Form 6-K ULTRAPETROL BAHAMAS LTD For: May 31

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the month of May 2016

Commission File Number: 001-33068

ULTRAPETROL (BAHAMAS) LIMITED

(Translation of registrant's name into English)

Ocean Centre, Montagu Foreshore

East Bay St.

Nassau, Bahamas

P.O. Box SS-19084

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports

under cover of Form 20-F or Form 40-F.

Form 20-F [X] Form 40-F [  ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as

permitted by Regulation S-T Rule 101(b)(1): ___

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ___

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Attached hereto as Exhibit 1 are a copy of the Company's report for the three months ended March 31, 2016, containing certain unaudited financial information and Management's Discussion and Analysis of Financial Condition and Results of Operations for the three months ended March 31, 2016 and 2015 (unaudited).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 12, 2016

       Exhibit 1

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

Our disclosure and analysis in this report concerning our operations, cash flows and financial position, including, in particular, the likelihood of our success in developing and expanding our business, include forward-looking statements. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "will," "may," "should," and similar expressions are forward-looking statements. Although these statements are based upon assumptions we believe to be reasonable based upon available information, including projections of revenues, operating margins, earnings, cash flow, working capital and capital expenditures, they are subject to risks and uncertainties. These forward-looking statements represent our estimates and assumptions only as of the date of this report and are not intended to give any assurance as to future results. As a result, you should not place undue reliance on any forward-looking statements. We assume no obligation to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors, except as required by applicable securities laws. Factors that might cause future results to differ include, but are not limited to, the following:

In this report, unless the context otherwise indicates, the terms "we", "us" and "our" (and similar terms) refer to Ultrapetrol (Bahamas) Limited and its subsidiaries and joint ventures.

ULTRAPETROL (BAHAMAS) LIMITED

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE

THREE MONTHS ENDED MARCH 31, 2016 AND 2015 (UNAUDITED)

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements of Ultrapetrol (Bahamas) Limited (the "Company") and subsidiaries for the three months ended March 31, 2016, and 2015 included elsewhere in this report.

Our Company

We are an industrial shipping company serving the marine transportation needs of clients in the geographic markets on which we focus. We serve the shipping markets for grain, forest products, minerals, crude oil, petroleum and refined petroleum products, the general cargo and container trade, as well as the offshore oil platform supply market through our operations in the following three segments of the marine transportation industry.

Our River Business, with 679 barges (of which 24 are under lease) and 34 pushboats as of March 31, 2016, is the largest owner and operator of river barges and pushboats that transport dry bulk and liquid cargos through the Hidrovia Region of South America, a large area with growing agricultural, forest and mineral related exports. This region is crossed by navigable rivers that flow through Argentina, Brazil, Bolivia, Paraguay and Uruguay to ports serviced by ocean export vessels. These countries are estimated to account for approximately 54% of world soybean production in 2016, as compared to 30% in 1995. We also own a barge building facility at Punta Alvear, which is the most modern of its kind in South America, and we own an inland tank barge, Parana Iron, which has been converted into an iron ore transfer and storage unit currently employed with a non-related third party. Finally, we own an additional transshipment unit to transfer cargo between barges.

Our Offshore Supply Business owns and operates vessels that provide critical logistical and transportation services for offshore petroleum exploration and production companies, in the coastal waters of Brazil and the North Sea. As of March 31, 2016, our Offshore Supply Business fleet consisted of thirteen Platform Supply Vessels, or PSVs, and one ROV (Remotely Operated Vehicle) Support Vessel, or RSV. Out of the thirteen PSVs, eight were chartered in Brazil (although one of these vessels was blocked but expected to resume its contract in the forthcoming months), three were laid-up in Brazil and two remained laid-up in the North Sea while being tendered for long term charters with Petrobras. Our RSV UP Coral is chartered in Brazil with Petrobras.

Our Ocean Business, as of March 31, 2016, owned two ocean-going vessels and bareboat chartered two more that we regularly employ in the South American coastal trade where we have preferential rights and customer relationships. The fleet is comprised of two Product Tankers (both of which are under lease) and two container feeder vessels. On January 28, 2016, we sold our Product Tanker Alejandrina.

We are focused on growing our businesses with an efficient and versatile fleet that will allow us to provide an array of transportation services to customers in several different industries. Our business strategy is to leverage our expertise and strong customer relationships to grow the volume, efficiency, and market share in a targeted manner.

Developments in the three months ended March 31, 2016

On January 11, 2016, we signed forbearance agreements through March 31, 2016, with lenders to certain of the Company's subsidiaries in its Offshore Supply Business.

On January 13 and January 14, 2016, we prepaid $1.8 million and $2.5 million of the outstanding balances under our $38.4 million DVB-NIBC loan facility and our $84.0 million DVB-NIBC-ABN loan facility, respectively, pursuant to the forbearance agreements signed with such lenders.

On January 15, 2016, the 30-day grace period to make the $10.0 million interest payment related to outstanding 2021 Notes expired and, concurrently, signed forbearance agreements through March 31, 2016, with IFC and OFID regarding loan facilities related to the Company's River Business.

On January 28, 2016, we entered into a MOA whereby we agreed to sell out Product Tanker Alejandrina for $4.9 million (before commissions). This vessel was subsequently delivered to buyers on March 7, 2016. Concurrently, on that same date, we fully repaid $2.9 million corresponding to the outstanding balance of our senior loan facility with Natixis.

On January 29, 2016, the Company announced that, as a result of its negotiations with advisors representing in excess of 85% of the holders of the Company's 2021 Notes, the Company reached a forbearance agreement through March 31, 2016 (the "Bondholder Forbearance Agreement"). This agreement provides for the appointment of two new, independent directors, as well as but not limited to the formation of a special committee that will explore restructuring options and make recommendations to the Company's Board of Directors. Among such recommendations are the standalone restructuring proposal and/or selling the River Business and the Offshore Supply Business segments.

On February 9, 2016, in accordance with the Bondholder Forbearance Agreement, the Company closed a consent solicitation that resulted holders of $223,348,000 aggregate principal amount of the Notes, representing approximately 99.27% percent of the 2021 Notes outstanding, consenting to the Forbearance Agreement. Accordingly, each holder that submitted a Forbearance Form received $8.954635 per $1,000 in aggregate principal amount of 2021 Notes held.

On February 9, 2016, the Company received notice from NASDAQ indicating that the Company's common stock was not in compliance with NASDAQ's continued listing standard for the NASDAQ Global Select Market requiring a minimum market value of publicly held shares of $5,000,000 for the preceding 30 consecutive business days. Effective February 23, 2016, the Company's stock was listed on the NASDAQ Capital Market, rather than on the NASDAQ Global Select Market. By transferring to the NASDAQ Capital Market, the Company regained compliance with the continued listing standard for the minimum required market value of its publicly held shares. Also in connection with the Company's move to the NASDAQ Capital Market, NASDAQ has extended the period during which the Company must come into compliance with the minimum bid price per share requirement through August 22, 2016. If at any time during that period, the closing bid price of the Company's common stock is at least $1.00 per share for a minimum of ten consecutive business days, compliance will be regained and the matter will be closed. Ultrapetrol intends to regain compliance with this continued listing standard by bringing the share price back to at least $1.00 within the prescribed timeframe and will consider a range of available options to ensure full compliance with the continued listing standards of the NASDAQ Capital Market.

On February 11, 2016, Mr. Barry W. Ridings and Mr. John C. Wobensmith joined the Company's Board of Directors, pursuant to the Bondholder Forbearance Agreement. As a result of these appointments, the Board's membership increased to seven and the Special Committee was formed. The Special Committee shall, among other things, explore and make recommendations to the Board of Directors of the Company in connection with a potential restructuring of the Company.

Recent developments

On April 5, 2016, we announced that we reached an agreement with our secured lenders to extend the existing forbearance agreements through April 30, 2016.

On May 10, 2016, we announced that we reached an agreement with our secured lenders to extend the existing forbearance agreements through May 31, 2016.

Factors Affecting Our Results of Operations

We organize our business and evaluate performance by the following business segments: the River Business, the Offshore Supply Business and the Ocean Business. The accounting policies of the reportable segments are the same as those for the unaudited condensed consolidated financial statements. We do not have significant inter-segment transactions.

Revenues

In our River Business, we currently contract for the carriage of cargoes, mostly under contracts of affreightment, or COAs. Most of these COAs currently provide for adjustments to the freight rate based on changes in the price of fuel. When transporting containers or vehicles, we charge our clients on a per-trip per unit basis. In addition, we derive revenues from the sale of new barges built at our Punta Alvear yard to third parties except for the sale of 24 barges to a third party which are then leased back to us. In that case, neither net revenues nor manufacturing expenses are recognized and the net result from the sale of those barges is deferred in time throughout the term of the lease. Finally, under our transshipment service agreement, we will recognize revenues per ton loaded to the oceangoing vessel.

