If we are not in compliance with our covenants and are not able to obtain covenant waivers or modifications, our lenders could
require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our
indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet, or they could accelerate
our indebtedness, any of which would impair our ability to continue to conduct our business. If our indebtedness is accelerated,
we might not be able to refinance our debt or obtain additional financing and could lose our vessels if our lenders foreclose on
their liens. In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses
and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to comply with our
loan agreements.
Furthermore, certain of our credit facilities contain a cross-default provision that may be triggered by a default under one of our
other credit facilities. A cross-default provision means that a default on one loan would result in a default on certain of our other
loans. Because of the presence of cross-default provisions in certain of our credit facilities, the refusal of any one lender under
our credit facilities to grant or extend a waiver could result in certain of our indebtedness being accelerated, even if our other
lenders under our credit facilities have waived covenant defaults under the respective credit facilities. If our secured
indebtedness is accelerated in full or in part, it would be very difficult for us to refinance our debt or obtain additional financing
and we could lose our vessels securing our credit facilities if our lenders foreclose their liens, which would adversely affect our
ability to conduct our business.
Also, any contemplated vessel acquisitions will have to be at levels that do not impair the required ratios set out above. The
global economic downturn that occurred within the past several years had an adverse effect on vessel values, which may occur
again if an economic slowdown arises in the future. If the estimated asset values of the vessels in our fleet decrease, such
decreases may limit the amounts we can draw down under our future credit facilities to purchase additional vessels and our
ability to expand our fleet. In addition, we may be obligated to prepay part of our outstanding debt in order to remain in
compliance with the relevant covenants in our current or future credit facilities. If funds under our current or future credit
facilities become unavailable as a result of a breach of our covenants or otherwise, we may not be able to perform our business
strategy, which could have a material adverse effect on our business, results of operations and financial condition and our
ability to pay dividends.
Technological innovation and quality and efficiency requirements from our customers could reduce our charter hire income
and the value of our vessels.
Our customers have a high and increasing focus on quality and compliance standards with their suppliers across the entire
supply chain, including the shipping and transportation segment. Our continued compliance with these standards and quality
requirements is vital for our operations. The charter hire rates and the value and operational life of a vessel are determined by a
number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fuel
economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related
docking facilities and pass through canals and straits. The length of a vessel’s physical life is related to its original design and
construction, its maintenance and the impact of the stress of operations. We face competition from companies with more
modern vessels having more fuel efficient designs than our vessels, or eco vessels, and if new dry bulk vessels are built that are
more efficient or more flexible or have longer physical lives than the current eco vessels, competition from the current eco
vessels and any more technologically advanced vessels could adversely affect the amount of charter hire payments we receive
for our vessels and the resale value of our vessels could significantly decrease. Similarly, technologically advanced vessels are
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needed to comply with environmental laws the investment in which along with the foregoing could have a material adverse
effect on our results of operations, charter hire payments and resale value of vessels. This could have an adverse effect on our
results of operations, cash flows, financial condition and ability to pay dividends.
We may be unable to successfully compete with other vessel operators for charters, which could adversely affect our results
of operations and financial position.
The operation of dry bulk vessels and transportation of dry bulk cargoes is extremely competitive. Competition for the
transportation of dry bulk cargoes by sea is intense and depends on price, location, size, age, condition and the acceptability of
the vessel and its operators to the charterers. Through our operating subsidiaries, we compete with other vessel owners, and, to
a lesser extent, owners of other size vessels. The dry bulk market is highly fragmented. Due in part to the highly fragmented
market, competitors with greater resources could enter the dry bulk shipping industry and operate larger fleets through
consolidations or acquisitions and may be able to offer lower charter rates and higher quality vessels than we are able to offer.
As a result, we cannot assure you that we will be successful in finding continued timely employment of our existing vessels,
which could adversely affect our results of operations and financial position.
We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet
their obligations could cause us to suffer losses or otherwise adversely affect our business.
We have entered, and may enter in the future, into various contracts that are material to the operation of our business, including
charter parties with our customers, loan agreements with our lenders, and vessel management, pooling arrangements,
newbuilding contracts and other agreements with other entities, which subject us to counterparty risks. The ability and
willingness of each of the counterparties to perform its obligations under a contract with us or contracts entered into on our
behalf will depend on a number of factors that are beyond our control and may include, among other things, general economic
conditions, the condition of the shipping sector, the overall financial condition of the counterparty, charter rates received for our
vessels and the supply and demand for commodities. Should a counterparty fail to honor its obligations under any such contract
or attempt to negotiate our agreements, we could sustain significant losses which could have a material adverse effect on our
business, financial condition, results of operations, cash flows, ability to pay dividends to holders of our common shares in the
amounts anticipated or at all and compliance with covenants in our secured loan agreements. Charterers are sensitive to the
commodity markets and may be impacted by market forces affecting commodities and/or uncertain industry conditions. In
addition, in depressed market conditions, charterers may have incentive to renegotiate their charters or default on their
obligations under charters. Should a charterer in the future fail to honor its obligations under agreements with us, it may be
difficult to secure substitute employment for such vessel, and any new charter arrangements we secure on the spot market or on
charters may be at lower rates, depending on the then existing charter rate levels, compared to the rates currently being charged
for our vessels. In addition, if the charterer of a vessel in our fleet that is used as collateral under one or more of our loan
agreements defaults on its charter obligations to us, such default may constitute an event of default under our loan agreements,
which may allow the bank to exercise remedies under our loan agreements. Although we assess the creditworthiness of our
counterparties, a prolonged period of difficult industry conditions could lead to changes in a counterparty’s financial condition
and increase our exposure to credit risk and bad debts. In addition, we may offer extended payment terms to our customers in
order to secure contracts, which may lead to more frequent collection issues and adversely affect our financial results and
liquidity.
Volatility of LIBOR and potential changes of the use of LIBOR as a benchmark could affect our profitability, earnings and
cash flow.
As certain of our current financing agreements have, and our future financing arrangements may have, floating interest rates,
typically based on LIBOR, movements in interest rates could negatively affect our financial performance. The publication of
U.S. Dollar LIBOR for the one-week and two-month U.S. Dollar LIBOR tenors ceased on December 31, 2021, and the ICE
Benchmark Administration (“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the
United Kingdom’s Financial Conduct Authority, announced the publication of all other U.S. Dollar LIBOR tenors will cease on
June 30, 2023. The United States Federal Reserve concurrently issued a statement advising banks to cease issuing U.S. Dollar
LIBOR instruments after 2021. As such, any new loan agreements we enter into will not use LIBOR as an interest rate, and we
will need to transition our existing loan agreements from U.S. Dollar LIBOR to an alternative reference rate prior to June 2023.
In order to manage our exposure to interest rate fluctuations under LIBOR, SOFR or any other alternative rate, we have and
may from time to time use interest rate derivatives to effectively fix some of our floating rate debt obligations. No assurance
can however be given that the use of these derivative instruments, if any, may effectively protect us from adverse interest rate
15
movements. The use of interest rate derivatives may affect our results through mark to market valuation of these derivatives.
Also, adverse movements in interest rate derivatives may require us to post cash as collateral, which may impact our free cash
position. Interest rate derivatives may also be impacted by the transition from LIBOR to SOFR or other alternative rates.
Our financing agreements contain a provision requiring or permitting us to enter into negotiations with our lenders to agree to
an alternative interest rate or an alternative basis for determining the interest rate in anticipation of the cessation of LIBOR.
These clauses present significant uncertainties as to how alternative reference rates or alternative bases for determination of
rates would be agreed upon, as well as the potential for disputes or litigation with our lenders regarding the appropriateness or
comparability to LIBOR of any substitute indices, such as SOFR, and any credit adjustment spread between the two
benchmarks. In the absence of an agreement between us and our lenders, most of our financing agreements provide that LIBOR
would be replaced with some variation of the lenders’ cost-of-funds rate. The discontinuation of LIBOR presents a number of
risks to our business, including volatility in applicable interest rates among our financing agreements, potential increased
borrowing costs for future financing agreements or unavailability of or difficulty in attaining financing, which could in turn
have an adverse effect on our profitability, earnings and cash flow.
Certain of our directors, executive officers and major shareholders may have interests that are different from the interests of
our other shareholders.
Certain of our directors, executive officers and major shareholders may have interests that are different from, or are in addition
to, the interests of our other shareholders. In particular, Hemen Holding Limited ("Hemen") and certain related companies
whose shares are indirectly held by trusts settled by Mr. Fredriksen, our director, for the benefit of his family beneficially own
approximately 39.2% of our issued and outstanding common shares as of March 16, 2023.
Hemen is also a principal shareholder of a number of other large publicly traded and private companies involved in various
sectors of the shipping and oil services industries (the "Hemen Related Companies"). In addition, certain of our directors,
including Mr. Lorentzon, Mr. Fredriksen and Mr. O'Shaughnessy, also serve on the boards of one or more of the Hemen
Related Companies, including but not limited to, Frontline plc (NYSE:FRO) (“Frontline”), SFL Corporation Ltd. (NYSE:SFL)
(“SFL”), Archer Limited (OSE:ARCHER) (“Archer”), Avance Gas Holding Ltd. (OSE:AGAS) (“Avance”), ST Energy
Transition 1 Ltd. (NASDAQ: STET) (“ST ENERGY”') and Flex LNG Ltd. (OSE:FLNG) ("FLEX"). There may be real or
apparent conflicts of interest with respect to matters affecting Hemen and other Hemen Related Companies whose interests in
some circumstances may be adverse to our interests.
To the extent that we do business with or compete with other Hemen Related Companies for business opportunities, prospects
or financial resources, or participate in ventures in which other Hemen Related Companies may participate, these directors and
officers may face actual or apparent conflicts of interest in connection with decisions that could have different implications for
us. These decisions may relate to corporate opportunities, corporate strategies, potential acquisitions of businesses, newbuilding
acquisitions, inter-company agreements, the issuance or disposition of securities, the election of new or additional directors and
other matters. Such potential conflicts may delay or limit the opportunities available to us, and it is possible that conflicts may
be resolved in a manner adverse to us or result in agreements that are less favorable to us than terms that would be obtained in
arm's-length negotiations with unaffiliated third-parties.
For so long as Hemen owns a significant percentage of our outstanding ordinary shares, it may be able to exercise significant
influence over us and will be able to strongly influence the outcome of shareholder votes on other matters, including the
adoption or amendment of provisions in our articles of incorporation or bye-laws and approval of possible mergers,
amalgamations, control transactions and other significant corporate transactions. This concentration of ownership may have the
effect of delaying, deferring or preventing a change in control, merger, amalgamations, consolidation, takeover or other
business combination. This concentration of ownership could also discourage a potential acquirer from making a tender offer or
otherwise attempting to obtain control of us, which could in turn have an adverse effect on the market price of our ordinary
shares. Hemen, may not necessarily act in accordance with the best interests of other shareholders. The interests of Hemen may
not coincide with the interests of other holders of our ordinary shares. To the extent that conflicts of interests may arise, Hemen
may vote in a manner adverse to us or to you or other holders of our securities.
The increased costs associated with operating and maintaining secondhand vessels could adversely affect our earnings.
In general, the costs to operate and maintain a vessel in good operating condition increase with the age of the vessel. As of the
date of this annual report, the average age of our dry bulk vessel fleet is approximately 6.8 years. In February 2023, we entered
into an agreement for the acquisition of six scrubber fitted Newcastlemax vessels. After this acquisition, the average age of our
dry bulk fleet is estimated to be approximately 6.6 years. As our fleet ages, we will incur increased costs. Older vessels are
typically less fuel efficient than more recently constructed vessels due to improvements in engine and hull technology.
Governmental regulations, safety and other equipment standards related to the age of vessels may require expenditures for
alterations or the addition of new equipment to some of our vessels and may restrict the type of activities in which these vessels
16
may engage. We cannot assure you that, as our vessels age, market conditions will justify those expenditures or enable us to
operate our vessels profitably during the remainder of their useful lives. As a result, regulations and standards could have a
material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends.
Delays or defaults by the shipyards in the construction of our newbuildings could increase our expenses and diminish our
net income and cash flows.
As of December 31, 2022, we had contracts for ten newbuilding vessels. Vessel construction projects are generally subject to
risks of delay that are inherent in any large construction project, which may be caused by numerous factors, including shortages
of equipment, materials or skilled labor, unscheduled delays in the delivery of ordered materials and equipment or shipyard
construction, failure of equipment to meet quality and/or performance standards, financial or operating difficulties experienced
by equipment vendors or the shipyard, unanticipated actual or purported change orders, inability to obtain required permits or
approvals, design or engineering changes and work stoppages and other labor disputes, adverse weather conditions or any other
events of force majeure. Significant delays could adversely affect our financial position, results of operations and cash flows.
Additionally, failure to complete a project on time may result in the delay of revenue from that vessel, and we will continue to
incur costs and expenses related to delayed vessels, such as supervision expense and interest expense for the issued and
outstanding debt.
Changes in the price of fuel, or bunkers, may adversely affect our profits.
Since we primarily employ our vessels in the spot market, we expect that fuel, or bunkers, will typically be the largest expense
in our shipping operations for our vessels. The cost of fuel, including the fuel efficiency or capability to use lower priced fuel,
can also be an important factor considered by charterers in negotiating charter rates. While we believe that we can transfer
increased cost to the customer and will experience a competitive advantage as a result of increased bunker prices due to the
greater fuel efficiency of our vessels compared to the average global fleet, changes in the price of fuel may adversely affect our
profitability. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including
geopolitical developments, supply and demand for oil and gas, actions by the Organization of Petroleum Exporting Countries
(the "OPEC"), and other oil and gas producers, war and unrest in oil producing countries and regions, regional production
patterns and environmental concerns. Any future increase in the cost of fuel may reduce the profitability and competitiveness of
our business versus other forms of transportation, such as truck or rail.
In addition, if the recent sharp increase in crude oil prices and widening of the spread between the prices of high sulfur fuel and
low sulfur fuel resulting from conflict between Russia and Ukraine continues, this might lead to a decrease in the economic
viability of older vessels that lack fuel efficiency and a reduction of useful lives of these vessels.
Operational risks and damage to our vessels could adversely impact our performance.
Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters, bad weather and
other acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error,
war, terrorism, piracy, labor strikes, boycotts and other circumstances or events. These hazards may result in death or injury to
persons, loss of revenues or property, the payment of ransoms, environmental damage, higher insurance rates, damage to our
customer relationships and market disruptions, delay or rerouting. Epidemics and other public health incidents may also lead to
crew member illness, which can disrupt the operations of our vessels, or to public health measures, which may prevent our
vessels from calling on ports or discharging cargo in the affected areas or in other locations after having visited the affected
areas. Please also see "Our financial results and operations have been and may continue to be adversely affected by the ongoing
outbreak of COVID-19, and related governmental responses thereto."
If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are
unpredictable and may be substantial. We may have to pay drydocking costs that our insurance does not cover at all or in full.
The loss of revenues while these vessels are being repaired and repositioned, as well as the actual cost of these repairs, may
adversely affect our business and financial condition. In addition, space at drydocking facilities is sometimes limited and not all
drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking facility or our vessels
may be forced to travel to a drydocking facility that is not conveniently located relative to our vessels' positions. The loss of
earnings while these vessels are forced to wait for space or to travel to more distant drydocking facilities may adversely affect
our business and financial condition.
The operation of dry bulk vessels has certain unique operational risks. With a dry bulk vessel, the cargo itself and its interaction
with the ship can be a risk factor. By their nature, dry bulk cargoes are often heavy, dense and easily shifted, and react badly to
water exposure. In addition, dry bulk vessels are often subjected to battering treatment during unloading operations with grabs,
jackhammers (to pry encrusted cargoes out of the hold), and small bulldozers. This treatment may cause damage to the dry bulk
17
vessel. Dry bulk vessels damaged due to treatment during unloading procedures may be more susceptible to a breach at sea.
Hull breaches in dry bulk vessels may lead to the flooding of their holds. If flooding occurs in the forward holds, the bulk cargo
may become so waterlogged that the vessel's bulkheads may buckle under the resulting pressure leading to the loss of the dry
bulk vessel. These risks may also impact the risk of loss of life or harm to our crew.
If we are unable to adequately maintain or safeguard our vessels, we may be unable to prevent these events. Any of these
circumstances or events could negatively impact our business, financial condition or results of operations. In addition, the loss
of any of our vessels could harm our crew and our reputation as a safe and reliable vessel owner and operator.
We rely on our and our ship managers' information systems to conduct our business, and failure to protect these systems
against security breaches could adversely affect our business and results of operations, including on our vessels.
Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.
The safety and security of our vessels and efficient operation of our business, including processing, transmitting and storing
electronic and financial information, depend on computer hardware and software systems, which are increasingly vulnerable to
security breaches and other disruptions. Any significant interruption or failure of our information systems or any significant
breach of security could adversely affect our business and results of operations.
Our vessels rely on information systems for a significant part of their operations, including navigation, provision of services,
propulsion, machinery management, power control, communications and cargo management. We have in place safety and
security measures on our vessels and onshore operations to secure our vessels against cyber-security attacks and any disruption
to their information systems. However, these measures and technology may not adequately prevent security breaches despite
our continuous efforts to upgrade and address the latest known threats, which are constantly evolving and have become
increasingly sophisticated. If these threats are not recognized or detected until they have been launched, we may be unable to
anticipate these threats and may not become aware in a timely manner of such a security breach, which could exacerbate any
damage we experience. A disruption to the information system of any of our vessels could lead to, among other things,
incorrect routing, collision, grounding and propulsion failure.
Beyond our vessels, we rely on industry accepted security measures and technology to securely maintain confidential and
proprietary information maintained on our information systems. However, these measures and technology may not adequately
prevent security breaches. The technology and other controls and processes designed to secure our confidential and proprietary
information, detect and remedy any unauthorized access to that information were designed to obtain reasonable, but not
absolute, assurance that such information is secure and that any unauthorized access is identified and addressed appropriately.
Such controls may in the future fail to prevent or detect unauthorized access to our confidential and proprietary information. In
addition, the foregoing events could result in violations of applicable privacy and other laws. If confidential information is
inappropriately accessed and used by a third party or an employee for illegal purposes, we may be responsible to the affected
individuals for any losses they may have incurred as a result of misappropriation. In such an instance, we may also be subject to
regulatory action, investigation or liable to a governmental authority for fines or penalties associated with a lapse in the
integrity and security of our information systems.
We may be required to expend significant capital and other resources to protect against and remedy any potential or existing
security breaches and their consequences. A cyber-attack could also lead to litigation, fines, other remedial action, heightened
regulatory scrutiny and diminished customer confidence. In addition, our remediation efforts may not be successful and we may
not have adequate insurance to cover these losses.
The unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could
disrupt our business and could have a material adverse effect on our business, results of operations, cash flows and financial
condition.
Moreover, cyber-attacks against the Ukrainian government and other countries in the region have been reported in connection
with the ongoing conflicts between Russia and Ukraine. To the extent such attacks have collateral effects on global critical
infrastructure or financial institutions, such developments could adversely affect our business, operating results and financial
condition. At this time, it is difficult to assess the likelihood of such threat and any potential impact.
Further, in March 2022, the SEC proposed amendments to its rules on cybersecurity risk management, strategy, governance,
and incident disclosure. The proposed amendments, if adopted, would require us to report material cybersecurity incidents
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involving our information systems and periodic reporting regarding our policies and procedures to identify and manage
cybersecurity risks, amongst other disclosures.
Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and
cause disruption of our business.
International shipping is subject to security and customs inspection and related procedures in countries of origin, destination
and trans-shipment points. Under the U.S. Maritime Transportation Security Act of 2002 (“MTSA”), the U.S. Coast Guard
issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to
the jurisdiction of the United States and at certain ports and facilities. These security procedures can result in delays in the
loading, offloading or trans-shipment and the levying of customs duties, fines or other penalties against exporters or importers
and, in some cases, carriers. Future changes to the existing security procedures may be implemented that could affect the dry
bulk sector. These changes have the potential to impose additional financial and legal obligations on carriers and, in certain
cases, to render the shipment of certain types of goods uneconomical or impractical. These additional costs could reduce the
volume of goods shipped, resulting in a decreased demand for vessels and have a negative effect on our business, revenues and
customer relations.
Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties and an adverse effect
on our business.
We may operate in a number of countries throughout the world, including countries known to have a reputation for corruption.
We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business
conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977 (the
"FCPA"), and other anti-bribery legislation. We are subject, however, to the risk that we, our affiliated entities or our or their
respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws,
including FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of
operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In
addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting,
investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our
senior management. Though we have implemented monitoring procedures and required policies, guidelines, contractual terms
and audits, these measures may not prevent or detect failures by our agents or intermediaries regarding compliance.
We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material
adverse effect on us.
We may be, from time to time, involved in various litigation matters. These matters may include, among other things, contract
disputes, shareholder litigation, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort
claims, employment matters, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of
our business. Although we intend to defend these matters vigorously, we cannot predict with certainty the outcome or effect of
any claim or other litigation matter, and the ultimate outcome of any litigation or the potential costs to resolve them may have a
material adverse effect on us. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent
which may have a material adverse effect on our financial condition.
We may not have adequate insurance to compensate us if our vessels are damaged or lost.
In the event of a casualty to a vessel or other catastrophic event, we rely on our insurance to pay the insured value of the vessel
or the damages incurred. We procure insurance for our fleet against those risks that we believe companies in the shipping
industry commonly insure. These include hull and machinery insurance, protection and indemnity insurance, including
environmental damage and pollution insurance coverage, freight, demurrage and defense insurance and war risk insurance. We
can give no assurance that we will be adequately insured against all risks and we cannot guarantee that any particular claim will
be paid, even if we have previously recorded a receivable or revenue in respect of such claim. Our insurance policies may
contain deductibles for which we will be responsible and limitations and exclusions, which may increase our costs or lower our
revenues.
We cannot assure you that we will be able to obtain adequate insurance coverage for our vessels in the future or renew our
existing policies on the same or commercially reasonable terms, or at all. For example, more stringent environmental
regulations have in the past led to increased costs for, and in the future may result in the lack of availability of, protection and
indemnity insurance against risks of environmental damage or pollution. Any uninsured or underinsured loss could harm our
business, results of operations, cash flows, financial condition and ability to pay dividends. In addition, our insurance may be
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voidable by the insurers as a result of certain of our actions, such as our vessels failing to maintain certification with applicable
maritime self-regulatory organizations. Further, we cannot assure you that our insurance policies will cover all losses that we
incur, or that disputes over insurance claims will not arise with our insurance carriers. Any claims covered by insurance would
be subject to deductibles, and since it is possible that a large number of claims may be brought, the aggregate amount of these
deductibles could be material. In addition, our insurance policies may be subject to limitations and exclusions, which may
increase our costs or lower our revenues, thereby possibly having a material adverse effect on our business, results of
operations, cash flows and financial condition and ability to pay dividends.
We may be subject to calls because we obtain some of our insurance through protection and indemnity associations.
We may be subject to increased premium payments, or calls, if the value of our claim records, the claim records of our fleet
managers, and/or the claim records of other members of the protection and indemnity associations through which we receive
insurance coverage for tort liability (including pollution-related liability) significantly exceed projected claims. In addition, our
protection and indemnity associations may not have enough resources to cover claims made against them. Our payment of these
calls could result in significant expense to us, which could have a material adverse effect on our business, results of operations,
cash flows, financial condition and ability to pay dividends.
United States tax authorities could treat us as a "passive foreign investment company", which could have adverse United
States federal income tax consequences to United States shareholders.
A foreign corporation will be treated as a "passive foreign investment company" ("PFIC"), for United States federal income tax
purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of "passive income" or (2) at
least 50% of the average value of the corporation's assets produce or are held for the production of those types of "passive
income". For purposes of these tests, "passive income" includes dividends, interest, and gains from the sale or exchange of
investment property and rents and royalties other than rents and royalties which are received from unrelated parties in
connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of
services does not constitute "passive income". United States shareholders of a PFIC are subject to a disadvantageous United
States federal income tax regime with respect to the distributions they receive from the PFIC and the gain, if any, they derive
from the sale or other disposition of their shares in the PFIC.
Based on our current and proposed method of operation, we do not believe that we are or that we have been or will be a PFIC
with respect to any taxable year. In this regard, we intend to treat the gross income we derive or are deemed to derive from our
time chartering and voyage chartering activities as services income, rather than rental income. Accordingly, we believe that our
income from these activities does not constitute "passive income", and the assets that we own and operate in connection with
the production of that income do not constitute assets that produce, or are held for the production of, "passive income".
Although there is no direct legal authority under the PFIC rules addressing our method of operation there is substantial legal
authority supporting our position consisting of case law and the United States Internal Revenue Service (the "IRS"),
pronouncements concerning the characterization of income derived from time charters and voyage charters as services income
for other tax purposes. However, it should be noted that there is also authority that characterizes time charter income as rental
income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of
law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no
assurance can be given that we would not constitute a PFIC for any future taxable year if there were to be changes in the nature
and extent of our operations.
If the IRS were to find that we are or have been a PFIC for any taxable year, our United States shareholders will face adverse
United States federal income tax consequences. Under the PFIC rules, unless those shareholders make an election available
under United States Internal Revenue Code of 1986, as amended (the "Code") (which election could itself have adverse
consequences for such shareholders, as discussed below under "Taxation-United States Federal Income Tax Considerations"),
such shareholders would be liable to pay United States federal income tax at the then prevailing income tax rates on ordinary
income plus interest upon excess distributions and upon any gain from the disposition of our common shares, as if the excess
distribution or gain had been recognized ratably over the shareholder's holding period of our common shares.
We may not qualify for an exemption under Section 883 of the Code, and may therefore have to pay tax on United States
source income, which would reduce our earnings.
Under the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as ourselves and our
subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States,
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may be subject to a 4% United States federal income tax without allowance for deduction, unless that corporation qualifies for
exemption from tax under Section 883 of the Code and the applicable Treasury Regulations promulgated thereunder.
We believe that we and each of our subsidiaries qualified for this statutory tax exemption for our taxable year ending on
December 31, 2022 and we will take this position for United States federal income tax return reporting purposes. However,
there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption for future taxable
years and thereby become subject to United States federal income tax on our United States source shipping income. For
example, we would no longer qualify for exemption under Section 883 of the Code for a particular taxable year if certain non-
qualified shareholders with a 5% or greater interest in our common shares owned, in the aggregate, 50% or more of our
outstanding common shares for more than half the days during the taxable year. It is possible that we could be subject to this
rule for our taxable year ending on or after December 31, 2023. Due to the factual nature of the issues involved, there can be no
assurances on our tax-exempt status or that of any of our subsidiaries.
If we or our subsidiaries are not entitled to exemption under Section 883 of the Code for any taxable year, we, or our
subsidiaries, could be subject during those years to an effective 2% United States federal income tax on gross shipping income
derived during such a year that is attributable to the transport of cargoes to or from the United States. The imposition of this tax
would have a negative effect on our business. However, the amount of our shipping income that would be subject to this tax has
historically not been material.
Because our offices and most of our assets are outside the United States, you may not be able to bring suit against us, or
enforce a judgment obtained against us in the United States.
Our executive offices, administrative activities and the majority of our assets are located outside the United States. In addition,
most of our directors and officers are not United States residents. As a result, it may be more difficult for investors to effect
service of process within the United States upon us, or to enforce both in the United States and outside the United States
judgments against us in any action, including actions predicated upon the civil liability provisions of the United States federal
securities laws.
As an exempted company incorporated under Bermuda law, our operations may be subject to economic substance
requirements.
The Economic Substance Act 2018 and the Economic Substance Regulations 2018 of Bermuda (the ''Economic Substance Act''
and the ''Economic Substance Regulations'' respectively) became operative on December 31, 2018. The Economic Substance
Act applies to every registered entity in Bermuda that engages in a relevant activity and requires that every such entity shall
maintain a substantial economic presence in Bermuda. Relevant activities for the purposes of the Economic Substance Act are
banking business, insurance business, fund management business, financing and leasing business, headquarters business,
shipping business, distribution and service center business, intellectual property holding business and conducting business as a
holding entity.
The Bermuda Economic Substance Act provides that a registered entity that carries on a relevant activity complies with
economic substance requirements if (a) it is directed and managed in Bermuda, (b) its core income-generating activities (as may
be prescribed) are undertaken in Bermuda with respect to the relevant activity, (c) it maintains adequate physical presence in
Bermuda, (d) it has adequate full time employees in Bermuda with suitable qualifications and (e) it incurs adequate operating
expenditure in Bermuda in relation to the relevant activity.
A registered entity that carries on a relevant activity is obliged under the Bermuda Economic Substance Act to file a declaration
in the prescribed form (the “Declaration”) with the Registrar of Companies (the “Registrar”) on an annual basis.
If we fail to comply with our obligations under the Bermuda Economic Substance Act or any similar law applicable to us in any
other jurisdictions, we could be subject to financial penalties and spontaneous disclosure of information to foreign tax officials
in related jurisdictions and may be struck from the register of companies in Bermuda or such other jurisdiction. Any of these
actions could have a material adverse effect on our business, financial condition and results of operations.
Risks Related to an Investment in Our Securities
Our share price may be highly volatile and future sales of our common shares could cause the market price of our common
shares to decline.
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Our common shares commenced trading on the NASDAQ Global Select Market (the "NASDAQ") in February 1997 and
currently trade under the symbol "GOGL". Beginning on April 7, 2015, our shares have traded on the Oslo Stock Exchange (the
"OSE"), under the ticker code "GOGL". We cannot assure you that an active and liquid public market for our common shares
will continue. The market price of our common shares has historically fluctuated over a wide range and may continue to
fluctuate significantly in response to many factors, such as actual or anticipated fluctuations in our operating results, changes in
financial estimates by securities analysts, economic and regulatory trends, general market conditions, rumors and other factors,
many of which are beyond our control. If the volatility in the broad stock market worsens, it could have an adverse effect on the
market price of our common shares and impact a potential sale price if holders of our common shares decide to sell their shares.
The dry bulk shipping industry has been highly unpredictable and volatile, and this is often reflected in the market for common
shares of companies in this industry. Further, we believe volatility in the market for our common shares could result from
market and trading dynamics unrelated to our operating business or prospects and outside of our control. Investors may
purchase our common shares to hedge existing exposure in our common shares or to speculate on the price of our common
shares. Speculation on the price of our common shares may lead to volatile price movements in our shares that are not directly
correlated to the performance or prospects of our company and could cause purchasers of our common shares to incur
substantial losses.
In addition, some companies that have experienced volatility in the market price of their common shares have been subject to
securities class-action litigation. If instituted against us, such litigation could result in substantial costs and diversion of
management’s attention and resources, which could materially and adversely affect our business, financial condition, operating
results and growth prospects. There can be no guarantee that the price of our common shares will remain at or rise above its
post-distribution level or that future sales of our common shares will not be at prices lower than those initially distributed or
sold to investors.
We are thus unable to predict when such instances of trading volatility will occur or how long such dynamics may last.
Therefore, we cannot assure you that you will be able to sell any of our common shares you may have purchased at a price
greater than or equal to its original purchase price, or that you will be able to sell our common shares at all.
Future issuance of shares or other securities may dilute the holdings of shareholders and could materially affect the price of
our common shares.
In the future we may offer additional shares or other securities to finance new projects, in connection with unanticipated
liabilities or expenses or for any other purposes. Any such additional offering could reduce the proportionate ownership and
voting interests of holders of our common shares, as well as our earnings per share and our net asset value per share, which
could have a material adverse effect on the market price of our common shares. These issuances and sales could also impair our
ability to raise additional capital through the sale of our equity securities in the future.
We cannot assure you that our Board will declare dividend payments in the future.
The declaration and payment of dividends, if any, will always be subject to our board of director's discretion. The timing and
amount of any dividends declared will depend on, among other things, our earnings, financial condition and cash requirements
and availability, our ability to obtain debt and equity financing on acceptable terms as contemplated by our growth strategy. In
addition, other external factors, such as our lenders imposing restrictions on our ability to pay dividends under the terms of
future loan facilities we may enter into, may limit our ability to pay dividends.
Our growth strategy contemplates that we will finance the acquisition of additional vessels through a combination of debt and
equity financing on terms acceptable to us. If financing is not available to us on acceptable terms, our Board may determine to
finance or refinance acquisitions with cash from operations, which could also reduce or even eliminate the amount of cash
available for the payment of dividends.
ITEM 4.  INFORMATION ON THE COMPANY
A.  HISTORY AND DEVELOPMENT OF THE COMPANY
History
On September 18, 1996, we were incorporated in Bermuda under the name Knightsbridge Tankers Limited as an exempted
company pursuant to the Bermuda Companies Act of 1981. Following the completion of the Merger with the Former Golden
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Ocean, a dry bulk shipping company based in Bermuda and listed on the Oslo Stock Exchange ("OSE"), we changed our name
to Golden Ocean Group Limited.
Our common shares currently trade on the NASDAQ and the OSE under the ticker code "GOGL".
We are engaged primarily in the ownership and operation of dry bulk vessels. We operate through subsidiaries located in
Bermuda, Liberia, the Marshall Islands, Norway, Singapore and UK. We are also involved in the charter, purchase and sale of
vessels.
Historical business purpose and the Merger
We were originally established for the purpose of owning and operating five very large crude oil carriers ("VLCCs"). However,
we expanded our business to the dry bulk segment from 2009 and onwards by acquiring secondhand vessels and by entering
into newbuilding contracts. Between 2007 and 2013, we sold our five VLCCs and subsequently discontinued our crude oil
tanker operations. In 2014, we made significant expansion in the dry bulk segment by acquiring 29 special purpose companies,
from Frontline 2012 Ltd ("Frontline 2012"), each owning a dry bulk newbuilding, all of which were delivered to us between
2014 and 2018.
On October 7, 2014, we and the Former Golden Ocean entered into the Merger Agreement. The Merger was approved by our
shareholders and the shareholders of the Former Golden Ocean at separate special general meetings held on March 26, 2015. In
addition, our shareholders approved the adoption of the Amended and Restated Bye-laws. As of March 31, 2015, and following
completion of the Merger, we owned 47 vessels and had 25 vessels under construction.
Our Acquisitions, Disposals and Newbuildings
We entered into the following acquisitions and disposals in 2020, 2021, 2022 and 2023 (to date):
In December 2020, we entered into an agreement to sell Golden Shea, a Panamax vessel, to an unrelated third party for $9.6
million. The vessel was delivered to its new owner in March 2021.
In January 2021, we entered into an agreement to sell Golden Saguenay, a Panamax vessel, to an unrelated third party for $8.4
million. The vessel was delivered to its new owners and final payment received in April 2021.
In February 2021, we entered into an agreement to acquire 15 modern dry bulk vessels and three newbuildings for a total
consideration of $752.0 million from affiliates of Hemen, our largest shareholder (the “Vessel Acquisitions”). We took delivery
of all vessels and newbuildings in the first six months of 2021.
In the second half of 2021, we entered into agreements to construct a total of seven Kamsarmax vessels. The vessels have
various delivery dates, with the earliest expected to be delivered in the second quarter of 2023 and the latest expected to be
delivered by the first quarter of 2024. Remaining capital commitments as of the date of this report are $154.5 million net of
commissions. Capital commitments will be financed through the sales proceeds from older vessels, with operating cash flows
and debt financing to be established closer to the delivery of the newbuildings.
In November 2021, we sold two older Panamax vessels, Golden Opportunity and Golden Endurer, to unrelated third parties for
$37.2 million.
In February 2022, we entered into an agreement to sell en-bloc three older Panamax vessels, Golden Empress, Golden
Enterprise and Golden Endeavour to an unrelated third party for $52.0 million. The vessels were delivered to their new owner
in April and May 2022 and the total net cash flows from the transaction after repayment of debt was approximately $33.1
million. We recorded a gain of $9.5 million from the sale in the second quarter of 2022.
In June 2022, we entered into agreements to construct a total of three additional Kamsarmax vessels. The vessels are expected
to be delivered to us during 2024. Remaining capital commitments as of the date of this annual report are $87.3 million net of
commissions. Capital commitments will be financed through the sales proceeds from older vessels, with operating cash flows
and debt financing to be established closer to the delivery of the newbuildings.
In June 2022, we entered into an agreement to sell en-bloc two Ultramax vessels, Golden Cecilie and Golden Cathrine to an
unrelated third party for $63.0 million. The vessels were delivered to their new owner in the third quarter of 2022 and the total
net cash flows from the transaction after repayment of debt was approximately $42.8 million. We recorded a gain of $21.9
million from the sale in 2022.
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In November 2022, we entered into an agreement to sell two Panamax vessels, Golden Ice and Golden Strength, to an unrelated
third party for an aggregate sales price of $30.3 million. Golden Ice was delivered to its new owner in December 2022, at which
time we recorded a gain of approximately $2.8 million and received cash proceeds net of debt of $9.9 million. Golden Strength
was delivered to its new owner in January 2023, and we expect to record a gain of approximately $2.7 million and receive cash
net of  commissions of $16.5 million.
In February 2023, we signed agreements for the acquisition of six scrubber fitted Newcastlemax vessels from an unrelated third
party for a total consideration of $291.0 million. The transaction is expected to be closed by June 2023. The vessels have an
average age of around 2.5 years and will be chartered back to the seller for a period of approximately 36 months at an average
fixed net TCE rate of approximately $21,000 per day. In March 2023, we entered into a $233.0 million two-year credit facility
to part finance the transaction. The facility has an interest of SOFR plus a margin of 1.90% per annum. The remaining part of
acquisition price will be financed with cash on hand.
B.  BUSINESS OVERVIEW
We are an international shipping company that owns and operates a fleet of dry bulk vessels, comprising of Newcastlemax,
Capesize, Panamax and Ultramax vessels. Our vessels transport a broad range of major and minor bulk commodities, including
ores, coal, grains and fertilizers, along worldwide shipping routes. Our vessels operate in the spot and time charter markets.
As of March 16, 2023, we owned 74 dry bulk vessels and had construction contracts for ten newbuildings. Each vessel is owned
and operated by one of our subsidiaries and is flagged either in the Marshall Islands, Hong Kong or Panama. In addition, we
had nine vessels chartered-in (of which seven and one are chartered in on finance leases and operating leases, respectively, from
SFL and one chartered in on an operating lease from an unrelated third party). Five of our vessels are chartered-out on fixed
rate time charters, 37 of our vessels are chartered out on index linked rate time charters and the remaining 41 vessels operate in
the spot market.
We own various vessel owning and operating subsidiaries. Our operations take place substantially outside of the United States.
Our subsidiaries, therefore, own and operate vessels that may be affected by changes in foreign governments and other
economic and political conditions. Our vessels operate worldwide and as a result, our management does not, and did not,
evaluate performance by geographical region because this information is not meaningful.
The dry bulk shipping industry is highly cyclical, experiencing volatility in profitability, vessel values and freight rates. Freight
rates are strongly influenced by the supply of dry bulk vessels and the demand for dry bulk seaborne transportation.
Our Business Strategy
Our business strategy centers around the largest sizes of dry bulk carriers (Capesize and Panamax). Another element of our
strategy is to maintain a low average fleet age, ensuring low operational costs and a low carbon footprint.
Shipowners essentially have two options: (i) fix the vessels on long-period charters at fixed-paying rates, or, (ii) be exposed to
the daily spot market rates.
We decide our fixed-paying versus spot market ratio depending on market expectations, charter rates, newbuilding costs,
vessels’ resale and scrap values, and vessel operating expenses.
We adjust our market exposure through time charters, voyage charters, bareboat charters, sale and leasebacks, sales and
purchases of vessels, and acquisitions. Our intention is to create shareholder value through sustainable growth and prudent
employment of our fleet.
Our business strategy includes three main pillars (Simplification, Risk Management, and Decarbonization) on which we are
focusing our efforts: (1) Simplification relates to the increased focus on our core business and our capabilities as a shipowner in
large-size dry bulk shipping, (2) Risk Management relates to our decision making on fixed-paying income versus spot
exposure, as well as on enhancing transparency and accountability through clearly defined risk parameters and (3)
Decarbonization and digitalization refers to our focus on positioning the Company for a low-carbon future by exploring new
technologies and optimization tools.
Our Environmental, Social, and Governance Efforts
Environment
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Environmental risk management is an integrated part of our daily operations and management processes. We review all
identified risks to the environment, which allows us to establish appropriate management tools and safeguards in place. Our
Management System is ISO-compliant and in accordance with the ISM Code. Our Ship Energy Efficiency Management Plans
(“SEEMP”) allows for a granular risk assessment for each individual vessel's performance as well as providing a thorough
system for reporting.
Together with companies such as Avance Gas, Flex LNG, Frontline and SFL, Golden Ocean established the ESG forum. The
goal is to design industry-leading approaches to ESG risk management and reporting parameters to ensure best-in-class
performance. 
Social
Our policy promotes safety at sea, health and prevention of injury, illness, and loss of life. Our managers employ and train
qualified seafarers in accordance with the requirements of the flag state and established by the Standards of Training,
Certification & Watchkeeping Convention ("STCW").
In addition to securing our workers’ health and safety, we seek to ensure that our employees, on-shore and off-shore, are
working under conditions that meet the requirements set out in the International Labour Conventions and the Maritime Labour
Convention. As part of safeguarding seafarers' labor rights, these conventions include the right to collective bargaining
agreements and that no employee is discriminated based on nationality, race or any other basis. The PSC and the OCIMF Ship
Inspection Report Programme (SIRE) have been implemented, ensuring that we comply with applicable labor rights.
Governance
We have a risk-based approach to compliance and have established policies and procedures which clearly set out how we
manage ESG issues. Implementing these policies and procedures mitigates our risks and any negative ESG impacts. All policies
and procedures were updated in 2022.
Our Board is responsible for the governance of ESG-related issues and approves the company’s ESG Policies as well as
additional topics included in the ESG report. Our Board takes an active role in and considers what constitutes strategic ESG
matters. Our Board annually reviews our ESG report and is responsible for ensuring that appropriate and effective ESG-related
risk management and internal control systems are in place.
The executive management team, led by the principal executive officer, recognizes the importance of climate risk and
opportunities and their impact on the future of the shipping industry. The executive management team leads the strategy process
and risk management and discusses risks and opportunities with the technical department and, more generally, in the ESG
Forum (outlined above). The Team reports all material climate-related risks and opportunities to the Board – i.e., divestments
and investments impacting the carbon emission profile of Golden Ocean.
Our Decarbonization Strategy
Decarbonization has been a part of Golden Ocean’s strategy since 2020. Our goal is to own and operate a modern, fuel-efficient
fleet with a low carbon footprint. Golden Ocean acknowledges the initial GHG strategy of the IMO, aiming to lower CO2
emissions per transport work by at least 40% by 2030, compared to 2008 levels.
However, we believe the IMO strategy is not ambitious enough and have, therefore, introduced our own emission-reduction
targets surpassing the goals of the IMO. We target a reduction of AER by 15% by 2026 and 30% by 2030, compared to 2019.
We will also aim for net-zero emissions by 2050.
Decarbonization of our fleet also means that Golden Ocean’s fleet has become more competitive, as customers’ demand for
low-emission shipping is increasing. Having a fleet that generates low emissions demonstrates Golden Ocean’s compliance
with current regulations, such as like the IMO’s carbon intensity indicator (“CII”), and complying with future regulations, such
as the carbon tax in the EU, becomes easier.
ESG Report
Our comprehensive and stand-alone annual ESG report, in respect of the year ended December 31, 2021 was published in July
2022 (the "2021 ESG Report") and can be found on the Company's website. The information in the ESG report and on the
Company’s website is not incorporated by reference into this document.
We have considered and assessed if detailed information in our 2021 ESG report or similar information for year 2022 should be
included in this report for the year ended December 31, 2022. Decarbonization is of strategic importance to us and we believe
that, going forward, ESG can have a material effect on our financial position and results of operations. While climate change
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and environmental regulations have not had a material impact on our business, financial position or results of operations in
2021 or 2022, our investors and shareholders are provided with a sufficient material level of details regarding climate risks and
environmental expenditures in this annual report, specifically described above in "Item 3. D. Risk Factors." While we expect
that the ESG report for 2022 will further enhance this information, we do not believe it will contain additional material
information.
In 2022, we continued to strengthen our management and understanding of climate risk by conducting high-level review using
the framework provided by the Task Force on Climate-Related Financial Disclosures ("TFCD"). More specifically, we assessed
governance, strategy, risk management and climate-related issues relevant to Golden Ocean and the shipping sector by
following the TFCD framework. This has improved our ability to identify risks and opportunities associated with climate
change and help tackle these challenges going forward.
In 2022, we have continued to implement measures to achieve targets mentioned above. As of the date of this annual report,
these measures have not resulted in a material increase of our ESG related expenditures. The longer-term prospective creates a
vast array of implications for our business and dry bulk industry in general and involve more uncertainty. As of the date of this
annual report, we have one of the most modern and fuel-efficient fleets in the industry, and we continue to modernize our fleet
by selling older tonnage. In the long-term, we are looking for zero emission propulsion technology with the ultimate aim of net
zero emissions.
During the year ended December 31, 2022, we have not incurred any material capital expenditures with regards to our
environmental initiatives. In total we have incurred and recorded operating costs of $5.7 million, relating to decarbonization and
digitalization initiatives and $6.0 million, relating to the installation of ballast water treatment systems ("BWTS"). Currently,
there are three vessels in our fleet with BWTS installations pending and a total remaining cost of approximately $1.5 million for
all ships to meet Management of Ships' Ballast Water and Sediments (the "BWM Convention") requirements (described below).
While decarbonization is of strategic importance to us, it is not material to our business when comparing our total revenues and
result of operations to the total cost of our environmental initiatives.
Russian-Ukrainian War
The ongoing conflict between Russia and Ukraine has disrupted supply chains and caused instability in the global economy,
and the United States and the European Union, among other countries, announced sanctions against the Russian government
and its supporters.
The United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers and enforces multiple
authorities under which sanctions have been imposed on Russia, including: the Russian Harmful Foreign Activities sanctions
program, established by the Russia-related national emergency declared in Executive Order (E.O.) 14024 and subsequently
expanded and addressed through certain additional authorities, and the Ukraine-/Russia-related sanctions program, established
with the Ukraine-related national emergency declared in E.O. 13660 and subsequently expanded and addressed through certain
additional authorities. The United States has also issued several Executive Orders that prohibit certain transactions related to
Russia, including the importation of certain energy products of Russian Federation origin, and investments in the Russian
energy sector by U.S. persons, among other prohibitions and export controls. The ongoing conflict could result in the
imposition of further economic sanctions or new categories of export restrictions against persons in or connected to Russia.
While in general much uncertainty remains regarding the global impact of the conflict in Ukraine, it is possible that such
tensions could adversely affect the Company’s business, financial condition, results of operation and cash flows.
Russia and Ukraine combined accounted for approximately 10% of global steel trade and supply approximately 30% of
Europe’s steel imports. Following the onset of the conflict, steel buyers had to find alternative supplies to substitute for steel
and semi-finished products sourced from Russia and Ukraine, which stimulated seaborne trade routes. The impact of decreased
demand for certain commodities was offset by increased demand for others, elevated port congestion and new trade routes that
emerged after Russia’s incursion into Ukraine.
Notably, high fuel prices have also impacted the dry bulk market in 2022, which was reflected in sailing speeds trending down
during the periods with high fuel prices. We believe that the increased fuel prices may well be absorbed by increased freight
rates going forward for a modern fleet.
The direct impact of the conflict on our business has been limited to time charter cancellations and suspensions under time
charter agreements made prior to the onset of the conflict. In March 2022, we cancelled a time charter agreement with respect to
Golden Pearl in consequence of our counterparty’s failure to pay charter hire following the imposition of sanctions by the
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European Union on charterers’ beneficial owner. In addition, in April 2022, we suspended time charter agreements with respect
to two vessels (Admiral Schmidt and Vitus Bering), and in May 2022 redelivered those vessels to their disponent owners, where
we understand that those vessels were financed by disponent owners as part of a sale-leaseback arrangement with a Russian-
state owned entity.
Management Structure
Overall responsibility for the oversight of the management of our company and its subsidiaries rests with our Board. We
operate management services through Golden Ocean Group Management (Bermuda) Ltd, our subsidiary incorporated in
Bermuda, which in turn subcontracts services to Golden Ocean Management AS and Golden Ocean Shipping Co. Pte. Ltd., our
subsidiaries incorporated in Norway and Singapore, respectively. Our principal executive officer, principal financial officer and
principal commercial officer are employed by Golden Ocean Management AS. The Board defines the scope and terms of the
services to be provided, including day-to-day operations by the aforementioned subsidiaries, and requires that it be consulted on
all matters of material importance and/or of an unusual nature and, for such matters, provides specific authorization to
personnel to act on our behalf.
Technical Supervision Services
We receive technical supervision services from Frontline Management (Bermuda) Limited ("Frontline Management"). Pursuant
to the terms of the agreement, Frontline Management receives a management fee per vessel per year. This fee is subject to
annual review. Frontline Management performs also newbuilding supervision on our behalf and charges us for costs incurred in
relation to the supervision. Technical operations and crewing of all owned vessels are outsourced to several leading ship
management companies.
Seasonality
 
