SCORPIO BULKERS INC.00015872646-K9/30/2020false12/31Q3202000015872642020-01-012020-09-30iso4217:USD00015872642020-09-3000015872642019-12-31iso4217:USDxbrli:sharesxbrli:shares00015872642019-01-012019-09-300001587264us-gaap:CommonStockMember2019-12-310001587264us-gaap:AdditionalPaidInCapitalMember2019-12-310001587264us-gaap:RetainedEarningsMember2019-12-310001587264us-gaap:CommonStockMember2020-01-012020-09-300001587264us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300001587264us-gaap:CommonStockMember2020-09-300001587264us-gaap:AdditionalPaidInCapitalMember2020-09-300001587264us-gaap:RetainedEarningsMember2020-09-300001587264us-gaap:CommonStockMember2018-12-310001587264us-gaap:AdditionalPaidInCapitalMember2018-12-3100015872642018-12-310001587264us-gaap:RetainedEarningsMember2018-12-310001587264us-gaap:CommonStockMember2019-01-012019-09-300001587264us-gaap:AdditionalPaidInCapitalMember2019-01-012019-09-300001587264us-gaap:CommonStockMember2019-09-300001587264us-gaap:AdditionalPaidInCapitalMember2019-09-3000015872642019-09-300001587264us-gaap:RetainedEarningsMember2019-09-30salt:deadWeightTon0001587264srt:MinimumMember2020-01-012020-09-30xbrli:pure0001587264salt:KamsarmaxVesselMember2020-01-012020-09-300001587264salt:UltramaxMember2020-01-012020-09-300001587264salt:UltramaxpoolMembersrt:MinimumMember2020-01-012020-09-300001587264salt:UltramaxpoolMembersrt:MaximumMember2020-01-012020-09-300001587264srt:MinimumMembersalt:KamsarmaxpoolMember2020-01-012020-09-300001587264srt:MaximumMembersalt:KamsarmaxpoolMember2020-01-012020-09-3000015872642020-04-072020-04-07salt:numberOfVesselsCoveredByCreditFacility0001587264salt:KamsarmaxVesselMember2020-09-300001587264salt:UltramaxMember2020-09-300001587264salt:SBIAntaresMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIAthenaMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:UltramaxMembersalt:SBIBravoMember2020-01-012020-09-300001587264salt:UltramaxMembersalt:SBILeoMember2020-01-012020-09-300001587264salt:SBIEchoMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBILyraMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:UltramaxMembersalt:SBITangoMember2020-01-012020-09-300001587264salt:SBIMaiaMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIHydraMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBISubaruMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:UltramaxMembersalt:SBIPegasusMember2020-01-012020-09-300001587264salt:SBIUrsaMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIThaliaMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:UltramaxMembersalt:SBICronosMember2020-01-012020-09-300001587264salt:SBIOrionMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:UltramaxMembersalt:SBIAchillesMember2020-01-012020-09-300001587264salt:SBIHerculesMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIHermesMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIPerseusMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIZeusMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIHeraMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIHyperionMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:UltramaxMembersalt:SBITethysMember2020-01-012020-09-300001587264salt:SBIPhoebeMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIPoseidonMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIApolloMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBISamsonMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIPhoenixMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIAriesMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIGeminiMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIPiscesMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBILibraMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:SBIVirgoMembersalt:UltramaxMember2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBISambaMember2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBIRumbaMember2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBICapoeiraMember2020-01-012020-09-300001587264salt:SBICariocaMembersalt:Kamsarmax1Member2020-01-012020-09-300001587264salt:SBICongaMembersalt:Kamsarmax1Member2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBISoustaMember2020-01-012020-09-300001587264salt:SBIRockMembersalt:Kamsarmax1Member2020-01-012020-09-300001587264salt:SBILambadaMembersalt:Kamsarmax1Member2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBIReggaeMember2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBIZumbaMember2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBIMacarenaMember2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBIParaparaMember2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBISwingMember2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBIMazurkaMember2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBIJiveMember2020-01-012020-09-300001587264salt:Kamsarmax1Membersalt:SBILynxMember2020-01-012020-09-300001587264salt:Kamsarmax1Member2020-01-012020-09-300001587264salt:UltramaxpoolMember2020-01-012020-03-310001587264salt:UltramaxpoolMember2019-01-012019-09-300001587264salt:UltramaxpoolMember2020-01-012020-09-300001587264salt:ScorpioCommercialScorpioShipManagementMemberus-gaap:ContractTerminationMember2020-09-300001587264salt:ScorpioCommercialScorpioShipManagementMemberus-gaap:ContractTerminationMember2020-01-012020-09-300001587264srt:MinimumMember2020-09-300001587264srt:MaximumMember2020-09-3000015872642020-01-012020-06-3000015872642020-04-0700015872642020-04-060001587264us-gaap:CommonStockMember2020-01-012020-06-3000015872642020-06-300001587264salt:ScorpioServicesHoldingLimitedMember2020-06-300001587264salt:ScorpioServicesHoldingLimitedMember2020-09-300001587264salt:A12.5MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:A12.5MillionCreditFacilityMemberus-gaap:SecuredDebtMember2019-12-310001587264salt:A27.3MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:A27.3MillionCreditFacilityMemberus-gaap:SecuredDebtMember2019-12-310001587264salt:A85.5MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:A85.5MillionCreditFacilityMemberus-gaap:SecuredDebtMember2019-12-310001587264salt:A38.7MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:A38.7MillionCreditFacilityMemberus-gaap:SecuredDebtMember2019-12-310001587264salt:A12.8MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:A12.8MillionCreditFacilityMemberus-gaap:SecuredDebtMember2019-12-310001587264salt:A30.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:A30.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2019-12-310001587264us-gaap:SecuredDebtMembersalt:A60.0MillionCreditFacilityMember2020-09-300001587264us-gaap:SecuredDebtMembersalt:A60.0MillionCreditFacilityMemberMember2019-12-310001587264salt:A184.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:A184.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2019-12-310001587264salt:A34.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:A34.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2019-12-310001587264us-gaap:SecuredDebtMembersalt:A90.0CreditFacilityMember2020-09-300001587264us-gaap:SecuredDebtMembersalt:A90.0CreditFacilityMember2019-12-310001587264salt:SBIRumbaMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:SBIRumbaMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2019-12-310001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:SBITangoMemberus-gaap:SecuredDebtMember2020-09-300001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:SBITangoMemberus-gaap:SecuredDebtMember2019-12-310001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:SBIEchoMemberus-gaap:SecuredDebtMember2020-09-300001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:SBIEchoMemberus-gaap:SecuredDebtMember2019-12-310001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:SBHermesMemberus-gaap:SecuredDebtMember2020-09-300001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:SBHermesMemberus-gaap:SecuredDebtMember2019-12-310001587264salt:SBISambaMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:SBISambaMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2019-12-310001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:CMBFLMemberus-gaap:SecuredDebtMember2020-09-300001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:VirgoandLibraLeaseMemberus-gaap:SecuredDebtMember2019-12-310001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:VirgoandLibraLeaseMemberus-gaap:SecuredDebtMember2020-09-300001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:CMBFLMemberus-gaap:SecuredDebtMember2019-12-310001587264salt:AVICMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:AVICMemberDomainus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2019-12-310001587264salt:A673MillionLeaseFinancingMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:A673MillionLeaseFinancingMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2019-12-310001587264us-gaap:SecuredDebtMember2020-09-300001587264us-gaap:SecuredDebtMember2019-12-310001587264salt:CurrentDomainDomain2020-09-300001587264salt:NoncurrentDomain2020-09-300001587264salt:CurrentDomainDomain2019-12-310001587264salt:NoncurrentDomain2019-12-310001587264salt:Kamsarmax1Membersalt:A85.5MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:Kamsarmax1Membersalt:A30.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:Kamsarmax1Memberus-gaap:SecuredDebtMembersalt:A60.0MillionCreditFacilityMemberMember2020-09-300001587264salt:A184.0MillionCreditFacilityMembersalt:Kamsarmax1Memberus-gaap:SecuredDebtMember2020-09-300001587264salt:Kamsarmax1Membersalt:A34.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:Kamsarmax1Memberus-gaap:SecuredDebtMembersalt:A90.0CreditFacilityMember2020-09-300001587264salt:UltramaxMembersalt:A85.5MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:UltramaxMembersalt:A30.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:UltramaxMemberus-gaap:SecuredDebtMembersalt:A60.0MillionCreditFacilityMemberMember2020-09-300001587264salt:A184.0MillionCreditFacilityMembersalt:UltramaxMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:UltramaxMembersalt:A34.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:UltramaxMemberus-gaap:SecuredDebtMembersalt:A90.0CreditFacilityMember2020-09-300001587264salt:A85.5MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-01-012020-09-300001587264salt:A30.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-01-012020-09-300001587264us-gaap:SecuredDebtMembersalt:A60.0MillionCreditFacilityMemberMember2020-01-012020-09-300001587264salt:A184.