Filed: March 30, 2010 (period: December 31, 2009)
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- (b) Additional paid-in capital
- (c) Incentive plan
- (d) Dividend Reinvestment and Direct Stock Purchase Plan (the "Plan")
- (e) Sales agency financing agreement ("SAFA" or the "Agreement")
- (f) Secondary public offering
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The amounts presented as current and non-current deferred revenue in the accompanying consolidated balance sheets as of December 31, 2009 and 2008 reflect (a) cash received prior to the balance sheet date for which all criteria to recognize as revenue have not been met, (b) any deferred revenue resulting from charter agreements providing for varying annual charter rates over their term, which were accounted for on a straight line basis at their average rate and (c) the unamortized balance of the liability associated with the acquisition of the Salt Lake City with a charter party assumed at a value below its fair market value at the date of delivery of the vessel.
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DIANA SHIPPING INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2009 (Expressed in thousands of U.S. Dollars – except share and per share data, unless otherwise stated)
As of December 31, 2009 and 2008, cash received prior to the balance sheet date for which all criteria to recognize as revenue have not been met amounted to $6,865 and $5,195, respectively, and is included in Deferred revenue, current portion in the accompanying consolidated balance sheets. In November 2006, the Company entered into a long term time charter agreement with an unrelated third party company to charter the Sideris GS for a period of four years at varying rates for each year. In 2007, the Company entered into two similar long term time charter agreements with unrelated third party companies to charter the Semirio and the Aliki for a period of four years each at varying rates. The Company accounts for the revenues deriving from the above agreements on a straight line basis at the average rate of the agreements, and the balance is recorded in deferred revenue. As at December 31, 2009 and 2008, deferred revenue deriving from those agreements amounted to $8,039 and $9,535, respectively, and is included in Deferred revenue, current ($6,136 and $1,489, respectively) and non-current ($1,903 and $8,046, respectively) portion in the accompanying consolidated balance sheets. In December 2007, upon delivery of the Salt Lake City, the Company assumed the then existing time charter agreement of the vessel. According to the Company's policy, the time charter agreement was valued on the date of the vessel's delivery and resulted in the recognition of a deferred income of $25,000. As of December 31, 2009 and 2008, the unamortized balance of the liability amounted to $14,459 and $19,574, respectively, and is included in Deferred revenue, current portion ($5,118 and $5,118, respectively) and non-current portion ($9,341 and $14,456, respectively), in the accompanying consolidated balance sheets. The amortization during 2009, 2008 and 2007 amounted to $5,115, $5,132 and $294, respectively, and is included in Voyage and time charter revenues in the accompanying consolidated statements of income.
Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company's vessels. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. Up to $1 billion of the liabilities associated with the individual vessels' actions, mainly for sea pollution, are covered by the Protection and Indemnity (P&I) Club insurance.
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DIANA SHIPPING INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2009 (Expressed in thousands of U.S. Dollars – except share and per share data, unless otherwise stated)
During 2009, the Company's Board of Directors approved the grant of 364,200 shares of restricted common stock to executive management and non-executive directors pursuant to the Company's 2005 equity incentive plan, and in accordance with terms and conditions of Restricted Shares Award Agreements signed by the grantees. The restricted shares will be vested over a period of 3 years by one-third each year, and are subject to forfeiture until they become vested. Unless they forfeit, grantees have the right to vote, to receive and retain all dividends paid and to exercise all other rights, powers and privileges of a holder of shares.
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DIANA SHIPPING INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2009 (Expressed in thousands of U.S. Dollars – except share and per share data, unless otherwise stated) The Company follows the provisions in ASC 718 "Compensation – Stock Compensation", for purposes of accounting for such share-based payments. All share-based compensation provided to employees is recognized in accordance with the relevant guidance, and is included in General and administrative expenses in the accompanying consolidated statements of income. As of December 31, 2009 and 2008, the Company had granted a total number of restricted stock awards of $1,039,700 and $675,500, respectively, of which 125,167 were vested as of December 31, 2009. The fair value of the restricted shares has been determined with reference to the closing price of the Company's stock on the date the agreements were signed. The aggregate compensation cost is being recognized ratably in the consolidated income statement over the respective vesting periods. In 2009 and 2008, an amount of $3,944 and $1,113, respectively, was recognized in General and administrative expenses. At December 31, 2009 and 2008, the total unrecognized cost relating to restricted share awards was $12,233 and $11,770, respectively. At December 31, 2009, the weighted-average period over which the total compensation cost related to non-vested awards not yet recognized is expected to be recognized is 2 years. On October 21, 2008, the Stock Incentive Plan was amended and restated. Under the amended and restated Plan, the Administrator may waive or modify the application of forfeiture of awards of restricted stock and performance shares in connection with cessation of service with the Company. The Company's Board of Directors delegated to the members of the Compensation Committee its authority as Administrator of the Plan to vest restricted stock awards granted under the Plan in the event of the grantee's death.
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DIANA SHIPPING INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2009 (Expressed in thousands of U.S. Dollars – except share and per share data, unless otherwise stated)
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