The dry bulk trade has a history of tracking seasonal demand fluctuations. As China is the most significant market for dry bulk
shipping, the public holidays in relation to the Chinese New Year during the first quarter usually results in a decrease in market
activity during this period. Also, in the last few years, adverse weather conditions in the Southern Hemisphere, which often
occur during the first quarter, have had a negative impact on iron ore and coal exports from Australia and iron ore exports from
Brazil.
Grain has traditionally had the greatest impact on the seasonality in the dry bulk market, particularly during the peak demand
seasons, which occurs during the second quarter in the Southern Hemisphere and at the end of the third quarter and throughout
the fourth quarter in the Northern Hemisphere. The growth of iron ore and coal transportation over the last decade, however,
has diminished the relative importance of grain to the dry bulk transportation industry. Since iron ore, like most other
commodities, has moved from fixed price agreements between shippers and receivers to spot pricing, short-term price
fluctuations have had an impact on iron ore trading by reducing normal seasonal patterns. Other factors, however, such as
weather and port congestion still impact market volatility.
Customers
For the year ended December 31, 2022, no customer accounted for 10% or more for our consolidated revenues. For the year
ended December 31, 2021, one customer accounted for 10% or more of our consolidated revenues in the amounts of $117.7
million. For the year ended December 31, 2020, no customer accounted for 10% or more of our consolidated revenues.
Competition
The market for international seaborne dry bulk transportation services is highly fragmented and competitive. Seaborne dry bulk
transportation services are generally provided by independent ship-owner fleets. In addition, many owners and operators in the
dry bulk sector pool their vessels together on an ongoing basis, and such pools are available to customers to the same extent as
independently owned and operated fleets. Competition for charters in the dry bulk market is intense and is based upon price,
location, size, age, condition and acceptability of the vessel and its manager. Competition is also affected by the availability of
other size vessels to compete in the trades in which we engage. Charters are to a large extent brokered through international
independent brokerage houses that specialize in finding the optimal ship for any particular cargo based on the aforementioned
criteria. Brokers may be appointed by the cargo shipper or the ship owner.
Environmental and Other Regulations in the Shipping Industry
Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international
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conventions and treaties, national, state and local laws and regulations in force in the countries in which our vessels may
operate or are registered relating to safety and health and environmental protection including the storage, handling, emission,
transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for
damage to natural resources. Compliance with such laws, regulations and other requirements entails significant expense,
including vessel modifications and implementation of certain operating procedures.
A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities
include the local port authorities (applicable national authorities such as the USCG, harbor master or equivalent), classification
societies, flag state administrations (countries of registry) and charterers, particularly terminal operators. Certain of these
entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to
maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the
operation of one or more of our vessels.
Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are
required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance,
continuous training of our officers and crews and compliance with United States and international regulations. We believe that
the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels
have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations. However,
because such laws and regulations frequently change and may impose increasingly stricter requirements, we cannot predict the
ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of
our vessels. In addition, a future serious marine incident that causes significant adverse environmental impact could result in
additional legislation or regulation that could negatively affect our profitability.
International Maritime Organization
The IMO, the United Nations agency for maritime safety and the prevention of pollution by vessels (the “IMO”), has adopted
the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating
thereto, collectively referred to as MARPOL 73/78 and herein as “MARPOL,” the International Convention for the Safety of
Life at Sea of 1974 (“SOLAS Convention”), and the International Convention on Load Lines of 1966 (the “LL Convention”).
MARPOL establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions,
handling and disposal of noxious liquids and the handling of harmful substances in packaged forms. MARPOL is applicable to
dry bulk, tanker and LNG carriers, among other vessels, and is broken into six Annexes, each of which regulates a different
source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried in bulk in
liquid or in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and
Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997; new emission
standards, titled IMO-2020, took effect on January 1, 2020.
In 2013, the IMO’s Marine Environmental Protection Committee (the "MEPC") adopted a resolution amending MARPOL
Annex I Condition Assessment Scheme ("CAS"). These amendments became effective on October 1, 2014, and require
compliance with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and
Oil Tankers ("ESP Code"), which provides for enhanced inspection programs. We may need to make certain financial
expenditures to comply with these amendments.
Air Emissions
In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005,
Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits
“deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile
compounds from cargo tanks, and the shipboard incineration of specific substances. Annex VI also includes a global cap on the
sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, as
explained below. Emissions of “volatile organic compounds” from certain vessels, and the shipboard incineration (from
incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls (“PCBs”)) are also
prohibited. We believe that all our vessels are currently compliant in all material respects with these regulations.
The Marine Environment Protection Committee (“MEPC”), adopted amendments to Annex VI regarding emissions of sulfur
oxide, nitrogen oxide, particulate matter and ozone depleting substances, which entered into force on July 1, 2010. The
amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the
amount of sulfur contained in any fuel oil used on board ships. On October 27, 2016, at its 70th session, the MEPC agreed to
implement a global 0.5% m/m sulfur oxide emissions limit (reduced from 3.50%) starting from January 1, 2020. This limitation
can be met by using low-sulfur compliant fuel oil, alternative fuels, or certain exhaust gas cleaning systems. Ships are now
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required to obtain bunker delivery notes and International Air Pollution Prevention (“IAPP”) Certificates from their flag states
that specify sulfur content. Additionally, at MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5%
sulfur on ships were adopted and took effect on March 1, 2020, with the exception of vessels fitted with exhaust gas cleaning
equipment (“scrubbers”), which can carry fuel of higher sulfur content. These regulations subject ocean-going vessels to
stringent emissions controls, and may cause us to incur substantial costs.
Sulfur content standards are even stricter within certain “Emission Control Areas” (“ECAs”). As of January 1, 2015, ships
operating within an ECA were not permitted to use fuel with sulfur content in excess of 0.1% m/m. Amended Annex VI
establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specified portions
of the Baltic Sea area, North Sea area, North American area and United States Caribbean area. Ocean-going vessels in these
areas will be subject to stringent emission controls and may cause us to incur additional costs. Other areas in China are subject
to local regulations that impose stricter emission controls. In December 2021, the member states of the Convention for the
Protection of the Mediterranean Sea Against Pollution (“Barcelona Convention”) agreed to support the designation of a new
ECA in the Mediterranean. On December 15, 2022, MEPC 79 adopted the designation of a new ECA in the Mediterranean,
with an effective date of May 1, 2025. If other ECAs are approved by the IMO, or other new or more stringent requirements
relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S. Environmental Protection
Agency (“EPA”) or the states where we operate, compliance with these regulations could entail significant capital expenditures
or otherwise increase the costs of our operations.
Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines,
depending on their date of installation. At the MEPC meeting held from March to April 2014, amendments to Annex VI were
adopted which address the date on which Tier III Nitrogen Oxide ("NOx") standards in ECAs will go into effect. Under the
amendments, Tier III NOx standards apply to ships that operate in the North American and U.S. Caribbean Sea ECAs designed
for the control of NOx produced by vessels with a marine diesel engine installed and constructed on or after January 1, 2016.
Tier III requirements could apply to areas that will be designated for Tier III NOx in the future. At MEPC 70 and MEPC 71, the
MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built on or after January 1, 2021. The EPA
promulgated equivalent (and in some senses stricter) emissions standards in 2010. As a result of these designations or similar
future designations, we may be required to incur additional operating or other costs.
As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and
requires ships above 5,000 gross tonnage to collect and report annual data on fuel oil consumption to an IMO database, with the
first year of data collection having commenced on January 1, 2019. The IMO intends to use such data as the first step in its
roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below.
As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now
required to develop and implement Ship Energy Efficiency Management Plans (“SEEMP”), and new ships must be designed in
compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design Index
(“EEDI”). Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014.
Additionally, MEPC 75 introduced draft amendments to Annex VI which impose new regulations to reduce greenhouse gas
emissions from ships. These amendments introduce requirements to assess and measure the energy efficiency of all ships and
set the required attainment values, with the goal of reducing the carbon intensity of international shipping. The requirements
include (1) a technical requirement to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index (“EEXI”),
and (2) operational carbon intensity reduction requirements, based on a new operational carbon intensity indicator (“CII”). The
attained EEXI is required to be calculated for ships of 400 gross tonnage and above, in accordance with different values set for
ship types and categories. With respect to the CII, the draft amendments would require ships of 5,000 gross tonnage to
document and verify their actual annual operational CII achieved against a determined required annual operational CII.
Additionally, MEPC 75 proposed draft amendments requiring that, on or before January 1, 2023, all ships above 400 gross
tonnage must have an approved SEEMP on board. For ships above 5,000 gross tonnage, the SEEMP would need to include
certain mandatory content. MEPC 75 also approved draft amendments to MARPOL Annex I to prohibit the use and carriage for
use as fuel of heavy fuel oil (“HFO”) by ships in Arctic waters on and after July 1, 2024. The draft amendments introduced at
MEPC 75 were adopted at the MEPC 76 session in June 2021 and entered into force on November 1, 2022, with the
requirements for EEXI and CII certification coming into effect from January 1, 2023. We have incurred increased costs to
comply with these revised standards, and we will incur additional costs in 2023, however we do not expect these costs to be
material. Additional or new conventions, laws and regulations may be adopted that could require the installation of expensive
emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.
MEPC 77 adopted a non-binding resolution which urges Member States and ship operators to voluntarily use distillate or other
cleaner alternative fuels or methods of propulsion that are safe for ships and could contribute to the reduction of Black Carbon
emissions from ships when operating in or near the Arctic. MEPC 79 adopted amendments to MARPOL Annex VI, Appendix
IX to include the attained and required CII values, the CII rating and attained EEXI for existing ships in the required
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information to be submitted to the IMO Ship Fuel Oil Consumption Database. The amendments will enter into force on May 1,
2024.
We may incur costs to comply with these revised standards, however we do not expect these costs to be material. Additional or
new conventions, laws and regulations may be adopted that could require the installation of expensive emission control systems
and could adversely affect our business, results of operations, cash flows and financial condition.
Safety Management System Requirements
The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of
Limitation of Liability for Maritime Claims (the “LLMC”) sets limitations of liability for a loss of life or personal injury claim
or a property claim against ship owners. We believe that our vessels are in substantial compliance with SOLAS and LLMC
standards.
Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and
for Pollution Prevention (the “ISM Code”), our operations are also subject to environmental standards and requirements. The
ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that
includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and
procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety
management system that our managers have developed for compliance with the ISM Code. The failure of a vessel owner or
bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance
coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. The ISM Code requires
that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance
by a vessel’s management with the ISM Code requirements for a safety management system. No vessel can obtain a safety
management certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the
ISM Code. Our managers have obtained applicable documents of compliance for their offices and safety management
certificates for all of our vessels for which the certificates are required by the IMO. The document of compliance and safety
management certificate are renewed as required.
Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length
must have adequate strength, integrity and stability to minimize risk of loss or pollution. Goal-based standards amendments in
SOLAS regulation II-1/3-10 entered into force in 2012, with July 1, 2016 set for application to new oil tankers and bulk
carriers. The SOLAS Convention regulation II-1/3-10 on goal-based ship construction standards for bulk carriers and oil
tankers, which entered into force on January 1, 2012, requires that all oil tankers and bulk carriers of 150 meters in length and
above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structural requirements conforming
to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers
(GBS Standards).
Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be
in compliance with the International Maritime Dangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the IMDG
Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from the International
Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory
training requirements. Amendments which took effect on January 1, 2020 also reflect the latest material from the UN
Recommendations on the Transport of Dangerous Goods, including (1) new provisions regarding IMO type 9 tank, (2) new
abbreviations for segregation groups, and (3) special provisions for carriage of lithium batteries and of vehicles powered by
flammable liquid or gas. Additional amendments, which came into force on June 1, 2022, include (1) addition of a definition of
dosage rate, (2) additions to the list of high consequence dangerous goods, (3) new provisions for medical/clinical waste, (4)
addition of various ISO standards for gas cylinders, (5) a new handling code, and (6) changes to stowage and segregation
provisions.
The IMO has also adopted the International Convention on STCW. As of February 2017, all seafarers are required to meet the
STCW standards and be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally
employ the classification societies, which have incorporated SOLAS and STCW requirements into their class rules, to
undertake surveys to confirm compliance.
The IMO's Maritime Safety Committee and MEPC, respectively, each adopted relevant parts of the International Code for
Ships Operating in Polar Water (the “Polar Code”). The Polar Code, which entered into force on January 1, 2017, covers
design, construction, equipment, operational, training, search and rescue as well as environmental protection matters relevant to
ships operating in the waters surrounding the two poles. It also includes mandatory measures regarding safety and pollution
prevention as well as recommendatory provisions. The Polar Code applies to new ships constructed after January 1, 2017, and
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after January 1, 2018, ships constructed before January 1, 2017 are required to meet the relevant requirements by the earlier of
their first intermediate or renewal survey.
Furthermore, recent action by the IMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity
regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity
threats. In February 2021, the U.S. Coast Guard published guidance on addressing cyber risks in a vessel’s safety management
system. This might cause companies to create additional procedures for monitoring cybersecurity, which could require
additional expenses and/or capital expenditures. The impact of such regulations is difficult to predict at this time.
In June 2022, SOLAS also set out new amendments that will take effect January 1, 2024, which include new requirements for:
(1) the design for safe mooring operations, (2) the Global Maritime Distress and Safety System (“GMDSS”), (3) watertight
integrity, (4) watertight doors on cargo ships, (5) fault-isolation of fire detection systems, and (6) life-saving appliances. These
new requirements may impact the cost of our operations
Pollution Control and Liability Requirements
The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial
waters of the signatories to such conventions. For example, the IMO adopted an International Convention for the Control and
BWM Convention in 2004. The BWM Convention entered into force on September 8, 2017. The BWM Convention requires
ships to manage their ballast water to remove, render harmless, or avoid the uptake or discharge of new or invasive aquatic
organisms and pathogens within ballast water and sediments. The BWM Convention’s implementing regulations call for a
phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration
limits, and require all ships to carry a ballast water record book and an international ballast water management certificate.
On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so that
the dates are triggered by the entry into force date and not the dates originally in the BWM Convention. This, in effect, makes
all vessels delivered before the entry into force date “existing vessels” and allows for the installation of ballast water
management systems on such vessels at the first International Oil Pollution Prevention ("IOPP") renewal survey following entry
into force of the convention. The MEPC adopted updated guidelines for approval of ballast water management systems (G8) at
MEPC 70. At MEPC 71, the schedule regarding the BWM Convention’s implementation dates was also discussed and
amendments were introduced to extend the date existing vessels are subject to certain ballast water standards. Those changes
were adopted at MEPC 72. Ships over 400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of
ballast water only in open seas and away from coastal waters. The “D-2 standard” specifies the maximum amount of viable
organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date
of the IOPP renewal survey, existing vessels must comply with the D-2 standard on or after September 8, 2019. For most ships,
compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted
organisms. Ballast water management systems, which include systems that make use of chemical, biocides, organisms or
biological mechanisms, or which alter the chemical or physical characteristics of the ballast water, must be approved in
accordance with IMO Guidelines (Regulation D-3). As of October 13, 2019, MEPC 72’s amendments to the BWM Convention
took effect, making the Code for Approval of Ballast Water Management Systems, which governs assessment of ballast water
management systems, mandatory rather than permissive, and formalized an implementation schedule for the D-2 standard.
Under these amendments, all ships must meet the D-2 standard by September 8, 2024. Remaining costs of compliance with
these regulations is estimated to be approximately $1.0 million in total for the remaining two vessels that do not currently have
ballast water management systems installed. Additionally, in November 2020, MEPC 75 adopted amendments to the BWM
Convention which would require a commissioning test of the ballast water management system for the initial survey or when
performing an additional survey for retrofits. This analysis will not apply to ships that already have an installed BWM system
certified under the BWM Convention. These amendments have entered into force on June 1, 2022. In December 2022, MEPC
79 agreed that it should be permitted to use ballast tanks for temporary storage of treated sewage and grey water. MEPC 79 also
established that ships are expected to return to D-2 compliance after experiencing challenging uptake water and bypassing a
BWM system should only be used as a last resort. Guidance will be developed at MEPC 80 (in July 2023) to set out appropriate
actions and uniform procedures to ensure compliance with the BWM Convention.
Once mid-ocean exchange or ballast water treatment requirements become mandatory under the BWM Convention, the cost of
compliance could increase for ocean carriers and may have a material effect on our operations. However, many countries
already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive
and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to
conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements.
The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the “Bunker
Convention”) to impose strict liability on ship owners (including the registered owner, bareboat charterer, manager or operator)
for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention
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requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the
limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in
accordance with the LLMC). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship’s
bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.
Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions,
such as the United States where the International Convention on Civil Liability for Oil Pollution Damage of 1969, as from time
to time amended and replaced by the 1992 protocol, or the Bunker Convention has not been adopted, various legislative
schemes or common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis.
Anti-Fouling Requirements
In 2001, the IMO adopted the International Convention on the Control of Harmful Anti-fouling Systems on Ships (the “Anti-
fouling Convention”). The Anti-fouling Convention, which entered into force on September 17, 2008, prohibits the use of
organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. Vessels of over
400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into
service or before an International Anti-fouling System Certificate is issued for the first time; and subsequent surveys when the
Anti-fouling systems are altered or replaced.
We have obtained Anti-fouling System Certificates for all our vessels that are subject to the Anti-fouling Convention.
Compliance Enforcement
Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased
liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or
detention in, some ports. The USCG and European Union authorities have indicated that vessels not in compliance with the
ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of the
date of this report, each of our vessels is ISM Code certified. However, there can be no assurance that such certificates will be
maintained in the future. The IMO continues to review and introduce new regulations. It is impossible to predict what
additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.
United States Regulations
The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act
The U.S. Oil Pollution Act of 1990 (“OPA”) established an extensive regulatory and liability regime for the protection and
cleanup of the environment from oil spills. OPA affects all “owners and operators” whose vessels trade or operate within the
U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial sea and its 200
nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”), which applies to the discharge of hazardous substances other than oil, except in
limited circumstances, whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel
as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.
Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill
results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs
and other damages arising from discharges or threatened discharges of oil from their vessels, including bunkers (fuel). OPA
defines these other damages broadly to include:
i.injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
ii.injury to, or economic losses resulting from, the destruction of real and personal property;
iii.loss of subsistence use of natural resources that are injured, destroyed or lost;
iv.net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss
of real or personal property, or natural resources;
v.lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal
property or natural resources; and
vi.net cost of increased or additional public services necessitated by removal activities following a
discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of
natural resources.
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OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective November 12,
2019, the USCG adjusted the limits of OPA liability for non-tank vessels, edible oil tank vessels, and any oil spill response
vessels, to the greater of $1,200 per gross ton or $997,100 (subject to periodic adjustment for inflation). On December 23, 2022,
the USCG issued a final rule to adjust the limitation of liability under the OPA. Effective March 23, 2023, the new adjusted
limits of OPA liability for non-tank vessels, edible oil tank vessels, and any oil spill response vessels, to the greater of $1,300
per gross ton or $1,076,000 (subject to periodic adjustment for inflation).
These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety,
construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual
relationship), or a responsible party's gross negligence or willful misconduct. The limitation on liability similarly does not apply
if the responsible party fails or refuses to (i) report the incident as required by law where the responsible party knows or has
reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or
(iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the
Intervention on the High Seas Act.
CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and
remedial costs, as well as damages for injury to, or destruction or loss of, natural resources, including the reasonable costs
associated with assessing the same, and health assessments or health effects studies. There is no liability if the discharge of a
hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under
CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and
the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person
liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from
willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or
operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused to
provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject
to OPA.
OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. OPA and
CERCLA both require owners and operators of vessels to establish and maintain with the USCG evidence of financial
responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject.
Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety
bond, qualification as a self-insurer or a guarantee. We comply and plan to comply going forward with the USCG’s financial
responsibility regulations by providing applicable certificates of financial responsibility.
The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including
higher liability caps under OPA, new regulations regarding offshore oil and gas drilling, and a pilot inspection program for
offshore facilities. However, several of these initiatives and regulations have been or may be revised. For example, the U.S.
Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective
December 27, 2018, modified and relaxed certain environmental and safety protections under the 2016 PSSR. Additionally, the
BSEE amended the Well Control Rule, effective July 15, 2019, which rolled back certain reforms regarding the safety of
drilling operations, and former U.S. President Trump had proposed leasing new sections of U.S. waters to oil and gas
companies for offshore drilling. In January 2021, U.S. President Biden signed an executive order temporarily blocking new
leases for oil and gas drilling in federal waters. However, attorney generals from 13 states filed suit in March 2021 to lift the
executive order, and in June 2021, a federal judge in Louisiana granted a preliminary injunction against the Biden
administration, stating that the power to pause offshore oil and gas leases “lies solely with Congress.” In August 2022, a federal
judge in Louisiana sided with Texas Attorney General Ken Paxton, along with the other 12 plaintiff states, by issuing a
permanent injunction against the Biden Administration’s moratorium on oil and gas leasing on federal public lands and offshore
waters. With these rapid changes, compliance with any new requirements of OPA and future legislation or regulations
applicable to the operation of our vessels could impact the cost of our operations and adversely affect our business.
OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring
within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA and some states have
enacted legislation providing for unlimited liability for oil spills. Many U.S. states that border a navigable waterway have
enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a
discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law. Moreover, some
states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, although in some
cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel owners’
responsibilities under these laws. The Company intends to comply with all applicable state regulations in the ports where the
Company’s vessels call.
33
We currently maintain pollution liability coverage insurance in the amount of $1.0 billion per incident for each of our vessels. If
the damages from a catastrophic spill were to exceed our insurance coverage, it could have an adverse effect on our business
and results of operation.
Other United States Environmental Initiatives
The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires the EPA to promulgate
standards applicable to emissions of volatile organic compounds and other air contaminants. The CAA requires states to adopt
State Implementation Plans ("SIPs"), some of which regulate emissions resulting from vessel loading and unloading operations
which may affect our vessels.
The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable
waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any
unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and
complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the
United States” (“WOTUS”), thereby expanding federal authority under the CWA. Following litigation on the revised WOTUS
rule, in December 2018, the EPA and Department of the Army proposed a revised, limited definition of WOTUS. In 2019 and
2020, the agencies repealed the prior WOTUS Rule and promulgated the Navigable Waters Protection Rule (“NWPR”) which
significantly reduced the scope and oversight of EPA and the Department of the Army in traditionally non-navigable
waterways. On August 30, 2021, a federal district court in Arizona vacated the NWPR and directed the agencies to replace the
rule. On December 7, 2021, the EPA and the Department of the Army proposed a rule that would reinstate the pre-2015
definition. On December 30, 2022, the EPA and the Department of Army announced the final WOTUS rule that largely
reinstated the pre-2015 definition. The EPA and the USCG have also enacted rules relating to ballast water discharge,
compliance with which requires the installation of equipment on our vessels to treat ballast water before it is discharged or the
implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise
restrict our vessels from entering U.S. Waters. 
The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels
within United States waters pursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on
December 4, 2018 and replaces the 2013 Vessel General Permit (“VGP”) program (which authorizes discharges incidental to
operations of commercial vessels and contains numeric ballast water discharge limits for most vessels to reduce the risk of
invasive species in U.S. waters, stringent requirements for exhaust gas scrubbers, and requirements for the use of
environmentally acceptable lubricants) and current Coast Guard ballast water management regulations adopted under the U.S.
National Invasive Species Act (“NISA”), such as mid-ocean ballast exchange programs and installation of approved USCG
technology for all vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters. VIDA establishes a
new framework for the regulation of vessel incidental discharges under Clean Water Act ("CWA"), requires the EPA to develop
performance standards for those discharges within two years of enactment, and requires the U.S. Coast Guard to develop
implementation, compliance, and enforcement regulations within two years of EPA’s promulgation of standards. Under VIDA,
all provisions of the 2013 VGP and USCG regulations regarding ballast water treatment remain in force and effect until the
EPA and U.S. Coast Guard regulations are finalized. Non-military, non-recreational vessels greater than 79 feet in length must
continue to comply with the requirements of the VGP, including submission of a Notice of Intent (“NOI”) or retention of a
PARI form and submission of annual reports. We have submitted NOIs for our vessels where required. Compliance with the
EPA, U.S. Coast Guard and state regulations could require the installation of ballast water treatment equipment on our vessels
or the implementation of other port facility disposal procedures at potentially substantial cost or may otherwise restrict our
vessels from entering U.S. waters.
European Union Regulations
In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of
polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the
discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a
polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag,
but certain exceptions apply to warships or where human safety or that of the ship is in danger. Criminal liability for pollution
may result in substantial penalties or fines and increased civil liability claims. Regulation (EU) 2015/757 of the European
Parliament and of the Council of 29 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting and
verification of carbon dioxide emissions from maritime transport, and, subject to some exclusions, requires companies with
ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually, which may cause us to incur
additional expenses.
34
The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of
high-risk ships, as determined by type, age, and flag as well as the number of times the ship has been detained. The European
Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and a definitive ban for
repeated offenses. The regulation also provided the European Union with greater authority and control over classification
societies, by imposing more requirements on classification societies and providing for fines or penalty payments for
organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to use reduced sulfur
content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced
requirements parallel to those in Annex VI relating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1%
maximum sulfur requirement for fuel used by ships at berth in the Baltic, the North Sea and the English Channel (the so called
“SOx-Emission Control Area”). As of January 2020, EU member states must also ensure that ships in all EU waters, except the
SOx-Emission Control Area, use fuels with a 0.5% maximum sulfur content.
On September 15, 2020, the European Parliament voted to include greenhouse gas emissions from the maritime sector in the
European Union’s carbon market, EU ETS. On July 14, 2021, the European Parliament formally proposed its plan, which
would involve gradually including the maritime sector from 2023 and phasing the sector in over a three-year period. This will
require shipowners to buy permits to cover these emissions. The Environment Council adopted a general approach on the
proposal in June 2022. On December 18, 2022, the Environmental Council and European Parliament agreed to include maritime
shipping emissions within the scope of the EU ETS on a gradual introduction of obligations for shipping companies to
surrender allowances: 40% for verified emissions from 2024, 70% for 2025 and 100% for 2026. Most large vessels will be
included in the scope of the EU ETS from the start. Big offshore vessels of 5,000 gross tonnage and above will be included in
the 'MRV' on the monitoring, reporting and verification of CO2 emissions from maritime transport regulation from 2025 and in
the EU ETS from 2027.
International Labour Organization
The International Labour Organization (the “ILO”) is a specialized agency of the UN that has adopted the Maritime Labor
Convention 2006 (“MLC 2006”). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is required to
ensure compliance with the MLC 2006 for all ships that are 500 gross tonnage or over and are either engaged in international
voyages or flying the flag of a Member and operating from a port, or between ports, in another country. We believe that all our
vessels are in substantial compliance with and are certified to meet MLC 2006.
Greenhouse Gas Regulation
Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United
Nations Framework Convention on Climate Change, which entered into force in 2005 and pursuant to which adopting countries
have been required to implement national programs to reduce greenhouse gas emissions with targets extended through 2020.
International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions on shipping
emissions may be included in any new treaty. In December 2009, more than 27 nations, including the U.S. and China, signed
the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions. The 2015 United
Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016
and does not directly limit greenhouse gas emissions from ships. The U.S. initially entered into the agreement, but on June 1,
2017, the former U.S. President Trump announced that the United States intends to withdraw from the Paris Agreement, and the
withdrawal became effective on November 4, 2020. On January 20, 2021, U.S. President Biden signed an executive order to
rejoin the Paris Agreement, which the U.S. officially rejoined on February 19, 2021.
At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy
on reduction of greenhouse gas emissions from ships was approved. In accordance with this roadmap, in April 2018, nations at
the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initial strategy identifies “levels of
ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through
implementation of further phases of the EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an
average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008
emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while
pursuing efforts towards phasing them out entirely. The initial strategy notes that technological innovation, alternative fuels
and/or energy sources for international shipping will be integral to achieve the overall ambition. These regulations could cause
us to incur additional substantial expenses. At MEPC 77, the Member States agreed to initiate the revision of the Initial IMO
Strategy on Reduction of GHG emissions from ships, recognizing the need to strengthen the ambition during the revision
process. A final draft Revised IMO GHG Strategy would be considered by MEPC 80 (scheduled to meet in spring 2023), with a
view to adoption.
35
The EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states from 20% of 1990
levels by 2020. The EU also committed to reduce its emissions by 20% under the Kyoto Protocol’s second period from 2013 to
2020. Starting in January 2018, large ships over 5,000 gross tonnage calling at EU ports are required to collect and publish data
on carbon dioxide emissions and other information. As previously discussed, regulations relating to the inclusion of greenhouse
gas emissions from the maritime sector in the European Union’s carbon market are also forthcoming.
Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where
we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol or Paris Agreement, that restricts
emissions of greenhouse gases could require us to make significant financial expenditures which we cannot predict with
certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent
that climate change may result in sea level changes or certain weather events.
Vessel Security Regulations
Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to
enhance vessel security such as the MTSA. To implement certain portions of the MTSA, the USCG issued regulations requiring
the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United
States and at certain ports and facilities, some of which are regulated by the EPA.
Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and
mandates compliance with the ISPS Code. The ISPS Code is designed to enhance the security of ports and ships against
terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate (“ISSC”) from a recognized
security organization approved by the vessel’s flag state. Ships operating without a valid certificate may be detained, expelled
from, or refused entry at port until they obtain an ISSC. The various requirements, some of which are found in the SOLAS
Convention, include, for example, on-board installation of automatic identification systems to provide a means for the
automatic transmission of safety-related information from among similarly equipped ships and shore stations, including
information on a ship’s identity, position, course, speed and navigational status; on-board installation of ship security alert
systems, which do not sound on the vessel but only alert the authorities on shore; the development of vessel security plans; ship
identification number to be permanently marked on a vessel’s hull; a continuous synopsis record kept onboard showing a
vessel’s history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was
registered with that state, the ship’s identification number, the port at which the ship is registered and the name of the registered
owner(s) and their registered address; and compliance with flag state security certification requirements.
The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA
vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel’s compliance with the
SOLAS Convention security requirements and the ISPS Code. Future security measures could have a significant financial
impact on us. We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the
ISPS Code.
The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships,
notably off the coast of Somalia, including the Gulf of Aden and Arabian Sea area. Substantial loss of revenue and other costs
may be incurred as a result of detention of a vessel or additional security measures, and the risk of uninsured losses could
significantly affect our business. Costs are incurred in taking additional security measures in accordance with Best Management
Practices to Deter Piracy, notably those contained in the BMP4 industry standard.
Inspection by Classification Societies
The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of
registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and
regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it a condition for insurance
coverage and lending that a vessel be certified “in class” by a classification society which is a member of the International
Association of Classification Societies, the IACS. The IACS has adopted harmonized Common Structural Rules (the "Rules"),
which apply to oil tankers and bulk carriers contracted for construction on or after July 1, 2015. The Rules attempt to create a
level of consistency between IACS Societies. All of our vessels are certified as being “in class” by all the applicable
Classification Societies (e.g., American Bureau of Shipping, Lloyd's Register of Shipping).
A vessel must undergo annual surveys, intermediate surveys, drydockings and special surveys. In lieu of a special survey, a
vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a
five-year period. Every vessel is also required to be drydocked every 30 to 36 months for inspection of the underwater parts of
the vessel. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special
36
survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable which could cause us
to be in violation of certain covenants in our loan agreements. Any such inability to carry cargo or be employed, or any such
violation of covenants, could have a material adverse impact on our financial condition and results of operations.
Risk of Loss and Liability Insurance
General
The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo
loss or damage and business interruption due to political circumstances in foreign countries, piracy incidents, hostilities and
labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental
mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually
unlimited liability upon shipowners, operators and bareboat charterers of any vessel trading in the exclusive economic zone of
the United States for certain oil pollution accidents in the United States, has made liability insurance more expensive for
shipowners and operators trading in the United States market. We carry insurance coverage as customary in the shipping
industry. However, not all risks can be insured, specific claims may be rejected, and we might not be always able to obtain
adequate insurance coverage at reasonable rates.
Marine Insurance
We procure hull and machinery insurance, protection and indemnity insurance, which includes environmental damage and
pollution insurance and war risk insurance and freight, demurrage and defense insurance for our fleet.
Protection and Indemnity Insurance
Protection and indemnity insurance is provided by mutual protection and indemnity associations ("P&I Associations"), and
covers our third-party liabilities in connection with our shipping activities. This includes third-party liability and other related
expenses of injury or death of crew, passengers and other third parties, loss or damage to cargo, claims arising from collisions
with other vessels, damage to other third-party property, pollution arising from oil or other substances, and salvage, towing and
other related costs, including wreck removal. Protection and indemnity insurance is a form of mutual indemnity insurance,
extended by protection and indemnity mutual associations (such associations, “clubs”).
Our current protection and indemnity insurance coverage for pollution is $1.0 billion per vessel per incident. The 13 P&I
Associations that comprise the International Group insure approximately 90% of the world’s commercial tonnage and have
entered into a pooling agreement to reinsure each association’s liabilities. The International Group’s website states that the Pool
provides a mechanism for sharing all claims in excess of $10.0 million up to, currently, approximately $8.2 billion. As a
member of a P&I Association, which is a member of the International Group, we are subject to calls payable to the associations
based on our claim records as well as the claim records of all other members of the individual associations and members of the
shipping pool of P&I Associations comprising the International Group.
C.  ORGANIZATIONAL STRUCTURE
See Exhibit 8.1 for a list of our significant subsidiaries.
D.  PROPERTY, PLANT AND EQUIPMENT
The following table summarizes key information about our fleet as of March 16, 2023:
Vessel
Built
DWT
Flag
Type of Employment
Newcastlemax - Owned
Golden Gayle
2011
206,565
MI
Spot market
Golden Scape
2016
211,112
HK
Index linked time charter
Golden Swift
2016
211,112
HK
Spot market
Golden Coral
2019
208,132
MI
Index linked time charter
Golden Champion
2019
208,391
MI
Spot market
Golden Comfort
2020
208,000
MI
Spot market
Golden Courage
2020
208,395
MI
Spot market
Golden Confidence
2020
207,988
MI
Spot market
37
Golden Competence
2020
208,000
MI
Spot market
Golden Skies
2020
210,897
MI
Index linked time charter
Golden Spirit
2020
210,866
MI
Index linked time charter
Golden Saint
2020
211,138
MI
Index linked time charter
Golden Spray
2021
208,000
MI
Index linked time charter
2,718,596
Capesize - Owned
Golden Feng
2009
169,232
MI
Spot market
Golden Shui
2009
169,333
MI
Spot market
Golden Myrtalia
2011
177,979
MI
Index linked time charter
Golden Anastasia
2014
179,189
MI
Spot market
Golden Houston
2014
181,214
MI
Spot market
Golden Kaki
2014
181,214
MI
Index linked time charter
KSL Salvador
2014
180,958
HK
Index linked time charter
KSL San Francisco
2014
181,066
HK
Index linked time charter
KSL Santiago
2014
181,020
HK
Index linked time charter
KSL Santos
2014
181,055
HK
Index linked time charter
KSL Sapporo
2014
180,960
HK
Index linked time charter
KSL Seattle
2014
181,015
HK
Index linked time charter
KSL Singapore
2014
181,062
HK
Index linked time charter
KSL Sydney
2014
181,000
HK
Index linked time charter
Golden Amreen
2015
179,337
MI
Spot market
Golden Aso
2015
182,472
HK
Spot market
Golden Finsbury
2015
182,418
HK
Spot market
Golden Kathrine
2015
182,486
HK
Index linked time charter
KSL Sakura
2015
181,062
HK
Index linked time charter
KSL Seoul
2015
181,010
HK
Index linked time charter
KSL Seville
2015
181,062
HK
Index linked time charter
KSL Stockholm
2015
181,055
HK
Index linked time charter
Golden Barnet
2016
180,355
HK
Spot market
Golden Behike
2016
180,491
MI
Index linked time charter
Golden Bexley
2016
180,209
HK
Index linked time charter
Golden Fulham
2016
182,610
HK
Index linked time charter
Golden Monterrey
2016
180,491
MI
Index linked time charter
Golden Nimbus
2017
180,504
MI
Spot market
Golden Savannah
2017
181,044
HK
Index linked time charter
Golden Surabaya
2017
181,046
HK
Index linked time charter
Golden Arcus
2018
180,478
MI
Index linked time charter
Golden Calvus
2018
180,521
MI
Spot market
Golden Cirrus
2018
180,487
MI
Index linked time charter
Golden Cumulus
2018
180,499
MI
Spot market
Golden Incus
2018
180,511
MI
Index linked time charter
6,306,445
Capesize - Operating Lease - Related Party, SFL
KSL China
2013
179,109
MI
Index linked time charter
179,109
38
Capesize - Finance Lease - Related Party, SFL
Battersea
2009
169,500
MI
Spot market
Belgravia
2009
169,500
MI
Spot market
Golden Magnum
2009
179,788
HK
Spot market
Golden Beijing
2010
176,000
HK
Spot market
Golden Future
2010
176,000
HK
Spot market
Golden Zhejiang
2010
175,834
HK
Spot market
Golden Zhoushan
2011
175,834
HK
Spot market
1,222,456
Panamax - Owned
Golden Arion
2011
82,188
MI
Spot market
Golden Ioanari
2011
81,526
MI
Spot market
Golden Jake
2011
82,188
MI
Spot market
Golden Suek
2011
74,849
HK
Index linked time charter
Golden Daisy
2012
81,507
MI
Time charter
Golden Ginger
2012
81,487
MI
Spot market
Golden Keen
2012
81,586
MI
Spot market
Golden Rose
2012
81,585
MI
Time charter
Golden Bull
2012
75,000
HK
Index linked time charter
Golden Brilliant
2013
74,500
HK
Spot market
Golden Diamond
2013
74,062
HK
Index linked time charter
Golden Pearl
2013
74,186
HK
Spot market
Golden Sue
2013
84,943
MI
Time charter
Golden Deb
2014
84,943
MI
Time charter
Golden Ruby
2014
74,052
HK
Index linked time charter
Golden Kennedy
2015
83,789
MI
Time charter
Golden Amber
2017
74,500
MI
Index linked time charter
Golden Opal
2017
74,231
MI
Index linked time charter
Golden Fortune
2020
81,600
MI
Spot market
Golden Fellow
2020
81,135
MI
Spot market
Golden Frost
2020
80,559
MI
Spot market
Golden Forward
2021
81,130
MI
Spot market
Golden Friend
2021
81,206
MI
Spot market
Golden Freeze
2021
81,000
MI
Spot market
Golden Fast
2021
81,000
MI
Spot market
Golden Furious
2021
81,000
MI
Spot market
2,069,752
Supramax - Operating Lease - Third party
Golden Hawk
2015
58,000
PAN
Spot market
Key to Flags:
MI – Marshall Islands, HK – Hong Kong, PAN - Panama.
Other than our interests in the vessels described above, we do not own or lease any other material physical properties, except
for related party leases of our office space in Singapore and in Oslo.
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
39
ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS
A. OPERATING RESULTS
Summary of key information
The following table should also be read in conjunction with the consolidated financial statements and notes thereto included
herein. Our accounts are maintained in U.S. dollars.
 