In our Offshore Supply Business, we contract a substantial portion of our capacity under time charters to charterers in Brazil. We may decide to employ our vessels in the North Sea spot and/or term market or in any other markets such as West Africa or anywhere in the world.

In our Ocean Business, we currently contract our tanker vessels on a time charter basis. We sell space on our container feeder vessels on a per Twenty Foot-Equivalent Unit ("TEU") basis which is very similar to a COA basis as far as recording of revenues and voyage expenses. Some of the differences between time charters and COAs are summarized below.

Our ships on time charters generate both lower revenues and lower expenses for us than those under COAs. At comparable price levels both time charters and COAs result in approximately the same operating income, although the operating margin as a percentage of revenues may differ significantly.

Time charter revenues accounted for 47% of the total revenues derived from transportation services in the first three months of 2016 and COA revenues accounted for 53%. With respect to COA revenues derived from transportation service in the first three months of 2016, 98% were in respect of repetitive voyages for our regular customers and 2% were in respect of single voyages for occasional customers.

Our container vessels are paid on a rate based on each container shipped and is expressed in dollars per TEU. By comparison, these vessels' results are expressed similar to those vessels operating under a COA.

In our River Business, demand for our cargo carrying services is driven by agricultural, mining and petroleum related activities in the Hidrovia Region. Droughts and other adverse weather conditions, such as floods, could result in a decline in production of the agricultural products we transport, which would likely result in a reduction in demand for our services. Further, most of the operations in our River Business occur on the Parana and Paraguay Rivers and any changes adversely affecting navigability of either of these rivers, such as low water levels, could reduce or limit our ability to effectively transport cargo on the rivers.

In our Offshore Supply Business, we currently have our RSV and eight of our PSVs operating under long-term charters with Petrobras (one of which is currently blocked) in Brazil. Three of our remaining vessels are currently laid-up in Brazil and two in the North Sea. We are exploring alternative courses of action for these vessels, including negotiations with Petrobras. Further early termination or blockage of our time charter contracts with Petrobras may result in our PSVs or RSV being laid up for an extended period of time which could have a material adverse effect on our financial condition and results of operations. Petrobras' current situation may result in it having to cut back on its capital expenditure plans even further. Such reduction could adversely affect the amount of exploration and production, which in turn could negatively affect our PSV and RSV operations in Brazil and our results of operations. In that regard, Petrobras announced that more than 80% of its 2015-2019 investment plan was assigned to exploration and production activities and that the investments will be focused on deep-water production with fewer expenses in exploratory activity. Onshore and shallow-water blocks are no longer on the Petrobras' radar, unlike what happened until 2015, when it started to review its portfolio given the cash restriction amid the industry's crisis.

We believe that Petrobras' capital expenditure plans will nevertheless provide significant opportunities within the Brazilian PSV market, particularly for companies that own or are constructing Brazilian-built vessels and we intend to actively pursue the further expansion of our PSV operations in Brazil, evaluating the construction of additional PSVs within Brazil and identifying opportunities to utilize the preferential rights provided by our current Brazilian-built PSVs and any future PSVs we may construct. We may decide to employ our vessels in the North Sea spot and/or term market or in any other markets such as West Africa or anywhere in the world.

In our Ocean Business, we employed a significant part of our ocean fleet on time charter to different customers during the first three months of 2016.

Expenses

Our operating expenses generally include the cost of all vessel management, crewing, spares and stores, insurance, lubricants, repairs and maintenance. Generally, the most significant of these expenses are repairs and maintenance, wages paid to marine personnel and marine insurance costs.

In our River Business, our voyage expenses include port expenses and bunkers as well as charter hire paid to third parties.

In our Offshore Supply Business, voyage expenses include offshore and brokerage commissions paid by us to third parties, which provide brokerage services, and bunker costs incurred when our vessels are repositioned between the North Sea and Brazil, which are fully covered by us.

In our Ocean Business, through our container feeder operation, our operating expenses include bunker costs which are fully covered by us, port expenses, Terminal Handling Costs, or THC, incurred in the regular operation of our container feeder service, and agency fees paid by us to third parties. It also includes container leasing, storage and insurance expense.

Through our River Business, we own a repair facility for our river fleet at Pueblo Esther, Argentina, where we operate one floating dry dock, a shipyard for building barges and other vessels in Punta Alvear, Argentina, land for the construction of two terminals in Argentina, one grain loading terminal and 50% of a second terminal in Paraguay. UABL also rents offices in Asuncion, Paraguay and Buenos Aires, Argentina.

Through our Offshore Supply Business, we hold a lease for office and warehouse space in Rio de Janeiro, Brazil. In addition, through Ravenscroft, we own a building located at 3251 Ponce de Leon Boulevard, Coral Gables, Florida, United States. We also hold subleases to additional office space at Avenida Leandro N. Alem 986, Capital Federal, Buenos Aires, Argentina, and rent an office in Aberdeen, Scotland.

Foreign Currency Transactions

Our exchange rate risk arises in the ordinary course of our business primarily from our foreign currency expenses and revenues. We are also exposed to exchange rate risk on the portion of our balances denominated in currencies other than the U.S. dollar, such as tax credits in various tax jurisdictions in South America.

During the first three months of 2016, 94% of our revenues were denominated in U.S. dollars and 6% of our revenues were denominated and collected in Brazilian reais. However, 44% of our total revenues were denominated in U.S. dollars but collected in Argentine pesos, Brazilian reais and Paraguayan guaranies. During the first three months of 2016 significant amounts of our expenses were denominated in U.S. dollars and 49% of our total out of pocket operating expenses were paid in Argentine pesos, Brazilian reais and Paraguayan guaranies.

Our operating results, which we report in U.S. dollars, may be affected by fluctuations in the exchange rate between the U.S. dollar and other currencies. For accounting purposes, we use U.S. dollars as our functional currency. Therefore, revenue and expense accounts are translated into U.S. dollars at the average exchange rate prevailing during the month of each transaction. The Argentine peso devalued approximately 67% on average against to the U.S. dollar when comparing the average exchange rate in the three month period ended March 31, 2016, to the average exchange rate of the same period of 2015. Similarly, the Brazilian real devalued approximately 37% against the U.S. dollar when comparing the average exchange rate in the three month period ended March 31, 2016, to the average exchange rate of the same period of 2015.

Foreign currency exchange gains (losses), net are included as a component of other expenses, net in our unaudited condensed consolidated financial statements.

Inflation, Interest Rates and Fuel Price Increases

Inflationary pressures in the South American countries in which we operate may not be compensated by equivalent adjustments in the rate of exchange between the U.S. dollar and the local currencies. Additionally, revaluations of the local currencies against the U.S. dollar, even in the absence of inflation, have an incremental effect on the portion of our operating expenses incurred in those local currencies measured in U.S. dollars. Please see Foreign Currency Transactions.

If the London market for dollar loans between banks were to become volatile the spread between published LIBOR and the lending rates actually charged to banks in the London interbank market would widen. Interest in most loan agreements in our industry has been based on published LIBOR rates. After the financial crisis which began in 2008, however, lenders have insisted on provisions that entitle them, in their discretion, to replace published LIBOR as the base for the interest calculation with their own cost-of-funds rate. Since then, we have been required to include similar provisions in some of our financings. If our lenders were to use the interest rate on their costs of funds instead of LIBOR in connection with such provisions, our lending costs could increase significantly, which would have an adverse effect on our profitability, earnings and cash flow.

As of March 31, 2016, we had $48.9 million of LIBOR-based variable rate borrowings under our credit facilities with International Finance Corporation, or IFC, and The OPEC Fund for International Development, or OFID, subject to an interest rate collar agreement, designated as cash flow hedge, to fix the interest rate of these borrowings within a floor of 1.69% and a cap of 5.0% per annum until June 2016.

As of March 31, 2016, the Company had $13.7 million of LIBOR-based variable rate borrowings under its credit facility with DVB, NIBC and ABN Amro subject to interest rate swaps, as economic hedges, to fix the interest rate of these borrowings between October 2012 and October 2016 at a weighted average cost of debt of 0.9% per annum, excluding margin. In addition, the Company had $13.6 million of LIBOR-based variable rate borrowings under the same facility subject to interest rate swaps designated as cash flow hedge for accounting purposes, to fix the interest rate of these borrowings between March 2014 and September 2016 at a weighted average cost of debt of 1.2% per annum, excluding margin. Finally, the Company had $14.6 million of LIBOR-based variable rate borrowings under the same facility subject to interest rate swaps designated as cash flow hedge for accounting purposes, to fix the interest rate of these borrowings between October 2014 and October 2016 at a weighted average cost of debt of 1.22% per annum, excluding margin.

As of March 31, 2016, the Company had $6.0 million of LIBOR-based variable rate borrowings under its credit facility with DVB and Banco Security, subject to an interest rate swap, designated as cash flow hedge for accounting purposes, to fix the interest rate of these borrowings at a weighted average interest rate of 3.39% per annum.