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2020-01-012020-09-300001587264salt:A34.0MillionCreditFacilityMemberus-gaap:SecuredDebtMember2018-10-032018-10-030001587264us-gaap:SecuredDebtMembersalt:A90.0CreditFacilityMember2018-11-082018-11-080001587264us-gaap:SecuredDebtMembersalt:A60.0MillionCreditFacilityMemberMember2020-09-300001587264salt:SBIRumbaMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2017-10-252017-10-250001587264salt:SBIRumbaMember2017-10-252017-10-250001587264salt:A196LeaseSBIRumbaMember2020-01-012020-09-300001587264salt:SBITangoMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2017-10-252017-10-250001587264salt:SBITangoMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2018-07-182018-07-180001587264salt:SBITangoMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2020-01-012020-09-300001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:SBIEchoMemberus-gaap:SecuredDebtMember2018-07-182018-07-180001587264salt:SBIEchoMember2018-07-182018-07-180001587264salt:SBHermesMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2018-11-162018-11-160001587264salt:SBISambaMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2019-04-152019-04-150001587264salt:CMBFLMemberus-gaap:FinanceLeasesPortfolioSegmentMembersalt:UltramaxpoolMemberus-gaap:SecuredDebtMember2019-05-240001587264salt:KamsarmaxpoolMembersalt:CMBFLMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2019-05-240001587264salt:CMBFLMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2019-05-242019-05-240001587264salt:CMBFLMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2019-05-240001587264us-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2020-01-012020-09-300001587264salt:VirgoandLibraLeaseMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2019-05-212019-05-210001587264salt:VirgoandLibraLeaseMember2020-01-012020-09-300001587264salt:VirgoandLibraLeaseMemberus-gaap:SecuredDebtMember2019-05-212019-05-210001587264salt:AVICMembersalt:UltramaxpoolMemberus-gaap:SecuredDebtMember2019-07-160001587264salt:AVICMember2019-06-272019-06-270001587264salt:AVICMember2020-01-012020-09-300001587264us-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:SecuredDebtMember2019-07-160001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:UltramaxpoolMemberus-gaap:SecuredDebtMember2020-09-300001587264us-gaap:FinanceLeasesPortfolioSegmentMembersalt:UltramaxpoolMemberus-gaap:SecuredDebtMember2020-01-012020-09-300001587264salt:A673MillionLeaseFinancingMembersalt:UltramaxpoolMemberus-gaap:SecuredDebtMember2020-03-190001587264salt:A673MillionLeaseFinancingMembersalt:SBICronosMemberus-gaap:SecuredDebtMember2020-03-192020-03-190001587264salt:A673MillionLeaseFinancingMembersalt:SBIAchillesMemberus-gaap:SecuredDebtMember2020-03-192020-03-190001587264salt:SBILynxMembersalt:A673MillionLeaseFinancingMemberus-gaap:SecuredDebtMember2020-03-192020-03-190001587264salt:A673MillionLeaseFinancingMemberus-gaap:SecuredDebtMember2020-09-300001587264salt:A673MillionLeaseFinancingMembersalt:UltramaxpoolMemberus-gaap:SecuredDebtMember2020-01-012020-09-300001587264srt:MinimumMemberus-gaap:SecuredDebtMember2020-09-300001587264srt:MaximumMemberus-gaap:SecuredDebtMember2020-09-300001587264srt:MaximumMemberus-gaap:SecuredDebtMember2020-01-012020-09-300001587264us-gaap:SecuredDebtMember2020-01-012020-09-300001587264srt:MaximumMember2020-01-012020-09-300001587264us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-09-300001587264us-gaap:FairValueMeasurementsRecurringMember2019-12-310001587264us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-09-300001587264us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2019-12-310001587264us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2019-12-310001587264us-gaap:FairValueMeasurementsRecurringMemberus-gaap:SecuredDebtMember2020-09-300001587264us-gaap:FairValueMeasurementsRecurringMemberus-gaap:SecuredDebtMember2019-12-310001587264salt:SalesLeasebackTransactionMemberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001587264salt:SalesLeasebackTransactionMemberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001587264us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel1Member2020-09-300001587264us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMember2020-09-300001587264us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2020-09-300001587264salt:Kamsarmax1Member2020-09-300001587264salt:ScorpioServicesHoldingLimitedMember2020-01-012020-09-300001587264salt:ScorpioCommercialScorpioShipManagementMember2020-01-012020-09-300001587264salt:ScorpioCommercialManagementMember2020-01-012020-09-300001587264salt:KamsarmaxpoolMember2020-01-012020-09-300001587264salt:UltramaxpoolMember2020-01-012020-09-300001587264salt:KamsarmaxpoolMember2019-01-012019-09-300001587264salt:UltramaxpoolMember2019-01-012019-09-300001587264salt:SumecVesselsMember2020-01-012020-09-300001587264salt:SumecVesselsMembersrt:MinimumMember2020-01-012020-09-300001587264srt:MaximumMembersalt:SumecVesselsMember2020-01-012020-09-300001587264salt:ScorpioShipManagementSAMMember2020-09-300001587264salt:ScorpioShipManagementSAMMembersrt:MinimumMember2020-01-012020-09-300001587264salt:ScorpioShipManagementSAMMembersrt:MaximumMember2020-01-012020-09-300001587264salt:ScorpioTankersMember2018-10-1200015872642020-05-110001587264salt:ScorpioCommercialManagementMember2019-01-012019-09-300001587264salt:BunkerSupplierMember2020-01-012020-09-300001587264salt:BunkerSupplierMember2019-01-012019-09-300001587264salt:ScorpioShipManagementSAMMember2020-01-012020-09-300001587264salt:ScorpioShipManagementSAMMember2019-01-012019-09-300001587264salt:PortAgentMember2020-01-012020-09-300001587264salt:PortAgentMember2019-01-012019-09-300001587264salt:ScorpioServicesHoldingLimitedMember2019-01-012019-09-300001587264salt:ScorpioUKLimitedMember2020-01-012020-09-300001587264salt:ScorpioUKLimitedMember2019-01-012019-09-300001587264salt:TravelProviderMember2020-01-012020-09-300001587264salt:TravelProviderMember2019-01-012019-09-300001587264salt:ScorpioTankersMember2020-01-012020-09-300001587264salt:ScorpioTankersMember2019-01-012019-09-300001587264salt:KamsarmaxpoolMember2020-09-300001587264salt:KamsarmaxpoolMember2019-12-310001587264salt:UltramaxpoolMember2020-09-300001587264salt:UltramaxpoolMember2019-12-310001587264salt:ScorpioShipManagementSAMMember2019-12-310001587264salt:ScorpioTankersMember2020-09-300001587264salt:ScorpioTankersMember2019-12-310001587264salt:ScorpioCommercialManagementMember2020-09-300001587264salt:ScorpioCommercialManagementMember2019-12-310001587264salt:ScorpioServicesHoldingLimitedMember2019-12-310001587264salt:BunkerSupplierMember2020-09-300001587264salt:BunkerSupplierMember2019-12-310001587264salt:PortAgentMember2020-09-300001587264salt:PortAgentMember2019-12-310001587264salt:SCMSSMAsetsHeldForSaleAdjustmentMember2020-09-300001587264salt:SCMSSMAsetsHeldForSaleAdjustmentMember2019-12-3100015872642018-10-120001587264salt:OceanTreePhoenixMember2020-01-012020-09-300001587264salt:OceanTreePhoenixMember2020-09-300001587264salt:NewTimeCharterIn2019Member2020-01-012020-09-300001587264salt:TCITaizhouMember2020-01-012020-09-300001587264salt:TCITaizhouMember2020-09-300001587264salt:TCIZhenjiangMember2020-01-012020-09-300001587264salt:TCIZhenjiangMember2020-09-300001587264salt:CLSuzhouMember2020-09-300001587264salt:Yangze11Member2020-01-012020-09-300001587264srt:MinimumMembersalt:Yangze11Member2020-01-012020-09-300001587264salt:Yangze11Member2020-09-300001587264salt:KamsarmaxpoolMember2020-01-012020-09-300001587264salt:ScorpioUltramaxPoolMember2020-01-012020-09-300001587264us-gaap:CorporateMember2020-01-012020-09-300001587264salt:KamsarmaxpoolMember2019-01-012019-09-300001587264salt:ScorpioUltramaxPoolMember2019-01-012019-09-300001587264us-gaap:CorporateMember2019-01-012019-09-300001587264salt:KamsarmaxpoolMember2020-09-300001587264salt:KamsarmaxpoolMember2019-12-310001587264salt:ScorpioUltramaxPoolMember2020-09-300001587264salt:ScorpioUltramaxPoolMember2019-12-310001587264us-gaap:CorporateMember2020-09-300001587264us-gaap:CorporateMember2019-12-310001587264us-gaap:SubsequentEventMember2020-10-272020-10-270001587264us-gaap:SubsequentEventMember2020-10-012020-12-090001587264salt:UltramaxpoolMemberus-gaap:SubsequentEventMember2020-10-012020-12-090001587264salt:KamsarmaxpoolMemberus-gaap:SubsequentEventMember2020-10-012020-12-090001587264salt:KamsarmaxpoolMembersalt:SBICongaMemberus-gaap:SubsequentEventMember2020-10-012020-12-090001587264salt:SBIPhoenixMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2020-10-012020-12-090001587264salt:SBISamsonMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2020-10-012020-12-090001587264salt:SBIHeraMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2020-10-012020-12-090001587264salt:SBIZeusMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2020-10-012020-12-090001587264salt:SBIHyperionMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2020-10-012020-12-090001587264salt:KamsarmaxpoolMemberus-gaap:SubsequentEventMembersalt:SBIReggaeMember2021-02-012021-05-310001587264salt:KamsarmaxpoolMembersalt:SBIJiveMemberus-gaap:SubsequentEventMember2021-02-012021-05-310001587264salt:KamsarmaxpoolMembersalt:SBISwingMemberus-gaap:SubsequentEventMember2021-02-012021-05-310001587264salt:KamsarmaxpoolMembersalt:SBIMazurkaMemberus-gaap:SubsequentEventMember2021-02-012021-05-310001587264salt:KamsarmaxpoolMembersalt:SBIParaparaMemberus-gaap:SubsequentEventMember2021-02-012021-05-310001587264salt:UltramaxpoolMemberus-gaap:SubsequentEventMembersalt:SBIGeminiMember2021-01-012021-01-310001587264salt:SBIHydraMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2021-01-012021-04-300001587264salt:UltramaxpoolMemberus-gaap:SubsequentEventMembersalt:SBIAntaresMember2021-01-012021-04-300001587264salt:SBIBravoMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2021-01-012021-04-300001587264salt:SBIMaiaMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2021-01-012021-04-300001587264salt:SBIApolloMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2021-01-012021-01-310001587264salt:UltramaxpoolMemberus-gaap:SubsequentEventMembersalt:SBIPoseidonMember2021-01-012021-01-310001587264salt:SBIOrionMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2021-01-012021-03-310001587264salt:SBITethysMembersalt:UltramaxpoolMemberus-gaap:SubsequentEventMember2021-01-012021-03-310001587264us-gaap:SubsequentEventMember2020-01-012020-12-310001587264salt:A184.0MillionCreditFacilityMembersalt:SBIRockSBISoustaSBICongaSBIHeraAndSBIZeusMemberus-gaap:SubsequentEventMemberus-gaap:SecuredDebtMember2020-10-012020-12-310001587264salt:SBIPhoenixAndSBISamsonMemberus-gaap:SubsequentEventMemberus-gaap:SecuredDebtMembersalt:A90.0CreditFacilityMember2020-10-012020-12-310001587264us-gaap:SubsequentEventMember2020-12-090001587264us-gaap:SubsequentEventMember2020-10-012020-12-310001587264us-gaap:SubsequentEventMember2020-12-31