Fiscal year ended December 31,
 
2022
2021
2020
(in thousands of $, except shares, per share data and ratios)
Statement of Operations Data:
Total operating revenues
1,113,456
1,203,181
607,943
Total operating expenses
712,141
697,353
672,570
Net operating (loss) income
435,087
513,608
(61,662)
Net income (loss)
461,847
527,218
(137,669)
Earnings (loss) per share: basic ($)
$2.30
$2.74
($0.96)
Earnings (loss) per share: diluted ($)
$2.29
$2.73
($0.96)
Dividends per share ($)
$2.35
$1.60
$0.05
Balance Sheet Data (at end of year):
Cash and cash equivalents
134,784
197,032
153,093
Short-term restricted cash
3,289
12,985
22,009
Vessels and equipment, net
2,665,785
2,880,321
2,267,686
Finance leases, right of use assets, net
83,589
98,535
113,480
Operating leases, right of use assets, net
15,646
19,965
22,739
Total assets
3,257,291
3,454,177
2,721,067
Current portion of long-term debt
92,865
105,864
87,831
Current portion of obligations under finance lease
18,387
21,755
23,475
Current portion of obligations under operating lease
5,546
13,860
16,783
Long-term debt
1,027,991
1,156,481
957,652
Obligations under finance lease
87,588
105,975
127,730
Obligations under operating lease
13,051
14,907
25,254
Share capital
10,061
10,061
7,215
Total equity
1,917,033
1,928,741
1,368,756
Common shares outstanding
200,485,621
200,435,621
143,327,697
Other Financial Data:
Equity to assets ratio (percentage) (1)
58.9%
55.8%
50.3%
Debt to equity ratio (2)
0.6
0.7
0.9
Price earnings ratio (3)
3.8
3.4
(4.8)
Time charter equivalent income (4)
833,230
948,757
426,372
Time charter equivalent rate (5)
24,262
27,582
13,466
(1)Equity to assets ratio is calculated as total equity divided by total assets.
(2)Debt to equity ratio is calculated as total interest bearing current and long-term liabilities divided by total equity.
(3)Price earnings ratio is calculated using the year end share price divided by basic (loss) earnings per share.
(4)A reconciliation of time charter equivalent income ("TCE income"), to total operating revenues as reflected in the
consolidated statements of operation is as follows: 
40
(in thousands of $)
2022
2021
2020
Total operating revenues
1,113,456
1,203,181
607,943
Add: Amortization of favorable charter party contracts
—
1,859
12,148
Add: Other operating income / (expenses)
(413)
(2,008)
2,965
Less: Other revenues
1,263
1,410
2,140
Net time and voyage charter revenues
1,111,780
1,201,622
620,916
Less: Voyage expenses & commission
278,550
252,865
194,544
Time charter equivalent income
833,230
948,757
426,372
Consistent with general practice in the shipping industry, we use TCE income as a measure to compare revenue generated from
a voyage charter to revenue generated from a time charter. We define TCE income as operating revenues less voyage expenses
and commission plus amortization of time charter party out contracts. Under time charter agreements, voyage costs, such as
bunker fuel, canal and port charges and commissions, are borne and paid by the charterer whereas under voyage charter
agreements, voyage costs are borne and paid by the owner. TCE income is a common shipping industry performance measure
used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter
types (i.e., spot charters and time charters) under which the vessels may be employed between the periods. TCE income, a non-
U.S. GAAP measure, provides additional meaningful information in conjunction with operating revenues, the most directly
comparable U.S. GAAP measure, because it assists management in making decisions regarding the deployment and use of our
vessels and in evaluating their financial performance, regardless of whether a vessel has been employed on a time charter or a
voyage charter.
(5)TCE rate, represents the weighted average daily TCE income of our entire operating fleet.
(in thousands of $, except for TCE Rate and days)
2022
2021
2020
Time charter equivalent income
833,230
948,757
426,372
Fleet available days
35,217
35,114
32,867
Fleet offhire days
(874)
(716)
(1,204)
Fleet onhire days
34,343
34,398
31,663
Time charter equivalent rate
24,262
27,582
13,466
TCE rate is a measure of the average daily income performance, following alignment of the revenue streams resulting from
operation of the vessels under voyage or spot charters and time charters, as detailed in footnote 5 above. Our method of
calculating TCE rate is determined by dividing TCE income by onhire days during a reporting period. Onhire days are
calculated on a vessel by vessel basis and represent the net of available days and offhire days for each vessel (owned or
chartered in) in our possession during a reporting period. Available days for a vessel during a reporting period is the number of
days the vessel (owned or chartered in) is in our possession during the period. By definition, available days for an owned vessel
equal the calendar days during a reporting period, unless the vessel is delivered by the yard during the relevant period whereas;
available days for a chartered-in vessel equal the tenure in days of the underlying time charter agreement, pro-rated to the
relevant reporting period if such tenure overlaps more than one reporting periods. Offhire days for a vessel during a reporting
period is the number of days the vessel is in our possession during the period but is not operational as a result of unscheduled
repairs, scheduled drydocking or special or intermediate surveys and lay-ups, if any.
Overview of fleet
The following discussion should be read in conjunction with "Item 4. Information on the Company" and the audited
Consolidated Financial Statements and Notes thereto included herein.
As of December 31, 2022, we owned 75 dry bulk vessels and had construction contracts for ten newbuildings. In addition, we
had nine vessels chartered-in (of which seven and one are chartered in on finance leases and operating leases, respectively, from
SFL and one is chartered in on an operating lease from an unrelated third party). Our owned vessels are owned and operated by
one of our subsidiaries and are flagged either in the Marshall Islands, Hong Kong or Panama. As of December 31, 2022, five of
41
our vessels were chartered-out on fixed rate time charters, 37 of our vessels were chartered out on index linked rate time
charters, 42 vessels operated in the spot market.
Fleet Changes
Refer to "Item 4. Information on the Company - A. History and Development of the Company" for a discussion on acquisitions
and disposals of vessels during the years ended December 31, 2022, 2021, and 2020. A summary of the changes in the vessels
that we own and chartered in under long-term operating and finance leases for the years ended December 31, 2022, 2021 and
2020 is summarized below.
 
2022
2021
2020
Newcastlemax
At start of period
13
3
3
Acquisitions and newbuilding deliveries
—
10
d
—
At end of period
13
13
3
Capesize
At start of period
43
43
43
Acquisitions and newbuilding deliveries
—
—
—
Disposals
—
—
—
At end of period
43
43
43
Panamax
At start of period
33
29
30
Acquisitions and newbuilding deliveries
—
8
e
—
Disposals
(4)
a
(4)
f
(1)
g
Redelivery
(2)
b
—
—
At end of period
27
33
29
Ultramax
At start of period
3
3
3
Acquisitions and newbuilding deliveries
—
—
—
Disposals
(2)
c
—
—
At end of period
1
3
3
Total
At start of period
92
78
79
Acquisitions and newbuilding deliveries
—
18
—
Disposals
(6)
(4)
(1)
Redelivery
(2)
—
—
84
92
78
a.(i) Disposal of three vessels (Golden Empress, Golden Endeavour and Golden Enterprise) to an unrelated third party
and (ii) disposal of one vessel (Golden Ice) to an unrelated third party.
b.Redelivery of two vessels (Admiral Schmidt and Vitus Bering) to their owner in May 2022 and as such are not included
in our fleet.
c.Disposal of two vessels (Golden Cathrine and Golden Cecilie) to an unrelated third party.
d.(i) Delivery of one newbuilding (Golden Spray) and (ii) delivery of nine vessels (Golden Coral, Golden Champion,
Golden Comfort, Golden Courage, Golden Competence, Golden Confidence, Golden Skies, Golden Spirit and Golden
Saint) acquired from affiliates of Hemen.
e.(i) Delivery of two newbuildings (Golden Fast and Golden Furious) and (ii) delivery of six vessels (Golden Fortune,
Golden Forward, Golden Friend, Golden Fellow, Golden Frost and Golden Freeze) acquired from affiliates of
Hemen.
f.Disposal of four vessels (Golden Shea, Golden Saguenay, Golden Opportunity and Golden Endurer) to unrelated third
parties.
g.Redelivery of one vessel (Golden Eclipse) following the expiration of the lease in April 2020.
Summary of Fleet Employment
42
As discussed below, as of December 31, 2022, our vessels operated under time charters or voyage charters.
A time charter agreement is a contract entered into by an owner and a charterer whereby the charterer is entitled to the use of a
vessel for a specific period of time for a specified daily fixed or index-linked rate of hire. Under a time charter agreement,
voyage costs, such as bunker fuel and port charges, are borne and paid by the charterer. In the time charter market, rates vary
depending on the length of the charter period and vessel specific factors such as age, speed and fuel consumption. An index-
linked rate usually refers to freight rate indices issued by the Baltic Exchange, such as the Baltic Capesize Index and the Baltic
Panamax Index. These rates are based on actual charter hire rates under charter entered into by market participants, as well as
daily assessments provided to the Baltic Exchange by a panel of major shipbrokers.
A voyage or spot charter agreement is a contract entered into by an owner and a charterer whereby a charterer is entitled to the
use of a vessel to transport commodities between specified geographical locations at a specified freight rate per ton. Under
voyage charter agreements, voyage costs are borne and paid by the owner. In the voyage charter market, rates are also
influenced by cargo size, commodity, port dues and canal transit fees, as well as delivery and redelivery regions. In general, a
larger cargo size is quoted at a lower rate per ton than a smaller cargo size. Routes with costly ports or canals generally
command higher rates than routes with low port dues and no canals to transit. Voyages with a load port within a region that
includes ports where vessels usually discharge cargo or a discharge port within a region with ports where vessels load cargo are
generally quoted at lower rates, because such voyages generally increase vessel utilization by reducing the unloaded portion (or
ballast leg) that is included in the calculation of the return charter to a loading area.
43
 