Additionally, as of March 31, 2016, the Company had variable rate debt (due 2015 through 2021) totaling $120.9 million. These debts call for the Company to pay interest based on LIBOR plus a 120-400 basis points margin range. Some of our existing financing agreements, within the terms and conditions contained in the relevant loan agreement, used a cost-of-funds rate in replacement of LIBOR. The interest rates generally reset either quarterly or semi-annually. As of March 31, 2016, the weighted average interest rate on these borrowings was 3.5%, including margin.

A 1% increase in LIBOR or a 1% increase in the cost-of-funds used as base rate by some of our lenders would translate to a $1.2 million increase in our interest expense per year, which would adversely affect our earnings and financing cash flow.

We have negotiated fuel price adjustment clauses in most of our contracts in the River Business. However, we may experience temporary misalignments between the adjustment of fuel in our freight contracts and our fuel purchase agreements (either positive or negative) because one may adjust prices on a monthly basis while the other adjusts prices weekly. Similarly, in some of our trades the adjustment formula may not be one hundred percent effective to protect us against fuel price fluctuations. Additionally, as our re-engining and repowering program progresses and more pushboats in our fleet start to consume heavy fuel (as opposed to diesel oil), the adjustment formulas in our transportation contracts will gradually cease to reflect the change in our fuel costs, resulting in gradually larger misalignments between such adjustments and our fuel purchases.

In the Offshore Supply Business, the risk of variation of fuel prices under the vessels' current employment is generally borne by the charterers, since they are generally responsible for the supply and cost of fuel. During their positioning voyage from their delivery shipyard up to their area of operation and if and when a vessel is off-hire for technical or commercial reasons, fuel consumption will be for owners' account.

In our Ocean Business, for those vessels that operate under time charters, increases on bunker (fuel oil) costs do not have a material effect on the results of those vessels which are time chartered to third parties, since it is the charterers' responsibility to pay for fuel. When our ocean vessels are employed under COAs, however, freight rates for voyage charters are fixed on a per ton basis including bunker fuel for our account, which is calculated for the voyage at an assumed bunker cost. A rise or fall in bunker prices may have a temporary negative or positive effect on results as the case may be as the actual cost of fuel purchased for the performance of a particular voyage or COA may be higher or lower than the price considered when calculating the freight for that particular voyage. Generally, in the long term, freight rates in the market should be sensitive to variations in the price of fuel. However, a sharp rise in bunker prices may have a temporary negative effect on results since freights generally adjust only after prices have settled at a higher level.

In our container feeder service, the operation of our two container feeder vessels, Asturiano and Argentino, involves some degree of fuel price fluctuation risk since we have to pay for the cost of bunkers and although we can adjust our rates per TEU in connection with these variations, we may not always be able to, or may even be unable to, pass these variations to our customers (either fully or partially) in the future, which could have an adverse effect on our results of operations.

Seasonality

Each of our businesses has seasonal aspects, which affect their revenues on a quarterly basis. The high season for our River Business is generally between the months of March and September, in connection with the South American harvest and higher river levels. However, growth in the soy pellet manufacturing, minerals and forest industries may help offset some of this seasonality. The Offshore Supply Business operates year-round, particularly off the coast of Brazil, although weather conditions in the North Sea may reduce activity from December to February. In the Ocean Business, we employ our Product Tankers on time charters so there is no seasonality effect, while our container feeder service experiences a somewhat slower season during the first quarter due to the congestion at the main discharge terminal in Patagonia in connection with the cruise tourist season.

Legal Proceedings

On September 21, 2005, the local Customs Authority of Ciudad del Este, Paraguay issued a finding concerning certain UABL entities referred to three matters in respect of certain operations of our River Business for the prior three-year period: (i) that UABL owed taxes to that authority in the amount of $2.2 million, (ii) a fine for non-payment of the taxes in the same amount, and (iii) that the tax base used by UABL entities to calculate the applicable withholding tax that UABL had used to calculate taxes paid in said period. The referred amounts exclude legal costs and interests which in Paraguay are substantial. The first two issues were disregarded by the Tax and Administrative Court on November 24, 2006. Nevertheless, the third issue continued. On September 22, 2010, the Paraguayan Supreme Court revoked the March 26, 2009 ruling of the Tax and Administrative Court -which had decided we were not liable- and confirmed the decision of the Paraguayan undersecretary for taxation which condemned UABL Paraguay S.A. to pay approximately $0.6 million non-withheld taxes, $0.7 million in fines and $1.3 million in accrued due interests. This matter was settled in a signed agreement with the Tax Authorities on October 14, 2010, and UABL paid the total amount of $1.3 million in full and final settlement of the claim and agreed to drop the appeal we had filed against to the Supreme Court. However, in parallel with this ruling the Office of the Treasury Attorney initiated an action in respect of the first two issues concerned in this litigation which had been terminated on November 24, 2006 to review certain formal aspects over which a decision of the Court is still pending. Aside from the mentioned procedures, the Customs Authorities of Paraguay have reopened the proceedings against UABL S.A., UABL Paraguay S.A. and Yataity S.A. in connection with the possible reopening of the case pending a decision of the reopening of the case in court, which is currently on hold waiting for the Court's resolution. We have been advised by UABL's counsel in the case that there is only a remote possibility that the Paraguayan Courts would find UABL liable for any of these taxes or fines still in dispute or that the final outcome of these proceedings could have a material adverse effect on the Company.

These administrative proceedings were commenced on April 7, 2009, by the Paraguayan Customs in Asuncion against UABL Paraguay S.A. alleging infringement of Customs regulations due to lack of submission of import clearance documents in Paraguay for bunkers purchased between January 9, 2007 and December 23, 2008, from YPF S.A. in Argentina, and between years 2003 and 2006. The total amount owed according to Customs in Asuncion is up to Gs. 12,056,635,704 (approximately $2.1 million), that is to say twice the value of the purchased bunkers (Gs. 6,028,317,852). The claim was rejected by the competent Court. This ruling was appealed and applied for annulment and is now in procedure at the Supreme Court of Justice of Paraguay pending resolution. Our local counsel is of the opinion that, due to the court's state-favored conservative criteria, there are fifty percent chances that these proceedings will have a material adverse financial impact on the consolidated financial position or result of operations of the Company.

Oceanpar S.A. was notified of this investigation on June 17, 2011. The matter under investigation is whether UABL Paraguay S.A. paid all import taxes and duties corresponding to the re-importation of barges subject to conversion in foreign yards. Customs imposed a fine of Gs. 2,791,514,822 (approximately $0.6 million) and judicial proceedings have been commenced where a final decision from the Supreme Court of Justice of Paraguay is still pending. Our local counsel has advised that, due to the conservative criteria of the courts in favor of the state, there are fifty percent chances that these proceedings will have a material adverse impact on the consolidated financial position or result of operations of the Company.

These are administrative proceedings commenced by the Paraguayan Tax Authorities on December 15, 2011 against UABL Paraguay S.A. due to an alleged improper use of some fiscal credit. The aforementioned tax authorities suggested some rectifications to be made and also informed that UABL Paraguay S.A. may owe taxes due to differences in the rate applied to certain fiscal remittance incomes related to the operation of some barges under leasing. The potential amount in dispute has not been calculated yet but it should not exceed approximately $3.0 million. Our local counsel has advised that there is only a remote chance that these proceedings, when ultimately resolved by a judicial court, will have a material adverse impact on the consolidated financial position or result of operations of the Company.

On June 24, 2009, Ultrapetrol S.A. (hereinafter "UPSA") requested to the Argentine Secretary of Industry, an authorization to re-export some unused steel plates that had been temporarily imported for industrialized conversion by means of vessels repairs that were not finally industrialized due to cancellations of the repairs that some shipping companies had ordered. The total weight of those steel plates was 473 tons and their import value was approximately $0.4 million. In the event that steel plates cannot be exported, payable import duties and Customs' charges would amount to approximately $0.9 million, however in case of payment UPSA would have offsetting-tax credits amounting to approximately $0.3 million. We have been advised by local counsel that there is a positive prospect of obtaining the requested authorization for re-exporting the steel plates and we do not expect the resolution of these administrative proceedings to have a material adverse impact on the consolidated financial position or result of operations of the Company.

On May 05, 2015, UPSA took notice of administrative proceedings commenced by Argentine Customs Authorities on November 04, 2014, due to an alleged infringement of Customs regulations on temporary import regime. The Customs' fine applicable in such a case could vary between $0.1 million and $2.5 million, with an additional amount of $0.1 million regarding additional VAT and income taxes, and the charges for import duties could reach $0.5 million. The chances of success will depend on the outcome of the proceedings before the Argentine Secretary of Industry, but even if UPSA is found liable, the fine will probably be imposed around the minimum amount.