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    The following is management’s discussion and analysis of financial condition and results of operations of Scorpio Bulkers Inc. for the nine-month period ended September 30, 2020. The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements, including the notes thereto, included in this report, which have been prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP, and the discussion included in our Annual Report on Form 20-F for the year ended December 31, 2019, filed with the U.S. Securities and Exchange Commission, or the SEC, on April 2, 2020, or our Annual Report. The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, such as those set forth in the section entitled “Risk Factors” included in our Annual Report. We use the term deadweight tons, or dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, in describing the size of our vessels.

    Unless otherwise indicated, references to “Scorpio Bulkers,” the “Company,” “we,” “our,” “us,” or similar terms refer to Scorpio Bulkers Inc. and its subsidiaries, except where the context otherwise requires.

All share and per share information included herein have been retroactively adjusted to reflect the one-for-ten reverse stock split of the Company’s common shares, which took effect on April 7, 2020.

Overview

    We are an international shipping company that owns and operates the latest generation of newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 dwt in the international shipping markets. Scorpio Bulkers Inc. was incorporated in the Republic of the Marshall Islands on March 20, 2013.

    Our vessels transport a broad range of major and minor bulk commodities, including ores, coal, grains, and fertilizers, along worldwide shipping routes, and are employed primarily in the spot market or in spot market-oriented pools of similarly sized vessels. At September 30, 2020, we had an operating fleet of 54 vessels consisting of 49 owned or finance leased vessels (including 16 Kamsarmax vessels and 33 Ultramax vessels), and five time chartered-in Kamsarmax vessels.

    The Company is organized by vessel type into two operating segments:

•Ultramax - includes vessels ranging from approximately 60,200 dwt to 64,000 dwt

•Kamsarmax - includes vessels ranging from approximately 82,000 dwt to 84,000 dwt

    Our vessels are commercially managed by Scorpio Commercial Management S.A.M., or SCM, and technically managed by Scorpio Ship Management S.A.M., or SSM, pursuant to a master agreement (as amended and restated from time to time) effective as from January 1, 2018, or the Master Agreement. SCM and SSM are controlled by the Lolli-Ghetti family, of which Emanuele Lauro, our Chairman and Chief Executive Officer, and Filippo Lauro, our Vice President, are members. Additional dry bulk vessels that we may acquire in the future are expected to be managed under the Master Agreement or on substantially similar terms.

    SCM’s commercial management services include securing employment for our vessels in the spot market or on time charters. SCM also manages the Scorpio Pools identified below, which are spot-market oriented pools of similarly sized vessels operated by companies affiliated with us, in which a number of our vessels and vessels owned by third parties are employed.