As of December 31,
 
2022
2021
2020
 
Number of
vessels
Percentage
of fleet
Number of
vessels
Percentage
of fleet
Number of
vessels
Percentage
of fleet
Newcastlemax
Spot
8
61.5%
8
61.5%
2
66.7%
Spot with RSA
—
—
—
—
—
—
Time charter
—
—
—
—
1
33.3%
Index linked time charter
5
38.5%
5
38.5%
—
—
13
100.0%
13
100.0%
3
100.0%
Capesize
Spot
17
39.5%
22
51.2%
1
2.3%
Spot with RSA
—
—
—
—
23
53.5%
Time charter
—
—
—
—
1
2.3%
Index linked time charter
26
60.5%
21
48.8%
18
41.9%
43
100.0%
43
100.0%
43
100.0%
Panamax
Spot
16
59.3%
24
72.7%
23
79.3%
Spot with RSA
—
—
—
—
—
—
Time charter
5
18.5%
5
15.2%
6
20.7%
Index linked time charter
6
22.2%
4
12.1%
—
—
27
100.0%
33
100.0%
29
100.0%
Ultramax
Spot
1
100.0%
—
—
—
—
Spot with RSA
—
—
—
—
3
100.0%
Time charter
—
—
3
100.0%
—
—
Index linked time charter
—
—
—
—
—
—
1
100.0%
3
100.0%
3
100.0%
Total
Spot
42
50.0%
54
58.7%
26
33.3%
Spot with RSA ¹
—
—
—
—
26
33.3%
Time charter
5
6.0%
8
8.7%
8
10.3%
Index linked time charter
37
44.0%
30
32.6%
18
23.1%
84
100.0%
92
100.0%
78
100.0%
(1) During 2021, 34 of our Capesize and Newcastlemax vessels that traded in the Capesize Chartering Ltd. ("CCL") pool
contributed with an average of 256 days per vessel. In August 2021, we announced termination of our relationship with CCL
pool, and by December 31, 2021, the last vessels had been redelivered to us. In addition, three of our Ultramax vessels traded in
the CTM pool during 2021.
Below is an overview as of December 31, 2022 of our vessels on time charter contracts that had a minimum initial contract
duration of more than 11 months:
Vessel Type
Vessel Name
Dwt
Expiry (min period)
Panamax
Golden Daisy
81,507
June 2023
Panamax
Golden Rose
81,585
September 2023
Panamax
Golden Sue
84,943
March 2023
Panamax
Golden Deb
84,943
June 2023
Panamax
Golden Kennedy
83,789
March 2023
44
Refer to "Item 4. Information on the Company - D. Property Plant and Equipment" for a summary of key information of our
fleet as of the date of this annual report. In addition, from time to time we may also enter into Forward Freight Agreements
("FFAs"), to hedge our exposure to the charter market for a specified route and period of time. Refer to Note 28, "Financial
Assets and Liabilities", to our Consolidated Financial Statements included herein for additional information on our financial
instruments.
Our Fleet – 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, newbuildings and right of use assets", we discuss our policy
for impairing the carrying values of our vessels and newbuildings. During the past few years, the market values of vessels have
experienced particular volatility, with valuations reaching peak in the first half of 2022 following subsequent declines in the
second half of 2022 for many vessel classes. As such, the charter-free market value, or basic market value, of certain of our
vessels may be below those vessels' carrying value, even though we would not impair those vessels' carrying value under the
accounting impairment policy, as the future undiscounted cash flows expected to be earned by such vessels over their operating
lives would exceed such vessels' carrying amounts.
Our estimates of basic market value assume that our vessels are 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 the values achieved for the
sale/purchase of similar vessels and appraised valuations and are inherently uncertain. In addition, vessel values are highly
volatile; as such, our estimates may not be indicative of the current or future basic market value of the vessels or prices that we
could achieve if we were to sell them.
The table set forth below indicates the carrying value of each of our owned vessels as of December 31, 2022 and 2021:
Vessel Type
Vessel Name
Built
Dwt
2022
($ millions)
2021
($ millions)
Newcastlemax
Golden Scape
2016
211,112
54.6*
57.0*
Newcastlemax
Golden Swift
2016
211,112
54.0*
56.3*
Newcastlemax
Golden Gayle
2011
206,565
26.8
26.7
Newcastlemax
Golden Skies
2020
210,897
49.7
51.4
Newcastlemax
Golden Competence
2019
208,000
49.8
51.5
Newcastlemax
Golden Confidence
2019
207,998
49.7
51.6
Newcastlemax
Golden Champion
2019
208,391
47.0
48.7
Newcastlemax
Golden Coral
2019
208,132
47.1
48.8
Newcastlemax
Golden Saint
2020
211,138
49.8
51.5
Newcastlemax
Golden Spirit
2020
210,866
50.7
52.4
Newcastlemax
Golden Comfort
2020
208,000
49.7
51.5
Newcastlemax
Golden Courage
2020
208,395
49.5
51.3
Newcastlemax
Golden Spray
2021
208,000
51.5
53.2
Capesize
Golden Feng
2009
169,232
28.0*
29.7
Capesize
Golden Shui
2009
169,333
28.1*
29.7
Capesize
KSL Salvador
2014
180,958
50.0*
52.4*
Capesize
KSL San Francisco
2014
181,066
47.6*
49.9*
Capesize
KSL Santiago
2014
181,020
50.0*
52.4*
Capesize
KSL Santos
2014
181,055
50.4*
52.8*
Capesize
KSL Sapporo
2014
180,960
52.1*
54.7*
Capesize
KSL Seattle
2014
181,015
51.8*
54.4*
Capesize
KSL Singapore
2014
181,062
48.9*
51.3*
Capesize
KSL Sydney
2014
181,000
52.3*
54.9*
Capesize
KSL Sakura
2015
181,062
48.1*
50.4*
Capesize
KSL Seoul
2015
181,010
51.2*
53.6*
45
Capesize
KSL Stockholm
2015
181,055
48.7*
51.0*
Capesize
KSL Seville
2015
181,062
50.7*
53.1*
Capesize
Golden Kathrine
2015
182,486
51.9*
54.4*
Capesize
Golden Aso
2015
182,472
52.9*
55.3*
Capesize
Golden Finsbury
2015
182,418
43.0*
44.9
Capesize
Golden Barnet
2016
180,355
42.9*
44.7
Capesize
Golden Bexley
2016
180,209
42.8*
44.6
Capesize
Golden Fulham
2016
182,610
41.2*
43.0
Capesize
Golden Amreen
2015
179,337
33.4
34.8
Capesize
Golden Anastasia
2014
179,189
32.0
33.3
Capesize
Golden Behike
2016
180,491
33.7
35.1
Capesize
Golden Houston
2014
181,214
31.0
32.3
Capesize
Golden Kaki
2014
181,214
32.2
33.6
Capesize
Golden Monterrey
2016
180,491
36.0
37.5
Capesize
Golden Myrtalia
2011
177,979
22.3
21.9
Capesize
Golden Nimbus
2017
180,504
42.0*
43.7
Capesize
Golden Savannah
2017
181,044
51.3*
53.5*
Capesize
Golden Surabaya
2017
181,046
51.1*
53.3*
Capesize
Golden Cumulus
2018
180,499
42.6*
44.3
Capesize
Golden Cirrus
2018
180,487
42.6*
44.3
Capesize
Golden Incus
2018
180,511
42.5*
44.2
Capesize
Golden Calvus
2018
180,521
42.5*
44.1
Capesize
Golden Arcus
2018
180,478
42.6*
44.2
Panamax
Golden Ice ****
2008
75,500
—
11.9
Panamax
Golden Strength ****
2009
75,500
—
13.1
Panamax
Golden Suek
2011
74,849
14.2
14.3
Panamax
Golden Bull
2012
75,000
15.2
15.2
Panamax
Golden Brilliant
2013
74,500
15.9
16.6
Panamax
Golden Diamond
2013
74,062
16.1
16.8
Panamax
Golden Pearl
2013
74,186
16.0
16.7
Panamax
Golden Ruby
2014
74,052
17.6
18.4
Panamax
Golden Sue
2013
84,943
19.7
20.6
Panamax
Golden Deb
2013
84,943
20.3
21.3
Panamax
Golden Kennedy
2015
83,789
20.3
21.2
Panamax
Golden Opal
2017
74,231
18.7
19.4
Panamax
Golden Amber
2017
74,500
18.5
19.2
Panamax
Golden Empress **
2010
79,463
—
13.8
Panamax
Golden Endeavour **
2010
79,454
—
13.8
Panamax
Golden Enterprise **
2011
79,463
—
14.5
Panamax
Golden Daisy
2012
81,507
16.3
16.5
Panamax
Golden Ginger
2012
81,487
16.2
16.5
Panamax
Golden Rose
2012
81,585
16.3
16.5
Panamax
Golden Jake
2011
82,188
15.1
15.9
Panamax
Golden Arion
2011
82,188
15.1
15.9
Panamax
Golden Ioanari
2011
81,526
14.5
14.8
Panamax
Golden Keen
2012
81,586
16.1
16.4
Panamax
Golden Fortune
2020
81,600
26.2
27.2
46
Panamax
Golden Fellow
2020
81,135
26.3
27.2
Panamax
Golden Frost
2020
80,559
27.0
27.8
Panamax
Golden Forward
2021
81,130
27.2
28.1
Panamax
Golden Friend
2021
81,206
27.2
28.2
Panamax
Golden Freeze
2021
81,000
29.1
30.1
Panamax
Golden Fast
2021
81,000
29.7
30.7
Panamax
Golden Furious
2021
81,000
29.9
30.9
Ultramax
Golden Cecilie ***
2015
60,263
—
20.4
Ultramax
Golden Cathrine ***
2015
60,000
—
20.4
2,665.0
2,879.5
*Indicates vessels for which we believe, as of December 31, 2022 and/or 2021, the basic charter-free market value is lower than
the vessel’s carrying value. We believe that the aggregate carrying value of these vessels exceed their December 31, 2022 and
2021 aggregate basic charter-free market value by approximately $328.1 million and $192.2 million, respectively. We believe
that the estimated future undiscounted cash flows expected to be earned by each of these vessels over its remaining estimated
useful life, exceed each of these vessel's carrying value as of December 31, 2022 and 2021, respectively, and accordingly, we
have not recorded an impairment charge. The aggregate carrying value of our total fleet is above the aggregate basic charter-
free market value by approximately $124.0 million as of December 31, 2022. The aggregate carrying value of our total fleet is
below the aggregate basic charter-free market value by approximately $265.7 million as of December 31, 2021.
**In February 2022, we entered into an agreement to sell en-bloc three older Panamax vessels, Golden Empress, Golden
Enterprise and Golden Endeavour to an unrelated third party. In April and May 2022, the vessels were delivered to their new
owner. We recorded a gain of $9.5 million from the sale in the second quarter of 2022.
***In June 2022, we entered into an agreement to sell en-bloc two Ultramax vessels, Golden Cecilie and Golden Cathrine, to
an unrelated third party. In September 2022, the vessels were delivered to their new owner. We recorded a gain of $21.9 million
from the sale in the third quarter of 2022.
****In November 2022, we entered into an agreement to sell two Panamax vessels, Golden Ice and Golden Strength, to an
unrelated third party. In December 2022 and January 2023, the vessels were delivered to their new owner, respectively. We
recorded a gain of $2.8 million from the sale of Golden Ice in the fourth quarter of 2022, and expect to record a gain of $2.7
million in the first quarter of 2023 from the sale of Golden Strength, which has been classified as a vessel held for sale as of
December 31, 2022.
We refer you to the risk factor entitled "The market values of our vessels may decline, which could limit the amount of funds
that we can borrow, cause us to breach certain financial covenants in our credit facilities, or result in an impairment charge, and
cause us to incur a loss if we sell vessels following a decline in their market value".
Factors Affecting Our Results
The principal factors which affect our results of operations and financial position include:
•the earnings from our vessels;
•gains (losses) from the sale of assets;
•other operating income (expenses), net
•ship operating expenses;
•impairment losses on vessels and newbuildings;
•impairment losses on right of use assets;
47
•administrative expenses;
•depreciation;
•interest expense;
•share of results of associated companies; and
•changes in fair value of our financial instruments.
We derive our earnings from time charters, voyage charters and revenue sharing arrangements. As of December 31, 2022, 42 of
our 84 vessels, which are owned or leased in by us, were employed in the voyage charter market or on short-term time charters
of less than eleven months. The dry bulk industry has historically been highly cyclical, experiencing volatility in profitability,
vessel values and freight rates.
Gains and losses on the sale of vessels are recognized when the vessel has been delivered and all risks have been transferred
and are determined by comparing the net proceeds received with the carrying value of the vessel.
Revenues generated through revenue sharing agreements, or RSAs, are presented gross when we are considered the principal
under the charter parties with the net income allocated under the RSA presented as other operating income, net.
Ship operating costs are the direct costs associated with running a vessel and include crew costs, vessel supplies, repairs and
maintenance, drydockings, lubricating oils, insurance and management fees.
An impairment loss on a vessel, newbuilding or right of use asset is recognized when the carrying value exceeds the estimated
future net undiscounted cash flows expected to be earned over the remaining estimated useful life of the vessel or right of use
asset, or exceeds the estimated net sales proceeds when a vessel is classified as held for sale.
Administrative expenses are comprised of general corporate overhead expenses, including personnel costs, property costs, audit
fees, legal and professional fees, stock option expenses and other general administrative expenses. Personnel costs include,
among other things, salaries, pension costs, fringe benefits, travel costs and health insurance.
Depreciation, or the periodic costs charged to our income for the reduction in usefulness and long-term value of our vessels, is
also related to the number of vessels we own or lease. We depreciate the cost of vessels we own, less their estimated residual
value, over their estimated useful life on a straight-line basis. We depreciate the cost of vessels held under finance lease over the
term of the lease. No charge is made for depreciation of vessels under construction until they are delivered.
Interest expense relates to vessel specific debt facilities and finance leases. Interest expense depends on our overall borrowing
levels and may significantly increase when we acquire vessels or on the delivery of newbuildings. Interest expense may also
change with prevailing interest rates, although the effect of these changes may be reduced by interest rate swaps or other
derivative instruments.
Our marketable equity securities are investments in equity securities with readily determinable fair values. These investments
are measured at fair value and any resulting unrealized gains and losses are recorded in the consolidated statement of
operations.
None of our derivatives qualify for hedge accounting and changes in fair values are recognized in the Consolidated Statement
of Operations.
Share of results from associated companies is accounted for under equity method of accounting.
Inflation
Inflation has only had a moderate effect on our expenses despite the current economic conditions. Significant global
inflationary pressures (such as triggered by war between Russia and the Ukraine) increase operating, voyage, general and
administrative, financing costs. Historically shipping companies are accustomed to navigating in shipping downturns, coping
with inflationary pressures and monitoring costs to preserve the liquidity, as they typically encourage suppliers and service
providers to lower rates and prices.
Except from bunker fuel prices, other inflationary effects were so far immaterial in the period ended December 31, 2022. In
particular, we have observed inflation affecting ship operating expenses, such as spares freight, services and flight tickets for
crew; however, these effects were not material in comparison to our total ship operating expenses (travel expenses and freight
of spares were estimated to be $4.2 and $1.4 million more expensive due to inflation in 2022).
48
The extent of inflation impact on our future financial and operational results, which could be material, will depend on the
duration and severity of the Russo-Ukrainian War and the overall macroeconomic situation. For 2023 we expect an increase in
crew expenses of approximately 6%, due to Russian seafarers no longer being present in the global pool, which decreases
overall number of seafarers in the world. Therefore, there will be an increased demand for qualified crew, and this has and will
continue to put inflationary pressure on crew costs. In addition, it is anticipated that insurance costs, which have risen over the
last three years, will increase by 5% to 10% in 2023. Further, to stay compliant with environmental requirements, we expect to
incur additional drydock costs per vessel of up to 20% in 2023 (for cargo hold maintenance and hull/cargo sand blasting and
painting)
Year ended December 31, 2022 compared with year ended December 31, 2021
Operating revenues
We currently operate most of our vessels in the spot market, exposing us to fluctuations in spot market charter rates. As a result,
our shipping revenues and financial performance are significantly affected by conditions in the dry bulk spot market, and any
decrease in spot charter rates may adversely affect our earnings. In addition, the mix of charters between spot or voyage
charters and time charters also affects our revenues and voyage expenses. In 2022, market conditions softened compared to
those in 2021, which is illustrated by a decrease in the Baltic Dry Index, or BDI, from an average of 2,943 points in 2021 to an
average of 1,936 in 2022. This is also evidenced through a decrease in our achieved TCE rate for the full fleet from $27,582 per
day in 2021 to $24,262 per day in 2022. Our achieved TCE rates are a combination of many factors, including, but not limited
to, timing of entering into contracts, earnings on our scrubber fitted vessels due to the level of price spread between high sulfur
and low sulfur fuel, as well as the mix of charters between spot or voyage charters and time charters. In addition, vessels and
newbuildings acquired from affiliates of Hemen, our largest shareholder, in 2021 were delivered between April and June 2021,
therefore only having a partial effect in 2021, as opposed to a full effect in 2022.
(in thousands of $)
2022
2021
Change
Time charter revenues
593,795
603,959
(10,164)
Voyage charter revenues
518,398
597,812
(79,414)
Other revenues
1,263
1,410
(147)
Total operating revenues
1,113,456
1,203,181
(89,725)
Time charter revenues decreased by $10.2 million in 2022 compared with 2021, primarily due to:
•a decrease of $43.4 million reflecting lower rates under index-linked and short-term time charters for vessels that were
in our fleet through the duration of both these periods;
•a decrease of $36.0 million due to sale of ten vessels which were delivered to new owners during 2021 and 2022,
whereas for 2021, the vessels were in our fleet for part of or the entire duration of the period; and
•a decrease of $35.4 million reflecting lower market rates for the vessels acquired from affiliates of Hemen in 2021,
The decrease in time charter revenues described above was partially offset by:
•an increase of $65.1 million attributable to an increase in the number of time charter days for own vessels attributable
to contract type mix between time charter and voyage charter for vessels that were in our fleet through the duration of
both of these periods;
•an increase of $21.6 million generated from the vessels acquired from affiliates of Hemen in 2021 attributable to an
increase in the number of time charter days;
•an increase of $14.1 million reflecting increase in bunker prices for bunkers on board delivered to charterers during the
period; and
•an increase of $3.8 million attributable to chartered-in vessels that traded on time charters during the period.
Voyage charter revenues decreased by $79.4 million in 2022 compared with 2021, primarily due to:
•a decrease of $142.0 million attributable to a reduction of voyage days due to contract type mix between time charter
and voyage charter for vessels that were in our fleet through the duration of both of these periods;
•a decrease of $21.2 million relating to reduced voyage activity of chartered-in vessels partially due to the acquisition of
18 vessels from affiliates of Hemen;
•a decrease of $14.8 million reflecting lower market rates for the vessels acquired from affiliates of Hemen in 2021; and
49
•a decrease of $4.4 million due to sale of four vessels which were delivered to new owners during 2021 and 2022,
whereas for 2021, the vessels were in our fleet for part of or the entire duration of the period.
The decrease in voyage charter revenues described above was partially offset by:
•an increase of $70.5 million generated from the vessels acquired from affiliates of Hemen in 2021 attributable to an
increase in the number of voyage days; and
•an increase of $32.5 million reflecting the increase in the dry bulk market for Panamax vessels as well as higher
earnings for scrubber fitted vessels, which resulted in higher rates for vessels that were in our fleet through the
duration of both these periods.
Other revenues decreased by $0.1 million in 2022 compared with 2021 primarily attributable to a decrease in commercial
management services.
As a result of the factors mentioned above, the average TCE rate decreased from $27,582 for the year ended December 31,
2021 to $24,262 for the year ended December 31, 2022.
Gain on sale of assets
(in thousands of $)
2022
2021
Change
Gain on sale of assets
34,185
9,788
24,397
Gain on sale of assets increased by $24.4 million in 2022 compared with 2021. In 2022, we sold a total of six vessels, Golden
Empress, Golden Enterprise, Golden Endeavour, Golden Cecilie, Golden Cathrine and Golden Ice, and recorded a gain of
$34.2 million. In 2021, we sold a total of two vessels, Golden Endurer and Golden Opportunity, and recorded a gain of $9.8
million.
Other operating income (expenses), net
(in thousands of $)
2022
2021
Change
Other operating income (expenses), net
(413)
(2,008)
1,595
The amount booked under "Other operating income (expenses), net" was in 2021 the settlement amount with CCL related to the
difference between the calculated pool result for our own vessels and the actual result from the charter party with the third party
customer. The decrease in "Other operating income (expenses), net" from 2021 is primarily related to the termination of our
relationship with CCL. All vessels were delivered to us in 2021. In 2022, we have recorded an adjustment for the financial year
2021 based on updated CCL results for 2021.
Voyage expenses and commission
(in thousands of $)
2022
2021
Change
Voyage expenses and commission
278,550
252,865
25,685
 
Voyage expenses and commission increased by $25.7 million in 2022 compared with 2021 primarily due to:
•an increase of $77.9 million attributable to increase in fuel prices and commissions;
•an increase of $35.1 million generated by an increase in number of voyage days for the vessels acquired from affiliates
of Hemen in 2021; and
•an increase of $10.0 million relating to vessels chartered in, primarily due to increase in fuel prices; partially offset by
•a decrease of $93.4 million relating to decrease in number of voyage days due to a change in contract type mix
between time charter and voyage charter for vessels which were in our fleet during both periods; and
•a decrease of $3.9 million relating to vessels sold in 2021 and 2022.
Ship operating expenses
(in thousands of $)
2022
2021
Change
Ship operating expenses
225,971
208,894
17,077
Ship operating expenses increased by $17.1 million in 2022 compared with 2021 primarily due to:
50
•an increase of $16.8 million related to running ship operating expenses, primarily as a result of the vessels acquired
from affiliates of Hemen in 2021;
•an increase of $4.2 million in crew costs due to increase in travel expenses;
•an increase of $8.1 million due to increase of freight of spares, insurance deductibles and other technical costs
•an increase of $5.7 million related to various vessels upgrades, mostly due to our decarbonization efforts, and
•an increase of $1.1 million related to various owner related expenses.
This was partially offset by:
•a decrease of $12.0 million related to vessels sold in 2021 and 2022;
•a decrease in COVID-19 related expenses by $4.8 million; and
•a decrease of $2.0 million attributable to the non-lease component, or service element, from charter hire expenses to
ship operating expenses for vessels chartered in on time charters during the period.
As a result, daily operating costs per vessel (excluding drydocking costs) increased by $482 per day, from $5,662 per day
during the year ended December 31, 2021 to $6,144 per day during the year ended December 31, 2022. Of the increase of $482
per day, approximately $200 per day relates to various vessel upgrades due to our decarbonization efforts.
Charter hire expenses
(in thousands of $)
2022
2021
Change
Charter hire expenses
57,406
89,559
(32,153)
Charter hire expenses decreased by $32.2 million in 2022 compared with 2021 primarily due to:
•a decrease of $14.6 million related to vessels acquired from affiliates of Hemen in 2021 that were chartered in before
the acquisition;
•a decrease of $8.8 million related to a decrease in trading activity for short-term charter-in activity from third parties;
•a decrease of $6.8 million attributable to profit share amount for SFL vessels; and
•a decrease of $2.0 million attributable to decrease in variable component for operating leases, including index-linked
remuneration for the Ultramax vessel Golden Hawk.
Administrative expenses
(in thousands of $)
2022
2021
Change
Administrative expenses
20,375
18,149
2,226
Administrative expenses increased by $2.2 million in 2022 as compared to 2021 due to an increase of $1.3 million in personnel
related expenses, $0.8 million in office and IT expenses and a net increase of $0.1 million in other administrative expenses.
Impairment loss on vessels
(in thousands of $)
2022
2021
Change
Impairment loss on vessels
—
4,187
(4,187)
In January 2021, we entered into an agreement to sell Golden Saguenay, a Panamax vessel, to an unrelated third party for a total
gross amount of $8.4 million, and we recognized a $4.2 million impairment loss in connection with the sale in 2021. No
impairments were recorded in 2022.
Depreciation
(in thousands of $)
2022
2021
Change
Depreciation
129,839
123,699
6,140
Depreciation expenses increased by $6.1 million in 2022 as compared to 2021, primarily due to:
•an increase of $9.5 million attributable to vessels acquired from affiliates of Hemen in 2021, and
•an increase of $0.2 million attributable to vessels that were in our fleet during both periods.
The increase was partially offset by:
51
•a decrease of $3.6 million attributable to sale of vessels in 2021 and 2022.
Interest income
(in thousands of $)
2022
2021
Change
Interest income
2,345
484
1,861
Interest income increased by $1.9 million in 2022 compared with 2021 primarily due to higher interest rates earned on our
deposits.
Interest expense
(in thousands of $)
2022
2021
Change
Interest on floating rate debt
45,792
26,649
19,143
Finance lease interest expense
6,989
6,690
299
Commitment fees
2,273
498
1,775
Interest capitalized on newbuildings
(2,424)
—
(2,424)
Amortization of deferred charges
3,618
2,677
941
Related party interest expense
—
3,395
(3,395)
Interest expense
56,248
39,909
16,339
Interest expense increased by $16.3 million in 2022 compared with 2021, primarily due to:
•an increase of $19.1 million attributable to higher interest on our floating debt primarily due to an increase in LIBOR
rates, with the average 3-month LIBOR rates increasing from 0.16% in 2021 to 2.40% in 2022;
•an increase of $1.8 million in commitment fees during 2022;
•an increase of $0.9 million of amortization of deferred charges; and
•an increase of $0.3 million in finance lease interest expenses.
These factors were partially offset by:
•a decrease of $3.4 million attributable to decrease of interest on related party debt after refinancing with third parties of
the $413.6 million loan agreement with Sterna Finance Ltd. ("Sterna Finance"), an affiliate of Hemen; and
•an increase of $2.4 million in interest capitalized on newbuildings as ten newbuildings are due for delivery by 2024.
Equity results of associated companies
(in thousands of $)
2022
2021
Change
Equity results of associated companies
40,793
24,482
16,311
Equity results of associated companies increased by $16.3 million in 2022 compared to 2021. This was primarily due to
recognizing a total equity in earnings of $19.3 million from our investment in TFG Marine Pte Ltd ("TFG Marine") and United
Freight Carriers LLC ("UFC") in 2022 compared to a gain of $0.6 million in 2021. An increase in gain for TFG and UFC was
due to a combination of factors, among others, an increase in trading activity. In addition, our share in earnings from our
investment in SwissMarine Pte. Ltd. ("SwissMarine") amounted to $21.5 million in 2022 compared to an equity in earnings of
$24.4 million in 2021.
Gain (loss) on derivatives
(in thousands of $)
2022
2021
Change
Gain (loss) on derivatives
39,968
30,465
9,503
The gain on derivatives increased by $9.5 million in 2022 compared with 2021 primarily due to a positive development in the
fair value of our USD denominated interest rate swaps of $28.7 million, which correlates with the increase in the USD forward
rates. In addition, we had a positive development for bunker derivatives and foreign currency swaps of $0.2 million and $0.1
million, respectively.
52
This was partially offset by a reduction in gain from forward freight derivatives of $19.5 million. The loss from forward freight
derivatives was $0.6 million in 2022 compared with a gain of $18.9 million in 2021. The decrease in forward freight derivatives
gain was primarily attributable to a negative development in FFA market, where we settled a total position of 225 days in 2022
compared to settlement of a total position of 700 days in 2021.
Gain (loss) on marketable equity securities
(in thousands of $)
2022
2021
Change
Gain (loss) on marketable equity securities
503
(2,000)
2,503
The gain on marketable equity securities in 2022 relates to our investment in Eneti Inc., a company engaged in marine based
renewable energy. Eneti Inc. was, until February 2021, named Scorpio Bulkers Inc., engaged in dry bulk shipping. Eneti Inc. is
listed on the New York Stock Exchange, measured at fair value, with changes in the fair value recognized in the Consolidated
Statements of Operations.
Other financial items
(in thousands of $)
2022
2021
Change
Other financial items
(222)
477
(699)
Other financial items decreased by $0.7 million in 2022 compared with 2021 primarily due to a decrease of $0.7 million and
$0.1 million in other financial charges and foreign exchange loss, respectively, offset by an increase of $0.1 million in bank
charges.
For the discussion of our operating results in 2021 compared with 2020, we refer to "Item 5. Operating and Financial Review
and Prospects" included in our annual report on Form 20-F for the year ended December 31, 2021, which was filed with the
U.S. Securities and Exchange Commission on March 24, 2022.
Recently Issued Accounting Standards
Refer to Note 3, "Recently Issued Accounting Standards", of "Item 18. Financial Statements".
B. LIQUIDITY AND CAPITAL RESOURCES
We operate in a capital-intensive industry and have historically financed our purchase of vessels through a combination of
equity capital and borrowings from commercial banks, as well as issuance of convertible bonds. Our ability to generate
adequate cash flows on a short and medium term basis depends substantially on the trading performance of our vessels in the
market. Periodic adjustments to the supply of and demand for dry bulk vessels cause the industry to be cyclical in nature.
We expect continued volatility in market rates for our vessels in the foreseeable future with a consequent effect on our short and
medium term liquidity.
Our funding and treasury activities are conducted within corporate policies to increase investment returns while maintaining
appropriate liquidity for our requirements. Cash and cash equivalents are held primarily in U.S. dollars with some balances held
in Norwegian Kroner, Euro and Singapore dollars.
Our short-term liquidity requirements relate to payment of operating costs (including drydocking), installation of ballast water
treatment systems on certain of our vessels, installation of scrubbers, activities relating to decarbonization, payment of
installments for newbuildings, funding working capital requirements, repayment of bank loans, lease payments for our
chartered in fleet and maintaining cash reserves against fluctuations in operating cash flows and payment of cash distributions.
Sources of short-term liquidity include cash balances, restricted cash balances, short-term investments and receipts from
customers, $50 million unused revolving credit tranche under $304 million facility and $50 million unused revolving credit
tranche under $175 million facility. Restricted cash consists of cash, which may only be used for certain purposes under the
Company's contractual arrangements and primarily comprises collateral deposits for derivative trading. Please refer to Note 11,
"Cash, Cash Equivalents and Restricted cash", for a description of our covenant requirements.
As of December 31, 2022 and 2021, we had cash and cash equivalents of $134.8 and $197.0 million, respectively. In addition,
as of December 31, 2022 and 2021, we had total restricted cash balances of $3.3 million and $13.0 million, respectively,
primarily comprising of collateral deposits for derivative trading. As of December 31, 2022, cash and cash equivalents included
53
cash balances of $61.3 million (December 31, 2021: $69.5 million), which are required to be maintained by the financial
covenants in our loan facilities.
As of December 31, 2022, the Company had ten Kamsarmax vessels under construction and outstanding remaining contractual
commitments of $255.6 million due by the fourth quarter of 2024. The remaining commitments will be partially financed with
the proceeds from sales of older vessels, including the sale of Golden Strength, cash on hand, operating cash flows and debt
financing to be established closer to the delivery of the newbuildings.
Other significant transactions subsequent to December 31, 2022, impacting our cash flows include the following:
•In January 2023, Golden Strength was delivered to its owner and we have received cash net of  commissions of $16.5
million
•In January 2023, the Company signed a loan agreement for a $250.0 million credit facility with a group of leading
shipping banks to refinance a $93.75 million credit facility, $131.79 million credit facility and $155.3 million credit
facility with total outstanding debt balance of $230.4 million as of December 31, 2022. The new financing has an
interest rate of SOFR plus 185 basis points. The refinancing was completed in February 2023.
•In February 2023, TFG Marine fully repaid the outstanding loan of $0.9 million, in addition to dividends of $4.9
million related to 2022.
•In February 2023, we signed agreements for the acquisition of six scrubber fitted Newcastlemax vessels from an
unrelated third party for a total consideration of $291.0 million. The transaction is expected to be closed by June 2023.
The vessels have an average age of around 2.5 years and will be chartered back to the seller for a period of 
approximately 36 months at an average fixed net TCE rate of approximately $21,000 per day. In March 2023, we
entered into a $233.0 million two-year credit facility to part finance the transaction. The facility has an interest of
SOFR plus a margin of 1.90% per annum. The remaining part of acquisition price will be financed with cash on hand.
•On February 16, 2023, the Company announced a cash dividend of $0.20 per share in respect of the fourth quarter of
2022, which was paid on or about March 9, 2023, to shareholders on record as of February 28, 2023. Shareholders
holding the Company’s shares through Euronext VPS received this cash dividend on or about March 13, 2023.
We believe that our working capital, cash on hand and borrowings under our current facilities will be sufficient to fund our
requirements for, at least, the 12 months from the date of this annual report.
Medium to Long-term Liquidity and Cash Requirements
Our medium and long-term liquidity requirements include funding drydockings, scrubbers, payment of installments for
newbuildings, BWTS, investments relating to environmental requirements and the debt and equity portion of potential
investments in new or replacement vessels and repayment of bank and related party loans. Potential additional sources of
funding for our medium and long-term liquidity requirements include new loans, refinancing of existing arrangements, equity
issues, public and private debt offerings, sales of vessels or other assets and sale and leaseback arrangements.
Summary of contractual obligations
As of December 31, 2022, we had the following contractual obligations:
 