On May 9, 2014, the Rio de Janeiro State Treasury Office commenced administrative proceedings against UP Offshore Apoio Marítimo Ltda. alleging infringement of tax regulations due to lack of payment of ICMS tax related to the temporary import of the vessel UP Pearl . The said authorities determined the corresponding assessment in the amount of R$ 768,096.34 (approximately $0.2 million), plus interest. A decision is now pending over the non-application of the tax to the vessel's import. Our local counsel has advised that there is a remote chance that these proceedings, when ultimately resolved by a judicial court, will have a material adverse impact on the consolidated financial position or result of operations of the Company.

These proceedings were commenced by the National Customs Authority of Paraguay on a supposed Income Tax evasion regarding some freight services rendered by UABL S.A., UABL Paraguay S.A. and Yataity S.A. from Tres Fronteras Terminal and other ports in Paraguay during 2000 and 2005. Those three entities were charged by said administrative authority for owing the alleged non-paid taxes plus same amount in fines. The total amount was, after some discussions, finally determined by the Customs National Authority in approximately $0.3 million plus a fine in the same amount. This resolution has been judicially argued by UABL entities and is now pending resolution by the Supreme Court of Justice of Paraguay. Our local counsel is of the opinion that, due to the court's state-favored conservative criteria, there are fifty percent chances that these proceedings will have a material adverse financial impact on the consolidated financial position or result of operations of the Company.

Claims have been made against Ultrapetrol by companies in the Trafigura Group under a series of contracts made in 2011-13 for construction of river barges. The claims are for alleged defects in the construction of the barges, which are (with some minor exceptions) denied by Ultrapetrol S.A.

Solicitors representing Trafigura have commenced arbitration proceedings against Ultrapetrol S.A. and arbitrators were appointed in September/October 2015. Claim Submissions were served on February 2, 2016. The total claims amount to approximately $15.5 million, excluding interest and costs. The opinion of our local counsel is reasonably optimistic that these proceedings will not have a material adverse financial impact on the consolidated financial position or results of the Company.

This case involves cross-claims under a long-term bareboat charter on 24 barges, dated April 25, 2012, between Touax Hydrovia Corp. ("Touax"), as Owner, Corporación de Navegación Mundial S.A. ("Cornamusa"), as Charterer, and Ultrapetrol (Bahamas) Limited ("Ultrapetrol"), as guarantor. Touax had the obligation to register the barges in a jurisdiction which would permit Cornamusa, through a Paraguayan subsidiary, to operate the barges on the Parana-Paraguay River System. Due to a change in Paraguayan legislation, Touax was no longer able to register the last 7 barges under its flag after the expiration of their provisional certificates and remain without any register. Therefore, these barges have been out of service and put off-hire by Cornamusa. Touax commenced an arbitration claim in New York against Cornamusa related to the payment of hire (roughly $1.3 million at the present) which was suspended on December 2014. Likewise, as Cornamusa considers Touax to be in breach of the provision which obligated Touax to ensure that its registration of the barges would not impede Cornamusa's ability to trade them on the River system, it has therefore submitted a counterclaim in New York arbitration against Touax for breach. This counterclaim involves losses for insurance during the period of layup (following expiration of the provisional certificates) and transportation/mooring costs. Additionally, Touax executives admitted that they had recently abandoned their efforts to resolve the flagging issue. Consequently, Cornamusa terminated the contract with respect to the 7 barges in dispute. Touax may increase its claim, but that has not yet occurred. In addition, the application for $6.0 million security filed by Touax and opposed by Cornamusa and Ultrapetrol has been recently denied for the time being.

Our local counsel indicated that Cornamusa has the better argument supported by the contract terms and has classified the outcome of this contingency as uncertain.

On March 6, 2015, the Rio de Janeiro State Treasury Office commenced administrative proceedings against UP Offshore Apoio Marítimo Ltda. aiming to collect Service Tax (ISS) supposedly due on values related to bareboat charter agreements for the period August 2010 to December 2014 which were determined in the amount of approximately $4.5 million. On April 1, 2015, the company presented its administrative defense. At the same time, the right of the company not to pay this tax is being discussed in court and a decision is still pending. Our local counsel has advised that there are strong arguments to support our right and a remote chance to get an unfavorable decision.

Various other legal, labor and tax proceedings involving us may arise from time to time in the ordinary course of business. However, we are not presently involved in any other legal, labor or tax proceedings that are reasonably possible to have a material adverse effect on us.

Results of Operations

Three months ended March 31, 2016, compared to three months ended March 31, 2015.

The following table sets forth certain unaudited historical statements of operations data for the periods indicated above derived from our unaudited condensed consolidated statements of income expressed in thousands of dollars:

Revenues. Total revenues from our River Business decreased 12% from $38.9 million in the three months ended March 31, 2015, to $34.2 million in the same period of 2016. This $4.7 million decrease resulted mainly from a $3.4 million decrease in revenues from our river operations mostly related to lower average freight rates and a $1.2 million decrease related to our Parana Iron on account of a 32% reduction in transshipped volume.

Total revenues from our Offshore Supply Business decreased 31% from $29.6 million in the three months ended March 31, 2015, to $20.3 million in the same period of 2016. This $9.3 million decrease is primarily attributable to a combined $10.5 million decrease related to the contract cancellation by Petrobras in September 2015 of our UP Amber, UP Pearl and UP Esmeralda and the blocking of our UP Turquoise, a $1.2 million decrease in revenues of our UP Safira related to higher offhire days as compared to the same period last year, a $1.0 million decrease in revenues of our UP Agate and UP Jasper related to their lay-up in the North Sea and a $0.8 million decrease in revenues of the rest of our PSV fleet related to an average 37% devaluation of the Brazilian real between the first quarter of 2015 and the same period of 2016; partially offset by a $4.2 million increase in revenues of our UP Opal and our RSV UP Coral, which entered into long-term charters with Petrobras on January 25 and August 5, 2015 respectively.

Total revenues from our Ocean Business decreased $3.5 million, from $16.1 million in the three months ended March 31, 2015, to $12.6 million in the same period of 2016, or 22%. This decrease is mainly attributable to $2.6 million decrease in revenues of our Amadeo, which was sold and delivered to buyers on May 29, 2015, a $0.6 million decrease related to our Argentino due to slower vessel rotation and a $0.3 million decrease related to our Austral due to an increase in offhire days in the first quarter of 2016 as compared to the same period last year.

Voyage and manufacturing expenses. In the three months ended March 31, 2016, voyage expenses of our River Business were $11.9 million, as compared to $16.6 million for the same period of 2015, a decrease of $4.7 million, or 28%. This decrease is mainly attributable to a $2.9 million decrease in fuel expenses related to lower fuel prices and to a $1.7 million decrease in voyage expenses derived from the full impact of the new operational model implemented during 2015.

In the three months ended March 31, 2016, voyage expenses of our Offshore Supply Business were $1.8 million, as compared to $1.6 million in the same period of 2015. This increase is primarily attributable to a $1.1 million increase related to the payment to a contractor of our RSV UP Coral; partially offset by a $0.8 million decrease related to the positioning costs of UP Opal to Brazil in the first quarter of 2015 and a $0.2 million combined decrease in the rest of our PSV fleet mainly related to the devaluation of the Brazilian real between the first quarter of 2015 and the same period of 2016.

In the three months ended March 31, 2016, voyage expenses of our Ocean Business were $5.4 million, as compared to $5.0 million during the same period of 2015, an increase of $0.4 million, or 8%. This increase is primarily attributable to the bareboat hire of our Mentor, which entered into operation on July 1, 2015.

Running costs. In the three months ended March 31, 2016, running costs of our River Business were $10.2 million, as compared to $13.9 million in the same period of 2015, a decrease of $3.7 million, or 27%. This decrease is mainly attributable to a $3.1 million decrease in crew expenses on account of a reduced headcount, a $0.7 million decrease in repairs, spares and maintenance costs of our pushboat fleet.

In the three months ended March 31, 2016, running costs of our Offshore Supply Business were $7.1 million, as compared to $12.4 million in the same period of 2015, a decrease of $5.3 million, or 43%. This decrease in running costs is mainly attributable to a combined $2.5 million decrease related to the contract cancellation by Petrobras in September 2015 of our UP Amber, UP Pearl and UP Esmeralda and the blocking of our UP Turquoise, a $1.8 million decrease in most of our PSV fleet mostly related to the devaluation of the Brazilian real, and a $1.2 million combined decrease of our UP Agate and UP Jasper related to their lay up in the North Sea; partially offset by a $0.3 million increase related to our RSV UP Coral, as compared to its operation as PSV during the first quarter of 2015.