    SSM’s technical management services include providing technical support, such as arranging the hiring of qualified officers and crew, supervising the maintenance and performance of our vessels, purchasing supplies, spare parts and new equipment, arranging and supervising drydocking and repairs, and monitoring regulatory and classification society compliance and customer standards.

    We have also entered into an administrative services agreement, as amended from time to time, or the Administrative Services Agreement, with Scorpio Services Holding Limited, or SSH, an entity controlled by the Lolli-Ghetti family. The administrative services provided under this agreement primarily include provision of administrative staff, office space and accounting, legal compliance, financial and information technology services. We reimburse SSH for the direct or indirect expenses it incurs in providing us with the administrative services described above.

    We generate revenue by charging customers for the transportation of their drybulk cargoes using our vessels. Historically, these services generally have been provided under the following basic types of contractual relationships:

•Commercial Pools, whereby we participate with other shipowners to operate a large number of vessels as an integrated transportation system, which offers customers greater flexibility and a higher level of service while achieving scheduling efficiencies. Pools negotiate charters primarily in the spot market but may also arrange time charter agreements. The size and scope of these pools enable them to enhance utilization rates for pool vessels by securing backhaul voyages and COAs (described below), thus generating higher effective TCE revenues than otherwise might be obtainable in the spot market.

•Voyage charters, which are charters for short intervals that are priced on current, or “spot,” market rates.

•Time charters, which are chartered to customers for a fixed period of time at rates that are generally fixed, but may contain a variable component based on inflation, interest rates, or current market rates.

    For all of our vessels’ contractual relationships, we are responsible for crewing and other vessel operating costs for our owned or finance leased vessels and the charterhire expense for vessels that we time charter-in.

    The table below illustrates the primary distinctions among these different employment arrangements:

See “Important Financial and Operational Terms and Concepts” below.

As of the date of this report, some of our owned, finance leased and time chartered-in vessels were operating in the Scorpio Kamsarmax Pool or the Scorpio Ultramax Pool, which we refer to together as the “Scorpio Pools,” which are spot market-oriented commercial pools managed by our commercial manager, SCM, a related party of ours.

Important Financial and Operational Terms and Concepts

We use a variety of financial and operational terms and concepts. These include the following:

Hire rate. The basic payment from the charterer for the use of the vessel.

Vessel revenues. Vessel revenues primarily include revenues from time charters, pool revenues, and voyage charters. Vessel revenues are affected by hire rates and the number of days a vessel operates. Vessel revenues are also affected by the mix of business between vessels on time charter, vessels in pools, and vessels operating on voyage charter. Revenues from vessels in pools and on voyage charter are more volatile, as they are typically tied to prevailing market rates.

Voyage charters. Voyage charters or spot voyages are charters under which the customer pays a transportation charge for the movement of a specific cargo between two or more specified ports. We pay all of the voyage expenses.

Voyage expenses. Voyage expenses primarily include bunkers, port charges, canal tolls, cargo handling operations and brokerage commissions paid by us under voyage charters, as well as brokerage commissions and miscellaneous voyage expenses that we are unable to collect under time charter and pool arrangements. These expenses are subtracted from voyage charter revenues to calculate TCE revenues.

Vessel operating costs. For our owned and finance leased vessels, we are responsible for vessel operating costs, which include crewing, repairs and maintenance, insurance, stores, lube oils, communication expenses, and technical management fees.

Technical management fees are paid to SSM. Pursuant to our Master Agreement, SSM provides us with technical management services, and we provide them with the ability to subcontract technical management of our vessels.

Charterhire. Charterhire is the amount we pay the owner for time chartered-in vessels. The amount is usually for a fixed period of time at rates that are generally fixed, but may contain a variable component based on inflation, interest rates, or current market rates. The vessel’s owner is responsible for crewing and other vessel operating costs.

Drydocking. We periodically drydock each of our owned and finance leased vessels for inspection, repairs and maintenance and any modifications to comply with industry certification or governmental requirements. Generally, each vessel is drydocked every 30 months to 60 months. We capitalize a substantial portion of the costs incurred during drydocking and amortize those costs on a straight-line basis from the completion of a drydocking to the estimated completion of the next drydocking. We immediately expense costs for routine repairs and maintenance performed during drydocking that do not improve or extend the useful lives of the vessels. The number of drydockings undertaken in a given period and the nature of the work performed determine the level of drydocking expenditures.

Depreciation. Depreciation expense typically consists of:

•charges related to the depreciation of the historical cost of our owned or finance leased vessels (less an estimated residual value) over the estimated useful lives of the vessels; and

•charges related to the amortization of drydocking expenditures over the estimated number of years to the next scheduled drydocking.

Time charter equivalent (TCE) revenue or rates. We report TCE revenue, a non-GAAP financial measure, because (i) we believe it provides additional meaningful information in conjunction with voyage revenues and voyage expenses, the most directly comparable U.S. GAAP measures, (ii) it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance, (iii) it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods, and (iv) we believe that it presents useful information to investors. TCE revenue is vessel revenue less voyage expenses, including bunkers, port charges and commissions to SCM. The TCE rate achieved on a given voyage is expressed in U.S. dollars/day and is generally calculated by dividing TCE revenue by the number of revenue days in the period. For a reconciliation of TCE revenue, deduct voyage expenses from revenue on our Statement of Operations. Please also see “Non-GAAP Financial Measures.”

Revenue days. Revenue days are the total number of calendar days our vessels were in service during a period, less the total number of off-hire days during the period associated with repairs or drydockings. Consequently, revenue days represent the total number of days available for the vessel to earn revenue. Idle days, which are days when a vessel is available to earn revenue, yet is not employed, are included in revenue days. We use revenue days to show changes in net vessel revenues between periods.

Contract of affreightment. A contract of affreightment, or COA, relates to the carriage of specific quantities of cargo with multiple voyages over the same route and over a specific period of time which usually spans a number of years. A COA does not designate the specific vessels or voyage schedules that will transport the cargo, thereby providing both the charterer and shipowner greater operating flexibility than with voyage charters alone. The charterer has the flexibility to determine the individual voyage scheduling at a future date while the shipowner may use different vessels to perform these individual voyages. As a result, COAs are mostly entered into by large fleet operators, such as pools or shipowners with large fleets of the same vessel type. We pay the voyage expenses while the freight rate normally is agreed on a per cargo ton basis.

Commercial pools. To increase vessel utilization and revenues, we participate in commercial pools with other shipowners and operators of similar modern, well-maintained vessels. By operating a large number of vessels as an integrated transportation system, commercial pools offer customers greater flexibility and a higher level of service while achieving scheduling efficiencies. Pools employ experienced commercial charterers and operators who have close working relationships with customers and brokers, while technical management is performed by each shipowner. Pools negotiate charters with customers primarily in the spot market. The size and scope of these pools enable them to enhance utilization rates for pool

vessels by securing backhaul voyages and COAs, thus generating higher effective TCE revenues than otherwise might be obtainable in the spot market while providing a higher level of service offerings to customers.

Off-hire. Time a vessel is not available for service due primarily to scheduled and unscheduled repairs or drydockings. For time chartered-in vessels, we do not pay the charterhire expense when the vessel is off-hire.

Operating days. Operating days are the total number of available days in a period with respect to owned and finance leased vessels, before deducting available days due to off-hire days and days in drydock. Operating days is a measurement that is only applicable to our owned and finance leased vessels, not our time chartered-in vessels.

Non-GAAP Financial Measures

    To supplement our financial information presented in accordance with U.S. GAAP, management uses certain “non-GAAP financial measures” as such term is defined in Regulation G promulgated by the SEC. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Management believes the presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations, and therefore a more complete understanding of factors affecting our business than U.S. GAAP measures alone. In addition, management believes the presentation of these matters is useful to investors for period-to-period comparison of results as the items may reflect certain unique and/or non-operating items such as asset sales, write-offs, contract termination costs or items outside of management’s control.