Payment due by period
 
 
Less than
 
 
More than
(in thousands of $)
Total
one year
1-3 years
3-5 years
5 years
Floating rate debt
1,131,506
92,865
551,544
304,480
182,617
Operating lease obligations 1
18,597
5,546
6,133
5,014
1,904
Finance lease obligations 2
105,975
18,387
38,430
37,143
12,015
Ballast water treatment system commitments 3
1,000
1,000
—
—
—
Scrubber commitments
1,200
1,200
—
—
—
Newbuilding commitments4
255,603
158,959
96,644
—
—
Interest on floating rate debt 5
219,267
76,970
95,433
39,378
7,486
Interest on operating lease obligations1
3,019
954
1,405
604
56
Interest on finance lease obligations2
19,167
6,097
8,674
4,091
305
Total contractual cash obligations
1,755,334
361,978
798,263
390,710
204,383
54
1.As of December 31, 2022, we had two vessels under operating leases, one of which was with SFL and one with an
unrelated third party. The operating lease obligation for the SFL vessels excludes the purchase option exercisable at
the end of the ten-year minimum term to buy back the vessel together with the seven finance leased vessels en-bloc for
an aggregate $112.0 million and excludes the additional three years of hire that are at SFL's option. It is also net of the
$7,000 per day that SFL pays to us for operating costs. The table above does not reflect the contingent profit sharing
arrangement with SFL. See also Note 10, "Operating Leases", and Note 27, "Related Party Transactions", to our
audited Consolidated Financial Statements included herein.
2.As of December 31, 2022, we held seven vessels under finance leases from SFL. The table above does not reflect the
contingent profit sharing arrangement with SFL and purchase option. See also Note 27, "Related Party Transactions",
to our audited Consolidated Financial Statements included herein.
3.As of December 31, 2022, we had firm commitments to install ballast water treatment systems with an estimated
financial commitment, excluding installation costs, of $1.0 million.
4.Newbuilding commitments represent remaining capital commitments relating to ten Kamsarmax vessels for which we
entered into seven contracts in 2021 and three contracts in 2022.
5.Interest on floating rate debt was calculated using the three-month USD LIBOR plus the agreed LIBOR margin (or
adjusted LIBOR margin for SOFR facilities) applicable for each of our credit facilities and the respective outstanding
principal as of December 31, 2022.
Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated.
(in thousands of $)
2022
2021
2020
Net cash provided by operating activities
503,387
560,398
140,640
Net cash provided by (used in)  investing activities
72,816
(390,024)
(19,151)
Net cash used in financing activities
(648,147)
(135,459)
(109,631)
Net change in cash, cash equivalents and restricted cash
(71,944)
34,915
11,858
Cash, cash equivalents and restricted cash at beginning of period
210,017
175,102
163,244
Cash, cash equivalents and restricted cash at end of period
138,073
210,017
175,102
Net cash provided by operating activities
We have significant exposure to the spot market as on average only seven of our 83 owned and leased vessels traded on long-
term fixed rate time charter contracts during 2022. As of the date of this report, we have five vessels currently on a fixed rate
time charters with longer duration of more than 11 months. From time to time we may also enter into FFAs, to hedge our
exposure to the charter market for a specified route and period of time. See "Item 5. Operating and Financial Review and
Prospects" for further information of our FFA positions as of December 31, 2022. As a substantial part of our fleet trade on
either voyage charters or index linked time charter contracts, we are significantly exposed to the spot market. Therefore, our
reliance on the spot market contributes to fluctuations in cash flows from operating activities as a result of its exposure to
highly cyclical dry bulk charter rates. TCE represents operating revenues less other income and voyage expenses. TCE is
therefore impacted by both movements in operating revenues, as determined by market freight rates, and voyage expenses,
which are primarily comprised of bunker expenses, port charges and canal tolls. Any increase or decrease in the average TCE
rates earned by our vessels will have a positive or negative comparative impact, respectively, on the amount of cash provided
by operating activities, and as a result any increase or decrease in the average rates earned by our vessels in periods subsequent
to December 31, 2022, compared with the actual rates achieved during 2022, will as a consequence have a positive or negative
comparative impact on the amount of cash provided by operating activities.
Net cash provided by operating activities in the year ended December 31, 2022 was $503.4 million compared with $560.4
million and $140.6 million in the year ended December 31, 2021 and December 31, 2020, respectively. Net cash provided by
operating activities was primarily impacted by: (i) overall market conditions as reflected by TCE income of our fleet, (ii) the
size and composition of our fleet that we own, lease and charter-in, (iii) changes in operating assets and liabilities including
impact of whether our vessels are operated under time charters or voyage charters as revenues from time charters are generally
received monthly or bi-weekly in advance while revenues from voyage charters are received on negotiated terms for each
voyage, normally 90/95% after completed loading and the remaining after completed discharge, (iv) changes in net cash interest
expense as a result of outstanding debt and changes in LIBOR/SOFR, (v) the number of vessels drydocking in a period and (vi)
change in other operating items.
55
The decrease in net cash provided by operating activities of $57.0 million in the year ended December 31, 2022 compared with
the year ended December 31, 2021 was primarily driven by (i) impact by overall market conditions as reflected by decreased
TCE income of $123.2 million attributable to vessels that were in our fleet through the duration of both periods, (ii) $19.6
million positive result related to our fleet composition, primarily due to Vessel Acquisitions from Hemen, sale of vessels and
change in short-term trading activity, (iii) net positive effect of $78.3 million from change in operating assets and liabilities, (iv)
negative effect of $12.5 million as a result of increased net interest costs, (v) negative effect of $0.1 million related to more
vessels being drydocked in 2022 and (vi) a negative change of $19.2 million in other operating items.
Based on the current level of operating expenses, debt repayments, interest expenses and general and administrative costs, the
average cash break-even rates on a TCE basis are (i) approximately $14,000 per day for our Capesize vessels and (ii)
approximately $10,500 per day for our Panamax vessels. As of March 16, 2023, average market spot rates year to date were as
follows: Non-scrubber fitted Capesize vessels approximately $7,800 per day and non-scrubber fitted Panamax vessels
approximately $9,200 per day.
Net cash provided by  investing activities
Net cash provided by investing activities was $72.8 million in 2022 and comprised primarily:
•proceeds of approximately $51.5 million from the sale of the three Panamax vessels of Golden Empress, Golden
Enterprise and Golden Endeavour;
•proceeds of approximately $61.7 million from the sale of Golden Cecile and Golden Cathrine;
•proceeds of approximately $14.3 million from the sale of Golden Ice;
•$5.4 million repayment of a shareholder loan by SwissMarine; and
•$0.9 million proceeds received for sale of associate company SeaTeam Management Pte. Ltd. in 2020.
This was partially offset by the following:
•payments of approximately $5.0 million related to installation of ballast water treatment systems on certain of our
vessels, and
•installment payments of $56.0 million for ten Kamsarmax newbuilding contracts.
Net cash used in financing activities
Net cash used in financing activities in 2022 was $648.1 million were comprised of:
•distributions of $471.7 million in cash dividends to our shareholders;
•repayment of remaining debt in relation to refinancing of the $420.0 million credit facility in the total amount of
$265.6 million;
•ordinary repayment of long-term debt of $99.2 million;
•repayment of debt in connection with sale of Golden Empress, Golden Enterprise and Golden Endeavour, Golden
Cecilie, Golden Catrine, Golden Ice and Golden Strength of $52.4 million;
•repayments of $29.1 million in finance lease obligation;
•$3.3 million in share repurchases; and
•$2.8 million debt fees paid in connection with refinancing of $420.0 million facility.
This was partially offset by:
•the new $275.0 million credit facility being fully drawn down; and
•$0.8 million in proceeds from exercised share options.
Cash Flows for the Years ended December 31, 2021 and 2020
See "Item 5. Operating and Financial Review and Prospects – Liquidity and Capital Resources – Cash Flows – Cash Flows for
the Years Ended December 31, 2021 " in our annual report on Form 20-F for the year ended December 31, 2021 for a
discussion of our cash flows for 2021. For a discussion of our cash flows for 2020 please see "Item 5. Operating and Financial
Review and Prospects – Liquidity and Capital Resources – Cash Flows – Cash Flows for the Years Ended December 31, 2020 "
in our annual report on Form 20-F for the year ended December 31, 2020.
Borrowing Activities
$275.0 million term loan facility
56
In May 2022, we signed a loan agreement for a $275.0 million term loan and revolving facility to refinance our obligations
under the $420.0 million loan facility described below. The $420 million loan facility was secured by 14 Capesize vessels and
was scheduled to mature in June 2023. The new $275.0 million facility bears an interest of SOFR plus 190 basis points. All
tranches under the $225.0 million term loan facility and revolving credit tranche of $50.0 million mature in May 2027, with a
balloon payment of $170.0 million. Repayments are made on a quarterly basis from third quarter of 2022 onward. During 2022,
$11.1 million was repaid and there was no available undrawn amount.
$175.0 million term loan facility
In August 2021, we entered into the $175.0 million loan facility refinancing six Newcastlemax vessels acquired from Hemen,
previously financed under the $413.6 million loan agreement with Sterna Finance Ltd., a related party (the "Sterna Facility").
The $175 million loan facility has a five-year tenor and 19-year age adjusted repayment profile. The facility bears interest of
LIBOR plus a margin of 190 basis points. It also includes a $50 million non-amortizing revolving credit tranche. All tranches
under the term loan facility mature in August 2026, with a balloon payment of $77.1 million. Repayments of term loan are
made on a quarterly basis from fourth quarter of 2021 onward. During 2022, $10.1 million (2021: $2.5 million) was repaid in
regular repayments. In 2021, we repaid the full $50 million revolving credit tranche, consequently leaving an available undrawn
amount of $50 million.
$260.0 million lease financing
In August 2021, we signed a sale-and-leaseback agreement for an amount of $260.0 million, refinancing the remaining nine
vessels and three newbuildings financed by the Sterna Facility. The lease financing has a seven-year tenor, carries an interest
rate of LIBOR plus a margin of 200 basis points, has a straight line amortization profile of 21 years and has purchase options
throughout the term, with a purchase obligation at maturity. Repayments are made on a quarterly basis from fourth quarter of
2021 onward. During 2022, $12.4 million ($3.1 million in 2021) was repaid and there was no available undrawn amount.
$304.0 million term loan facility
In November 2020, we entered into the $304.0 million term loan and revolving credit facility to refinance our obligations under
$425.0 million credit facility that was scheduled to mature in March 2021. This loan facility has been entered into with six
reputable shipping banks, five of which were part of the group of banks that financed the $425.0 million credit facility and is
secured by 14 Capesize vessels. The term loan facility of $254.0 million has a tenor of five years and a 20-year age adjusted
repayment profile, carrying an interest cost of LIBOR plus a margin of 235 basis points. All tranches under the term loan
facility mature in November 2025, with a balloon payment of $165.2 million. Repayments of term loan are made on a quarterly
basis from first quarter of 2021 onward. The facility includes a non-amortizing revolving credit tranche of $50.0 million with
maturity date in November 2025. During 2022, $18.7 million (2021: $18.7 million) was repaid in regular repayments. In 2021,
we repaid the full $50.0 million revolving credit tranche, consequently leaving an available undrawn amount of $50.0 million.
$93.75 million loan facility
This facility has a five-year tenor and a 19-year age adjusted amortization profile. The facility bears interest of LIBOR plus a
margin of 215 basis points. Repayments are made on a quarterly basis from third quarter of 2019 onward. All tranches under
the facility mature in second quarter of 2024, with a balloon payment of in total $62.5 million. During 2022, $6.6 million (2021:
$6.6 million) was repaid and there was no available undrawn amount. The facility was refinanced in 2023 with the new
$250.0 million credit facility (please refer to description of the new facility in the beginning of section "Item 5. B. Liquidity and
Capital Resources").
$131.79 million loan facility
This facility has a five-year tenor and a 19-year age adjusted amortization profile. The facility bears interest of LIBOR plus a
margin of 210 basis points. Repayments are made on a quarterly basis from third quarter of 2019 onward. All tranches under
the facility mature in second quarter of 2024, with a balloon payment of in total $76.6 million. During 2022, $9.8 million (2021:
$15.4 million) was repaid and there was no available undrawn amount. The facility was refinanced in 2023 with the new
$250.0 million credit facility (please refer to description of the new facility in the beginning of section "Item 5. B. Liquidity and
Capital Resources").
$155.3 million loan facility
In November 2019, we refinanced our $284.0 million loan facility that financed 15 vessels and was scheduled to mature in
December 2019. A $155.3 million term loan facility was entered into with six reputable shipping banks, five of which were part
of the group of banks that financed the $284.0 million facility. In connection with this refinancing, we prepaid the outstanding
debt under the $284.0 million facility of $155.4 million. This facility bears interest of LIBOR plus a margin of 210 basis points.
Repayments are made on a quarterly basis from first quarter of 2020 onward. All tranches under the facility mature in fourth
quarter of 2024, with a balloon payment of in total $56.5 million. During 2022, $50.7 million (2021: $20.8 million) was repaid,
which included repayment of debt in connection to the sale of Golden Endeavour, Golden Empress, Golden Enterprise, Golden
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Cecilie and Golden Cathrine, amounting to $41.1 million. There was no available undrawn amount. The facility was refinanced
in 2023 with the new $250.0 million credit facility (please refer to description of the new facility in the beginning of section
"Item 5. B. Liquidity and Capital Resources").
$120.0 million term loan facility
In May 2018, we entered into a $120.0 million term loan facility to refinance 10 vessels and repay $58.3 million due under the
$34.0 million term loan facility and the $82.5 million term loan facilities with maturity in 2018 and prepay the full outstanding
amounts under our related party seller credit loans of $65.5 million. This facility bears interest of LIBOR plus a margin of 225
basis points. Repayments are made on a quarterly basis from third quarter of 2018 onward. All tranches under the facility
mature in April 2025, with a balloon payment of in total $52.4 million. During 2022, $17.5 million (2021: $18.6 million) was
repaid, which included repayment of debt in connection to the sale of Golden Ice and Golden Strength, amounting to
$11.4 million. There was no available undrawn amount.
$420.0 million term loan facility
In June 2014, we entered into a term loan facility of up to $420.0 million, dependent on the market values of the vessels at the
time of draw down, consisting of 14 tranches of up to $30.0 million to finance, in part, 14 newbuilding vessels. Each tranche is
repayable by quarterly installments based on a 20-years profile from the delivery date of each vessel and all amounts
outstanding shall be repaid on June 30, 2020. The facility has an interest rate of LIBOR plus a margin of 250 basis points. In
January 2016, following an accelerated repayment to comply with the minimum value covenant as of December 31, 2015, the
quarterly repayment schedule was amended to $5.2 million, in total, for all 14 tranches.
In February 2019, we extended our $420 million term loan facility for 14 vessels by three years from June 2020 to June 2023 at
LIBOR plus a margin of 250 basis points and upsized the facility to partially finance the installation of scrubbers on up to 11
vessels. Each scrubber installation was financed with up to $3 million in a separate tranche to be repaid over three years,
commencing January 1, 2020.
In May 2022, we fully repaid the outstanding amounts under the $420.0 million term loan facility and drew down on the new
$275.0 million term loan and revolving credit facility described above. During 2022, a total of $280.4 million was repaid (2021:
$29.6 million).
$425.0 million senior secured post-delivery term loan facility
In February 2015, we entered into a senior secured post-delivery term loan facility of up to $425.0 million, depending on the
market values of the vessels at the time of draw down, to partially finance 14 newbuilding vessels. The loan bore interest at
LIBOR plus a margin of 220 basis points.
In November 2020, we fully repaid the outstanding amounts under the $425.0 million credit facility and drew down on the new
$304.0 million term loan and revolving credit facility. In total, during 2020, $322.5 million was repaid.
See Note 21, "Debt", to the audited Consolidated Financial Statements included herein for additional details of loan facilities.
Covenants
Our loan agreements contain loan-to-value clauses, which could require us to post additional collateral or prepay a portion of
the outstanding borrowings should the value of the vessels securing borrowings under each of such agreements decrease below
required levels. In addition, our loan agreements contain certain financial covenants, including the requirement to maintain a
certain level of free cash, positive working capital as defined in the loan agreements and a value adjusted equity covenant.
Under most of our debt facilities the aggregate value of the collateral vessels shall not fall below 135% of the loan outstanding,
depending on the facility (for $175 million and $275 million loan facilities, the value should not fall below 130%. For
$260 million lease financing, the value should not fall below 115%). We need to maintain free cash of the higher of $20 million
or 5% of total interest bearing debt, maintain positive working capital and maintain a value adjusted equity of at least 25% of
value adjusted total assets.
With regards to free cash, we have covenanted to retain at least $61.3 million of cash and cash equivalents as of December 31,
2022 (December 31, 2021: $69.5 million) and in accordance with our accounting policy this is classified under cash and cash
equivalents. In addition, none of our vessel owning subsidiaries may sell, transfer or otherwise dispose of their interests in the
vessels they own without the prior written consent of the applicable lenders unless, in the case of a vessel sale, the outstanding
borrowings under the credit facility applicable to that vessel are repaid in full. Failure to comply with any of the covenants in
the loan agreements could result in a default, which would permit the lender to accelerate the maturity of the debt and to
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foreclose upon any collateral securing the debt. Under those circumstances, we might not have sufficient funds or other
resources to satisfy our obligations.
As of December 31, 2022, we were in compliance with all of the financial and other covenants contained in our loan
agreements.
Equity Issuances
In February 2021, we completed a private placement, which raised gross proceeds of NOK 2,873 million, or approximately
$338 million through the placing of 54,207,547 new shares at a subscription price of NOK 53.00 per offer share. Net proceeds
from the private placement after deduction of legal and other placement related costs amounted to $335.3 million. Hemen
subscribed for 27,103,773 new shares, equivalent to approximately $169 million.
In May 2021, we completed a subsequent offering following the private placement and issued 2,710,377 new shares at NOK
53.00 per share, raising gross proceeds of NOK 143.6 million (or approximately $16.9 million). Net proceeds from the
subsequent offering after deduction of legal and other placement related costs amounted to $16.9 million. All shares were
acquired by third parties.
In the year ended December 31, 2021, we issued 190,000 shares in connection with our 2016 share option plan (the "2016
Plan"). We settled the applicable options using the equal amount of treasury shares and recorded a loss of $0.4 million in the
equity statement.
In May 2022, our management exercised 450,000 share options. We settled the exercise of options by distributing the same
amount of treasury shares.
See Note 25, "Share Capital, Treasury Shares and Dividends", to the audited Consolidated Financial Statements included herein
for additional details of share issuances in exchange for vessel acquisitions.
C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
We do not undertake any significant expenditure on research and development and have no significant interests in patents or
licenses.
 
D. TREND INFORMATION
Dry bulk market conditions remained volatile in 2022, based on data reported from the Baltic Exchange, reflecting the impact
of a broad economic slowdown, easing of port congestion, and the war in Ukraine. With the exception of a temporary sharp
increase in rates in the immediate aftermath of Russia’s invasion of Ukraine, rates generally trended downwards during the
course of the year.
According to the Baltic Exchange, average earnings, on a TCE basis, for a Capesize vessel were $16,177 per day for 2022
compared with $33,333 per day for 2021. For a Panamax vessel, average earnings for 2022 were $20,736 per day compared
with $26,898 per day in 2021, and for a Supramax vessel, average earnings were $22,152 per day in 2022 compared with
$26,768 per day in 2021. According to industry sources, global fleet utilization (calculated as total demand in tonne miles
transported divided by total available fleet capacity) was on average 88.5% in 2022, a decrease from 91.0% in 2021. Global
fleet utilization in the first half of the 2022 was 89.2%, compared to 87.8% in the second half of the year, due a combination of
decreased port congestion and slowing demand for dry bulk commodities.
Average earnings were volatile over the course of 2022 as market conditions were impacted by various factors. Starting in the
first quarter of the year, sentiment was dampened as the Omicron variant of COVID-19 spread globally, the war in Ukraine
commenced and a rapid rise in inflation in most countries took hold. Market weakness was compounded by the continuation of
China’s “Zero-COVID” policy, which was ultimately lifted towards the end of 2022. The war in Ukraine contributed to market
volatility and also helped to provide some support to the market as new trade routes for certain commodities, most notably coal
and agribulks, emerged as the war unfolded.
In 2022, central banks commenced a series of aggressive increases in interest rates in order to tame inflation, which was
previously expected to be “transitory.” LIBOR, a benchmark for many adjustable rate mortgages, business loans, and financial
instruments traded on global financial markets, increased consistently throughout the course of the year. Twelve-month LIBOR
rates rose from 0.75% in January to 5.5% at the end of the year, reaching the highest level since 2006. Additionally, the war in
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Ukraine drove energy prices higher as European energy supply was threatened. Combined, these factors negatively impacted
demand and industrial activity in particular.
Global steel production decreased by 4.4% in 2022, following a 4.0% increase in production in 2021. The decrease was driven
by several factors, including the war in Ukraine, a slowdown in the global construction industry and a decrease in Chinese
production. Steel production in China decreased by 2.0% in 2022, following sharp declines in the second half of the year as the
Chinese government intervened to decelerate a property development market that had become overheated by speculation. Steel
production in China was also curtailed as they continued to ration energy in response to a global energy crisis and closed a
number of factories in certain industrial hubs in an effort to decrease pollution ahead of the 2022 Winter Olympics, which were
held in February. Indian steel production, by contrast, rose by 5.5% of the government is committed to an ambitious plan to
double steel production by 2030. Elsewhere, steel production was negatively impacted by weaker demand and higher energy
input costs.
Seaborne iron ore volumes decreased by 2.8% in 2022 compared with 2021. Chinese iron ore imports decreased by 1.3% in
2022 compared to 2021. Notably, iron ore exports from Brazil to China decreased by 2.9% during the same period while
exports from Australia to China increased by 6.0%. This had a disproportionate impact on tonne-mile demand. As iron ore is
primarily transported on Capesize vessels, the impact of shorter trade routes negatively impacted freight rates in this segment in
2022.
Transported volumes of coal globally decreased by 1.2% in 2022 compared with 2021. This decrease was primarily driven by
year-over-year decreases in imports of 12.6% and 9.6% by China and Taiwan, respectively. Limited availability of alternate
sources or energy production drove increases in thermal coal demand in Europe, where imports increased by 9.7% in 2022
compared to the prior year. Coking coal imports decreased by 2.4% in 2022 compared to 2021, reflecting a slowdown in
industrial activity globally. Thermal coal volumes decreased slightly by 1.0%, but a greater portion of volumes were imported
into Europe to replace Russian and Ukrainian volumes, resulting in new, longer trading routes. Transportation of agribulks,
which was resilient throughout the COVID-19 pandemic, decreased by 2.6% year-over-year in 2022. The war in Ukraine
caused grain prices to increase significantly since the end of 2021. Combined, Ukraine and Russia accounted for an estimated
16% of total grain exports in 2022. With sanctions impacting Russian exports and seaborne exports from the Ukraine severely
restricted, it is likely there were dislocations in the agribulk trade in 2022. Additionally, inflationary pressure impacted market
demand.
According to industry sources, 4.5 million dwt in total was scrapped during 2022, which represents 0.6% of the fleet at the start
of the year and marked a slight decrease from the level of scrapping in 2021. Scrapping activity was muted throughout the
course of the year as fleet utilization remained high by historical standards and owners maintained their positive outlooks due to
the prospect of the re-opening of the Chinese economy and the anticipated decline in the growth of the global fleet over the next
two years.  Freight rates were also sufficiently strong to maintain the profitability of older, less efficient vessels.
Fuel prices increased significantly following the start of the conflict in the Ukraine. The price spread between high sulfur fuel
and low sulfur fuel recently reached record levels in the second quarter of 2022 and remained elevated throughout the course of
the year. As a result, achieved earnings among vessels with different levels of fuel efficiency varied significantly. Looking
forward, the IMO has adopted rules that go into effect in 2023 aimed at accelerating greenhouse gas emissions to reach 2050
targets, which will put further pressure on the competitiveness of older vessels. The impact of higher prices for all grades of
fuel, along with decreased demand, has also resulted in slower vessel sailing speeds, which have partially offset the impact on
easing of port congestion and related logistical constraints on effective fleet supply.
The global fleet of dry bulk vessels amounted to 972.5 million dwt at the end of 2022 compared with 945.9 million dwt at the
end of 2021. Total deliveries of newbuildings amounted to 31.2 million dwt in 2022, which is equivalent to 3.3% of the fleet as
of the start of the year. As of the end of 2022, the total orderbook was approximately 7.1% of the capacity on the water. Vessels
scheduled for delivery in 2023 are estimated to constitute 3.3% of the sailing fleet on a gross basis, assuming no vessels are
scrapped. Fleet growth is expected to decline to 2.6% in 2024 on a gross basis, assuming no vessels are scrapped. The
combined impact of high fuel prices and incremental emissions-related regulations may lead to incremental scrapping in the
coming years. These factors may also cause vessels owners to reduce the sailing speeds of their vessels, thereby decreasing
effective fleet supply growth.
Asset prices for Capesize and Panamax vessels declined in 2022, following sharp increases in asset values in 2021. Values of
older inefficient vessels may decline if fuel prices remain high throughout 2023, particularly as a result of the new emission
rules imposed by the IMO coming into effect in 2023. Owners may likewise continue to place a premium on modern vessels.
The second-hand market was extremely active, with a record number of Capesize and Panamax vessels sold. Newbuilding
prices remained at elevated levels in 2022 after increasing by over 30% in 2021 as steel prices continued to be elevated and
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shipyard capacity is constrained due to significant vessel ordering in other segments, including LNG carriers, container vessels
and car carriers over the last two years. Dry bulk newbuilding ordering decreased by 50% in 2022, based on total deadweight
tonnage of vessels, compared to 2021 and by 60.5% compared to the 10-year average.
E. CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in accordance with accounting principles generally accepted in the United States
requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.
 
Management believes that the accounting policies relating to impairment of assets, revenue and expense recognition, vessels
and depreciation are the most critical in fully understanding and evaluating our reported financial results as they require a
higher degree of judgment in their application resulting from the need to make estimates about the effect of matters that are
inherently uncertain. See Note 2, "Summary of Significant Accounting Policies", to the audited Consolidated Financial
Statements included herein for detailed description of significant accounting policies.
Impairment
The carrying values of our vessels, newbuildings and right of use assets, if any, may not represent their fair market value at any
point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates. Historically, both
charter rates and vessel values tend to be cyclical. The carrying amounts of vessels, newbuildings and right of use assets that are
held and used by us are reviewed for potential impairment whenever events or changes in circumstances indicate that the
carrying amount of a particular vessel or and right of use assets may not be fully recoverable. Indicators of impairment are
identified based on a combination of factors which include amongst other, development of secondhand vessel values based on
external appraisals of our ships, development of forward freight rates, spot rates and operating cash flow. As of December 31,
2022, we have not identified any impairment indicators relating to our owned vessels, newbuildings and right of use assets. We
consider outlook for forward freight rates, external appraisals of our ships and operating cash flows to be positive on both
expectations of steady global demand for dry bulk commodities, and equally importantly, powerful supply-side dynamics that
have not been present for many years.
If impairment indicators exist, we assess recoverability of the carrying value of each owned asset and newbuilding on an
individual basis by estimating the future undiscounted cash flows expected to result from the asset and eventual disposal. Fair
value for our owned vessels is estimated based on values achieved for the sale/purchase of similar vessels, including any
remaining construction costs for newbuildings, and external appraisals. In addition, vessels held for sale are reported at the
lower of carrying amount and fair value less estimated costs to sell. Recoverability of right of use assets is assessed on an asset
by asset basis by estimating the future undiscounted cash flows from the right of use assets earned over the remaining lease
term of our operating and finance leases. For all, owned assets, newbuildings and right of use assets, if the future net
undiscounted cash flows are less than the carrying value of the asset, or the current carrying value plus future newbuilding
commitments, an impairment loss is recorded equal to the difference between the asset's carrying value and estimated fair value
derived from cash flow based valuations.
In developing estimates of future cash flows for owned vessels and newbuildings, we must make assumptions about future
performance, with significant assumptions being related to charter rates, additional earnings due to scrubber installations, ship
operating expenses, utilization, drydocking requirements, residual value and the estimated remaining useful lives of the vessels.
In developing estimates of future cash flows for right of use assets, we must make significant assumptions related to future
charter rates, additional earnings due to scrubber installations, ship operating expenses, utilization and drydocking
requirements. For owned vessels, newbuildings and leased assets, these assumptions are based on historical trends as well as
future expectations. Specifically, in estimating future charter rates, management takes into consideration rates currently in effect
for existing time charters and estimated daily time charter equivalent rates for each vessel class for the unfixed days over the
estimated remaining lives of each of the vessels. The estimated daily time charter equivalent rates used for unfixed days are
based on a combination of (i) forward freight market rates and (ii) estimate of implied charter rates based on the broker values
received from third party brokers. The implied rate is a calculated rate for each vessel based on the charter rate the vessel would
need to achieve, given our estimated future operating costs and discount factors that once discounted would equate to the
average broker values. Benefits from scrubber installations are calculated based on expected bunker fuel cost savings and
estimated consumption per year. We then use the resultant undiscounted cash flows in our model. Recognizing that the
transportation of dry bulk cargoes is cyclical and subject to significant volatility based on factors beyond our control,
management believes the use of estimates based on the combination of internally forecasted rates and calculated average rates
as of the reporting date to be reasonable.
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Estimated outflows for operating expenses and drydocking requirements are based on historical and budgeted costs and are
adjusted for assumed inflation. Utilization is based on historical levels achieved and estimates of a residual value are consistent
with the pattern of scrap rates used in management's evaluation of salvage value. Finally, additional investments to comply with
environmental requirements are based on budgeted costs and even though currently not expected to be material, they could be
material in the future.
The more significant factors that could impact management's assumptions regarding cash flows include (i) loss or reduction in
business from significant customers, (ii) unanticipated changes in demand for transportation of dry bulk cargoes, (iii) greater
than anticipated levels of newbuilding orders or lower than anticipated levels of vessel recycling, and (iv) changes in rules and
regulations applicable to the dry bulk industry, including legislation adopted by international organizations such as the IMO and
the European Union or by individual countries. Although management believes that the assumptions used to evaluate potential
impairment are reasonable and appropriate at the time they were made, such assumptions are highly subjective and likely to
change, possibly materially, in the future. There can be no assurance as to how long charter rates and vessel values will remain
at their current levels or whether they will deteriorate or improve by a significant degree. If charter rates were to remain at
depressed levels future assessments of vessel impairment would be adversely affected.
No impairment on the sale of vessels was recognized during the period ended December 31,2022. During the period ended
December 31, 2021, we recognized impairment on the sale of Golden Saguenay of $4.2 million.
Vessels and depreciation
Upcoming environmental regulations might affect useful life of our vessels. Although management believes that useful lives of
25 years represent the best estimate as of today, there can be no assurance that useful lives will not decrease in the future due to
innovation based on system fuel/efficiency and new environmental regulations.
Revenue and expense recognition
Estimates and judgments are required in ascertaining the most likely outcome of a particular voyage charter and allocation of
voyage results between periods based on load to discharge methods. Actual outcomes may differ from estimates, however
management believes that estimation uncertainty is low since estimates are made on a contract by contract basis.
The voyage charters generally have variable consideration in the form of demurrage or despatch, which is recognized as we
satisfy the performance obligations under the contract. We estimate demurrage or despatch at contract inception using either the
expected value or most likely amount approaches. Such estimate is reviewed and updated over the term of the voyage charter
contract, as such management believes estimation uncertainty for demurrage revenue is low.
ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.  DIRECTORS AND SENIOR MANAGEMENT
Set forth below are the names and positions of our directors and executive officers.
Name
Age
Position
Ola Lorentzon
73
Director, Chairman
John Fredriksen
78
Director
James O'Shaughnessy
59
Director and Audit Committee Chairman
Bjørn Tore Larsen
55
Director and Audit Committee member
Ben Mills
53
Director
Ulrik Uhrenfeldt Andersen
44
Chief Executive Officer of Golden Ocean Management AS
Peder Simonsen
48
Chief Financial Officer of Golden Ocean Management AS
Lars-Christian Svensen
37
Chief Commercial Officer of Golden Ocean Management AS
Certain biographical information about each of our directors and executive officers is set forth below.
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Ola Lorentzon  is currently Chairman of the Board and has served as a director on the Board since September 18, 1996,
Chairman since May 26, 2000 and Chief Executive Officer from May 2010 to March 2015. He is also Chairman of the Board
and director of Frontline plc, a director of Flex LNG Ltd and a director of Erik Thun AB. Mr. Lorentzon was the Managing
Director of Frontline Management AS, a subsidiary of Frontline, from April 2000 until September 2003.
 