In the three months ended March 31, 2016, running costs of our Ocean Business were $5.7 million, as compared to $8.1 million in the same period of 2015, a decrease of $2.4 million, or 30%. This decrease resulted mainly from a $3.4 million combined decrease of our Amadeo, Miranda I and Alejandrina, which were sold and delivered to buyers on May 29, 2015, July 16, 2015, and March 7, 2016, respectively, and a $0.1 million decrease in crew costs related to our container feeder vessels primarily driven by the devaluation of the Argentine peso; partially offset by a $1.2 million increase related to our Mentor, which entered operation on July 1, 2015.

Amortization of drydocking and intangible assets. Amortization of drydocks and intangible assets in the three months ended March 31, 2016, were $2.4 million, as compared to $2.0 million for the same period of 2015, an increase of $0.4 million, or 19%. This increase is primarily attributable to a $0.2 million increased level of amortization of drydocking of some of our pushboats in our River Business and to a $0.1 million increased level of amortization of drydock of our UP Turquoise on account of its drydock during the fourth quarter of 2015 in our Offshore Supply Business.

Depreciation of vessels and equipment. Depreciation of vessels and equipment for the three months ended March 31, 2016, was $9.9 million, as compared to $10.5 million in the same period of 2015. This $0.6 million decrease is mainly attributable to a $0.4 million decrease related to our barge fleet and a $0.3 million decrease of our Amadeo, which was sold and delivered to buyers on July 16, 2015; partially offset by a $0.1 million increase related to our UP Coral upon its conversion into an RSV.

Administrative and commercial expenses. Administrative and commercial expenses were $10.0 million in the three months ended March 31, 2016, as compared to $9.7 million in the same period of 2015. This $0.3 million increase is primarily attributable to a $0.2 million increase in debt bank taxes and a $0.1 million increase in board of director expenses mainly as a result of the two new members appointed during the first quarter of 2016.

Other operating income, net. Other operating income was $1.3 million in the three months ended March 31, 2016, as compared to nil in the same period of 2015. This increase is mainly attributable to loss of hire compensations related to our UP Safira, Asturiano and Argentino.

Operating profit (loss). Operating profit for the three months ended March 31, 2016, was $4.0 million, a decrease of $0.8 million from an operating profit of $4.8 million for the same period of 2015. This decrease is mainly attributable to a $3.8 million decrease in operating profit of our Offshore Supply Business from an operating profit of $8.1 million in the first quarter of 2015 to an operating profit of $4.3 million in the same period of 2016 mainly associated to the contract cancellation by Petrobras in September 2015 of our UP Amber, UP Pearl and UP Esmeralda and the blocking of our UP Turquoise; to a $0.7 million decrease in operating profit of our Ocean Business from zero in the first quarter of 2015 to an operating loss of $0.7 million in the same period of 2016 mainly associated to our Amadeo and Miranda I, sold in the second and third quarters of 2015, respectively, and a slower rotation of our container feeder vessels; partially offset by a $3.7 million increase in our River Business operating profit from a $3.3 million operating loss in the first quarter of 2015 to a $0.4 million operating profit in the same period of 2016 driven mainly by the new operational model based on a point to point convoys system instead of a hub and spoke system previously used and a reduced headcount.

Financial expense. Financial expense increased by $8.1 million to $16.4 million in the three months ended March 31, 2016, as compared to $8.3 million in the same period of 2015. This variation is mostly explained by $7.6 million debt renegotiation costs incurred during the first quarter of 2016, by a $0.3 million increase in interest expenses on account of a higher weighted average cost of debt and by a $0.2 million increase in debt issuance costs and other financial expenses.

Foreign currency exchange (losses) gains, net. Foreign currency exchange losses for the three months ended March 31, 2016, was $1.9 million, virtually unchanged as compared to the same period of 2015.

Income taxes (expenses). The income tax expense for the three months ended March 31, 2016, was $2.8 million, compared to a $0.3 million benefit in the same period of 2015. This $3.1 million variation is mainly attributable to a joint $3.4 million charge attributable to a deferred income tax liability related to the accelerated depreciation scheme in Brazil and decrease in the exchange variance provision in our Offshore Supply Business and a $0.6 million charge attributable to lower pretax losses in our Argentinean subsidiaries operating in the River and Ocean Businesses; partially offset by a $0.8 million decrease attributable to a lower pretax income in Brazil in our Offshore Supply Business.

Liquidity and Capital Resources

We are a holding company and operate in a capital-intensive industry requiring substantial ongoing investments in revenue producing assets. Our subsidiaries have historically funded their vessel acquisitions through a combination of debt, shareholder loans, cash flow from operations and equity contributions.

The ability of our subsidiaries to make distributions to us may be restricted by, among other things, restrictions under our credit facilities and applicable laws of the jurisdictions of their incorporation or organization.

Our internally generated cash flow is directly related to our business and the market sectors in which we operate. Should the markets in which we operate deteriorate or worsen, or should we experience poor results in our operations, cash flow from operations may be reduced. Due to current market conditions such as historically low commodity prices compounded with overcapacity in our River Business, as well as overcapacity in the Brazilian offshore supply marine market, which translated into contract cancellations in September 2015 and requests for time charter rate reductions on our PSV and RSV fleet, our cash generating capacity has been, and could continue to be, significantly impaired. These impacts have not permitted the regular service of our interest payments on our debt obligations.

We do not expect that cash on hand and cash expected to be generated from operations will be sufficient to repay our debt, which could result in our debt being accelerated by our lenders. In such a scenario, we would have to seek to access the capital markets to fund the mandatory payments and, if we are not successful in accessing the capital markets at sufficient levels, our lenders could foreclose their liens, which could impair our ability to conduct our business and continue as a going concern. Moreover, in connection with any additional amendments to our debt agreements that we obtain, or if we enter into any future credit agreements or debt instruments, our lenders may impose additional operating and financial restrictions on us. These restrictions may further restrict our ability to, among other things, fund our operations or capital needs, make acquisitions or pursue available business opportunities, which in turn may adversely affect our financial condition. In addition, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, require the pledging of additional collateral, accelerate the amortization schedule for our indebtedness or increase the margin and lending rates they charge us on our outstanding indebtedness.

Alternatively to debt capital markets, we may seek to raise additional cash through capital increase from Southern Cross, our major shareholder, or through the sale of certain of the Company's assets/segments.

Nevertheless, at March 31, 2016, we believe that cash on hand and internally generated cash flow will be sufficient to fund our operations (operating costs, working capital requirements and scheduled capital expenditures but not debt principal and service payments) for the next twelve months.

At March 31, 2016, we had aggregate indebtedness of $455.0 million, consisting of $225.0 million aggregate principal amount of our 2021 Notes, indebtedness of our subsidiary UP Offshore Apoio Maritimo Ltda. under a senior loan facility with DVB Bank AG, or DVB, of $4.2 million and $12.2 million under a loan facility with BNDES, indebtedness of our subsidiary UP Offshore (Bahamas) Ltd. of $55.6 million under three senior loan facilities with DVB and $24.2 million under an additional senior loan agreement with DVB and Banco Security as co-lenders, indebtedness of our subsidiary Ingatestone Holdings Inc. of $42.0 million under a senior loan facility with DVB, NIBC and ABN Amro as co-lenders, indebtedness of our subsidiary Linford Trading Inc. of $26.9 million under a senior loan facility with DVB and NIBC, indebtedness of our subsidiaries UABL Barges (Panama) Inc., Marine Financial Investment Corp., Eastham Barges Inc. and UABL Paraguay S.A. of $39.1 million in the aggregate under two senior loan facilities with IFC, indebtedness of our subsidiary UABL Paraguay S.A. of $9.8 million under a senior loan facility with OFID, and indebtedness of our subsidiaries UABL Paraguay S.A. and Riverpar S.A. of $16.2 million under a senior loan facility with IFC and OFID as co-lenders. In addition, as of March 31, 2016, we had accrued interest of $17.2 million.

At March 31, 2016, we had cash and cash equivalents on hand of $35.4 million plus $6.5 million in current restricted cash, making a total of $41.9 million.

Events of default under debt agreements

The Company has not made the $10.0 million interest payment due on December 15, 2015, on its 2021 Notes which constitutes an event of default under the Notes and the remaining credit agreements since they contain cross-default provisions. The Company has entered into forbearance agreements with most of its lenders with respect to this event of default which expire at the earlier of May 31, 2016, or the occurrence of certain events specified in the agreements. The lenders have agreed, for the duration of these agreements, not to accelerate their loans, take any enforcement actions or exercise any remedies with respect to defaults resulting from the nonpayment by the Company of its interest payment under the Notes, and to work with the Company in negotiating a sustainable financial structure. Nevertheless, the Company has paid in full principal and interests as scheduled in our loan agreements until the signing of the first forbearance agreements.

The forbearance agreement also provided for the formation of a special committee that will explore restructuring options and make recommendations to the Company's Board of Directors. Among such recommendations are the standalone restructuring proposal and/or selling the River Business and Offshore Supply Business segments.

In addition, such forbearance agreements waive compliance with all financial covenants which may not be in compliance, if any, as of March 31, 2016.

