August 12, 2010
Global Ship Lease Reports Results for the Second Quarter of 2010

LONDON, Aug. 12, 2010 (GLOBE NEWSWIRE) -- Global Ship Lease, Inc. (NYSE:GSL) (NYSE:GSL.U) and (NYSE:GSL.WS), a containership charter owner, announced today its unaudited results for the three months ended June 30, 2010.

Second Quarter and Year To Date Highlights

  • Generated $16.4 million of cash in the second quarter of 2010, up 11% on $14.8 million on cash generated in second quarter 2009 due mainly to the purchase of one additional vessel in August 2009. Cash generated in the six months ended June 30, 2010 was $33.3 million up 11% on $30.1 million for the six months ended June 30, 2009
  • Reported revenue of $39.6 million for the second quarter of 2010, up 9% on $36.2 million for the second quarter 2009 due mainly to the additional vessel. Revenue for the six months ended June 30, 2010 was $78.8 million up 11% on $71.2 million for the six months ended June 30, 2009
  • Reported normalized net earnings of $7.5 million, or $0.14 per A and B Common Share, for the second quarter of 2010, excluding a $12.5 million non-cash interest rate derivative mark-to-market loss. Normalized net earnings for second quarter 2009 were $6.1 million, or $0.11 per A and B Common Share, excluding $16.7 million non-cash mark-to-market gain. Normalized net earnings for the six months ended June 30, 2010 was $15.7 million, or $0.29 per A and B Common Share, compared to $13.0 million for the six months ended June 30, 2009, or $0.24 per A and B Common Share
  • Including the non-cash mark-to-market items, reported net loss was $5.0 million, or $0.09 loss per share, for the second quarter of 2010 compared to net income of $22.8 million, or $0.42 income per share, for the second quarter 2009. Reported net loss for the six months ended June 30, 2010 was $1.7 million, or $0.03 loss per share, compared to net income of $33.9 million for the six months ended June 30, 2009, or $0.63 income per share

Ian Webber, Chief Executive Officer of Global Ship Lease, stated, "During the second quarter, we generated record revenue as our 17 vessel fleet was employed on long-term fixed rate contracts with no off-hire days, achieving 100% utilization. While the recovery is still in its early stages, container shipping fundamentals continued to strengthen during the quarter as a result of both strong demand and reduced surplus capacity. Specifically, spot charter rates and containership values have continued to improve since the first quarter."

Mr. Webber continued, "During the second quarter, we also strengthened our financial position. Since amending our credit facility approximately one year ago, we have paid down $46 million in debt."

SELECTED FINANCIAL DATA – UNAUDITED

(thousands of U.S. dollars except per share data)

 Three months ended
Jun 30, 2010
Three months ended
Jun 30, 2009
Six months ended
Jun 30, 2010
Six months ended
Jun 30, 2009
     
Revenue 39,611 36,19378,762 71,201
Operating Income17,438 14,30435,843 27,723
Net (Loss) Income(4,954) 22,762(1,672) 33,918
(Loss) Earnings per A and B share (0.09) 0.42(0.03) 0.63
Normalised net earnings (1)7,500 6,11015,661 12,957
Normalised earnings per A and B share (1)0.14 0.110.29 0.24
Adjusted Cash From Operations (1)16,399 14,84033,259 30,145
     
         

(1) Normalized net earnings, normalized earnings per share, and adjusted cash from operations are non-US Generally Accepted Accounting Principles (US GAAP) measures, as explained further in this press release, and reconciliations are provided to the interim unaudited financial information.

Revenue and Utilization

The 17-vessel fleet generated revenue from fixed rate long-term time charters of $39.6 million in the three months ended June 30, 2010, up 9% on revenue of $36.2 million for the comparative period in 2009 when one fewer vessel was deployed. During the three months ended June 30, 2010, there were 1,547 ownership days, up 91 or 6% on 1,456 ownership days in the comparable period in 2009. There were no dry-dockings in the three months ended June 30, 2010 and no off-hire days, giving a utilization of 100%. In the comparable period of 2009, there were four unplanned off-hire days, representing utilization of 99.7%.