John Fredriksen was a director of the Former Golden Ocean and was appointed a director on the Board following the
completion of the Merger. Mr. Fredriksen is also a Director of a related party Frontline plc., a Cyprus company listed on NYSE
and the OSE whose principal shareholder is Hemen.
Bjørn Tore Larsen was appointed a director of the Board in March 2021. Bjørn Tore Larsen is currently the CEO and founder
of Norse Atlantic ASA, a startup airline listed on the Euronext Growth Oslo Stock Exchange. He is also a director of the OSM
Maritime Group, a world-leading ship management company which he founded in 1989. Mr. Larsen is also the Chairman of
ADS Maritime Holdings Plc a shipping investment company established in 2018 and listed on the Euronext Growth Oslo Stock
Exchange.
James O'Shaughnessy was appointed a director of the Board in September 2018. Mr. O'Shaughnessy served as an Executive
Vice President, Chief Accounting Officer and Corporate Controller of Axis Capital Holdings Limited up to March 26, 2019.
Prior to that Mr. O'Shaughnessy has amongst others served as Chief Financial Officer of Flagstone Reinsurance Holdings and
as Chief Accounting Officer and Senior Vice President of Scottish Re Group Ltd., and Chief Financial Officer of XL Re Ltd. at
XL Group plc. Mr. O'Shaughnessy received a Bachelor of Commerce degree from University College, Cork, Ireland and is both
a Fellow of the Institute of Chartered Accountants of Ireland, an Associate Member of the Chartered Insurance Institute of the
UK and a Chartered Director. Mr. O'Shaughnessy also serves as a director of Frontline plc, SFL Corporation Ltd., Archer
Limited, Avance Gas Holding Ltd, ST Energy Transition I Ltd., CG Insurance Group and Catalina General.
Ben Mills was appointed a director of the Board in August 2021. Mr. Mills has extensive experience from the dry bulk market
through tenures in Trafigura and the Baltic Exchange, particularly focusing on the Capesize segment. Mr. Mills is currently
Head of Dry Cargo in Seatankers Management Ltd, an affiliate of Hemen, the Company's largest shareholder.
Ulrik Uhrenfeldt Andersen has served as Chief Executive Officer of Golden Ocean Management since April 2020. Prior to
joining Golden Ocean, Mr. Andersen held various positions in the shipping industry of which the most recent include CEO of
Avance Gas, Head of Shipping in Petredec and Managing Director for Neu Gas Shipping. He holds an M. Sc. from Copenhagen
Business School and a B. Sc. in Shipping from the Institute of Chartered Shipbrokers.
Peder Simonsen has served as Chief Financial Officer of Golden Ocean Management AS since September 2020. Mr. Simonsen
was, prior to joining Golden Ocean, the Chief Financial Officer and Interim Chief Executive Officer of Avance Gas AS. Before
that he was First Vice President at Nordea Bank Norge ASA, where he worked with numerous large shipping and offshore
companies. Mr. Simonsen holds a B.A. (Hons) in Business Administration from the University of Stirling and a Master of
Business degree (Norwegian: Siviløkonom).
Lars-Christian Svensen has served as Chief Commercial Officer of Golden Ocean Management AS since December 2020.
Prior to joining Golden Ocean, Mr. Svensen held various roles within Western Bulk including the Senior Vice President role in
Norway and President for the company’s USA trading activities in Seattle. Prior to that he was working for Petredec as a
downstream analyst and Cmarine shipbrokers as a tanker broker in Singapore. He holds a shipping degree from Merkantilt
Institutt of Norway.
B.  COMPENSATION
During the year ended December 31, 2022, we paid aggregate cash compensation of approximately $3.7 million and an
aggregate amount of approximately $65 thousand for pension and retirement benefits to our directors and executive officers. In
addition, we recognized stock compensation expense of approximately $0.6 million in respect to options granted to our
executive officers throughout 2022. Current average exercise price is $6.27 per option at the date of this annual report.
See Note 26, "Share Options", to our audited Consolidated Financial Statements included herein for information pertaining to
the 2016 Plan, which permitted share options to be granted to directors, officers and employees of the Company and was
applicable for the options granted in 2020.
C.  BOARD PRACTICES
In accordance with our Second Amended and Restated Bye-laws, the number of directors shall be such number not less than
two as our shareholders by Ordinary Resolution may from time to time determine. We currently have five directors.
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As provided in the Second Amended and Restated Bye-Laws, each director shall hold office until the next annual general
meeting following his or her election or until his or her successor is elected. Our officers are elected by the Board and shall hold
office for such period and on such terms as the Board may determine.
We have established an audit committee comprising of Mr. O'Shaughnessy and Mr. Larsen. The audit committee is responsible
for assisting the Board with its oversight responsibilities regarding the integrity of our financial statements, our compliance with
legal and regulatory requirements, our independent registered public accounting firm's qualifications and independence, and the
performance of our internal audit functions. Mr. O'Shaughnessy is the Audit Committee Financial Expert.
There are no service contracts between us and any of our directors providing for benefits upon termination of their employment.
Board practices and exemptions from the NASDAQ corporate governance rules
As a foreign private issuer, we are exempt from certain requirements of the NASDAQ that are applicable to U.S. domestic
companies because we follow our home country (Bermuda) practice, which is permitted under the NASDAQ corporate
governance rules. For a listing and further discussion of how our corporate governance practices differ from those required of
U.S. companies listed on the NASDAQ, please see "Item 16G. Corporate Governance" of this annual report.
D.  EMPLOYEES
As of December 31, 2022, we employed 38 people in our offices in Oslo and Singapore. We contract with independent ship
managers to technically manage and operate our vessels.
E.  SHARE OWNERSHIP
As of March 16, 2023, the beneficial interests of our Directors and officers in our common shares were as follows:
Director or Officer
Common Shares of $0.05
each
Percentage of Common
Shares Outstanding
Ola Lorentzon
16,877
(1)
John Fredriksen (2)
—
—
Bjørn Tore Larsen
—
—
Ben Mills
—
—
James O'Shaughnessy
—
—
Ulrik Uhrenfeldt Andersen
—
—
Peder Simonsen
500
(1)
Lars-Christian Svensen
—
—
1.Less than 1%.
2.See “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders”.
Share Option Scheme
2016 Share Option Plan
Details of options to acquire our common shares by our directors and officers under the 2016 Plan as of March 16, 2023, were
as follows:
 
Director or Officer
Number of outstanding options
 
Exercise price
Expiration Date
Total
Vested
Ulrik Uhrenfeldt Andersen
250,000
—
$6.95
April 2025
Peder Simonsen
200,000
75,000
$5.75
September 2025
Lars-Christian Svensen
200,000
75,000
$5.93
November 2025
BOARD DIVERSITY
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On August 6, 2021, the SEC approved Nasdaq Listing Rule 5605(f) regarding board diversity. Under the rule, NASDAQ-listed
companies, that are also Foreign Issuers, are required to include, or explain why it has not included (as the case may be), at least
one “Diverse” director prior to December 31, 2023 and at least two “Diverse” directors by December 31, 2025. Under Nasdaq
Listing Rule 5605(f)(2)(D), boards of directors composed of five or fewer members must have one director who is “Diverse.”
Companies, such as Golden Ocean, that have five members on its board of directors before becoming subject to this rule will
not be required to have at least two members of its board of directors who are “Diverse” if it adds one “Diverse” director
increasing the board to six members.
The composition of our Board does not currently include an individual who is “Diverse” under the Nasdaq Listing Rule
5605(f), as presented in the below Board Diversity Matrix.
The Company does not meet the diversity objectives of 5605(f)(2)(D) because it is committed to ensuring that the Board’s
composition appropriately reflects the current and anticipated needs of the Board and the Company.
The table below provides certain information regarding the diversity of our Board as of the date of this annual report. Each term
used in the above description and table below has the meaning given to it in the Nasdaq listing rule and related instructions.
Board Diversity Matrix
Country of Principal Executive Offices:
Bermuda
Foreign Private Issuer
Yes
Disclosure Prohibited under Home Country Law
No
Total Number of Directors
5
Female
Male
Non-
Binary
Did Not Disclose
Gender
Part I: Gender Identity
Directors
0
5
0
0
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction
—
LGBTQ+
—
Did Not Disclose Demographic Background
5
F.  DISCLOSURE OF A REGISTRANT'S ACTION TO RECOVER ERRONEOUSLY AWARDED
COMPENSATION
Not applicable.
ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.  MAJOR SHAREHOLDERS
The following table presents certain information as of March 16, 2023 regarding the ownership of our common shares with
respect to each shareholder whom we know to beneficially own more than 5% of our outstanding common shares.
Owner
Number of shares owned
Percentage owned
Hemen Holding Limited (1,2)
78,622,902
39.2%
 
(1) C.K. Limited is the trustee of two trusts (the “Trusts”) settled by Mr. John Fredriksen. The Trusts indirectly hold all of the
shares of Hemen and the sole shareholder of Hemen, Greenwich Holdings Limited. Accordingly, C.K. Limited, as trustee, may
be deemed to beneficially own the 78,622,902 common shares of the Company that are owned by Hemen and beneficially
owned by Greenwich Holdings Limited. The beneficiaries of the Trusts are members of Mr. Fredriksen’s family. Mr.
Fredriksen is neither a beneficiary nor a trustee of either Trust. Therefore, Mr. Fredriksen has no economic interest in such
78,622,902 common shares and Mr. Fredriksen disclaims any control over such 78,622,902 common shares, save for any
indirect influence he may have with C.K. Limited, as the trustee of the Trusts, in his capacity as the settlor of the Trusts.
(2) Percentage amount based on 200,423,536 which is 201,190,621 issued common shares, adjusted for 767,085 treasury shares
as of March 16, 2023.
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Our major shareholders have the same voting rights as our other shareholders. No corporation or foreign government owns
more than 50% of our outstanding common shares. We are not aware of any arrangements, the operation of which may at a
subsequent date result in a change in control of the Company.
B.  RELATED PARTY TRANSACTIONS
 
See Note 27, "Related Party Transactions", to our audited Consolidated Financial Statements included herein.
C.  INTERESTS OF EXPERTS AND COUNSEL
Not applicable.
ITEM 8. FINANCIAL INFORMATION
A.  CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
See Item 18.
Legal Proceedings
We are a party, as plaintiff or defendant, to several lawsuits in various jurisdictions for demurrage, damages, offhire and other
claims and commercial disputes arising from the operation of our vessels, in the ordinary course of business or in connection
with our acquisition activities. We believe that the resolution of such claims will not have a material adverse effect on our
operations or financial condition.
To the best of our knowledge, there are no other legal or arbitration proceedings existing or pending which have had or may
have significant effects on our financial position or profitability and no such proceedings are pending or known to be
contemplated.
Dividend Distribution Policy
 
The amount and timing of any dividend distributions in the future will depend, among other things, on our compliance with
covenants in our credit facilities, earnings, financial condition, cash position, Bermuda law affecting the dividend distributions,
restrictions in our financing agreements and other factors. In addition, the declaration and payment of dividend distributions is
subject at all times to the discretion of our Board.
B.  SIGNIFICANT CHANGES
 
None.
 
ITEM 9.  THE OFFER AND LISTING
As of the date of this Annual Report, the Company had 200,423,536 common shares outstanding, which includes an adjustment
of 767,085 treasury shares. Our common shares have been quoted on the NASDAQ, since our initial public offering in February
1997 and traded under the ticker symbol "VLCCF". Following the completion of the Merger with the former Golden Ocean on
March 31, 2015, our common shares began trading under the new ticker symbol "GOGL" on NASDAQ since April 1, 2015.
In April 2015, we obtained a secondary listing on the OSE. Trading in our common shares on the OSE commenced on April 1,
2015.
ITEM 10.  ADDITIONAL INFORMATION
A.  SHARE CAPITAL
Not applicable.
B.  MEMORANDUM AND ARTICLES OF ASSOCIATION
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Our Amended and Restated Bye-Laws were adopted at the Special General Meeting held on March 26, 2015.
At our 2022 annual general meeting, the shareholders voted to amend our Bye-Laws (the “Second Amended and Restated Bye-
Laws”) to align the bye-laws of the Company with the bye-laws of other Hemen related companies. Our Second Amended and
Restated Bye-Laws, as adopted by shareholders on September 30, 2022, are filed as Exhibit 1.5 to this annual report on
Form 20-F.
To see the full text of our Memorandum of Association and Amended and Restated Bye-Laws, please see Exhibits 1.1 and 1.4
attached to this annual report and our annual report on Form 20-F for the year ended December 31, 2014 filed with the
Commission on April 29, 2015, and is hereby incorporated by reference into this annual report.
Purpose
The purposes and powers of the Company are set forth in Items 6 and 7(a) through (h) of our amended Memorandum of
Association and by reference to the Second Schedule of the Companies Act. These purposes include exploring, drilling,
moving, transporting and refining petroleum and hydro-carbon products, including oil and oil products; acquiring, owning,
chartering, selling, managing and operating ships and aircraft; the entering into of any guarantee, contract, indemnity or surety
ship to assure, support, secure, with or without the consideration or benefit, the performance of any obligations of any person or
persons; and the borrowing and raising of money in any currency or currencies to secure or discharge any debt or obligation in
any manner.
There are no limitations on the right of non-Bermudians or non-residents of Bermuda to hold or vote our common shares.
Voting Rights
The holders of our common shares will be entitled to one vote per share on each matter requiring the approval of the holders of
the common shares. At any annual or special general meeting of shareholders where there is a quorum, a simple majority vote
will generally decide any matter, unless a different vote is required by express provision of the Second Amended and Restated
Bye-Laws or Bermuda law.
The Companies Act and our  Bye-Laws do not confer any conversion or sinking fund rights attached to our common shares.
Preemptive Rights
Bermuda law does not provide a shareholder with a preemptive right to subscribe for additional issues of a company’s shares
unless, and to the extent that, the right is expressly granted to the shareholder under the bye-laws of a company or under any
contract between the shareholder and the company.
Holders of our common shares do not have any preemptive rights pursuant to the Second Amended and Restated Bye-Laws.
Repurchase of Shares
Subject to the Companies Act, the Memorandum of Association and the Second Amended and Restated Bye-Laws, our Board
may from time to time repurchase any common shares for cancellation or to be held as treasury shares.
Holders of our common shares, however, do not have any right to require the Company to purchase their shares pursuant to the
Second Amended and Restated Bye-Laws.
Redemption of Preference Shares
The Company may with the approval of the shareholders issue preference shares which are redeemable at the option of the
Company or the holder, subject to the Companies Act, the Memorandum of Association and the Second Amended and Restated
Bye-Laws.
Call on Shares
Pursuant to the Second Amended and Restated Bye-Laws, the Board may from time to time make calls upon our shareholders
in respect of any moneys unpaid on their shares.
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Reduction of Share Capital
Subject to the Companies Act, the Memorandum of Association and the Second Amended and Restated Bye-Laws, the
shareholders may by resolution authorize the reduction of the Company’s issued share capital or any capital redemption reserve
fund or any share premium account in any manner.
Dividend and Other Distributions
Under the Companies Act, a company may, subject to its bye-laws and by resolution of the directors, declare and pay a
dividend, or make a distribution out of contributed surplus, provided there are reasonable grounds for believing that after any
such payment (a) the company will be solvent and (b) the realizable value of its assets will be greater than its liabilities.
The Second Amended and Restated Bye-Laws provide that the Board from time to time may declare cash dividends or
distributions out of contributed surplus to be paid to the shareholders according to their rights and interests including such
interim dividends as appear to be justified by the position of the Company.
Board of Directors
The Second Amended and Restated Bye-Laws provide that the Board shall consist of not less than two members and shall at all
times comprise a majority of directors who are not residents in the United Kingdom. Our shareholders may change the number
of directors by the vote of shareholders representing a simple majority of the total number of votes which may be cast at any
annual or special general meeting, or by written resolution. Each director is elected at an annual general meeting of shareholders
for a term commencing upon election and each director shall serve until re-elected or their successors are appointed on the date
of the next scheduled annual general meeting of shareholders. The Second Amended and Restated Bye-Laws do not permit
cumulative voting for directors.
Subject to the Companies Act, the Second Amended and Restated Bye-Laws permit our directors to engage in any transaction
or arrangement with us or in which we may otherwise be interested. Additionally, as long as our director declares the nature of
his or her interest at the first opportunity at a meeting of the Board, he or she shall not by reason of his office be accountable to
us for any benefit which he or she derives from any transaction to which the Second Amended and Restated Bye-Laws permit
him or her to be interested.
Our directors are not required to retire because of their age and are not required to be holders of our common shares.
Removal of Directors and Vacancies on the Board
Under the Companies Act, any director may be removed, with or without cause, by a vote of the majority of shareholders if the
bye-laws so provide. A company may remove a director by specifically convening a special general meeting of the
shareholders. The notice of any such special general meeting must be served on the director concerned no less than fourteen
(14) days before the special general meeting. The affected director is entitled to be heard at that special general meeting.
The Second Amended and Restated Bye-Laws provide that directors may be removed, with or without cause, by a vote of the
shareholders representing a majority of the votes present and entitled to vote at a special general meeting called for that
purpose. The notice of any such special general meeting must be served on the director concerned no less than 14 days before
the special general meeting and he or she shall be entitled to be heard at that special general meeting.
Any director vacancy created by the removal of a director from our Board at a special general meeting may be filled by the
election of another director in his place by a majority vote of the shareholders entitled to vote at the special general meeting
called for the purpose of removal of that director, or in the absence of such election, by the Board. The Board may fill casual
vacancies so long as quorum of directors remains in office. Each director elected to the Board to fill a vacancy shall serve until
the next annual general meeting of shareholders and until a successor is duly elected and qualified or until such director’s
resignation or removal.
Quorum and Action by the Board of Directors
The Second Amended and Restated Bye-Laws provide that at any meeting of the Board (which must be held outside of the
United Kingdom or Norway), the presence of the majority of the Board, unless otherwise fixed, constitutes a quorum for the
transaction of business and that when a quorum is present, the acts of a majority of the directors present at any meeting shall be
the acts of the Board, except as may be otherwise specified by Bermuda law or the Second Amended and Restated Bye-Laws.
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A quorum shall not be present unless a majority of directors present are neither resident in Norway nor physically located or
resident in the United Kingdom.
A resolution in writing signed by all directors for the time being entitled to receive notice of a meeting of the Board shall be as
valid and effectual as a resolution passed at a meeting of the Board.
A meeting of the Board or committee appointed by the Board shall be deemed to take place at the place where the largest group
of participating directors or committee members has assembled or, if no such group exists, at the place where the chairman of
the meeting participates. In no event shall the place where the largest group of participating directors or committee members
has assembled or, if no such group exists, the place where the chairman of the meeting participates, be located in the United
Kingdom. The Board or relevant committee shall use its best endeavors to ensure that any such meeting is not deemed to have
been held in Norway, and the fact that one or more directors may be present at such teleconference by virtue of his being
physically in Norway shall not deem such meeting to have taken place in Norway.
Duties of Directors and Officers; Limitation of Liability
Under Bermuda law, directors and officers shall discharge their duties in good faith and with that degree of diligence, care and
skill which reasonably prudent people would exercise under similar circumstances in like positions. In discharging their duties,
directors and officers may rely upon financial statements of the company represented to them to be correct by the president or
the officer having charge of its books or accounts or by independent accountants.
The Companies Act provides that a company’s bye-laws may include a provision for the elimination or limitation of liability of
a director to the company or its shareholders for any loss arising or liability attaching to him by virtue of any rule of law in
respect to any negligence, default, breach of any duty or breach of trust of which the director may be guilty of; provided that
such provision shall not eliminate or limit the liability of a director for any fraud or dishonesty he may be guilty of.
The Second Amended and Restated Bye-Laws limit the liability of our directors and officers to the fullest extent permitted by
the Companies Act.
Director Indemnification
Bermuda law permits the bye-laws of a Bermuda company to contain a provision indemnifying the company’s directors and
officers for any loss arising or liability attaching to him or her by virtue of any rule of law in respect of any negligence, default,
breach of duty or breach of trust of which the officer or person may be guilty, save with respect to fraud or dishonesty.
Bermuda law also grants companies the power generally to indemnify directors and officers of a company, except in instances
of fraud and dishonesty, if any such person was or is a party or threatened to be made a party to a threatened, pending or
completed action, suit or proceeding by reason of the fact that he or she is or was a director and officer of such company or was
serving in a similar capacity for another entity at such company’s request.
The Second Amended and Restated Bye-Laws provide that each director, alternate director, officer, person or member of a
board committee, if any, resident representative, and his or her heirs, executors or administrators, collectively, Indemnitees, will
be indemnified and held harmless out of our assets to the fullest extent permitted by Bermuda law against all liabilities, loss,
damage or expense (including but not limited to liabilities under contract, tort and statute or any applicable foreign law or
regulation and all reasonable legal and other costs and expenses properly payable) incurred or suffered by him or her as such
director, alternate director, officer, person or committee member or resident representative. The restrictions on liability,
indemnities and waivers provided for in the Amended and Restated Bye-Laws do not extend to any matter that would render the
same void under the Companies Act. In addition, each Indemnitee shall be indemnified out of our assets against all liabilities
incurred in defending any proceedings, whether civil or criminal, in which judgment is given in such Indemnitee’s favor, or in
which he or she is acquitted.
Under the Second Amended and Restated Bye-Laws, shareholders have further agreed to waive any claim or right of action
they may have at any time against any Indemnitee on account of any action taken by such Indemnitee or the failure of such
Indemnitee to take any action in the performance of his or her duties with or for the Company with the exception of any claims
or rights of action arising out of fraud or dishonesty
Shareholder Meetings
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Under the Companies Act, an annual general meeting of the shareholders shall be held for the election of directors on any date
or time as designated by or in the manner provided for in the bye-laws and held at such place within or outside Bermuda as may
be designated in the bye-laws. Any other proper business may be transacted at the annual general meeting.
Under the Companies Act, any meeting that is not the annual general meeting is called a special general meeting, and may be
called by the Board or by such persons as authorized by the company’s memorandum of association or bye-laws. Under the
Companies Act, holders of one-tenth of a company’s issued common shares may also call special general meetings. At such
special general meeting, only business that is related to the purpose set forth in the required notice may be transacted.
Additionally, under Bermuda law, a company may, by resolution at a special general meeting, elect to dispense with the holding
of an annual general meeting for (a) the year in which it is made and any subsequent year or years; (b) for a specified number of
years; or (c) indefinitely.
Under the Companies Act, notice of any general meeting must be given not less than five (5) days before the meeting and shall
state the place, date and hour of the meeting and, in the case of a special general meeting, shall also state the purpose of such
meeting and the that it is being called at the direction of whoever is calling the meeting. Under Bermuda law, accidental failure
to give notice will not invalidate proceedings at a general meeting.
Annual General Meetings. The Second Amended and Restated Bye-Laws provide that the Board may fix the date, time and
place of the annual general meeting within or without Bermuda (but never in the United Kingdom or Norway) for the election
of directors and to transact any other business properly brought before the meeting.
Special General Meetings. The Second Amended and Restated Bye-Laws provide that special general meetings may be called
by the Board and when required by the Companies Act (i.e. by holders of one-tenth of a company’s issued common shares
through a written request to the Board).
Notice Requirements. The Second Amended and Restated Bye-Laws provide that we must give not less than five (5) days'
notice before any annual or special general meeting.
Quorum of Shareholders
Under the Companies Act, where the bye-laws so provide, a general meeting of the shareholders of a company may be held
with only one individual present if the requirement for a quorum is satisfied and, where a company has only one shareholder or
only one holder of any class of shares, the shareholder present in person or by proxy constitutes a general meeting.
Under the Second Amended and Restated Bye-Laws, quorum at annual or special general meetings shall be constituted by two
or more shareholders either present in person or by proxy throughout the meeting. If we only have one shareholder, then one
shareholder present in person or proxy shall constitute the necessary quorum.
Shareholder Action without a Meeting
Under the Companies Act, unless the company’s bye-laws provide otherwise, any action required to or that may be taken at an
annual or general meeting can be taken without a meeting if a written consent to such action is signed by the necessary majority
of the shareholders entitled to vote with respect thereto.
The Second Amended and Restated Bye-Laws provide that, except in the case of the removal of auditors and directors,
anything which may be done by resolution may, without an annual or special general meeting be done by resolution in writing,
signed by a simple majority of all the shareholders or their proxies (or such greater majority required by the Companies Act).
Shareholder’s Rights to Examine Books and Records
Under the Companies Act, any shareholder, during the usual hours of business, may inspect, for a purpose reasonably related to
his or her interest as a shareholder, and make copies of extracts from the share register, and minutes of all general meetings.
Amendments to Memorandum of Association
Under Bermuda law, a company may, by resolution passed at an annual or special general meeting of shareholders, alter the
provisions of the memorandum of association. An application for alteration can only be made by (i) holders of not less in the
aggregate than 20% in par value of a company’s issued share capital, (ii) by holders of not less in the aggregate that 20% of the
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company’s debentures entitled to object to alterations to the memorandum, or (iii) in the case a company that is limited by
guarantee, by not less than 20% of the shareholders.
Variation in Shareholder Rights
Under Bermuda law, if at any time a company has more than one class of shares, the rights attaching to any class, unless
otherwise provided for by the terms of issue of the relevant class, the rights attached to any class of share may be varied with
(i) the consent in writing of the holders of 75% in nominal value of the issued shares of that class, or (ii) the sanction of a
resolution passed at a separate general meeting of holders of the shares of the class at which a quorum consisting of at least two
persons holding or representing of one-third of the issued shares of the relevant class is present.
The Second Amended and Restated Bye-Laws may be amended from time to time in the manner provided for in the Companies
Act.
Vote on Amalgamations, Mergers, Consolidations and Sales of Assets
Under the Companies Act, any plan of merger or amalgamation must be authorized by the resolution of a company’s
shareholders and must be approved by a majority vote of three-fourths of those shareholders voting at such a general meeting of
the company. Also, it is required that a quorum of two or more persons holding or representing more than one-third (1/3) of the
issued and outstanding common shares of the company on the Record Date are in attendance in person or by proxy at such
special general meeting.
In our Second Amended and Restated Bye-Laws, any plan of merger or amalgamation must be authorized by the resolution of a
company's shareholders approved by a simple majority of votes cast at a general meeting of the company at which a quorum of
two or more shareholders are in attendance in person or by proxy throughout such meeting.
Appraisal and Dissenters Rights
Under Bermuda law, in the event of an amalgamation or a merger of a Bermuda company with another company or corporation,
a shareholder of the Bermuda company who did not vote in favor of the amalgamation or merger and is not satisfied that fair
value has been offered for such shareholder’s shares may, within one month of notice of the special general meeting, apply to
the Supreme Court of Bermuda to appraise the fair value of those shares.
Derivative Actions
Class actions and derivative actions are generally not available to shareholders under Bermuda law. Bermuda courts, however,
would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to
the company where the act complained of is alleged to be beyond the corporate power of the company, or illegal, or would
result in the violation of the company’s memorandum of association or bye-laws. Furthermore, consideration would be given by
a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for instance, where an act
requires the approval of a greater percentage of the company’s shareholders than that which actually approved it. However,
generally a derivative action will not be permitted where there is an alternative action available that would provide an adequate
remedy. Any property or damages recovered by derivative action go to the company, not to the plaintiff shareholders. When the
affairs of a company are being conducted in a manner which is oppressive or prejudicial to the interests of some part of the
shareholders, one or more shareholders may apply to the Supreme Court of Bermuda, which may make such order as it sees fit,
including an order regulating the conduct of the company’s affairs in the future or ordering the purchase of the shares of any
shareholders by other shareholders or by the company or that the company be wound up.
A statutory right of action is conferred on subscribers to shares of a Bermuda company against persons (including directors and
officers) responsible for the issue of a prospectus in respect of damage suffered by reason of an untrue statement contained in
the prospectus, but this confers no right of action against the Bermuda company itself. In addition, subject to any limitations
that may be contained in the company’s bye-laws, a shareholder may bring a derivative action on behalf of the company to
enforce a right of the company (as opposed to a right of its shareholders) against its officers (including directors) for breach of
their statutory and fiduciary duty to act honestly and in good faith with a view to the best interests of the company.
The Second Amended and Restated Bye-Laws contain provisions whereby each shareholder (i) agrees that the liability of our
officers shall be limited, (ii) agrees to waive any claim or right of action such shareholder might have, whether individually or
in the right of the Company, against any director, alternate director, officer, person or member of a committee, resident
representative or any of their respective heirs, executors or administrators for any action taken by any such person, or the failure
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of any such person to take any action, in the performance of his or her duties, or supposed duties, to the Company or otherwise,
and (iii) agrees to allow us to indemnify and hold harmless our officers and directors in respect of any liability attaching to such
officer and director incurred by him or her as an officer or director of the Company. The restrictions on liability, indemnity and
waiver do not extend to any liability of an officer or director for fraud or dishonesty.
Liquidation
Under Bermuda Law, in the event of our liquidation, dissolution or winding up, the holders of common shares are entitled to
share in our assets, if any, remaining after the payment of all of our debts and liabilities, subject to any liquidation preference on
any outstanding preference shares.
C.  MATERIAL CONTRACTS
Attached as exhibits to this annual report are the contracts we consider to be both material and not in the ordinary course of
business. Descriptions of these contracts are included within “Item 5. Operating and Financial Review and Prospects - B.
Liquidity and Capital Resources - Subsequent and Other Events” and “Item 5. Operating and Financial Review and Prospects -
B. Liquidity and Capital Resources - Equity Issuances.” Other than these contracts, we have no material contracts other than
those entered in the ordinary course of business.
D.  EXCHANGE CONTROLS
The Bermuda Monetary Authority (the "BMA"), must give permission for all issuances and transfers of securities of a Bermuda
exempted company like ours, unless the proposed transaction is exempted by the BMA's written general permissions. We have
received general permission from the BMA to issue any unissued common shares and for the free transferability of our common
shares as long as our common shares are listed on an "appointed stock exchange". Our common shares are listed on the
NASDAQ, which is an "appointed stock exchange". Our common shares may therefore be freely transferred among persons
who are residents and non-residents of Bermuda.
Although we are incorporated in Bermuda, we are classified as a non-resident of Bermuda for exchange control purposes by the
BMA. Other than transferring Bermuda Dollars out of Bermuda, there are no restrictions on our ability to transfer funds into
and out of Bermuda or to pay dividends to U.S. residents who are holders of common shares or other non-residents of Bermuda
who are holders of our common shares in currency other than Bermuda Dollars.
In accordance with Bermuda law, share certificates may be issued only in the names of corporations, individuals or legal
persons. In the case of an applicant acting in a special capacity (for example, as an executor or trustee), certificates may, at the
request of the applicant, record the capacity in which the applicant is acting. Notwithstanding the recording of any such special
capacity, we are not bound to investigate or incur any responsibility in respect of the proper administration of any such estate or
trust.
We will take no notice of any trust applicable to any of our shares or other securities whether or not we had notice of such trust.
As an "exempted company", we are exempt from Bermuda laws which restrict the percentage of share capital that may be held
by non-Bermudians, but as an exempted company, we may not participate in certain business transactions including: (i) the
acquisition or holding of land in Bermuda (except that required for its business and held by way of lease or tenancy for terms of
not more than 21 years) without the express authorization of the Bermuda legislature; (ii) the taking of mortgages on land in
Bermuda to secure an amount in excess of $50,000 without the consent of the Minister of Finance of Bermuda; (iii) the
acquisition of any bonds or debentures secured on any land in Bermuda except bonds or debentures issued by the Government
of Bermuda or by a public authority in Bermuda; or (iv) the carrying on of business of any kind in Bermuda, except in so far as
may be necessary for the carrying on of its business outside Bermuda or under a license granted by the Minister of Finance of
Bermuda.
The Bermuda government actively encourages foreign investment in "exempted" entities like us that are based in Bermuda but
do not operate in competition with local business. In addition to having no restrictions on the degree of foreign ownership, we
are subject neither to taxes on our income or dividends nor to any exchange controls in Bermuda. In addition, there is no capital
gains tax in Bermuda, and profits can be accumulated by us, as required, without limitation. There is no income tax treaty
between the United States and Bermuda pertaining to the taxation of income other than applicable to insurance enterprises.
 E.  TAXATION
 