Although the Company currently has sufficient liquidity to make the outstanding interest payments, the Company believes it is prudent not to do so at this time as negotiations continue with representatives of holders of the Notes and with the Company's other secured lenders to obtain debt maturity extensions or restructuring of the debt agreements, including the Notes and the credit facilities and loan agreements, as well as extensions on the current forbearance agreements.

We cannot guarantee that we will be able to obtain our lenders' consent to subsequently extend the current forbearance agreements or that our efforts to extend the maturity of or restructure our debt agreements will be successful. If we fail to remedy or obtain a waiver of the event of defaults our lenders may accelerate our indebtedness under the relevant debt agreement, which could trigger the cross-acceleration or cross-default provisions contained in our other debt agreements. If our indebtedness is accelerated, it will be very difficult in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels if our lenders foreclose their liens, which could impair our ability to conduct our business. Thus, there is a substantial doubt about the ability of the Company to continue as a going concern and about the recoverability of recorded assets.

The unaudited consolidated financial statements included elsewhere herein have been prepared assuming that the Company will continue as a going concern. Accordingly, the consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets amounts, the amounts and classification of liabilities, or any other adjustments that might result in the event the Company is unable to continue as a going concern.

Operating Activities

In the three months ended March 31, 2016, cash flow used in operations was $1.4 million as compared to cash flow provided by operations of $0.9 million in the same period of 2015. Net loss for the three months ended March 31, 2016, was $17.1 million as compared to $5.1 million in the same period of 2015, an increase of $12.0 million. To determine cash from operations, net (loss) income is adjusted for the effect of certain non-cash items including depreciation and amortization, which are analyzed in detail as follows:

Net (loss) is also adjusted for changes in operating assets and liabilities and expenditure in drydock in order to determine net cash provided by operations:

The negative change in operating assets and liabilities of $4.2 million for the three months ended March 31, 2016, resulted from a $7.1 million increase in accounts receivable, a $6.4 million increase in other receivables and a $0.4 million increase in other assets; partially offset by a $6.7 million increase in other payables, a $2.7 million increase in accounts payable and a $0.2 million increase in customer advances. In addition, cash flow from operating activities decreased by $0.7 million in the three months ended March 31, 2016, due to expenditures in drydock for our Offshore Supply Business.

The negative change in operating assets and liabilities of $6.3 million for the three months ended March 31, 2015, resulted from a $6.2 million increase in accounts receivables, by a $2.4 million increase in operating supplies and prepaid expenses, and by a $0.3 million decrease in customer advances; partially offset by a $1.8 million increase in accounts payable, and by a $0.9 million increase in other assets and liabilities. In addition, cash flow from operating activities decreased by $1.0 million, $0.2 million and $0.1 million in the three months ended March 31, 2015, due to expenditures in drydock for our River, Offshore Supply and Ocean businesses, respectively.

Investing Activities

During the three months ended March 31, 2016, we disbursed $1.1 million in the acquisition of UP Agate's crane, in our Offshore Supply Business; and $0.4 million in the construction of new line and port pushboats and $0.2 million in our IT navigation system, in our River Business.

Nevertheless, during the first quarter of 2016 we invested approximately $3.4 million in the production of tank barges in our Punta Alvear Shipyard which are shown within Operating Supplies and Inventories.

On January 28, 2016, we entered into a MOA whereby we agreed to sell out Product Tanker Alejandrina. This vessel was subsequently delivered to buyers on March 7, 2016, and we received net proceeds of $1.8 million after totally prepaying the $2.9 million balance outstanding with Natixis (included in financing activities) and commissions.

Financing Activities

Cash used in financing activities increased by $4.9 million from $6.2 million in the three months ended March 31, 2015, to $11.1 million in the same period of 2016. This increase is mainly attributable to a $7.6 million debt renegotiation costs paid during the first quarter 2016 and a $7.2 million increase in early repayments of long-term financial debt, including $2.9 million corresponding to the full prepayment of our senior loan facility with Natixis, $2.5 million corresponding to a partial repayment under the senior loan facility with DVB, NIBC and ABN Amro and $1.8 million corresponding to a partial repayment under the senior loan facility with DVB and NIBC; partially offset by a $5.2 million decrease in the scheduled repayments of long-term financial debt pursuant to the forbearance agreements signed with our creditors and $4.8 million provided by other financing activities, which include a decrease in restricted cash.

Future Capital Requirements

Our near-term cash requirements are related primarily to funding operations, funding the construction of barges in our shipyard at Punta Alvear, funding scheduled and unscheduled drydocks and potentially funding the conversion of our PSVs into RSVs. The Company does not anticipate ordering additional vessels in 2016 or realizing any additional capital expenditures other than maintenance capital expenditures.

We estimate that for the remainder of 2016, we will invest approximately $5.6 million in producing tank barges, $2.1 million in our pushboat fleet (including critical spares parts such as engine spares), $1.7 million in our IT Navigation System, $1.7 million the maintenance of our barge fleet and $0.6 million in upgrade works at our Punta Alvear Yard and fleetings, in our River Business. In addition, we currently estimate that we will invest approximately $1.6 million in spare parts for our PSV fleet and $1.8 million in the crane for our UP Agate, in our Offshore Supply Business. Finally, we expect to disburse an aggregate amount of $5.1 million in drydock expenses and $2.0 million in import duties of our Asturiano.

We expect to fund these future capital requirements through cash flow from operations.

We may order additional vessels and or incur other capital expenditures, which are not discussed above or contemplated at this time.

Supplemental Information

The following tables reconcile our Adjusted Consolidated EBITDA to our net cash provided by (used in) for the three months ended March 31, 2016 and 2015:

 

		Three Months Ended March 31,
$(000)		$	2016				2015
Net cash (used in) provided by operating activities		$	(1,435	)		$	903
Net cash provided by (used in) investing activities			2,795				(9,344	)
Net cash (used in) financing activities			(11,123	)			(6,245	)
Net cash (used in) provided by operating activities		$	(1,435	)		$	903
Plus
Adjustments
Increase / decrease in operating assets and liabilities			4,193				6,260
Expenditure for dry docking			742				1,330
Income taxes			2,817				(313	)
Financial expenses			8,753				8,255
Allowance for doubtful accounts			(134	)			--
Yard EBITDA from Touax barge sale			(100	)			(99	)
Other adjustments			(578	)			(1,097	)
Adjusted Consolidated EBITDA		$	14,258			$	15,239

The following tables reconcile our Adjusted Consolidated EBITDA to our segment operating (loss) profit for the three months ended March 31, 2016, and 2015, on a consolidated and a per segment basis:

The use of the term "Adjusted Consolidated EBITDA" in the current filing rather than EBITDA as has been used in previous filings, is responsive to the U.S. Securities and Exchange Commission Release No. 34-47226 wherefrom if the measurement being used excludes "non-cash charges" or other similar concepts other than strictly interest, taxes, depreciation and amortization, or were otherwise to depart from the definition of EBITDA as included in the aforementioned release, it should be called "Adjusted Consolidated EBITDA" rather than EBITDA.

EBITDA as defined in the Notes due 2021 consists of net income (loss) prior to deductions for interest expense and other financial gains and losses related to the financing of the Company, income taxes, depreciation of vessels and equipment and amortization of drydock expense, intangible assets, financial gain (loss) on extinguishment of debt, premium paid for redemption of preferred shares and certain non-cash charges (including for instance losses on write-down of vessels). The calculation of EBITDA as defined in the Notes due 2021 excludes from all items those amounts corresponding to unrestricted subsidiaries under the indenture governing our 8⅞% First Preferred Ship Mortgage Notes due 2021, or the Indenture, from the time of designation as such. We have provided EBITDA as defined in the Notes due 2021 in this report because we use it to and believe it provides useful information to investors to evaluate our ability to incur and service indebtedness and it is a required disclosure to comply with a covenant contained in such Indenture. We do not intend for EBITDA as defined in the Notes due 2021 to represent cash flows from operations, as defined by GAAP (on the date of calculation) and it should not be considered as an alternative to measure our liquidity. The foregoing definitions of EBITDA as defined in the Notes due 2021 may differ from other definitions of EBITDA or Consolidated EBITDA used in the financial covenants of our other credit facilities. These definitions of EBITDA as defined in the Notes due 2021 may not be comparable to similarly titled measures disclosed by other companies. Generally, funds represented by EBITDA as defined in the Notes due 2021 are available for management's discretionary use. EBITDA as defined in the Notes due 2021 has limitations as an analytical tool and should not be considered in isolation, or as a substitute for analysis of our results as reported. These limitations include, among others, the following:

 

ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES   Condensed Consolidated Financial Statements at March 31, 2016

