HispanicBusiness

For the nine months ended September 30, 2012 vessel operating expenses totaled $20.5 million compared to $17.2 million for the same period of 2011. The increase is mainly due to the fact that the average number of vessels increased to 14.2 during the nine months ended September 30, 2012 compared to 11.5 during the same period in 2011. Daily operating expenses decreased to $5,239 for the nine month period ended September 30, 2012 compared to $5,478 for the same period in 2011. This decrease is mainly attributable to improvements in our operational efficiency.

For the nine months ended September 30, 2012 and 2011 our dry-docking expenses were $3.0 million and $1.6 million, respectively. The increase is mainly due to the fact that in the nine months ended September 30, 2012 we had one Supramax vessel and one Capesize vessel that underwent dry docking surveys, compared to two Supramax vessels that underwent periodic dry-docking survey in the same period in 2011.

Even though we had an increase in the number of vessels that operated during nine months ended September 30, 2012 compared to the same period of 2011, depreciation expense decreased to $28.7 million for the nine months ended September 30, 2012 compared to $36.7 million for the nine months ended September 30, 2011. Decrease in depreciation expense is mainly due to reduced net book values of our two oldest Capesize vessels Star Sigma and Star Ypsilon, after the related impairment losses were recognized as of December 31, 2011.

General and administrative expenses totaled $7.3 million during the nine month period ended September 30, 2012 compared to $10.0 million during the nine month period ended September 30, 2011, respectively. The decrease in general and administrative expenses in nine month period ended September 30, 2012 is mainly due to the non-recurring severance payment to the Company's former Chief Executive Officer and President and to the Company's former Chief Financial Officer, which was payable pursuant to the terms of their employment and consultancy agreements with the Company, totaling to $2.8 million. Our general and administrative expenses decreased during the quarter ended September 30, 2012 compared to the same period in 2011 even though our number of employees increased during the period as a result of the growth of our fleet.

During the nine months ended September 30, 2012, we recorded an impairment loss of $303.2 million in the book value one of our oldest Capesize vessels, Star Sigma, and the whole fleet of our eight Supramax vessels, in order the carrying values of the respective vessels to reflect their fair market values.

Gain on time charter agreement termination totaled $6.5 million for the nine months ended September 30, 2012, representing a cash payment of $5.73 million and fuel oil valued at $0.72 million which was received as compensation for the early redelivery of vessel Star Sigma from its previous charterer. Gain on time charter agreement amounting $1.8 million for the nine months ended September 30, 2011 consisted of $1.2 million cash compensation in connection with the early redelivery of the Star Omicron by its previous charterer and $0.6 non-cash gain in connection with early redelivery of the Star Cosmo, by its previous charterer. The non-cash gain relates to the write off of both the unamortized fair value of below market acquired time charter on the respective vessels' redelivery date and the deferred revenue from the terminated time charter contract.