    Earnings before interest, taxes, depreciation and amortization, or EBITDA, adjusted net (loss) income and related per share amounts, as well as adjusted EBITDA and TCE revenue are non-GAAP financial measures that we believe provide investors with a means of evaluating and understanding how our management evaluates our operating performance. These non-GAAP financial measures should be viewed in addition to the results reported under U.S. GAAP, and should not be considered in isolation from, as substitutes for, nor superior to financial measures prepared in accordance with U.S. GAAP.

Reconciliations of adjusted net (loss) income, EBITDA, adjusted EBITDA and TCE revenue as determined in accordance with U.S. GAAP for the nine months ended September 30, 2020 and 2019 are provided below (dollars in thousands, except per share data).

EBITDA (unaudited)

(1) Includes depreciation, amortization of deferred financing costs and restricted stock amortization.

TCE Revenue (unaudited)

    Time Charter Equivalent (TCE) revenue is defined as voyage revenues less voyage expenses. Such TCE revenue, divided by the number of our available days during the period, or revenue days, is TCE per revenue day, which we believe is consistent with industry standards. TCE per revenue day is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per-day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts.

        

For the first nine months of 2020, the Company’s GAAP net loss was $206.4 million, or $23.34 per diluted share, including a loss of approximately $106.7 million and cash dividend income of $0.9 million, or $12.31 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc., a write-down of assets of approximately $36.6 million, or $4.14 per diluted share, related to the classification of four vessels (SBI Taurus, SBI Bolero, SBI Jaguar and SBI Rock) as held for sale and the agreement to sell the SBI Sousta and a write-off of approximately $0.4 million, or $0.04 per diluted share, of deferred financing costs on the credit facilities related to three vessels that were sold in the first nine months of 2020 (SBI Taurus, SBI Bolero and SBI Jaguar). For the first nine months of 2019, the Company’s GAAP net income was $29.6 million, or $4.25 per diluted share. These results include a non-cash gain of approximately $68.6 million and cash dividend income of $1.6 million, or $10.09 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc., a write-down of assets either sold or held for sale and write-off of related deferred financing costs totaling approximately $12.5 million, or $1.79 per diluted share, and the write-off of deferred financing costs of approximately $3.2 million, or $0.45 per diluted share.

EBITDA for the first nine months of 2020 and 2019 were a loss of $134.6 million and a gain of $116.8 million, respectively (see Non-GAAP Financial Measures above).

For the first nine months of 2020, the Company’s adjusted net loss was $169.4 million, or $19.16 adjusted per diluted share, which excludes the impact of the write-down of assets of approximately $36.6 million and the write-off of deferred financing costs on credit facilities related to the three vessels sold of approximately $0.4 million. Adjusted EBITDA for the first nine months of 2020 was a loss of $97.9 million (see Non-GAAP Financial Measures above).

For the first nine months of 2019, the Company’s adjusted net income was $42.1 million, or $6.04 adjusted per diluted share, which excludes the impact of the write-down of assets either sold or held for sale of approximately $12.0 million and the write-off of related deferred financing costs of approximately $0.4 million. Adjusted EBITDA for the first nine months of 2019 was $128.9 million (see Non-GAAP Financial Measures above).

The Company’s vessel revenues for the first nine months of 2020 were $113.7 million compared to $164.3 million in the first nine months of 2019. The Company’s TCE revenue (see Non-GAAP Financial Measures above) for the first nine months of 2020 was $109.2 million, a decrease of $54.3 million from the prior year period.

Total operating expenses for the first nine months of 2020 were $186.8 million, including the write-down of vessels of approximately $36.6 million, compared to $165.2 million in the first nine months of 2019, which included a charge related to the classification of vessels as sold or held for sale of approximately $12.0 million.

Recent and Other Developments

COVID-19

Since the beginning of the calendar year 2020, the ongoing outbreak of the novel coronavirus (COVID-19) that originated in China in December 2019 and that has spread to most developed nations of the world has resulted in numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus. These measures have resulted in a significant reduction in global economic activity and extreme volatility in the global financial and commodities markets. A significant reduction in manufacturing and other economic activities has and is expected to continue to have a materially adverse impact on the global demand for raw materials, coal and other bulk cargoes that our customers transport on our vessels. This significant decline in the demand for dry bulk tonnage may materially and adversely impact our ability to profitably charter our vessels. When these measures and the resulting economic impact will end and what the long-term impact of such measures on the global economy will be are not known at this time. As a result, the extent to which COVID-19 will impact the Company’s results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted.

Quarterly Cash Dividend

In the third quarter of 2020, the Company’s Board of Directors declared and the Company paid a quarterly cash dividend of $0.05 per share totaling approximately $0.6 million.

On October 27, 2020, the Company’s Board of Directors declared a quarterly cash dividend of $0.05 per share, payable on or about December 15, 2020, to all shareholders of record as of November 13, 2020.

During the fourth quarter of 2020, the Company entered into agreements with unaffiliated third parties to sell 21 vessels, including 14 Ultramax vessels and seven Kamsarmax vessels. A summary of the transactions is as follows.

The Company expects to recognize asset losses on sale / write-downs of approximately $191.8 million in the fourth quarter of 2020 in relation to the sale of the above vessels. The Company also expects to write-off approximately $4.6 million of deferred financing costs when the related debt is repaid in the fourth quarter of 2020 or first half of 2021.

Letter of Intent to Purchase Wind Turbine Installation Vessel

In August 2020, the Company signed a letter of intent to enter into a shipbuilding contract with Daewoo Shipbuilding and Marine Engineering Inc. to build a wind turbine installation vessel (“WTIV”) which is expected to be delivered in 2023, with options to construct three further similar vessels. The Company’s purchase of the WTIV is subject to the negotiation and execution of definitive documentation.

Financial Results for the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019

    For the first nine months of 2020, the Company’s GAAP net loss was $206.4 million, or $23.34 per diluted share, including a loss of approximately $106.7 million and cash dividend income of $0.9 million, or $12.31 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc., a write-down of assets of approximately $36.6 million, or $4.14 per diluted share, related to the classification of four vessels (SBI Taurus, SBI Bolero, SBI Jaguar and SBI Rock) as held for sale and the agreement to sell the SBI Sousta and a write-off of approximately $0.4 million, or $0.04 per diluted share, of deferred financing costs on the credit facilities related to three vessels that were sold in the first nine months of 2020 (SBI Taurus, SBI Bolero and SBI Jaguar). For the first nine months of 2019, the Company’s GAAP net income was $29.6 million, or $4.25 per diluted share. These results include a non-cash gain of approximately $68.6 million and cash dividend income of $1.6 million, or $10.09 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc., a write-down of assets either sold or held for sale and write-off of related deferred financing costs totaling approximately $12.5 million, or $1.79 per diluted share, and the write-off of deferred financing costs of approximately $3.2 million, or $0.45 per diluted share.

EBITDA for the first nine months of 2020 and 2019 were a loss of $134.6 million and a gain of $116.8 million, respectively (see Non-GAAP Financial Measures above).

For the first nine months of 2020, the Company’s adjusted net loss was $169.4 million, or $19.16 adjusted per diluted share, which excludes the impact of the write-down of assets of approximately $36.6 million and the write-off of deferred financing costs on credit facilities related to the three vessels sold of approximately $0.4 million. Adjusted EBITDA for the first nine months of 2020 was a loss of $97.9 million (see Non-GAAP Financial Measures above).

For the first nine months of 2019, the Company’s adjusted net income was $42.1 million, or $6.04 adjusted per diluted share, which excludes the impact of the write-down of assets either sold or held for sale of approximately $12.0 million and the write-off of related deferred financing costs of approximately $0.4 million. Adjusted EBITDA for the first nine months of 2019 was $128.9 million (see Non-GAAP Financial Measures above).

The Company’s vessel revenues for the first nine months of 2020 were $113.7 million compared to $164.3 million in the first nine months of 2019. The Company’s TCE revenue (see Non-GAAP Financial Measures above) for the first nine months of 2020 was $109.2 million, a decrease of $54.3 million from the prior year period.