CONTENTS		PAGE
Ÿ    Condensed Consolidated Financial Statements
–    Condensed Consolidated Balance Sheets at March 31, 2016 (unaudited) and December 31, 2015		F-1
–    Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 2016 and 2015 (unaudited)		F-2
–    Condensed Consolidated Statements of Comprehensive Loss for the three-month periods ended March 31, 2016 and 2015 (unaudited)		F-3
–    Condensed Consolidated Statements of Changes in Equity for the three-month periods ended March 31, 2016 and 2015 (unaudited)		F-4
–    Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2016 and 2015 (unaudited)		F-5
–    Notes to Condensed Consolidated Financial Statements (unaudited)		F-6

		At March 31, 2016 (unaudited)				At December 31, 2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	35,430			$	45,193
Restricted cash			6,471				10,779
Accounts receivable, net of allowance for doubtful accounts of $623 and $489 in 2016 and 2015, respectively			39,621				32,655
Operating supplies and inventories			20,009				16,947
Prepaid expenses			8,138				3,560
Other receivables			19,149				18,064
Other assets			-				4,535
Total current assets			128,818				131,733
NONCURRENT ASSETS
Other receivables			22,950				21,500
Restricted cash			1,472				1,472
Vessels and equipment, net			657,297				669,087
Dry dock			8,635				10,281
Investments in and receivables from affiliates			3,821				3,570
Deferred income tax assets			707				846
Total noncurrent assets			694,882				706,756
Total assets		$	823,700			$	838,489
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable		$	32,091			$	29,391
Customer advances			2,181				1,968
Payable to related parties			81				41
Accrued interest			17,156				11,454
Current portion of long-term financial debt, net of debt issuance costs of $10,584 and $10,827 in 2016 and 2015, respectively			445,195				452,721
Other current liabilities			18,855				19,955
Total current liabilities			515,559				515,530
NONCURRENT LIABILITIES
Deferred income tax liabilities			12,537				10,562
Deferred gains			2,682				2,783
Total noncurrent liabilities			15,219				13,345
Total liabilities			530,778				528,875
EQUITY
Common stock, $0.01 par value:  250,000,000 authorized shares; 140,729,487 shares outstanding			1,446				1,446
Additional paid-in capital			492,255				491,893
Treasury stock:  3,923,094 shares at cost			(19,488	)			(19,488	)
Accumulated deficit			(180,488	)			(163,388	)
Accumulated other comprehensive loss			(803	)			(849	)
Total equity			292,922				309,614
Total liabilities and equity		$	823,700			$	838,489

		For the three-month periods
		ended March 31,
		2016				2015
REVENUES
Transportation and services		$	67,097			$	84,573
OPERATING EXPENSES
Voyage expenses			(19,152	)			(23,236	)
Running costs			(22,956	)			(34,398	)
Depreciation and amortization			(12,277	)			(12,503	)
Administrative and commercial expenses			(10,003	)			(9,669	)
Other operating income, net			1,266				46
			(63,122	)			(79,760	)
Operating profit			3,975				4,813
OTHER INCOME (EXPENSES)
Financial expense			(16,364	)			(8,255	)
Foreign currency exchange losses, net			(1,932	)			(1,897	)
Investments in affiliates			27				(93	)
Other, net			11				12
Total other income (expenses)			(18,258	)			(10,233	)
Loss before income tax			(14,283	)			(5,420	)
Income tax (expense) benefit			(2,817	)			313
Net loss		$	(17,100	)		$	(5,107	)
LOSS PER SHARE - BASIC AND DILUTED		$	(0.12	)		$	(0.04	)
Basic and diluted weighted average number of shares			140,729,487				140,710,112

		For the three-month periods
		ended March 31,
		2016				2015
Net loss		$	(17,100	)		$	(5,107	)
Other comprehensive income (loss):
Reclassification of net foreign currency derivative gains to depreciation and amortization			(2	)			(2	)
Reclassification of net derivative losses on cash flow hedges to interest expense			147				225
Derivative (losses) income on cash flow hedges			(99	)			(250	)
			46				(27	)
Comprehensive loss, net of income tax effect of $0		$	(17,054	)		$	(5,134	)

		Ultrapetrol (Bahamas) Limited stockholders' equity
Balance		Shares amount				Common stock				Additional paid-in capital				Treasury stock				Accumulated deficit				Accumulated other comprehensive income (loss)				Total equity
December 31, 2014			140,729,487			$	1,446			$	490,469			$	(19,488	)		$	(115,384	)		$	(1,321	)		$	355,722
Compensation related to stock awards granted			-				-				364				-				-				-				364
Net loss			-				-				-				-				(5,107	)			-				(5,107	)
Other comprehensive income			-				-				-				-				-				(27	)			(27	)
March 31, 2015			140,729,487			$	1,446			$	490,833			$	(19,488	)		$	(120,491	)		$	(1,348	)		$	350,952
December 31, 2015			140,729,487			$	1,446			$	491,893			$	(19,488	)		$	(163,388	)		$	(849	)		$	309,614
Compensation related to stock awards granted			-				-				362				-				-				-				362
Net loss			-				-				-				-				(17,100	)			-				(17,100	)
Other comprehensive income			-				-				-				-				-				46				46
March 31, 2016			140,729,487			$	1,446			$	492,255			$	(19,488	)		$	(180,488	)		$	(803	)		$	292,922

		For the three-month periods ended March 31,
		2016				2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(17,100	)		$	(5,107	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation of vessels and equipment			9,889				10,504
Amortization of dry docking			2,388				1,999
Expenditure for dry docking			(742	)			(1,330	)
Loss on debt renegotiation costs			7,611				-
Debt issuance expense amortization			243				640
Net (income) losses from investments in affiliates			(27	)			93
Allowance for doubtful accounts			134				-
Share - based compensation			362				364
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable			(7,100	)			(6,209	)
Other receivables, operating supplies and inventories and prepaid expenses			(6,367	)			(2,413	)
Other			(352	)			122
Increase (decrease) in liabilities:
Accounts payable			2,673				1,757
Customer advances			213				(289	)
Other payables			6,740				772
Net cash (used in) provided by operating activities			(1,435	)			903
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of vessels and equipment			(1,889	)			(9,344	)
Proceeds from disposal of vessel, net			4,684				-
Net cash provided by (used in) investing activities			2,795				(9,344	)
CASH FLOWS FROM FINANCING ACTIVITIES
Debt renegotiation costs paid			(7,611	)			-
Early repayment of long-term financial debt			(7,234	)			-
Decrease in restricted cash			4,313				-
Scheduled repayments of long-term financial debt			(535	)			(5,727	)
Other financing activities, net			(56	)			(518	)
Net cash used in financing activities			(11,123	)			(6,245	)
Net decrease in cash and cash equivalents			(9,763	)			(14,686	)
Cash and cash equivalents at the beginning of year			45,193				34,982
Cash and cash equivalents at the end of the period		$	35,430			$	20,296

		For the three month periods ended March 31, (unaudited)
		2016				2015
Stock options			2,473,000				2,473,000
Restricted stock			-				19,000
Total			2,473,000				2,492,000

		For the three month periods ended March 31, (unaudited)
		2016				2015
Net loss		$	(17,100	)		$	(5,107	)
Basic and diluted weighted average number of shares			140,729,487				140,710,112
Basic and diluted net loss per share		$	(0.12	)		$	(0.04	)

		At March 31, 2016 (unaudited)				At December 31, 2015
Unrealized net losses on interest rate collar		$	(97	)		$	(212	)
Unrealized net losses on interest rate swaps			(814	)			(747	)
Unrealized net gains on EURO hedge			108				110
Accumulated other comprehensive loss		$	(803	)		$	(849	)

		At March 31, 2016 (unaudited)				At December 31, 2015
Ocean-going vessels		$	40,970			$	51,060
River barges and pushboats			493,615				496,585
PSVs			376,109				375,059
Furniture and equipment			14,718				14,500
Building, land, operating base and shipyard			55,007				54,978
Total original book value			980,419				992,182
Accumulated depreciation			(323,121	)			(323,095	)
Net book value		$	657,298			$	669,087

		Level 1				Level 2				Level 3
Current liabilities: -    Interest rate collar (included in other liabilities)		$	-			$	236			$	-
-    Interest rate swaps (included in other liabilities)			-				453				-

		Carrying amount (unaudited)				Estimated fair value (unaudited)
ASSETS
Cash and cash equivalents		$	35,430			$	35,430
Restricted cash (current and noncurrent portion)			7,943				7,943
LIABILITIES
Long term financial debt - Note 4 (1)		$	455,779			$	275,405

		At March 31, 2016 (unaudited)
		Current other liabilities				Noncurrent other liabilities
Derivatives designated as hedging instruments
Interest rate collar (cash flow hedge)		$	236			$	-
Interest rate swaps (cash flow hedge)			453				-
		$	689			$	-

		At December 31, 2015
		Current other liabilities				Noncurrent other liabilities
Derivatives designated as hedging instruments
Interest rate collar (cash flow hedge)		$	229			$	-
Interest rate swaps (cash flow hedge)			435				-
		$	664			$	-