For the six months ended June 30, 2010 revenue was $78.8 million, an increase of 11% on $71.2 million in the comparative period. With one additional vessel, ownership days at 3,077 were up 181 or 6% on 2,896 in the comparative period. Further, offhire days in the first half of 2010 were two, compared to 38 in the first half of 2009.

Vessel Operating Expenses

Vessel operating expenses, which include costs of crew, lubricating oil, spares and insurance, were $10.2 million for the three months ended June 30, 2010. The average cost per ownership day was $6,565 in the second quarter 2010 compared to $6,269 for the first quarter, up $296 or 5% due mainly to catch up spend on maintenance. The second quarter 2010 average daily cost was down 9% from the average daily cost of $7,217 for the comparative period in 2009. The reduction on the prior year is due to lower crew costs from slightly reduced manning and lower lubricating oil consumption from slow steaming and following installation of alpha lubricating equipment on a number of vessels.

For the six months ended June 30, 2010, vessel operating expenses were $19.8 million or an average cost per vessel per day of $6,418 compared to a total of $21.2 million or an average of $7,331 for the six months ended June 30, 2009.

Vessel operating expenses are at less than the capped amounts included in Global Ship Lease's ship management agreements.

Depreciation

Depreciation was $10.0 million for the three months ended June 30, 2010, including the effect of the purchase of one additional vessel in August 2009, compared to $9.0 million for the comparative period in 2009.

Depreciation was $19.9 million for the six months ended June 30, 2010 compared to $17.8 million for the comparative period in 2009.

General and Administrative Costs

General and administrative costs incurred were $2.1 million in the three months ended June 30, 2010, including $0.3 million non-cash charge for stock based incentives, compared to $2.4 million for the comparable period in 2009, including $0.9 million non-cash charge for stock based incentives.

In the six months ended June 30, 2010, general and administrative costs were $3.9 million, including $0.6 million non-cash charge for stock based incentives, compared to $4.6 million for the comparable period in 2009, including $1.6 million non-cash charge for stock based incentives.

Interest Expense

Interest expense, excluding the effect of interest rate derivatives which do not qualify for hedge accounting, for the three months ended June 30, 2010 was $6.0 million. The Company's borrowings under its credit facility averaged $584.1 million during the second quarter and were $553.1 million at June 30, 2010 after repayment in June 2010 of $31.0 million. There were $48.0 million preferred shares throughout the period. Interest expense in the comparative period in 2009 was $5.6 million based on average borrowings, including the preferred shares, of $590.1 million in the quarter.

For the six months ended June 30, 2010, interest expense, excluding the effect of interest rate derivatives which do not qualify for hedge accounting, was $11.9 million. The Company's borrowings under its credit facility averaged $585.2 million during the first half of 2010. There were $48.0 million preferred shares throughout the period. Interest expense in the first half of 2009 was $10.2 million based on average borrowings, including the preferred shares, of $590.1 million in the period.

Interest income for the three months ended June 30, 2010 was $60,000 and was $163,000 in the comparative 2009 period. For the six months ended June 30, 2010, interest income was $95,000 and was $305,000 in the comparative 2009 period.

Change in Fair Value of Financial Instruments

The Company hedges the majority of its interest rate exposure by entering into derivatives that swap floating rate debt for fixed rate debt to provide long-term stability and predictability to cash flows. As these hedges do not qualify for hedge accounting under US GAAP, the outstanding hedges are marked to market at each period end with any change in the fair value being booked to the income and expenditure account. The Company's derivative hedging instruments gave a $16.4 million loss in the three months ended June 30, 2010, reflecting primarily movements in the forward curve for interest rates. Of this amount, $3.9 million was a realized loss for settlements of swaps in the period and $12.5 million was an unrealized loss for revaluation of the balance sheet position. This compares to a $13.9 million gain in the three months ended June 30, 2009 of which $2.8 million was a realized loss and $16.7 million was an unrealized gain. 