Total operating expenses for the first nine months of 2020 were $186.8 million, including the write-down of vessels of approximately $36.6 million, compared to $165.2 million in the first nine months of 2019, which included a charge related to the classification of vessels as sold or held for sale of approximately $12.0 million.

    

Vessel revenue for the Company’s Ultramax Operations decreased to $66.7 million for the first nine months of 2020 from $103.2 million in the prior year period.

TCE revenue (see Non-GAAP Financial Measures above) for the Company’s Ultramax Operations was $64.0 million for the first nine months of 2020 compared to $102.8 million for the prior year period. The Company’s Ultramax fleet consisted of a day-weighted average of 34 vessels owned or finance leased and one vessel time chartered-in during the first nine months of 2020 and 37 vessels owned or finance leased and one vessel time chartered-in during the first nine months of 2019. TCE revenue per day was $7,604 and $10,010 for the first nine months of 2020 and 2019, respectively.

    

The Company’s Ultramax Operations vessel operating costs were $47.8 million for the first nine months of 2020, including approximately $2.6 million of takeover costs and contingency expenses, compared with vessel operating costs of $51.0 million in the prior year period, relating to the 34 and 37 vessels owned or finance leased on average, respectively, during the periods. The year over year decrease is due primarily to the reduction in fleet size and the COVID-19 pandemic, which for most of the year reduced crew travel and the purchase of stores and spares and the performance of repairs. Daily operating costs excluding takeover costs and contingency expenses for the first nine months of 2020 remained flat at $4,888 compared to $4,873 in the prior year period.

Charterhire expense for the Company’s Ultramax Operations was approximately $2.4 million and $2.7 million for the first nine months of 2020 and 2019, respectively, and relates to the vessel that the Company time chartered-in until August 2020 when the vessel was redelivered to its owner.

Ultramax Operations depreciation decreased from $27.1 million to $25.5 million in the first nine months of 2019 and 2020, respectively, due to the decrease in fleet size and the classification of vessels as held for sale (upon which depreciation ceases).

General and administrative expense for the Company’s Ultramax Operations, which consists primarily of administrative service fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions, was approximately $3.0 million for the first nine months of 2020 and $3.1 million in the prior year period.

During the first nine months of 2020, the Company recorded a write-down on assets held for sale of $7.6 million related to the classification of two Ultramax vessels, the SBI Jaguar and SBI Taurus, as held for sale. The sales were completed in April 2020. During the first nine months of 2019, the Company recorded a write-down on assets held for sale of $4.7 million related to the classification of the SBI Cougar and SBI Puma as held for sale. The sale of the vessels was completed in October 2019.

    

Vessel revenue for the Company’s Kamsarmax Operations decreased to $46.9 million in the first nine months of 2020 from $61.1 million in the prior year period.

TCE revenue (see Non-GAAP Financial Measures above) for the Company’s Kamsarmax Operations was $45.2 million for the first nine months of 2020 associated with a day-weighted average of 17 vessels owned or finance leased and five vessels time chartered-in, compared to $60.7 million for the prior year period associated with a day-weighted average of 19 vessels owned or finance leased. TCE revenue per day was $8,640 and $11,672 for the first nine months of 2020 and 2019, respectively.

    

Kamsarmax Operations vessel operating costs were $23.6 million for the first nine months of 2020, including approximately $1.3 million of takeover costs and contingency expenses, compared with vessel operating costs of $25.7 million in the prior year period, relating to 17 and 19 vessels owned or finance leased on average, respectively, during the periods. The year over year decrease is due primarily to the reduction in fleet size and the COVID-19 pandemic, which for most of the year reduced crew travel and the purchase of stores and spares and the performance of repairs. Daily operating costs excluding takeover costs and contingency expenses for the first nine months of 2020 decreased to $4,929 from $4,990 in the prior year period.

Kamsarmax Operations charterhire expense was $13.0 million in the first nine months of 2020, relating to five vessels the Company began time chartering-in during 2019. The year over year increase reflects the full year impact of the cost in 2020.

Kamsarmax Operations depreciation was $13.6 million and $13.7 million in the first nine months of 2020 and 2019, respectively. While the fleet size decreased, vessels were drydocked or had scrubbers installed both of which added to the costs being depreciated.

General and administrative expense for the Company’s Kamsarmax Operations was $1.5 million for the first nine months of 2020 and $1.6 million in the first nine months of 2019. The expense consists primarily of administrative services fees, which are incurred on a per vessel per day basis, and bank charges, which are incurred based on the number of transactions.

During the first nine months of 2020, the Company recorded a write down on assets held for sale of $29.0 million related to the classification of two vessels (SBI Bolero and SBI Rock) as held for sale and the agreement to sell the SBI Sousta at September 30, 2020. In the first nine months of 2019, $7.4 million was written down related to assets either sold or held for sale.

Corporate

Certain general and administrative expenses the Company incurs, as well as all of its financial expenses and investment income or losses, are not attributable to a specific segment. Accordingly, these costs are not allocated to the Company’s segments. These general and administrative expenses, including compensation, audit, legal and other professional fees, as well as the costs of being a public company, such as director fees, were $15.1 million and $19.3 million in the first nine months of 2020 and 2019, respectively. The decrease from the prior year is due primarily to a reduction in compensation costs.

The Company recorded a loss of approximately $106.7 million for the first nine months of 2020 and received cash dividend income of $0.9 million from its equity investment in Scorpio Tankers Inc. During the first nine months of 2019, the Company recorded a non-cash gain of approximately $68.6 million as well as cash dividend income of $1.6 million also related to its equity investment in Scorpio Tankers Inc.

Financial expenses, net of interest income decreased to $27.2 million in the first nine months of 2020 from $39.8 million in the prior year period due to lower LIBOR rates and the redemption of the Company’s 7.50% Senior Unsecured Notes in August 2019.

Liquidity and Capital Resources

Our primary sources of funds are cash flow from our vessels, a number of which operate in the Scorpio Pools, credit facility borrowings and equity offerings. Our liquidity and capital needs arise primarily from working capital requirements to operate our fleet, payments to meet or refinance our debt obligations and expenditures for vessel acquisition/construction, as well as to maintain the high quality of our fleet including drydocking and scrubber installations. We also make occasional repurchases of shares of our common stock at the sole discretion of management based on market conditions and other factors.

At September 30, 2020, cash and cash equivalents totaled $40.2 million and we had approximately $73.8 million in available and undrawn capacity under our revolving credit facilities. We believe that our current cash and cash equivalents balance, available credit under existing credit facilities, as well as our operating cash flows will be sufficient to fund the operation of our fleet as well as other liquidity requirements such as debt repayment and capital expenditures.

Recent Financing Activities

    Our recent financing activities include the following, which are more fully described in the “Secured Credit Facilities and Financing Obligations” section below:

$184 Million Credit Facility

During the fourth quarter of 2020, the Company repaid $56.2 million in aggregate related to the sales of the SBI Rock, SBI Sousta, SBI Conga, SBI Hera and SBI Zeus.

$90 Million Credit Facility

During the fourth quarter of 2020, the Company repaid $36.9 million in aggregate related to the sales of the SBI Phoenix, SBI Samson and SBI Hyperion.

    The cash flow provided by operating activities for the nine months ended September 30, 2020 reflects the lower time charter rates earned during the period. Our non-cash items include unrealized gains on investments, the loss/write-down on vessels held for sale, vessel depreciation, amortization of restricted stock and deferred financing costs.

Investing Activities

Net cash provided by investing activities of $53.6 million primarily reflects the proceeds received from the sale of 2.25 million common shares of Scorpio Tankers Inc. (NYSE: STNG) in May 2020 and the sale of two Ultramax vessels and one Kamsarmax vessel, partially offset by payments made on our scrubber program.