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The following discussion summarizes the material United States federal income tax, Bermuda tax and Liberian tax
consequences to United States Holders, as defined below, of the purchase, ownership and disposition of common shares. This
summary does not purport to deal with all aspects of United States federal income taxation and Bermuda taxation that may be
relevant to an investor's decision to purchase our common shares, nor any tax consequences arising under the laws of any state,
locality or other foreign jurisdiction.
United States Federal Income Tax Considerations
The following are the material United States federal income tax consequences to us of our activities and to United States
Holders of our common shares. The following discussion of United States federal income tax matters is based on the Code,
judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the U.S. Department of the
Treasury, all of which are subject to change, possibly with retroactive effect. Except as otherwise noted, this discussion is based
on the assumption that we will not maintain an office or other fixed place of business within the United States.
Taxation of Our Shipping Income: In General
We anticipate that we will derive substantially all of our gross income from the use and operation of vessels in international
commerce and that this income will principally consist of freights from the transportation of cargoes, charter hire from time or
voyage charters and the performance of services directly related thereto, which is referred to herein as "shipping income".
Shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United
States will be considered to be 50% derived from sources within the United States. Shipping income attributable to
transportation that both begins and ends in the United States will be considered to be 100% derived from sources within the
United States. We are not permitted by law to engage in transportation that gives rise to 100% United States source income.
Shipping income attributable to transportation exclusively between non-United States ports will be considered to be 100%
derived from sources outside the United States. Shipping income derived from sources outside the United States will not be
subject to United States federal income tax.
Based upon our current and anticipated shipping operations, our vessels will operate in various parts of the world, including to
or from United States ports. Unless exempt from United States federal income taxation under Section 883 of the Code ("Section
883"), we will be subject to United States federal income taxation, in the manner discussed below, to the extent our shipping
income is considered derived from sources within the United States.
Application of Section 883
Under the relevant provisions of Section 883, we will be exempt from United States federal income taxation on its United
States source shipping income if:
a.We are organized in a "qualified foreign country", which is one that grants an equivalent exemption from
taxation to corporations organized in the United States in respect of the shipping income for which exemption
is being claimed under Section 883, and which is referred to herein as the "country of organization
requirement"; and
b.We can satisfy any one of the following two ownership requirements for more than half the days during the
taxable year:
i.Our stock is "primarily and regularly" traded on an established securities market located in the
United States or a qualified foreign country (such as NASDAQ, on which our common shares trade),
which is referred to herein to as the "Publicly-Traded Test"; or
ii.more than 50% of our stock, in terms of value, is beneficially owned by one or more "qualified
shareholders" which, as defined, includes individuals who are residents of a qualified foreign
country or foreign corporations that satisfy the country of organization requirement and the Publicly-
Traded Test.
The United States Treasury Department has recognized Bermuda, our country of incorporation, as a qualified foreign country.
In addition, the United States Treasury Department has recognized each of Liberia and the Marshall Islands, the countries of
incorporation of our vessel-owning subsidiaries, as a qualified foreign country. Accordingly, we and our vessel owning
subsidiaries satisfy the country of organization requirement.
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Therefore, our eligibility for exemption under Section 883 is wholly dependent upon being able to satisfy one of the stock
ownership requirements.
For our 2022 taxable year, we believe that we satisfied the Publicly-Traded Test since our common shares were “primarily and
regularly” traded on the NASDAQ, which is an “established securities market” in the United States within the meaning of the
Treasury Regulation under Section 883 of the Code. We intend to take this position on our 2022 United States income tax
returns. However, we can provide no assurance that we will continue to be able to satisfy these requirements for any future
taxable years.
Under the Treasury Regulations, stock of a corporation will be considered to be "primarily traded" on an established securities
market in a country (such as NASDAQ) if the number of shares of such class of stock that are traded during any taxable year on
all established securities markets in that country exceeds the number of shares of such class that are traded during that taxable
year on established securities markets in any other single country. Currently, our common shares are primarily traded on the
NASDAQ Global Select Market for purposes of the “primarily traded” test.
Under the Treasury Regulations, stock of a corporation will be considered to be “regularly traded” on an established securities
market if one or more classes of stock of the corporation representing more than 50% of the total combined voting power of all
classes of stock entitled to vote and of the total value of the stock of the corporation are listed on such market during the taxable
year. Since our common shares, which constitute more than 50% of the total combined voting power and total value of our
stock, are listed on the NASDAQ, we will satisfy the listing requirement.
It is further required that, with respect to each class of stock relied upon to meet the listing threshold, (i) such class of stock is
traded on the market, other than in de minimis quantities, on at least 60 days during the taxable year or 1/6 of the days in a short
taxable year; and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average
number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable
year. We believe we will satisfy the foregoing trading frequency and trading volume tests. Even if this were not the case, the
Treasury Regulations provide that the foregoing trading frequency and trading volume tests will be deemed satisfied if, as we
expect to be the case with our common shares, such class of stock is traded on an established securities market in the United
States, such as the NASDAQ, and such stock is regularly quoted by dealers making a market in such stock.
Notwithstanding the foregoing, the Treasury Regulations provide, in pertinent part, that a class of our 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 of stock 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 vote and value
of the outstanding shares of such class of stock, which we refer to as the 5 Percent Override Rule.
For purposes of determining the persons that own 5% or more of our common shares (“5% Shareholders”), the Treasury
Regulations permit us to rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the SEC, as
having a 5% or more beneficial interest in our common shares. The Treasury Regulations further provide that an investment
company identified on an SEC Schedule 13G or Schedule 13D filing that is registered under the Investment Company Act of
1940, as amended, will not be treated as a 5% Shareholder for such purposes. We currently do not believe that 5% Shareholders
controlled more than 50% of the voting power or value of our common shares for more than half of the days in the 2022 taxable
year, and therefore, we should not run afoul of the 5 Percent Override Rule. for our most recently taxable year. There can be no
assurance that we will continue to satisfy the requirements of the Publicly-Traded Test, including not triggering the 5 Percent
Override Rule, in future taxable years.
Taxation in Absence of Section 883 Exemption
To the extent the benefits of Section 883 are unavailable with respect to any item of United States source income, our United
States source shipping income, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the
benefit of deductions, which is referred to herein as the "4% gross basis tax regime". Since under the sourcing rules described
above, no more than 50% of our shipping income would be treated as being derived from United States sources, the maximum
effective rate of United States federal income tax on our shipping income would never exceed 2% under the 4% gross basis tax
regime. Historically, the amount of this tax would not have been material.
Gain on Sale of Vessels
Regardless of whether we qualify for exemption under Section 883, we will not be subject to United States federal income
taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States
74
under United States federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United
States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United
States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.
Taxation of United States Holders
The following is a discussion of the material United States federal income tax considerations relevant to an investment decision
by a United States Holder, as defined below, with respect to the common shares. This summary is not intended to be applicable
to all categories of investors, such as dealers in securities, traders in securities that elect the mark-to-market method of
accounting, banks, thrifts or other financial institutions, insurance companies, regulated investment companies, tax-exempt
organizations, United States expatriates, persons that hold common shares as part of a straddle, conversion transaction or hedge,
persons who own, directly or constructively, 10% or more of our outstanding stock, persons deemed to sell common shares
under the constructive sale provisions of the Code, United States Holders whose "functional currency" is other than the United
States dollar, persons required to recognize income for U.S. federal income tax purposes no later than when such income is
reported on an “applicable financial statement”, persons subject to the "base erosion and anti-avoidance" tax, or holders subject
to the alternative minimum tax, each of which may be subject to special rules. In addition, this discussion is limited to persons
who hold common shares that are listed on the NASDAQ as "capital assets" (generally, property held for investment) within the
meaning of Code Section 1221. This summary does not contain a detailed description of all the United States federal income
tax consequences to United States Holders in light of their particular circumstances and does not address the Medicare tax on
net investment income, or the effects of any state, local or non-United States tax laws. You are encouraged to consult your own
tax advisor concerning the overall tax consequences arising in your own particular situation under United States federal, state,
local or foreign law of the ownership of common shares.
As used herein, the term "United States Holder" means a beneficial owner of common shares that is a (i) United States
individual citizen or resident, (ii) United States corporation or other United States entity taxable as a corporation, (iii) estate, the
income of which is subject to United States federal income taxation regardless of its source, or (iv) trust if a court within the
United States is able to exercise primary jurisdiction over the administration of the trust and one or more United States persons
have the authority to control all substantial decisions of the trust or (b) the trust has in effect a valid election to be treated as a
United States person for U.S. federal income tax purposes.
If a partnership holds common shares, the tax treatment of a partner will generally depend upon the status of the partner and
upon the activities of the partnership. If you are a partner in a partnership holding common shares, you are encouraged to
consult your own tax advisor regarding the United States federal income tax consequences of owning an interest in a
partnership that holds common shares.
Distributions
Subject to the discussion of passive foreign investment companies below, any distributions made by us with respect to common
shares to a United States Holder will generally constitute dividends, which may be taxable as ordinary income or "qualified
dividend income" as described in more detail below, to the extent of our current or accumulated earnings and profits, as
determined under United States federal income tax principles. Distributions in excess of our earnings and profits will be treated
first as a non-taxable return of capital to the extent of the United States Holder's tax basis in its common shares on a dollar-for-
dollar basis and thereafter as capital gain. Because we are not a United States corporation, United States Holders that are
corporations will not generally be entitled to claim a dividends-received deduction with respect to any distributions they receive
from us.
Dividends paid on common shares to a United States Holder which is an individual, trust or estate (a "United States Non-
Corporate Holder") will generally be treated as "qualified dividend income" that is taxable to such shareholder at preferential
United States federal income tax rates provided that (1) common shares are readily tradable on an established securities market
in the United States (such as the NASDAQ on which the common shares are listed); (2) we are not a passive foreign investment
company for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not
believe we are, have been since the beginning of our 2004 taxable year, or will be); (3) the United States Non-Corporate Holder
has owned common shares for more than 60 days in the 121-day period beginning 60 days before the date on which the
common shares become ex-dividend; and (4) certain other requirements are met. Any dividends paid by us which are not
eligible for these preferential rates will be taxed as ordinary income to a United States Holder.
If we pay an "extraordinary dividend" on our common shares (generally, a dividend in an amount which is equal to or in excess
of 10% of a shareholder's adjusted tax basis (or fair market value in certain circumstances) in the common shares) that is treated
75
as "qualified dividend income," then any loss derived by a United States Individual Holder from the sale or exchange of such
common shares will be treated as long-term capital loss to the extent of such dividend.
Sale, Exchange or other Disposition of Our Common Shares
Assuming we do not constitute a passive foreign investment company for any taxable year, a United States Holder generally
will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares in an amount equal to the
difference between the amount realized by the United States Holder from such sale, exchange or other disposition and the
United States Holder's tax basis in the common shares. Such gain or loss will be capital gain or loss and will be treated as long-
term capital gain or loss if the United States Holder's holding period in the common shares is greater than one year at the time
of the sale, exchange or other disposition. Long-term capital gains of a United States Non-Corporate Holder are taxable at
preferential United States federal income tax rates. A United States Holder's ability to deduct capital losses is subject to certain
limitations.
Special rules may apply to a United States Holder who purchased shares before 2004 and did not make a timely QEF election or
a mark-to-market election (as discussed below). Such United States Holders are encouraged to consult their tax advisors
regarding the United States federal income tax consequences to them of the disposal of our common shares.
Passive Foreign Investment Company Status and Significant Tax Consequences
Special United States federal income tax rules apply to a United States Holder that holds stock in a foreign corporation
classified as a PFIC, for United States federal income tax purposes. In general, we will be treated as a PFIC with respect to a
United States Holder if, for any taxable year in which such holder held our common shares, either;
•at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital
gains and rents derived other than in the active conduct of a rental business); or
•at least 50% of the average value of the assets held by us during such taxable year produce, or are held for the
production of, passive income.
For purposes of determining whether we are a PFIC, we will be treated as earning and owning its proportionate share of the
income and assets, respectively, of any of its subsidiary corporations in which it owns at least 25% of the value of the
subsidiary's stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute
passive income. By contrast, rental income would generally constitute "passive income" unless we are treated under specific
rules as deriving its rental income in the active conduct of a trade or business.
We were a PFIC for United States federal income tax purposes through our 2003 taxable year. United States Holders who held
our common shares prior to the 2004 taxable year are encouraged to consult their tax advisors regarding the proper tax
treatment of any dispositions of common shares and any distributions by us.
Based on our past and current operations and future projections, we do not believe that we were, are or will be a PFIC with
respect to any taxable year, other than the taxable years ending prior to its 2004 taxable year. Our belief is based principally on
the position that, for purposes of determining whether we are a PFIC, the gross income we derive or are deemed to derive from
the time chartering and voyage chartering activities should constitute services income, rather than rental income.
Correspondingly, we believe that such income does not constitute passive income, and the assets that we or our wholly-owned
subsidiaries own and operate in connection with the production of such income, in particular, the vessels, do not constitute
assets that produce, or are held for the production of, passive income for purposes of determining whether we are a PFIC.
Although there is no direct legal authority under the PFIC rules, we believe that there is substantial legal authority supporting
our position consisting of case law and the IRS pronouncements concerning the characterization of income derived from time
charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes
time charter income as rental income rather than services income for other tax purposes. Accordingly, in the absence of any
legal authority specifically relating to the Code provisions governing PFICs, the IRS or a court could disagree with our position.
In addition, although we intend to conduct our affairs in such a manner as to avoid being classified as a PFIC with respect to
any taxable year, there can be no assurance that the nature of our operations will not change in the future.
As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a United States Holder would be subject
to different taxation rules depending on whether the United States Holder makes an election to treat us as a "Qualified Electing
76
Fund", which is referred to herein as a "QEF election". As an alternative to making a QEF election, a United States Holder
should be able to elect to mark-to-market our common shares, which is referred to herein as a "Mark-to-Market election."
Taxation of United States Holders Making a Timely QEF Election
If a United States Holder makes a timely QEF election, which United States Holder is referred to herein as an "Electing United
States Holder", the Electing United States Holder must report each year for United States federal income tax purposes its pro
rata share of our ordinary earnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year
of the Electing United States Holder, regardless of whether or not distributions were received from us by the Electing United
States Holder. The Electing United States Holder's adjusted tax basis in the common shares will be increased to reflect taxed
but undistributed earnings and profits. Distributions of earnings and profits that had been previously taxed will result in a
corresponding reduction in the adjusted tax basis in the common shares and will not be taxed again once distributed. An
Electing United States Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of the
common shares. A United States Holder will be eligible to make a QEF election with respect to its common shares only if we
provide the United States Holder with annual tax information relating to us. There can be no assurance that we will provide
such tax information on an annual basis.
Taxation of United States Holders Making a "Mark-to-Market" Election
Alternatively, if we were to be treated as a PFIC for any taxable year and, as anticipated, the common shares are treated as
"marketable stock", a United States Holder would be allowed to make a Mark-to-Market election with respect to our common
shares. If that election is made, the United States Holder generally would include as ordinary income in each taxable year that
we are a PFIC the excess, if any, of the fair market value of the common shares at the end of the taxable year over such holder's
adjusted tax basis in the common shares. The United States Holder would also be permitted an ordinary loss for each such tax
year in respect of the excess, if any, of the United States Holder's adjusted tax basis in the common shares over its fair market
value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the
Mark-to-Market election. A United States Holder's tax basis in its common shares would be adjusted to reflect any such income
or loss amount. In any taxable year that we are a PFIC, gain realized on the sale, exchange or other disposition of the common
shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common
shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously
included by the United States Holder.
Taxation of United States Holders Not Making a Timely QEF or Mark-to-Market Election
Finally, if we were to be treated as a PFIC for any taxable year, a United States Holder who does not make either a QEF
election or a Mark-to-Market election for that year, who is referred to herein as a "Non-Electing United States Holder", would
be subject to special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-
Electing United States Holder on the common shares in a taxable year in excess of 125% of the average annual distributions
received by the Non-Electing United States Holder in the three preceding taxable years, or, if shorter, the Non-Electing United
States Holder's holding period for the common shares), and (2) any gain realized on the sale, exchange or other disposition of
the common shares. Under these special rules:
•the excess distribution or gain would be allocated ratably over the Non-Electing United States Holders' aggregate
holding period for the common shares;
•the amount allocated to the current taxable year and any taxable years before we became a PFIC would be taxed as
ordinary income; and
•the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the
applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed
with respect to the resulting tax attributable to each such other taxable year.
These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds
or otherwise utilize leverage in connection with its acquisition of the common shares. If a Non-Electing United States Holder
who is an individual dies while owning the common shares, the successor of such deceased Non-Electing United States Holder
generally would not receive a step-up in tax basis with respect to such stock.
PFIC Annual Filing Requirements
If we were to be treated as a PFIC, a United States Holder will generally be required to file an information return on an IRS
Form 8621 with respect to its ownership of our common stock.
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United States Federal Income Taxation of "Non-U.S. Holders"
A beneficial owner of our common shares that is not a United States Holder (and not an entity treated as a partnership) is
referred to herein as a "Non-U.S. Holder". If you are a partner in a partnership (or an entity or arrangement treated as a
partnership for United States federal income tax purposes) holding common shares, you should consult your own tax advisor
regarding the tax consequences to you of the partnership’s ownership of common shares.
Distributions
Distributions we pay to a Non-U.S. Holder will not be subject to United States federal income tax or withholding tax if the
Non-U.S. Holder is not engaged in a United States trade or business. If the Non-U.S. Holder is engaged in a United States trade
or business, our distributions will generally be subject to United States federal income tax, on a net income basis at the regular
graduated rates, to the extent they constitute income effectively connected with the Non-U.S. Holder’s United States trade or
business. However, distributions paid to a Non-U.S. Holder that is engaged in a trade or business may be exempt from taxation
under an income tax treaty if the income arising from the distribution is not attributable to a United States permanent
establishment maintained by the Non-U.S. Holder. A Non-U.S. Holder that is a corporation also may be subject to a branch
profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected
dividends, as adjusted for certain items.
Sale, Exchange or Other Disposition of Common Shares
Non-U.S. Holders will generally not be subject to U.S. federal income tax or withholding tax on any gain realized upon the sale,
exchange or other disposition of our common shares unless: (i) the gain is "effectively connected" with the Non-U.S. Holder's
conduct of a trade or business in the United States or, if the Non-U.S. Holder is entitled to the benefits of an applicable U.S.
income tax treaty with respect to that gain, that gain is attributable to a permanent establishment maintained by the Non- U.S.
Holder in the United States or (ii) the Non-U.S. Holder is an individual who is present in the United States for 183 days or more
during the taxable year of disposition and other conditions are met.
If the Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, the income from the
common shares, including dividends on the underlying common shares and the gain from the sale, exchange or other
disposition of the common shares that is "effectively connected" with the conduct of that U.S. trade or business, will generally
be subject to U.S. federal income tax in the same manner as discussed in the previous section relating to the U.S. federal income
taxation of United States Holders. In addition, in the case of a corporate Non-U.S. Holder, such Non-U.S. Holder's earnings and
profits that are attributable to the "effectively connected" income, subject to certain adjustments, may be subject to an additional
U.S. federal branch profits tax at a rate of 30% or at a lower rate as may be specified by an applicable U.S. income tax treaty.
Backup Withholding and Information Reporting
In general, dividend payments, or other taxable distributions, made within the United States to a holder of common shares will
be subject to information reporting requirements. Such payments will also be subject to "backup withholding" if paid to a non-
corporate United States Holder who:
•fails to provide an accurate taxpayer identification number;
•is notified by the IRS that he has failed to report all interest or dividends required to be shown on his United States
federal income tax returns; or
•in certain circumstances, fails to comply with applicable certification requirements.
If a holder sells his common shares to or through a United States office of a broker, the payment of the proceeds is subject to
both United States information reporting and backup withholding unless the holder establishes an exemption. If a holder sells
his common shares through a non-United States office of a non-United States broker and the sales proceeds are paid to the
holder outside the United States, then information reporting and backup withholding generally will not apply to that payment.
However, United States information reporting requirements, but not backup withholding, will apply to a payment of sales
proceeds, including a payment made to a holder outside the United States, if the holder sells his common shares through a non-
United States office of a broker that is a United States person or has some other contacts with the United States, unless the
broker has documentary evidence in its records that the holder is not a United States person and certain other conditions are
met, or the holder otherwise establishes an exemption.
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Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by
certifying their status on an applicable IRS Form W-8.
Backup withholding is not an additional tax. Rather, a taxpayer generally may obtain a refund of any amounts withheld under
backup withholding rules that exceed the taxpayer's income tax liability by filing a refund claim with the IRS.
Other U.S. Information Reporting Obligations
Individuals who are United States Holders (and to the extent specified in applicable Treasury Regulations, certain United States
entities) who hold "specified foreign financial assets" (as defined in Section 6038D of the Code) are required to file IRS Form
8938 with information relating to the asset for each taxable year in which the aggregate value of all such assets exceeds $75,000
at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by
applicable Treasury Regulations). Specified foreign financial assets would include, among other assets, the common shares,
unless the common shares are held through an account maintained with a United States financial institution. Substantial
penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not
due to willful neglect. Additionally, in the event an individual United States Holder (and to the extent specified in applicable
Treasury Regulations a United States entity) that is required to file IRS Form 8938 does not file such form, the statute of
limitations on the assessment and collection of United States federal income taxes of such holder for the related tax year may
not close until three years after the date that the required information is filed. United States Holders (including United States
entities) are encouraged consult their own tax advisors regarding their reporting obligations under this legislation.
Bermuda Taxation
 
As of the date of this annual report, we are not subject to taxation under the laws of Bermuda and distributions to us by our
subsidiaries also are not subject to any Bermuda tax. As of the date of this document, there is no Bermuda income, corporation
or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by non-residents of
Bermuda in respect of capital gains realized on a disposition of the Company's common shares or in respect of distributions by
us with respect to the Company's common shares. This does not, however, apply to the taxation of persons ordinarily resident in
Bermuda. Bermuda holders should consult their own tax advisors regarding possible Bermuda taxes with respect to dispositions
of, and distributions on, the Company's common shares.
 
The Minister of Finance in Bermuda has granted the Company a tax exempt status until March 31, 2035, under which no
income taxes or other taxes (other than duty on goods imported into Bermuda and payroll tax in respect of any Bermuda-
resident employees) are payable by us in Bermuda. If the Minister of Finance in Bermuda does not grant a new exemption or
extend the current tax exemption, and if the Bermudian Parliament passes legislation imposing taxes on exempted companies,
we may become subject to taxation in Bermuda after March 31, 2035.
 
Currently, there are no withholding taxes payable in Bermuda on dividends distributed by us to our shareholders.
 
Liberian Taxation
 
Under the Consolidated Tax Amendments Act of 2010, our Liberian subsidiaries should be considered non-resident Liberian
corporations which are wholly exempted from Liberian taxation effective as of 1977.
 
F.  DIVIDENDS AND PAYING AGENTS
Not applicable.
G.  STATEMENT BY EXPERTS
Not applicable.
H.  DOCUMENTS ON DISPLAY
We are subject to the informational requirements of the Exchange Act. In accordance with these requirements, we file reports
and other information with the Commission. These materials, including this annual report and the accompanying exhibits, are
available at http://www.sec.gov. In addition, documents referred to in this annual report may be inspected at our principal
executive offices at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, Bermuda HM 08. Our filings are also available on our
website at https://www.goldenocean.bm/. The information on our website, however, is not, and should not be deemed to be a
79
part of this annual report. You may also obtain copies of the incorporated documents, without charge, upon written request to
ir@goldenocean.no.
 
I.  SUBSIDIARY INFORMATION
Not applicable.
 
J.  ANNUAL REPORT TO SECURITY HOLDERS
Not applicable.
ITEM 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We interpret market risk as the risk arising from fluctuations in interest rates, foreign currency exchange rates, commodity
prices and other factors affecting the rate, index or price of an underlying financial instrument.
Interest Rate Risk
We are exposed to interest rate fluctuations primarily due to our floating interest rate bearing long-term debt. The international
dry bulk industry is a capital-intensive industry, which requires significant amounts of financing, typically provided in the form
of secured long-term debt. Our current bank financing agreements bear floating interest rates, typically three-month USD
LIBOR. Significant adverse fluctuations in floating interest rates could adversely affect our operating and financial performance
and our ability to service our debt.
From time to time, we may take positions in interest rate derivative contracts to manage the risk associated with fluctuations in
interest payments resulting from fluctuations of the underlying floating interest rates of our long-term debt. Adverse
fluctuations in floating interest rates could adversely affect our free cash position as we may be required to secure cash as
collateral, under our interest rate derivative contracts.
We are exposed to credit risk in the event of non-performance by the counterparties of our interest rate derivative contracts. In
order to mitigate the credit risk, we enter into derivative transactions with counterparties, usually well-established banks, which
have reliable credit ratings. The possibility of a counterparty contractual non-performance event to materialize is considered
remote and hence, the credit risk is considered minimal.
Our variable rate borrowings as of December 31, 2022 amounted to $1,120.9 million compared to $1,262.3 million as of
December 31, 2021 and bear interest at LIBOR/SOFR plus a margin.
Interest Rate Swap Agreements
Our swaps are intended to reduce the risk associated with fluctuations in interest rates payments whereby and as of December
31, 2022, the floating rate on a total notional principal amount of $500 million (December 31, 2021: $500 million) was
swapped to fixed rate.
As at December 31, 2022, a notional principal amount of $400 million, with LIBOR as reference rate, had a weighted average
fixed interest rate of $1.80%. In addition, as at December 31, 2022, a notional principal amount of $100 million, with SOFR as
reference rate, had a weighted average fixed interest rate of $1.97%. As at December 31, 2021, a notional amount of $500
million, with LIBOR as reference rate, had a weighted average fixed interest rate of 1.81%.
As at December 31, 2022 and 2021, the carrying value of the derivatives which represents their fair value is as follows:
(in thousands of $)
2022
2021
Interest rate swaps - asset positions
32,858
2,608
Interest rate swaps - liability positions
—
10,364
During 2022, we recorded a net gain on interest rate swaps of $40.1 million in the consolidated statement of operations, which
resulted from unrealized gain of $40.6 million (change in fair value), partially offset by realized loss (interest expense) of $0.5
million. During 2021, we recorded a net gain on interest rate swaps of $11.5 million in the consolidated statements of
operations, which resulted from unrealized gain of $19.8 million (change in the fair value), partially offset by realized loss
(interest expense) of $8.3 million.
80
As at December 31, 2022, our estimated interest expense until the maturity of our floating-rate long-term debt based on the
applicable three-month USD LIBOR plus the relevant margin of applicable to each of our floating-rate credit facilities is tabled
below. The table below also sets forth the sensitivity of our estimated interest expense to a 100 basis point increase in the
applicable three-month USD LIBOR.
(in thousands of $)
Estimated interest expense
Estimated interest expense -
increase of 100 basis points in
floating rate
Sensitivity
2023
76,970
88,087
11,117
2024
55,967
65,492
9,525
2025
39,466
46,698
7,232
2026
24,350
28,928
4,578
2027
15,028
17,826
2,798
Thereafter
7,486
8,853
1,367
 
219,267
255,884
36,617
Foreign Currency Risk
The majority of our transactions, assets and liabilities are denominated in United States dollars, our functional currency.
However, we incur expenditure in currencies other than the functional currency, mainly in Norwegian kroner and Singapore
dollars. There is a risk that currency fluctuations in transactions incurred in currencies other than the functional currency will
have a negative effect of the value of our cash flows. We may enter into foreign currency swaps to mitigate such risk exposures.
The counterparties to such contracts are major banking and financial institutions. Credit risk exists to the extent that the
counterparties are unable to perform under the contracts but this risk is considered remote as the counterparties are, in our
opinion, well established banks.
Foreign currency Swap Agreements
As of December 31, 2022, we had contracts to swap USD to NOK for a notional amount of $0.2 million. As of December 31,
2021, we had contracts to swap USD to NOK for a notional amount of $2.4 million. As of December 31, 2022, the fair value of
our swaps was a liability of $10 thousand (2021: receivable of $0.1 million). In 2022, we recorded total net loss on our foreign
currency swaps of $0.1 million (2021: loss of $0.2 million).
Inflation
Inflation has only had a moderate effect on our expenses given current economic conditions. Significant global inflationary
pressures (such as the war between Russia and the Ukraine) increase operating, voyage, general and administrative, and
financing costs. Historically, shipping companies are accustomed to navigating in shipping downturns, coping with inflationary
pressures and monitoring costs to preserve the liquidity, as they typically encourage suppliers and service providers to lower
rates and prices.
Please refer to “Commodity Price Risk” section below for a description of effects on our voyage expenses through increase in
fuel prices.
Except from commodity prices, other inflationary effects were so far immaterial in the period ended December 31, 2022. In
particular, we have observed inflation affecting ship operating expenses, such as spares freight, services and flight tickets for
crew; however, these effects were not material in comparison to our total ship operating expenses (travel expenses and freight
of spares were estimated to be $4.2 and $1.4 million more expensive due to inflation in 2022).
The impact that inflation will have on our future financial and operational results, which could be material, will depend on the
duration and severity of the Russo-Ukrainian War and the overall macroeconomic situation. For 2023 we expect an increase in
crew expenses of up to 6%, due to Russian seafarers no longer being present in the global pool, which decreases the overall
number of seafarers in the world. There will, therefore, be an increased demand for qualified crew, and this has and will
continue to put inflationary pressure on crew costs. In addition, it is anticipated that insurance costs, which have risen over the
last three years, will increase by 5% to 10% in 2023. Further, to stay compliant with environmental requirements, we expect to
incur additional drydock costs per vessel of up to 20% in 2023 (for cargo hold maintenance and hull/cargo sand blasting and
painting).
Commodity Price Risk
Fuel costs represent the largest component of our voyage expenses. An increase in the price of fuel may adversely affect our
profitability if these increases cannot be passed onto customers. The price and supply of fuel is unpredictable and fluctuates as a
81
result of events outside our control, including geo-political developments, supply and demand for oil and gas, actions by
members of OPEC and other oil and gas producers, war and unrest in oil producing countries and regions, regional production
patterns and environmental concerns and regulations.
In 2022, we have seen a significant increase in fuel prices. Please refer to “Results of Operations” for more details on how this
increase affected our operations. It should be noted that the negative effect of increase in fuel prices was partially absorbed by
the improved achieved contracts rates in the year ended December 31, 2022.
Bunker Swap Agreements
From time to time we may enter into contracts of affreightment and time charter contracts with fixed bunker prices on
redelivery. We are exposed to fluctuations in bunker prices, when the contracts of affreightment and time charter contracts are
based on an assumed bunker price for the trade. There is no guarantee that a bunker swap agreement removes all the risk from
the bunker exposure, due to possible differences in location and timing of the bunkering between the physical and financial
position. The counterparties to such contracts are major banking and financial institutions, and fuel suppliers. Credit risk exists
to the extent that the counterparties are unable to perform under the contracts but this risk is considered remote as the
counterparties are, in our opinion, usually well-established banks or other well-known institutions in the market.
As of December 31, 2022, we had outstanding bunker swap agreements for about $26.8 thousand metric tonnes (December 31,
2021: no outstanding bunker swap agreements). As of December 31, 2022, the fair value of our bunker swaps was a receivable
of $0.3 million and a payable of $1.3 million. In 2022, we recorded a total net gain on our bunker swaps of $0.5 million. In
2021, we recorded total net gain on our bunker swaps of $0.2 million.
Spot Market Rate Risk
The cyclical nature of the dry bulk shipping industry causes significant increases or decreases in the revenue that we earn from
our vessels, particularly those vessels that operate in the spot market.
Forward Freight Agreements
We take positions from time to time in the freight forward market, either as a hedge to a physical contract or as a speculative
position. All such contracts include a margin maintenance requirement based on marking the contract to market and are fully
settled in cash through what we consider reputable clearing houses on a daily basis, as such there are no balances relating to
FFAs on the Consolidated Balance Sheets. Generally, freight derivatives may be used to hedge a vessel owner’s exposure to the
charter market for a specified route and period of time. By taking positions in FFA or other derivative instruments, we could
suffer losses in the settling or termination of these agreements. This could adversely affect our results of operation and cash
flow.
In 2022, we recorded a net loss on our portfolio of FFA of $0.6 million (2021: net gain of $19.0 million).
Please see Note 28, "Financial Assets and Liabilities", to our Consolidated Financial Statements included herein for additional
information on our financial instruments.
ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
82
PART II
ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14.    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
None.
ITEM 15.    CONTROLS AND PROCEDURES
a)   Disclosure Controls and Procedures
Management assessed the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule
13a-15(e) of the Securities Exchange Act of 1934, as of the end of the period covered by this annual report as of December 31,
2022. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure
controls and procedures are effective as of the evaluation date.
 
b)   Management's annual report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in
Rules 13a-15(f) promulgated under the Securities Exchange Act of 1934.
Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officers and
effected by our Board, management and other personnel, 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 and includes those policies and procedures that:
•Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company;
•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of the Company's management and directors; and
•Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition
of our 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.
Management conducted the evaluation of the effectiveness of the Company's internal controls over financial reporting using the
control criteria framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in its report
entitled Internal Control-Integrated Framework (2013).
 
Our management with the participation of our principal executive officer and principal financial officer assessed the
effectiveness of the design and operation of our internal controls over financial reporting pursuant to Rule 13a-15 of the
Securities Exchange Act of 1934, as of December 31, 2022. Based upon that evaluation, our management with the participation
of our principal executive officer and principal financial officer concluded that our internal controls over financial reporting are
effective as of December 31, 2022.
 