For the six months ended June 30, 2010, the total loss from derivative hedging instruments was $25.7 million, of which $8.3 million was realized and $17.3 million unrealized compared to a total gain in the six months ended June 30, 2009 of $16.1 million of which $4.8 million was a realized loss and $21.0 million was an unrealized gain.

At June 30, 2010, the total mark-to-market unrealized loss recognized as a liability was $46.4 million.

Unrealized mark-to-market adjustments have no impact on operating performance or cash generation in the period reported.

Net Earnings

Normalized net earnings was $7.5 million, or $0.14 per Class A and B common share, for the three months ended June 30, 2010 excluding the $12.5 million non-cash interest rate derivative mark-to-market loss. Including the mark-to-market loss, the reported net loss was $5.0 million or $0.09 loss per Class A and B common share. For the three months ended June 30, 2009, normalized net earnings were $6.1 million, or $0.11 per Class A and B common share, excluding the $16.7 million non-cash interest rate derivative mark-to-market gain. Including the mark-to-market gain, reported net earnings were $22.8 million or $0.42 income per Class A and B common share. 

Normalized net earnings was $15.7 million, or $0.29 per Class A and B common share, for the six months ended June 30, 2010 excluding the $17.3 million non-cash interest rate derivative mark-to-market loss. Including the mark-to-market loss, the reported net loss was $1.7 million or $0.03 loss per Class A and B common share. For the six months ended June 30, 2009, normalized net earnings were $13.0 million, or $0.24 per Class A and B common share, excluding the $21.0 million non-cash interest rate derivative mark-to-market gain. Including the mark-to-market gain, reported net earnings were $33.9 million or $0.63 income per Class A and B common share. 

Normalized net earnings and normalized earnings per share are non-US GAAP measures and are reconciled to the financial information included in this press release. We believe that they are useful measures with which to assess the Company's financial performance as they adjust for non-cash items that do not affect the Company's ability to generate cash.

Credit Facility

On August 20, 2009, the Company entered into an amendment to its credit facility, whereby the loan-to-value covenant has been waived up to and including November 30, 2010 with the next loan-to-value test scheduled for April 30, 2011. Further, Global Ship Lease was able to borrow sufficient funds under the credit facility to allow the purchase of the CMA CGM Berlioz in August 2009. Amounts borrowed under the amended credit facility bear interest at LIBOR plus a fixed interest margin of 3.50% up to November 30, 2010. Thereafter, the margin will be between 2.50% and 3.50% depending on the loan-to-value ratio. 

In connection with the amended credit facility, all undrawn commitments of approximately $200 million were cancelled and Global Ship Lease may not pay dividends to common shareholders, instead using its cash flow to prepay borrowings under the credit facility. Global Ship Lease will be able to resume dividends after November 30, 2010 and once the loan-to-value is at or below 75%, when the prepayment of borrowings becomes fixed at $10 million per quarter. As part of the amendment, CMA CGM has agreed to defer redemption of the $48 million preferred shares it holds until after the final maturity of the credit facility in August 2016 and retain its current holding of approximately 24.4 million common shares at least until November 30, 2010. 

In the six months ended June 30, 2010, a total of $35.1 million has been prepaid leaving a balance outstanding of $553.1 million. The Company estimates that a further $60.3 million will be prepaid in the year ending June 30, 2011. 

Dividend

Global Ship Lease has agreed with its lenders that it will not declare or pay any dividend to common shareholders until the later of November 30, 2010 and when loan-to-value is at or below 75%. The board of directors will review the dividend policy when appropriate.

Adjusted Cash From Operations

Adjusted cash from operations was $16.4 million for the three months ended June 30, 2010 compared to $14.8 million for the three months ended June 30, 2009.

Adjusted cash from operations was $33.3 million for the six months ended June 30, 2010 compared to $30.1 million for the six months ended June 30, 2009.

Adjusted cash from operations is a non-US GAAP measure and is reconciled to the financial information further in this press release. The Company believes that it is a useful measure with which to assess the Company's operating performance as it adjusts for the effects of non-cash items.