Financing Activities

Net cash used in financing activities of $8.3 million primarily reflects the repayments of long term debt related to the sale of vessels, as well as per the normal amortization schedule offset by net proceeds from our issuance of stock and the refinancing of existing bank debt under financing obligations via our new sale and leaseback transactions.

Share Repurchase Program

In January 2019, the Company’s Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $50.0 million of the Company’s securities (the “Program”). During the fourth quarter of 2020, the Company repurchased approximately 0.8 million of the Company’s common shares under the Program for an aggregate purchase price of approximately $11.3 million (or at an average purchase price of $15.01 per repurchased share) funded from available cash resources. Approximately $38.7 million remains available for further repurchases under the Program.

Dividend

    Year to date 2020, our Board of Directors declared cash dividends totaling $0.35 per share or $3.2 million in the aggregate, of which $2.6 million has been paid as of the date of this filing.

Secured Credit Facilities and Financing Obligations

As of September 30, 2020, we had $650.8 million of outstanding borrowings under the credit agreements and financing obligations as shown in the following table (dollars in thousands):

Our secured credit facilities are secured by, among other things: a first priority mortgage over the relevant collateralized vessels; a first priority assignment of earnings, and insurances from the mortgaged vessels for the specific facility; a pledge of the earnings account of the mortgaged vessels for the specific facility; and a pledge of the equity interests of each vessel owning subsidiary under the specific facility.

Amendment of Minimum Liquidity Covenant

The Company agreed with its lenders and a finance lessor to permanently reduce the level of the minimum liquidity covenant under the relevant debt financings from the greater of: (i) $25.0 million or (ii) $700,000 per owned vessel, to the greater of: (i) $25.0 million or (ii) $500,000 per owned vessel. As a result, on the basis of the current owned or finance leased fleet size of 41 vessels, the minimum liquidity requirement is $25.0 million (a reduction from $28.7 million).

In consideration for the above amendment, the Company made advance principal repayments of approximately $7.7 million in aggregate in the third quarter of 2020 that would have fallen due in the third quarter of 2021.

Payment Holiday on Certain Future Principal Repayments

In addition, the Company agreed with a specific finance lessor to defer two quarterly installment payments (i.e. Q1 2021 and Q2 2021) to the subsequent eight quarters (in equal payments). As a result, the Company will not have to make certain quarterly installment payments on this lease financing totaling approximately $4.6 million that would have fallen due during the first half of 2021.

Loan Covenants

    Certain of our credit facilities and financing obligations discussed above, have, among other things, the following financial covenants, as amended or waived, the most stringent of which require us to maintain:

•The ratio of net debt to total capitalization of no greater than 0.60 to 1.00.

•Consolidated tangible net worth (adjusted for a minimum amount of $100.0 million in historical non-operating costs and to exclude certain future non-operating items, including impairments) of no less than $500.0 million plus: (i) 25% of cumulative positive net income (on a consolidated basis) for each fiscal quarter commencing on or after December 31, 2013, and (ii) 50% of the value of any new equity issues occurring on or after December 31, 2013.

•Minimum liquidity of not less than the greater of $25.0 million and $0.5 million per owned or finance leased vessel.

•Minimum fair value of the collateral for each credit facility, such that the aggregate fair value of the vessels collateralizing the credit facility be between 140% and 160% of the aggregate principal amount outstanding under such credit facility, or, if we do not meet these thresholds, to prepay a portion of the loan or provide additional security to eliminate the shortfall.

•Minimum fair value of the vessel for certain financing obligations be 115% of the principal amount outstanding under such financing obligation, or, if we do not meet this threshold, to prepay a portion of the financing obligation or provide additional security to eliminate the shortfall.

    Our credit facilities and financing obligations discussed above have, among other things, the following restrictive covenants which may restrict our ability to, among other things:

•incur additional indebtedness;

•sell the collateral vessel, if applicable;

•make additional investments or acquisitions;

•pay dividends; or

•effect a change of control of the Company.

    A violation of any of the financial covenants contained in our credit facilities described above may constitute an event of default under all of our credit facilities, which, unless cured within the grace period set forth under the credit facility, if applicable, or waived or modified by our lenders, provides our lenders with the right to, among other things, 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, reclassify our indebtedness as current liabilities, accelerate our indebtedness, and foreclose their liens on our vessels and the other assets securing the credit facilities, which would impair our ability to continue to conduct our business.

In addition, our credit facilities and finance leases contain subjective acceleration clauses under which the debt could become due and payable in the event of a material adverse change in our business.

    Furthermore, 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 in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels and other assets securing our credit facilities if our lenders foreclose their liens, which would adversely affect our ability to conduct our business.

    Moreover, in connection with any waivers of or amendments to our credit facilities that we have obtained, or may obtain in the future, our lenders may impose additional operating and financial restrictions on us or modify the terms of our existing credit facilities. These restrictions may further restrict our ability to, among other things, pay dividends, make capital expenditures or incur additional indebtedness, including through the issuance of guarantees. In addition, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the interest rates they charge us on our outstanding indebtedness.

    As of the date of this filing, we were in compliance with all of the financial covenants contained in our credit facilities and financing obligations that we had entered into as of the date of this filing.

    Please see Note 9, Debt, to our consolidated financial statements for additional information about these credit facilities and financing obligations.

Vessel Sales

$67.3 Million Lease Financing

On March 19, 2020, we closed the transactions to sell and leaseback the SBI Cronos and SBI Achilles, two Ultramax vessels and on April 2, 2020, we closed a transaction to sell and lease back the SBI Lynx, a Kamsarmax vessel to Ocean Yield ASA. As part of the transaction we agreed to bareboat charter-in the SBI Cronos for a period of nine years, the SBI Achilles for a period of ten years and the SBI Lynx for a period of twelve years. We have several purchase options during the charter period of each agreement, as well as a purchase option for each vessel upon the expiration of the relevant agreement.

The transaction provides financing for the installation of scrubbers for each of the vessels included at approximately $1.5 million, which will amortize over four years.

$12.8 Million Credit Facility

This credit facility was repaid in full and terminated upon the closing of the sale and leaseback transaction concerning the SBI Lynx under the $67.3 Million Lease Financing in April 2020.

$38.7 Million Credit Facility

This credit facility was repaid in full and terminated in April 2020 in connection with the sale of the SBI Jaguar.

$85.5 Million Credit Facility

We repaid approximately $11.1 million of this credit facility in April 2020 in connection with the sale of the SBI Taurus.

During the fourth quarter of 2020, the Company entered into agreements with unaffiliated third parties to sell 21 vessels, including 14 Ultramax vessels and seven Kamsarmax vessels. A summary of the transactions is as follows.

The Company expects to recognize asset losses on sale / write-downs of approximately $191.8 million in the fourth quarter of 2020 in relation to the sale of the above vessels. The Company also expects to write-off approximately $4.6 million of deferred financing costs when the related debt is repaid in the fourth quarter of 2020 or first half of 2021.

COVID-19

Since the beginning of the calendar year 2020, the ongoing outbreak of the novel coronavirus (COVID-19) that originated in China in December 2019 and that has spread to most developed nations of the world has resulted in numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus. These measures have resulted in a significant reduction in global economic activity and extreme volatility in the global financial and commodities markets. A significant reduction in manufacturing and other economic activities has and is expected to continue to have a materially adverse impact on the global demand for raw materials, coal and other bulk cargoes that our customers transport on our vessels. This significant decline in the demand for dry bulk tonnage may materially and adversely impact our ability to profitably charter our vessels. When these measures and the resulting economic impact will end and what the long-term impact of such measures on the global economy will be are not known at this time. As a result, the extent to which COVID-19 will impact the Company’s results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted.