The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by
PricewaterhouseCoopers AS, an independent registered public accounting firm, as stated in their report which appears herein.
c)   Attestation report of the registered public accounting firm
83
 
The independent registered public accounting firm that audited the consolidated financial statements, PricewaterhouseCoopers
AS, has issued an attestation report on the effectiveness of the Company's internal control over financial reporting as of
December 31, 2022, appearing under Item 18, and such report is incorporated herein by reference.
 
d)   Changes in internal control over financial reporting
 
There were no changes in our internal controls over financial reporting that occurred during the period covered by this annual
report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
ITEM 16.    [Reserved]
ITEM 16A.    AUDIT COMMITTEE FINANCIAL EXPERT
 
The Board has determined that Mr. O'Shaughnessy, who is an independent director, is our audit committee's financial expert.
ITEM 16B.    CODE OF ETHICS
We have adopted a code of ethics that applies to all entities controlled by us and all of our employees, directors, officers and
agents. We have posted a copy of our code of ethics, as well as waivers to our code of ethics, if any, on our website at
www.goldenocean.bm. We will provide any person, free of charge, a copy of our code of ethics upon written request to our
registered office.
ITEM 16C.    PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our principal accountant for 2022 and 2021 was PricewaterhouseCoopers AS (PCAOB ID 01318). The following table sets
forth for the two most recent fiscal years the fees paid or accrued for audit and services provided by PricewaterhouseCoopers
AS.
(in thousands of $)
2022
2021
Audit Fees (a)
856
764
Audit-Related Fees (b)
68
36
Tax Fees (c)
—
—
All Other Fees (d)
—
—
Total
924
800
(a)           Audit Fees
Audit fees represent professional services rendered for the audit of our annual financial statements and services provided by the
principal accountant in connection with statutory and regulatory filings or engagements.
(b)           Audit–Related Fees
Audit-related fees consisted of assurance and related services rendered by the principal accountant related to the performance of
the audit or review of our financial statements which have not been reported under Audit Fees above.
(c)           Tax Fees
Tax fees represent fees for professional services rendered by the principal accountant for tax compliance, tax advice and tax
planning.
(d)           All Other Fees
All other fees include services other than audit fees, audit-related fees and tax fees set forth above.
Our Board has adopted pre-approval policies and procedures in compliance with paragraph (c)(7)(i) of Rule 2-01 of Regulation
S-X that require the Board to approve the appointment of our independent auditor before such auditor is engaged and approve
each of the audit and non-audit related services to be provided to us by such auditor under such engagement. All services
provided by the principal auditor in 2022 and 2021 were approved by our Board pursuant to the pre-approval policy.
ITEM 16D.    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
84
Not applicable.
ITEM 16E.    PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
On October 4, 2022, we introduced a share buy-back program (the “2022 share buy-back program”) of up to $100.0 million to
purchase up to an aggregate of 10,000,000 of our common shares for a period up to 12 months. In 2022, we acquired a total of
400,000 shares under the 2022 share buy-back program. The shares were acquired on the OSE and on the NASDAQ at an
aggregate purchase price of $3.3 million. As of the date of this annual report, we have bought back an aggregate of 462,085
shares pursuant to the 2022 share buy-back program and hold 767,085 treasury shares.
The below table presents a summary of the common shares repurchased by the Company under the 2022 share buy-back
program as of the date of this annual report.
Issuer Purchases of Equity Securities
Period
(a) Total Number of
Common Shares
Purchased
(b) Average Price Paid
per Common Share
(c) Total Number of
Common Shares
Purchased as Part of
Publicly Announced
Plans or Program
(d) Maximum Number
(or Approximate
Dollar Value) of
Common Shares that
May Yet Be Purchased
Under the Plans or
Programs (1)
OSE
NASDAQ
OSE
(in NOK)
NASDAQ
(in USD)
October 1, 2022 –
October 31, 2022
—
—
—
—
—
—
November 1, 2022 –
November 30, 2022
—
—
—
—
—
—
December 1, 2022 –
December 31, 2022
150,000
250,000
80.39
8.20
400,000
9,600,000
January 1, 2023 –
January 31, 2023
62,085
—
80.69
—
62,085
9,537,915
February 1, 2023 –
February 28, 2023
—
—
—
—
—
—
March 1, 2023 –
March 16, 2023
—
—
—
—
—
—
Total
462,085
8.48
8.20
462,085
9,537,915
(1) On October 4, 2022, the Company announced the 2022 share buy-back program of up to $100.0 million to purchase up to an
aggregate of 10,000,000 of our common shares for a period up to 12 months. The specific timing and amounts of the
repurchases will be in the sole discretion of the Company and may vary based on market conditions and other factors. We are
not obligated under the terms of the program to repurchase any of our common shares.
See Note 25, "Share Capital, Treasury Shares and Dividends", to our audited Consolidated Financial Statements included herein
for more information.
ITEM 16F.    CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G.    CORPORATE GOVERNANCE
Pursuant to the NASDAQ listing standards available to foreign private issuers, we are not required to comply with all of the
corporate governance practices followed by U.S. companies under the NASDAQ listing standards. The significant differences
between our corporate governance practices and the NASDAQ standards applicable to listed U.S. companies are set forth
below.
Independence of Directors. NASDAQ requires that a U.S. listed company maintain a majority of independent directors. We are
exempt from certain NASDAQ requirements regarding independence of directors. Consistent with Bermuda law, our board of
85
directors is not required to be composed of a majority of independent directors. Our Board is currently comprised of five
directors, three of whom are independent, including Ola Lorentzon, James O’Shaughnessy and Bjorn Tore Larsen.
Executive Sessions. NASDAQ requires that independent directors meet regularly in executive sessions at which only
independent directors are present. We intend to hold executive sessions at which only independent directors are present at least
twice a year.
 
Nomination of Directors. NASDAQ requires that independent directors select or recommend nominees for directors. As
permitted under Bermuda law and our Second Amended and Restated Bye-Laws, we do not currently require that independent
directors select or recommend nominees for directors. Our Board, consisting of both independent and non-independent
directors, is responsible for identifying and recommending potential candidates to become board members and recommending
directors for appointment to board committees.
Audit Committee. NASDAQ requires, among other things, that a listed U.S. company have an audit committee consisting solely
of independent directors who also satisfy the requirements of SEC Rule 10A-3 and who can read and understand fundamental
financial statements. NASDAQ also requires that the audit committee have at least three members. As permitted under
Bermuda law and our Second Amended and Restated Bye-Laws, our audit committee consists of two members who currently
meet the independence requirements of SEC Rule 10A-3.
 
Compensation Committee. NASDAQ requires that a listed U.S. company have a compensation committee composed solely of
independent directors and having at least two members. NASDAQ requires that the compensation committee must determine,
or recommend to the full board for determination, the compensation of the chief executive officer and all other executive
officers. As permitted under Bermuda law and our Second Amended and Restated Bye-Laws, we do not currently have a
compensation committee and compensation of executive officers is not required to be determined by a committee composed of
independent members.
 
Related Party Transactions. NASDAQ requires that a listed U.S. company conduct appropriate review and oversight of all
related party transactions for potential conflict of interest situations on an ongoing basis by the company's audit committee or
another independent body of the Board. As permitted under Bermuda law and our Second Amended and Restated Bye-Laws,
our directors are not prohibited from being a party to, or otherwise interested in, any transaction or arrangement with us or in
which we are otherwise interested, provided that the director makes proper disclosure of same as required by our Second
Amended and Restated Bye-Laws and Bermuda law.
 
Proxy Materials. NASDAQ requires that a listed U.S. company solicit proxies and provide proxy statements for all shareholder
meetings. Such company must also provide copies of its proxy solicitation to NASDAQ. As permitted under Bermuda law and
our Second Amended and Restated Bye-Laws, we do not currently solicit proxies or provide proxy materials to NASDAQ. Our
Second Amended and Restated Bye-Laws also require that we notify our shareholders of meetings no less than five (5) days
before the meeting.
Share Issuance. In lieu of obtaining shareholder approval prior to the issuance of securities or the adoption of equity
compensation plans or material amendments to such equity compensation plans, consistent with Bermuda law and our Second
Amended and Restated Bye-Laws, our Board approves share issuances and the adoption of and material amendments to equity
compensation plans.
Quorum. NASDAQ rules provide that the minimum quorum requirement for a meeting of shareholders is 33 1/3% of the
outstanding common shares. The Company follows applicable Bermuda laws with respect to quorum requirements. The
Company’s quorum requirement is set forth in its Second Amended and Restated Bye-Laws, which provide that a quorum for
the transaction of business at any meeting of shareholders is two or more shareholders either present in person or by proxy
throughout the meeting. If we only have one shareholder, then one shareholder present in person or proxy shall constitute the
necessary quorum.
ITEM 16H.    MINE SAFETY DISCLOSURES
Not applicable.
ITEM 16I.    DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
86
PART III
ITEM 17.  FINANCIAL STATEMENTS
Not applicable.
ITEM 18.  FINANCIAL STATEMENTS
The following financial statements listed below and set forth on pages F-1 through F-44 are filed as part of this annual report:
Consolidated Financial Statements of Golden Ocean Group Limited
 
 
 
 
 
 
 
 
 
 
87
ITEM 19.  EXHIBITS
Number
Description of Exhibit
1.5
Second Amended and Restated Bye-Laws
8.1
Significant Subsidiaries
12.1
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
Exchange Act, as amended
12.2
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
Exchange Act, as amended
13.1
Principal Executive Officer Certifications pursuant to 18 U.S.C. Section 1350 as adopted, pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
13.2
Principal Financial Officer Certifications pursuant to 18 U.S.C. Section 1350 as adopted, pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
15.1
Consent of Independent Registered Public Accounting Firm
(1)
Incorporated by reference from our Registration Statement on Form F-3 (File No. 333-164007) filed with the
Commission on December 24, 2009.
(2)
Incorporated by reference from our Annual Report on Form 20-F filed with the Commission on April 29, 2015.
(3)
Incorporated by reference from Amendment No. 1 to our Registration Statement on Form 8-A filed with the
Commission on August 1, 2016.
(4)
Incorporated by reference from our Annual Report on Form 20-F filed with the Commission on April 5, 2017.
(5)
Incorporated by reference from our Annual Report on Form 20-F filed with the Commission on March 12, 2020.
88
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized
the undersigned to sign this annual report on its behalf.
GOLDEN OCEAN GROUP LIMITED
 
/s/ Peder Simonsen
Peder Simonsen
Principal Financial Officer
Dated: March 16, 2023
89
Consolidated Financial Statements of Golden Ocean Group Limited
 
 
 
 
 
 
 
 
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Golden Ocean Group Limited
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Golden Ocean Group Limited and its subsidiaries (the
“Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations, consolidated statements
of cash flows and consolidated statements of changes in equity for each of the three years in the period ended December 31,
2022, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the
Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in Management's Annual Report on Internal Control over Financial Reporting appearing under Item 15(b). Our responsibility is
to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (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
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects. 
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated 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 consolidated
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 consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
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 (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) 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 (iii) 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.
Critical Audit Matters
F-2
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of impairment indicators for owned vessels, newbuildings and right of use assets
As described in Notes 2, 10, 16, 17 and 18 to the consolidated financial statements, the Company’s Vessels and equipment, net,
Newbuildings, Finance leases, right of use assets, net, and Operating leases, right of use assets, net were USD 2,665,785
thousand, USD 91,898 thousand, USD 83,589 thousand and USD 15,646 thousand, respectively, as of December 31, 2022.
Management reviews the carrying values of the vessels, newbuildings and right of use assets for potential impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. Indicators of
impairment are identified based on a combination of factors which includes significant management’s judgments and
assumptions such as development of second hand vessel values based on external appraisals of the ships, development of
forward freight rates, spot rates and operating cash flows.
The principal considerations for our determination that performing procedures relating to the assessment of impairment
indicators for owned vessels, newbuildings and right of use assets is a critical audit matter are that there was significant
judgment by management when assessing the impairment indicators, which in turn led to a high degree of auditor judgment,
effort and subjectivity in performing procedures and evaluating audit evidence obtained relating to management’s significant
assumptions, such as development of second hand vessel values based on external appraisals of the ships, development of
forward freight rates, spot rates and operating cash flows.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s impairment indicator assessment for owned vessels, newbuildings and right of use assets including controls over
development of second hand vessel values based on external appraisals of the ships, development of forward freight rates, spot
rates and operating cash flows. These procedures also included, among others, testing management’s process for assessing
impairment indicators; testing the completeness, accuracy, and relevance of underlying data and evaluating the significant
assumptions used by management. Evaluating management’s assumptions related to development of second hand vessel values
based on appraisals of the ships, development of forward freight rates, spot rates and operating cash flows involved (i) testing
the assumptions used in the assessment to external data, (ii) evaluating management's assessment of the indicators and (iii)
testing whether the assumptions were consistent with evidence obtained in other areas of the audit and third party industry
information.
/s/ PricewaterhouseCoopers AS
Oslo, Norway
March 16, 2023
We have served as the Company’s auditor since 2010.
F-3
Golden Ocean Group Limited
Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020
(in thousands of $, except per share data)
 
2022
2021
2020
Operating revenues
Time charter revenues (including related party amounts of $2,033,
$13,281 and $19,528 for the years ended December 31, 2022, 2021 and
2020 respectively)
593,795
603,959
235,673
Voyage charter revenues
518,398
597,812
370,130
Other revenues
1,263
1,410
2,140
Total operating revenues
1,113,456
1,203,181
607,943
Gain on sale of assets
34,185
9,788
—
Other operating income (expenses), net - related party
(413)
(2,008)
2,965
Operating expenses
Voyage expenses and commissions
278,550
252,865
194,544
Ship operating expenses (including related party amounts of $4,916,
$9,313 and $11,574 for the years ended December 31, 2022, 2021 and
2020 respectively)
225,971
208,894
191,235
Charter hire expenses (including related party amounts of $37,328,
$60,885 and $63,468 for the years ended December 31, 2022, 2021 and
2020 respectively)
57,406
89,559
66,812
Administrative expenses
20,375
18,149
13,722
Impairment loss on vessels
—
4,187
721
Impairment loss on right of use assets
—
—
94,233
Depreciation
129,839
123,699
111,303
Total operating expenses
712,141
697,353
672,570
Net operating income (loss)
435,087
513,608
(61,662)
Other income (expenses)
Interest income
2,345
484
1,193
Interest expense (including related party amounts of nil, $3,395 and nil
for the years ended December 31, 2022, 2021 and 2020 respectively)
(56,248)
(39,909)
(47,477)
Share of results of associated companies
40,793
24,482
(3,710)
Gain from disposal of associated companies
—
—
2,570
Gain (loss) on derivatives
39,968
30,465
(17,450)
Gain (loss) on marketable equity securities
503
(2,000)
(10,177)
Other financial items
(222)
477
(825)
Net other income (expenses)
27,139
13,999
(75,876)
Net income (loss) before income taxes
462,226
527,607
(137,538)
Income tax expense
379
389
131
Net income (loss)
461,847
527,218
(137,669)
Per share information:
Earnings (loss) per share: basic
$2.30
$2.74
$(0.96)
Earnings (loss) per share: diluted
$2.29
$2.73
$(0.96)
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Golden Ocean Group Limited
Consolidated Balance Sheets as of December 31, 2022 and 2021
(in thousands of $)
 
2022
2021
ASSETS
Current assets
Cash and cash equivalents
134,784
197,032
Restricted cash
3,289
12,985
Marketable securities
2,187
1,684
Trade accounts receivable, net
14,950
28,838
Other current assets
54,430
35,158
Related party receivables
2,334
8,615
Derivative instruments receivables
12,262
2,679
Inventories
45,434
43,383
Prepaid expenses
12,503
8,440
Voyages in progress
16,974
30,576
Total current assets
299,147
369,390
Vessels and equipment, net
2,665,785
2,880,321
Vessels held for sale
12,542
—
Newbuildings
91,898
35,678
Finance leases, right of use assets, net
83,589
98,535
Operating leases, right of use assets, net
15,646
19,965
Investments in associated companies
65,400
41,343
Related party receivables
837
6,187
Derivative instruments receivable
20,861
—
Other long-term assets
1,586
2,758
Total assets
3,257,291
3,454,177
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt
92,865
105,864
Current portion of finance lease obligations - related party
18,387
21,755
Current portion of operating lease obligations (including related party balances of $2,010
and $2,537 as of December 31, 2022 and 2021 respectively)
5,546
13,860
Derivative instruments payables
1,313
10,364
      Related party payables
9,492
13,934
      Trade accounts payables
7,143
6,462
Accrued expenses
43,388
38,569
Other current liabilities
33,494
37,265
Total current liabilities
211,628
248,073
Long-term liabilities
Long-term debt
1,027,991
1,156,481
Non-current portion of finance lease obligations - related party
87,588
105,975
Non-current portion of operating lease obligations (including related party balances of
$11,345 and $13,355 as of December 31, 2022 and 2021 respectively)
13,051
14,907
Total liabilities
1,340,258
1,525,436
Commitments and contingencies*
Equity
F-5
Share capital (Shares issued: 2022: 201,190,621. 2021: 201,190,621. Outstanding shares:
2022: 200,485,621. 2021: 200,435,621 shares. All shares are issued and outstanding at par
value $0.05)
10,061
10,061
Treasury shares
(5,014)
(4,309)
Additional paid in capital
851
285
Contributed capital surplus
1,582,257
1,762,649
Accumulated earnings
328,878
160,055
Total equity
1,917,033
1,928,741
Total liabilities and equity
3,257,291
3,454,177
*For details please refer to Note 29, "Commitments and contingencies"
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Golden Ocean Group Limited
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020
(in thousands of $)
 
2022
2021
2020
Net income (loss)
461,847
527,218
(137,669)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation
129,839
123,699
111,303
Amortization of deferred charges
3,618
2,677
2,778
Gain from sale of vessels
(34,185)
(9,788)
—
Impairment loss on vessels
—
4,187
721
Impairment loss on right of use assets
—
—
94,233
Share option expenses
566
620
264
Share of results of associated companies
(40,793)
(24,482)
3,710
Dividends received from associated companies
16,273
—
450
Gain from disposal of associated companies
—
—
(2,570)
Amortization of charter party-out contracts
—
1,859
12,148
Mark to market (gain) loss on derivatives
(39,496)
(19,435)
20,542
Mark to market (gain) loss on marketable securities
(503)
2,000
10,177
Non-cash lease expense
(5,851)
(10,496)
(6,459)
Other
(518)
(235)
(178)
Changes in operating assets and liabilities, net:
Trade accounts receivable
13,889
(6,134)
22,896
Related party payables and receivables balances
902
(570)
6,041
Other receivables
(19,043)
(6,407)
3,991
Inventories
(2,051)
(18,219)
3,070
Voyages in progress
13,603
(17,141)
8,472
Prepaid expenses
(4,063)
2,001
(4,105)
Trade accounts payables
681
(11,939)
6,000
Accrued expenses
11,981
12,256
(1,126)
Other current liabilities
(3,309)
8,727
(14,049)
Net cash provided by operating activities
503,387
560,398
140,640
Investing activities
Dividends received from marketable equity securities
8
26
76
Proceeds from sale of shares in associated companies
937
937
1,694
Loan advance to related parties
—
—
(1,000)
Repayment of loans receivable from related parties
5,350
—
5,350
Additions to newbuildings (including related party amounts of $455,
$116,445 and nil for the years ended December 31, 2022, 2021 and 2020
respectively)
(56,028)
(152,460)
—
Purchase of vessels and equipment (including related party amounts of nil,
$286,894 and nil for the years ended December 31, 2022, 2021 and 2020
respectively)
(5,003)
(292,539)
(25,271)
Proceeds from sale of vessels
127,552
54,012
—
Net cash provided by (used in) investing activities
72,816
(390,024)
(19,151)
Financing activities
F-7
Proceeds from long-term debt (including related party amounts of nil,
$62,975 and nil for the years ended December 31, 2022, 2021 and 2020
respectively)
275,000
497,975
322,014
Repayment of long-term debt (including related party amounts of nil,
$413,600 and nil for the years ended December 31, 2022, 2021 and 2020
respectively)
(417,217)
(628,900)
(390,138)
Repayment of finance leases (including related party amounts of $29,059,
$32,237 and $47,181 for the years ended December 31, 2022, 2021 and 2020
respectively)
(29,059)
(32,237)
(48,972)
Debt fees paid
(2,750)
(4,466)
(3,040)
Net proceeds from share issuance
—
352,225
—
Share repurchases
(3,273)
—
—
Proceeds from exercise of share options
828
636
169
Lease incentives received
—
—
17,500
Distributions to shareholders
(471,676)
(320,692)
(7,164)
Net cash used in financing activities
(648,147)
(135,459)
(109,631)
Net change in cash, cash equivalents and restricted cash
(71,944)
34,915
11,858
Cash, cash equivalents and restricted cash at beginning of year
210,017
175,102
163,244
Cash, cash equivalents and restricted cash at end of year
138,073
210,017
175,102
Supplemental disclosure of cash flow information:
Interest expenses paid
45,190
30,850
36,351
Income taxes paid
240
153
77
Details of non-cash investing and financing activities in the year ended December 31, 2022, 2021 and 2020 are given in Note
16, "Vessel and Equipment, Net", and Note 17, "Newbuildings".
The accompanying notes are an integral part of these consolidated financial statements.
F-8
Golden Ocean Group Limited
Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2021 and 2020
(in thousands of $, except number of shares)
 
2022
2021
2020
Number of shares outstanding
Balance at beginning of year
200,435,621
143,327,697
143,277,697
Shares issued
—
56,917,924
—
Repurchases of shares
(400,000)
—
—
Distribution of treasury shares
450,000
190,000
50,000
Balance at end of year
200,485,621
200,435,621
143,327,697
Share capital
Balance at beginning of year
10,061
7,215
7,215
Shares issued
—
2,846
—
Balance at end of year
10,061
10,061
7,215
Treasury shares
Balance at beginning of year
(4,309)
(5,386)
(5,669)
Repurchases of shares
(3,273)
—
—
Distribution of treasury shares
2,568
1,077
283
Balance at end of year
(5,014)
(4,309)
(5,386)
Additional paid in capital
Balance at beginning of year
285
979
715
Shares issued
—
349,379
—
Stock option expense
566
620
264
Other
—
(22)
—
Reclassified to contributed surplus
—
(350,671)
—
Balance at end of year
851
285
979
Contributed capital surplus
Balance at beginning of year
1,762,649
1,732,670
1,739,834
Distributions to shareholders
(180,392)
(320,692)
(7,164)
Reclassified from additional paid in capital
—
350,671
—
Balance at end of year
1,582,257
1,762,649
1,732,670
Accumulated earnings (deficit)
Balance at beginning of year
160,055
(366,722)
(228,704)
Distributions to shareholders
(291,284)
—
—
Loss on distributed treasury shares
(1,740)
(441)
(115)
Adjustment on adoption of ASC 326 and other
—
—
(234)
Net (loss) income
461,847
527,218
(137,669)
Balance at end of year
328,878
160,055
(366,722)
Total equity
1,917,033
1,928,741
1,368,756
The accompanying notes are an integral part of these consolidated financial statements.
F-9
Golden Ocean Group Limited
Notes to Consolidated Financial Statements
1.  ORGANIZATION AND BUSINESS
Historical Structure and Business of the Company
We were incorporated as Knightsbridge Tankers Limited in Bermuda as an exempted company under the Bermuda Companies
Act of 1981 on September 18, 1996. We were originally established for the purpose of owning and operating five VLCCs. 
On October 7, 2014, we entered into the Merger Agreement, with the Former Golden Ocean, a dry bulk shipping company
based in Bermuda and listed on the Oslo Stock Exchange ("OSE"), pursuant to which the two companies agreed to merge, with
us as the surviving company. Following the completion of the Merger on March 31, 2015, we changed our name to Golden
Ocean Group Limited.
Our common shares commenced trading on the NASDAQ Global Select Market ("NASDAQ") in February 1997 and currently
trade under the symbol "GOGL". We obtained a secondary listing on the OSE in April 2015.
In 2021, we acquired 15 modern dry bulk vessels and three newbuildings for a total consideration of $752 million from
affiliates of Hemen (the “Vessel Acquisitions”). The Vessel Acquisition was financed by $338 million in new equity capital and
a $414 million debt facility provided by affiliates of Hemen.
We own and operate dry bulk carriers of primarily four sizes: Newcastlemax vessels, which are between 200,000 and 210,000
dwt, Capesize vessels, which are between 105,000 and 200,000 dwt, Panamax vessels (including Kamsarmax), which are
vessels between 65,000 and 105,000 dwt, and Ultramax vessels, which are between 55,000 and 65,000 dwt. We operate through
subsidiaries located in Bermuda, Liberia, the Marshall Islands, Norway, Singapore and UK. We are also involved in the charter,
purchase and sale of vessels.
As of December 31, 2022, we owned 75 dry bulk vessels and had construction contracts for ten newbuildings. In addition, we
had nine vessels chartered-in (of which seven and one are chartered in on finance leases and operating leases, respectively, from
SFL Corporation Ltd. ("SFL") and one is chartered in on an operating lease from an unrelated third party). Our owned vessels
are owned and operated by one of our subsidiaries and are flagged either in the Marshall Islands, Hong Kong or Panama.
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United
States of America. The consolidated financial statements include the assets and liabilities of us and our wholly-owned
subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.
Use of estimates
The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles requires us to make
estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Such estimates
and assumptions impact, among others, the following: judgements involved in identifying performance obligations in revenue
contracts, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price
to each performance obligation, impairment of assets, the amount of uncollectible accounts and accounts receivable, the amount
to be paid for certain liabilities, including contingent liabilities, the amount of costs to be capitalized in connection with the
construction of newbuildings and the determination of useful life of our vessels. Actual results could differ from those
estimates.
Fair values
We have determined the estimated fair value amounts presented in these consolidated financial statements using available
market information and appropriate methodologies. However, considerable judgment is required in interpreting market data to
develop the estimates of fair value. The estimates presented in these consolidated financial statements are not necessarily
indicative of the amounts that we could realize in a current market exchange. Estimating the fair value of assets and liabilities
requires the use of estimates and significant judgments, among others, the following: the market assumptions used when
valuing acquired time charter contracts, the expected revenues earned by vessels and the operating costs (including drydocking
costs) of those vessels and the discount rate used in cash flow based valuations. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value amounts.
Reporting and functional currency
F-10
Our functional currency is the United States dollar as all revenues are received in United States dollars and a majority of our
expenditures are made in United States dollars. We and our subsidiaries report in United States dollars.
Foreign currency
Transactions in foreign currencies during the year are translated into United States dollars at the rates of exchange in effect at
the date of the transaction. Foreign currency monetary assets and liabilities are translated using rates of exchange at the balance
sheet date. Foreign currency non-monetary assets and liabilities are translated using historical rates of exchange. Foreign
currency transaction gains or losses are included in the consolidated statements of operations.
Revenue and expense recognition
Revenue Recognition
Our shipping revenues are primarily generated from time charters and voyage charters. In a time charter, the vessel is hired by
the charterer for a specified period of time in exchange for consideration which is based on a daily hire rate. Generally, the
charterer has the discretion over the ports visited, shipping routes and vessel speed. The contract/charter party generally
provides typical warranties regarding the speed and performance of the vessel. The charter party generally has some owner
protective restrictions such as that the vessel is sent only to safe ports by the charterer and carries only lawful or non-hazardous
cargo. In a time charter contract, where we charter the ship out to a charterer, we are responsible for all the costs incurred for
running the vessel such as crew costs, vessel insurance, repairs and maintenance and lubes. The charterer bears the voyage
related costs such as bunker expenses, port charges, canal tolls during the hire period. The performance obligations in a time
charter contract are satisfied over the term of the contract beginning when the vessel is delivered to the charterer until it is
redelivered back to us. The charterer generally pays the charter hire in advance of the upcoming contract period. The time
charter contracts are considered operating leases because (i) the vessel is an identifiable asset (ii) we do not have substantive
substitution rights and (iii) the charterer has the right to control the use of the vessel during the term of the contract and derives
the economic benefits from such use. Time charter contracts are generally accounted for under ASC 842 leases and revenues
are recorded over the term of the charter. When a time charter contract is linked to an index, we recognize revenue for the
applicable period based on the actual index for that period.
Variable lease payments included into our time-charter agreements, such as positioning bonuses or profit sharing for fuel
savings from scrubbers, that do not depend on an index or rate are excluded from the calculation of lease payments and
recognized in the period in which the variability is resolved.
In a voyage charter contract, the charterer hires the vessel to transport a specific agreed-upon cargo for a single voyage. The
consideration for such a contract is determined on the basis of a freight rate per metric ton of cargo carried or occasionally on a
lump sum basis. The charterer is responsible for any short loading of cargo or "dead" freight. The voyage charter party
generally has standard payment terms of 90 or 95% freight paid within three to five days after completion of loading. The
voyage charter party generally has a "demurrage" or "despatch" clause. As per this clause, the charterer reimburses us for any
potential delays exceeding the allowed laytime as per the charter party clause at the ports visited, which is recorded as
demurrage revenue. Conversely, the charterer may be given credit if the loading/discharging activities happen within a shorter
period than the allowed laytime, which is despatch and results in a reduction in revenue. Estimates and judgments are required
in ascertaining the most likely outcome of a particular voyage and actual outcomes may differ from estimates. In a voyage
charter contract, the performance obligations begin to be satisfied once the vessel begins loading the cargo.
Certain of our voyage charter contracts contain a lease. Voyage charters contain a lease component if the contract (i) specifies a
specific vessel asset; and (ii) has terms that allow the charterer to exercise substantive decision-making rights, which have an
economic value to the charterer and therefore allow the charterer to direct how and for what purpose the vessel is used. Voyage
charter revenues and expenses are recognized ratably over the estimated length of each voyage, which the Company has
assessed commence on loading of the cargo. ASC 842 Leases provides a practical expedient for lessors in which the lessor may
elect, by class of underlying asset, to not separate non-lease components from the associated lease component and, instead, to
account for these components as a single component if both of the following are met: (1) the timing and pattern of transfer of
the non-lease component(s) and associated lease component are the same and (2) the lease component, if accounted for
separately, would be classified as an operating lease.
When a lessor, we have elected this expedient for our time charter contracts and voyage charter contracts that qualify as leases
and thus not separate the non-lease component, or service element, from the lease. Furthermore, ASC 842 Leases requires the
Company to account for the combined component in accordance with ASC 606 revenues from contracts with customers if the
non-lease components are the predominant components. Under this guidance the Company has assessed that the lease
components were the predominant component for all of its time charter contracts. Furthermore, for certain of its voyage charter
contracts the lease components were the predominant components.
F-11
Voyage and other contracts not qualifying as leases are accounted for under the provisions of ASC 606. We have determined
that our voyage charter contracts consist of a single performance obligation of transporting the cargo within a specified period.
Therefore, the performance obligation is met evenly as the voyage progresses, and the revenue is recognized on a straight line
basis over the voyage days from the commencement of loading to completion of discharge.
The voyage charters generally have variable consideration in the form of demurrage or despatch, which is recognized as we
satisfy the performance obligations under the contract. We estimate demurrage or despatch at contract inception using either the
expected value or most likely amount approaches. Such estimate is reviewed and updated over the term of the voyage charter
contract.
In a voyage contract, we bear all voyage related costs such as fuel costs, port charges and canal tolls. To recognize costs
incurred to fulfill a contract as an asset, the following criteria shall be met: (i) the costs relate directly to the contract, (ii) the
costs generate or enhance resources of the entity that will be used in satisfying performance obligations in the future and (iii)
the costs are expected to be recovered. The costs incurred during the period prior to commencement of loading the cargo,
primarily bunkers, are deferred as they represent setup costs and recorded as a current asset and are subsequently amortized on a
straight-line basis as we satisfy the performance obligations under the contract. Costs incurred to obtain a contract, such as
commissions, are also deferred and expensed over the same period. Costs related to the voyage which are incurred during the
period between loading and discharging the cargo, are expensed as incurred.
Several of our Capesize vessels operated under a pool arrangement for Capesize vessels with Capesize Chartering Ltd. ("CCL")
in 2021 and 2020. All vessels were redelivered to us in 2021. Revenues and expenses for our owned vessels generated through
this pool arrangement were presented gross. We considered ourselves the principal under the charter parties with the customers
for the vessels that operated under this pool arrangement, primarily because we considered ourselves to have control over the
service to be transferred for the customer under the charter parties. CCL, as pool manager, calculated the total pool revenues,
pool expenses and pool results based on each participant’s reported results. Based on the aggregated pool results as defined
under the pool agreement and a pre-determined pool key, reflecting a vessel’s earning capacity, CCL calculated and allocated a
pool result for each vessel. The difference between the calculated pool result for our owned vessels and the actual result from
the charter party with the third party customer was a settlement amount with CCL in 2021 and 2020. This settlement amount
allocated under the pool arrangement, is presented as other operating income (expenses), net, in our consolidated statements of
operations.
Our Ultramax vessels operated under a revenue sharing agreement ("RSA"), for Supramax vessels managed by C Transport
Maritime S.A.M. ("CTM"), formerly known as C Transport Holding Ltd, in 2021 and 2020. All vessels were redelivered to us
in 2021. Under this RSA, up to 2021 CTM performed both commercial and operational functions related to the contracts with
the third party customers. CTM as manager, recorded all revenues and voyage expenses for all vessels under the arrangement
which include vessels owned by third parties. The revenues and voyage expenses were pooled together, allocated and the net
result were distributed to each participant under the arrangement in accordance with an agreed-upon formula. Under this RSA,
CTM also operated and therefore controlled the use of our owned vessels included under the arrangement. As a result, the RSA
for our vessels with CTM was considered to meet the definition of a lease. We accounted for the transactions with CTM as
variable rate operating leases and recognized revenues for the applicable periods based on the net amount to be distributed by
CTM.
Other revenues primarily comprise revenues earned from the commercial management of related party vessels. Other revenues
are recognized on an accruals basis as the services are provided and performance obligations are met.
Gains and losses on the sale of vessels
Gains and losses on the sale of vessels are recognized when the vessel has been delivered and all risks have been transferred
and are determined by comparing the net proceeds received with the carrying value of the vessel.
Charter hire expense
Charter hire expense is charged to the consolidated statement of operations on a straight-line basis over the lease term.
Contingent rental expense (income)
Any contingent elements of rental expense (income), such as profit share or interest rate adjustments included in our leases, are
recognized when the contingent conditions have materialized.
Drydocking
Normal vessel repair and maintenance costs are expensed when incurred. We recognize the cost of a drydocking at the time the
drydocking takes place, applying the "expense as incurred" method.
F-12
Impairment of vessels, newbuildings and right of use assets
The carrying values of our vessels, newbuildings and right of use assets are reviewed for potential impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. Indicators of
impairment are identified based on a combination of factors which include amongst other, development of secondhand vessel
values based on external appraisals of our ships, development of forward freight rates, spot rates and operating cash flow. If
impairment indicators exist, we assess the recoverability of the carrying value of each asset on an individual basis. We assess
recoverability of the carrying value of owned vessels and newbuildings on an individual basis by estimating the future
undiscounted cash flows expected to result from the asset, including any remaining construction costs for newbuildings, and
eventual disposal. Fair value for our owned vessels and newbuildings is estimated based on values achieved for the sale/
purchase of similar vessels and external appraisals. In addition, owned vessels held for sale are reported at the lower of carrying