Fleet Utilization

The table below shows fleet utilization for the three and six months ended June 30, 2010 and 2009 and for the year ended December 31, 2009. Unplanned offhire in the six months ended June 30, 2009 includes 18 days for drydock and associated repairs following a grounding and a seven day deviation to land a sick crew member.

 
Three months ended

Six months ended
Year
ended
Days Jun 30,
2010
Jun 30,
2009

Increase
Jun 30,
2010
Jun 30,
2009

Increase
Dec 31,
2009
        
Ownership days 1,547 1,456 6% 3,077 2,896 6% 5,968
Planned offhire - scheduled
drydock
-- --  -- --  (32)
Unplanned offhire -- (4)  (2) (38)  (42)
Operating days 1,547 1,452 7% 3,075 2,858 8% 5,894
        
Utilization 100.0% 99.7%  99.9% 98.7%  98.8%

Fleet

The following table provides information about the on-the-water fleet of 17 vessels chartered to CMA CGM.                                                                                                                                                          

Vessel Name
Capacity

 in TEUs (1)

Year
Built

Purchase Date

by GSL
Charter
Remaining
Duration
(years)
 
Daily
Charter

Rate ($)
 
Ville d'Orion 4,113 1997 December 2007 2.50 $28,500 
Ville d'Aquarius 4,113 1996 December 2007 2.50 $28,500 
CMA CGM Matisse 2,262 1999 December 2007 6.50 $18,465 
CMA CGM Utrillo 2,262 1999 December 2007 6.50 $18,465 
Delmas Keta 2,207 2003 December 2007 7.50 $18,465 
Julie Delmas 2,207 2002 December 2007 7.50 $18,465 
Kumasi 2,207 2002 December 2007 7.50 $18,465 
Marie Delmas 2,207 2002 December 2007 7.50 $18,465 
CMA CGM La Tour 2,272 2001 December 2007 6.50 $18,465 
CMA CGM Manet 2,272 2001 December 2007 6.50 $18,465 
CMA CGM Alcazar 5,100 2007 January 2008 10.50 $33,750 
CMA CGM Chateau d'If 5,100 2007 January 2008 10.50 $33,750 
CMA CGM Thalassa 10,960 2008 December 2008 15.50 $47,200 
CMA CGM Jamaica 4,298 2006 December 2008 12.50 $25,350 
CMA CGM Sambhar 4,045 2006 December 2008 12.50 $25,350 
CMA CGM America 4,045 2006 December 2008 12.50 $25,350 
CMA CGM Berlioz 6,627 2001 August 2009 11.25 $34,000  
(1)     Twenty-foot Equivalent Units.       
  

The following table provides information about the contracted fleet.

Vessel Name

Capacity
in TEUs (1)


Year
Built


Estimated Delivery
Date
 


Charterer

Charter

Duration
(years)

Daily

Charter
Rate ($)
Hull 789 (2) 4,250 2010 December 2010 ZIM 7-8 (3) $28,000
Hull 790 (2) 4,250 2010 December 2010 ZIM 7-8 (3) $28,000
(1)     Twenty-foot Equivalent Units.      
(2)     Contracted to be purchased from German interests.      
(3)     Seven-year charter that could be extended to eight years at charterer's option.      

Conference Call and Webcast

Global Ship Lease will hold a conference call to discuss the Company's results for the three months ended June 30, 2010 today, Thursday, August 12, 2010 at 10:30 a.m. Eastern Time. There are two ways to access the conference call:

   (1) Dial-in: (888) 935-4577 or (212) 444-0413;  Passcode: 8030416 

        Please dial in at least 10 minutes prior to 10:30 a.m. Eastern Time to ensure a prompt start to the call. 

   (2) Live Internet webcast and slide presentation: http://www.globalshiplease.com

If you are unable to participate at this time, a replay of the call will be available through Thursday, August 26, 2010 at (866) 932-5017 or (347) 366-9565. Enter the code 8030416 to access the audio replay. The webcast will also be archived on the Company's website: http://www.globalshiplease.com.

About Global Ship Lease

Global Ship Lease is a containership charter owner. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under long-term, fixed rate charters to world class container liner companies. 