Fair Value of Our Vessels

The fair values of drybulk vessels, including our vessels, have generally experienced high volatility, and the fluctuation in the fair values of our vessels may result in an impairment charge or the incurrence of a loss on vessels sold or held for sale if the fair value of such vessels is below their carrying value. At September 30, 2020 the carrying value of our vessels was $1.3 billion in total on our condensed consolidated balance sheet, which exceeded the fair value of our vessels as of that date by approximately $400.0 million in total (approximately $114.0 million and $286.0 million on the Kamsarmax and Ultramax fleets, respectively). The fair market value of our vessels may fluctuate depending on a number of factors, including, among others: (i) prevailing level of charter rates; (ii) general economic and market conditions affecting the shipping industry; (iii) types, sizes and ages of vessels; (iv) supply of and demand for vessels; (v) other modes of transportation; (vi) cost of newbuildings; (vii) governmental or other regulations; (viii) the need to upgrade vessels as a result of charterer requirements, technological advances in vessel design or equipment or otherwise; (ix) technological advances; and (x) competition from other shipping companies and other modes of transportation. Thus far with respect to the fourth quarter of 2020, we expect to recognize asset write-downs of approximately $191.8 million in relation to the classification of certain vessels as held for sale.

Critical Accounting Estimates

    There have been no material changes to our significant accounting estimates since December 31, 2019 other than those reflected in our unaudited interim condensed consolidated financial statements for the nine-month period ended September 30, 2020 included elsewhere herein.  For a description of our critical accounting estimates and all of our significant accounting policies, see Note 1 to our audited financial statements and "Item 5 - Operating and Financial Review and Prospects," included in our Annual Report.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

    As of September 30, 2020, our contractual obligations and commitments consisted principally of debt repayments, future minimum payments under non-cancelable time chartered-in agreements and future minimum purchases under non-cancelable purchase agreements. As of September 30, 2020, there have been no significant changes to such arrangements and obligations since December 31, 2019 other than that noted below.

Financial Guarantees

We guarantee certain obligations of certain related parties arising from bunker purchases made through April 2021 on behalf of the vessels we own. The maximum potential liability as of the date of this filing is $5.0 million.

INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

			Page
Condensed Consolidated Balance Sheets as of September 30, 2020 (unaudited) and December 31, 2019			2
Unaudited Condensed Consolidated Statement of Operations for the nine months ended September 30, 2020 and 2019			4
Unaudited Condensed Consolidated Statement of Changes in Shareholders’ Equity for the nine months ended September 30, 2020 and 2019			5
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019			6
Unaudited Notes to the Condensed Consolidated Financial Statements			7

See notes to the unaudited condensed consolidated financial statements.

 

See notes to the unaudited condensed consolidated financial statements.

See notes to the unaudited condensed consolidated financial statements.

See notes to the unaudited condensed consolidated financial statements.

Unaudited Notes to Condensed Consolidated Financial Statements

1.Organization and Basis of Presentation

Company

Scorpio Bulkers Inc. and its subsidiaries (together the “Company”) is an international shipping company that owns and operates the latest generation newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 dwt in the international shipping markets. Scorpio Bulkers Inc. was incorporated in the Republic of the Marshall Islands on March 20, 2013.

The Company’s vessels transport a broad range of major and minor bulk commodities, including ores, coal, grains, and fertilizers, along worldwide shipping routes, and are, or are expected to be, employed primarily in the spot market or in spot market-oriented pools of similarly sized vessels. As of September 30, 2020, the Company owned or finance leased 49 vessels consisting of 16 Kamsarmax vessels and 33 Ultramax vessels and time chartered in five Kamsarmax vessels.

The Company is organized by vessel type into two operating segments (see Note 16, Segments, to the condensed consolidated financial statements):

•Ultramax - includes vessels ranging from approximately 60,200 dwt to 64,000 dwt

•Kamsarmax - includes vessels ranging from approximately 82,000 dwt to 84,000 dwt

In addition, in August 2020, the Company signed a letter of intent to enter into a shipbuilding contract with Daewoo Shipbuilding and Marine Engineering Inc. to build a wind turbine installation vessel (“WTIV”) which is expected to be delivered in 2023, with options to construct three further similar vessels. The Company’s purchase of the WTIV is subject to the negotiation and execution of definitive documentation.

The Company’s vessels are commercially managed by Scorpio Commercial Management S.A.M., or SCM, an entity controlled by the Lolli-Ghetti family of which Emanuele Lauro, the Company’s co-founder, Chairman and Chief Executive Officer, and Filippo Lauro, the Company’s Vice President, are members. SCM’s services include securing employment for the Company’s vessels in pools, in the spot market and on time charters.

The Company’s vessels are technically managed by Scorpio Ship Management S.A.M., or SSM, an entity controlled by the Lolli-Ghetti family. SSM facilitates vessel technical support such as crew, provisions, deck and engine stores, insurance, maintenance and repairs, and other services as necessary to operate the vessels such as drydocks and vetting/inspection under a technical management agreement.

The Company has also entered into an administrative services agreement, as amended from time to time, or the Administrative Services Agreement, with Scorpio Services Holding Limited, or SSH, an entity controlled by the Lolli-Ghetti family. The administrative services provided under this agreement primarily include provision of administrative staff, office space and accounting, legal compliance, financial and information technology services, in addition to arranging vessel sales and purchases for the Company.

Basis of accounting

The condensed consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. All material intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of financial position as of September 30, 2020 and the Company’s result of operations for the nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019. The condensed consolidated balance sheet as of December 31, 2019 was derived from audited financial statements but does not contain all the footnote disclosures from the annual financial statements.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reporting amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets, liabilities, revenues and expenses. Actual results could differ from those estimates.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with Securities and Exchange Commission, or the SEC, rules and regulations; however, management believes that the disclosures herein are adequate to make the information presented not misleading. This

report should be read in conjunction with the audited financial statements and the notes included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2019.

Reverse stock split

On April 7, 2020, the Company effected a one-for-ten reverse stock split. All share and per share information has been retroactively adjusted to reflect the reverse stock split. The par value was not adjusted as a result of the reverse stock split.

Going concern

The Company’s revenue is primarily derived from pool revenue. The bulker shipping industry is volatile and a sustained cyclical downturn could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

The fair market values of the Company’s vessels also experience high volatility. The fair market value of the vessels may increase or decrease depending on a number of factors including, but not limited to, the prevailing level of charter rates and day rates, general economic and market conditions affecting the international shipping industry, types, sizes and ages of vessels, supply and demand for vessels, availability of or developments in other modes of transportation, competition from other shipping companies, cost of newbuildings, governmental or other regulations and technological advances. In addition, as vessels grow older they generally decline in value. If the fair market value of its vessels declines, the Company may not be in compliance with certain provisions of its credit facilities and it may not be able to refinance its debt. The prepayment of certain credit facilities may be necessary for the Company to maintain compliance with certain covenants in the event that the value of its vessels falls below a certain level. Additionally, if the Company sells one or more of its vessels at a time when vessel prices have fallen, the sale price may be less than the vessel’s carrying value on its consolidated financial statements, resulting in a loss on sale or an impairment loss being recognized, ultimately leading to a reduction in earnings. Furthermore, if vessel values fall significantly, this could indicate a decrease in the recoverable amount for the vessel which may result in an impairment adjustment in the carrying value of the vessel.

These condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, nor to the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

2.Cash and cash equivalents

At December 31, 2019, cash and cash equivalents included $10.1 million of short-term deposits with original maturities of less than three months. There were no such short-term deposits at September 30, 2020.

The following is a summary of anti-dilutive equity awards not included in detailed earnings per share computations for the nine months ended September 30, 2020 and 2019 (in thousands).

						September 30,
						2020						2019
Anti-dilutive equity awards						266						109

4.Vessels, net

At September 30, 2020 the Company owned or finance leased 16 Kamsarmax vessels and 33 Ultramax vessels. A rollforward of activity within vessels is as follows (amounts in thousands):

Depreciation includes depreciation related to the Company’s finance leased vessels.

All of the Company’s vessels serve as collateral against existing loan facilities.