		For the three-month period ended March 31, (unaudited)
		2016				2015
Revenues (1)
−      South America		$	56,778			$	71,390
−      Central America			75				410
−      Europe			8,333				11,373
−      Asia			1,911				1,400
		$	67,097			$	84,573

		At March 31, 2016 (unaudited)				At December 31, 2015
Vessels and equipment, net
−      South America		$	598,373			$	610,599
−      Europe			54,699				54,251
−      Other			4,225				4,237
		$	657,297			$	669,087

		River Business				Offshore Supply Business				Ocean Business				Total
Transportation revenues		$	34,181			$	20,321			$	12,595			$	67,097
Manufacturing revenues			-				-				-				-
Running and voyage expenses			22,090				8,866				11,152				42,108
Depreciation and amortization			6,627				4,719				931				12,277
Segment operating (loss) profit			426				4,295				(746	)			3,975
Segment assets			416,169				326,367				39,996				782,532
Investments in and receivables from affiliates			3,796				-				25				3,821
Gains from investment in affiliates			27				-				-				27
Additions to long-lived assets			808				1,063				18				1,889

		At March 31, 2016 (unaudited)
Total assets for reportable segments		$	782,532
Other assets			5,738
Corporate cash and cash equivalents			35,430
Consolidated total assets		$	823,700

		River Business				Offshore Supply Business				Ocean Business				Total
Transportation revenues		$	38,930			$	29,557			$	16,086			$	84,573
Manufacturing revenues			-				-				-				-
Running and voyage expenses			30,467				14,023				13,144				57,634
Depreciation and amortization			6,663				4,495				1,345				12,503
Segment operating (loss) profit			(3,250	)			8,060				3				4,813
Segment assets			446,190				328,760				79,823				854,773
Investments in and receivables from affiliates			3,880				-				186				4,066
Loss from investment in affiliates			(93	)			-				-				(93	)
Additions to long-lived assets			7,260				1,839				245				9,344

		Parent				Combined subsidiary guarantors				Combined subsidiary non guarantors				Consolidating adjustments				Total consolidated amounts
Current assets
Receivables from related parties		$	420,066			$	54,003			$	174,689			$	(648,758	)		$	-
Other current assets			8,381				53,200				67,237				-				128,818
Total current assets			428,447				107,203				241,926				(648,758	)			128,818
Noncurrent assets
Vessels and equipment, net		$	-			$	257,004			$	400,990			$	(697	)		$	657,297
Investment in affiliates			103,978				-				25				(103,978	)			25
Other noncurrent assets			-				16,295				21,265				-				37,560
Total noncurrent assets			103,978				273,299				422,280				(104,675	)			694,882
Total assets		$	532,425			$	380,502			$	664,206			$	(753,433	)		$	823,700
Current liabilities
Payable to related parties		$	-			$	338,319			$	310,520			$	(648,758	)		$	81
Current portion of long-term financial debt, net     of debt issuance cost			218,841				41,499				184,855				-				445,195
Other current liabilities			20,662				24,110				25,511				-				70,283
Total current liabilities			239,503				403,928				520,886				(648,758	)			515,559
Noncurrent liabilities
Other non current liabilities		$	-			$	1,090			$	14,129			$	-			$	15,219
Total noncurrent liabilities			-				1,090				14,129				-				15,219
Total liabilities			239,503				405,018				535,015				(648,758	)			530,778
Total equity			292,922				(24,516	)			129,191				(104,675	)			292,922
Total liabilities and equity		$	532,425			$	380,502			$	664,206			$	(753,433	)		$	823,700

		Parent				Combined subsidiary guarantors				Combined subsidiary non guarantors				Consolidating adjustments				Total consolidated amounts
Current assets
Receivables from related parties		$	411,901			$	51,803			$	172,599			$	(636,303	)		$	-
Other current assets			18,654				57,678				55,401				-				131,733
Total current assets			430,555				109,481				228,000				(636,303	)			131,733
Noncurrent assets
Vessels and equipment, net			-				264,380				405,419				(712	)			669,087
Investment in affiliates			110,631				-				25				(110,631	)			25
Other noncurrent assets			-				17,270				20,374				-				37,644
Total noncurrent assets			110,631				281,650				425,818				(111,343	)			706,756
Total assets		$	541,186			$	391,131			$	653,818			$	(747,646	)		$	838,489
Current liabilities
Payable to related parties		$	-			$	330,500			$	305,844			$	(636,303	)		$	41
Current portion of long-term financial debt, net     of debt issuance cost			218,691				41,486				192,544				-				452,721
Other current liabilities			12,881				32,119				17,768				-				62,768
Total current liabilities			231,572				404,105				516,156				(636,303	)			515,530
Noncurrent liabilities
Due to affiliates		$	-			$	-			$	-			$	-			$	-
Long-term financial debt			-				-				-				-				-
Other noncurrent liabilities			-				652				12,693				-				13,345
Total noncurrent liabilities			-				652				12,693				-				13,345
Total liabilities			231,572				404,757				528,849				(636,303	)			528,875
Total equity			309,614				(13,626	)			124,969				(111,343	)			309,614
Total liabilities and equity		$	541,186			$	391,131			$	653,818			$	(747,646	)		$	838,489

		Parent				Combined subsidiary guarantors				Combined subsidiary non guarantors				Consolidating adjustments				Total consolidated amounts
Revenues		$	-			$	33,910			$	44,044			$	(10,857	)		$	67,097
Operating expenses			(2,600	)			(34,992	)			(36,402	)			10,872				(63,122	)
Operating (loss) profit			(2,600	)			(1,082	)			7,642				15				3,975
Investment in affiliates			(6,699	)			-				27				6,699				27
Other income (expenses)			(7,801	)			(9,518	)			(966	)			-				(18,285	)
Loss before income tax			(17,100	)			(10,600	)			6,703				6,714				(14,283	)
Income tax benefit (expense)			-				(290	)			(2,527	)			-				(2,817	)
Net (loss) income		$	(17,100	)		$	(10,890	)		$	4,176			$	6,714			$	(17,100	)

		Parent				Combined subsidiary guarantors				Combined subsidiary non guarantors				Consolidating adjustments				Total consolidated amounts
Revenues		$	-			$	43,366			$	53,979			$	(12,772	)		$	84,573
Operating expenses			(2,709	)			(45,999	)			(43,838	)			12,786				(79,760	)
Operating (loss) profit			(2,709	)			(2,633	)			10,141				14				4,813
Investment in affiliates			(1,981	)			-				(93	)			1,981				(93	)
Other (expenses) income			(417	)			(4,405	)			(5,318	)			-				(10,140	)
Loss before income tax			(5,107	)			(7,038	)			4,730				1,995				(5,420	)
Income tax benefit (expense)			-				40				273				-				313
Net loss		$	(5,107	)		$	(6,998	)		$	5,003			$	1,995			$	(5,107	)

		Parent				Combined subsidiary guarantors				Combined subsidiary non guarantors				Consolidating adjustments				Total consolidated amounts
Net loss		$	(17,100	)		$	(10,890	)		$	4,176			$	6,714			$	(17,100	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities			19,550				1,870				959				(6,714	)			15,665
Net cash (used in) provided by operating activities			2,450				(9,020	)			5,135				-				(1,435	)
Intercompany sources			(8,165	)			5,619				2,546				-				-
Non-subsidiary sources			-				(792	)			3,587				-				2,795
Net cash (used in) provided by investing activities			(8,165	)			4,827				6,133				-				2,795
Intercompany sources			-				-				-				-				-
Non-subsidiary sources			(7,643	)			-				(3,480	)			-				(11,123	)
Net cash used in financing activities			(7,643	)			-				(3,480	)			-				(11,123	)
Net (decrease) increase in cash and cash equivalents		$	(13,358	)		$	(4,193	)		$	7,788			$	-			$	(9,763	)

		Parent				Combined subsidiary guarantors				Combined subsidiary non guarantors				Consolidating adjustments				Total consolidated amounts
Net (loss) income		$	(5,107	)		$	(6,998	)		$	5,003			$	1,995			$	(5,107	)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities			17,312				(8,983	)			(324	)			(1,995	)			6,010
Net cash provided by (used in) operating activities			12,205				(15,981	)			4,679				-				903
Intercompany sources			(11,936	)			24,173				(12,237	)			-				-
Non-subsidiary sources			-				(5,854	)			(3,490	)			-				(9,344	)
Net cash provided by (used in) investing activities			(11,936	)			18,319				(15,727	)			-				(9,344	)
Intercompany sources			-				-				-				-				-
Non-subsidiary sources			(29	)			(4	)			(6,212	)			-				(6,245	)
Net cash (used in) financing activities			(29	)			(4	)			(6,212	)			-				(6,245	)
Net increase (decrease) in cash and cash equivalents		$	240			$	2,334			$	(17,260	)		$	-			$	(14,686	)