Global Ship Lease owns 17 vessels with a total capacity of 66,297 TEU with a weighted average age at June 30, 2010 of 6.3 years. All of the current vessels are fixed on long-term charters to CMA CGM with an average remaining term of 8.6 years. The Company has contracts in place to purchase two 4,250 TEU newbuildings from German interests for approximately $77 million each, that are scheduled to be delivered in the fourth quarter of 2010. The Company also has agreements to charter out these newbuildings to Zim Integrated Shipping Services Limited for seven or eight years at charterer's option.

Reconciliation of Non-U.S. GAAP Financial Measures

A. Adjusted Cash From Operations

Adjusted cash from operations is a non-US GAAP measure and is reconciled to the financial information below. It represents net cash provided by operating activities adjusted for certain non-cash items such as deferred taxation. Movements in working capital -- changes in receivables and payables -- are also adjusted as these are essentially timing differences. We also deduct cash paid to settle derivatives and an allowance for the cost of future drydockings, which due to their substantial and periodic nature could otherwise distort quarterly adjusted cashflow. Adjusted cash from operations is a non-US GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash. Adjusted cash from operations is not defined in accounting principles generally accepted in the United States and should not be considered to be an alternate to net earnings or any other financial metric required by such accounting principles. We believe that adjusted cash from operations is a useful measure with which to assess the Company's operating performance as it adjusts for the effects of non-cash items and includes the effect of certain cash items.

ADJUSTED CASH FROM OPERATIONS - UNAUDITED
(thousands of U.S. dollars)
     
  Three
months
ended
Jun 30,
2010
Three
months
ended
Jun 30,
2009
Six
months
ended
Jun 30,
2010
Six
months
ended
Jun 30,
2009
     
Cash provided by operating activities 25,687 18,285 45,028 35,583
     
Adjust: Deferred taxation (80) (203) (159) (410)
   Movement in receivables (655) 506 (460) 123
   Movement in payables (3,643) (67) (870) 1,464
   Settlement of derivatives (3,935) (2,781) (8,330) (4,815)
  Allowance for future dry-docks (975) (900) (1,950) (1,800)
     
Adjusted cash from operations 16,399 14,840 33,259 30,145

B. Normalized net earnings

Normalized net earnings is a non-US GAAP measure and is reconciled to the financial information below. It represents net earnings adjusted for the change in fair value of derivatives and the accelerated write off of a portion of deferred financing costs. Normalized net earnings is a non-GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net earnings for non-operating items such as change in fair value of derivatives to eliminate the effect of non cash non-operating items that do not affect operating performance or cash generated. Normalized net earnings is not defined in accounting principles generally accepted in the United States and should not be considered to be an alternate to net earnings or any other financial metric required by such accounting principles. Normalized net earnings per share is calculated based on normalized net earnings and the weighted average number of shares in the relevant period.

NORMALIZED NET EARNINGS -- UNAUDITED
(thousands of U.S. dollars except share and per share data)
     
  Three
months
ended
Jun 30,
2010
Three
months
ended
Jun 30,
2009
Six
months
ended
Jun 30,
2010
Six
months
ended
Jun 30,
2009
     
     
     
Net (loss) income (4,954) 22,762 (1,672) 33,918
     
Adjust:    Change in value of derivatives 12,454 (16,652) 17,333 (20,961)
     
Normalized net earnings 7,500 6,110 15,661 12,957
     
Weighted average number of Class A and B common shares outstanding (1)    
       Basic 54,236,423 53,786,150 54,236,423 53,786,150
       Diluted 54,236,423 53,786,150 54,236,423 53,922,780
     
Net (loss) income per share on reported
earnings
    
        Basic (0.09) 0.42 (0.03) 0.63
        Diluted (0.09) 0.42 (0.03) 0.63
     
Normalized net income per share    
        Basic 0.14 0.11 0.29 0.24
        Diluted 0.14 0.11 0.29 0.24

(1) The weighted average number of shares (basic and diluted) for the three and six months ended June 30, 2010 and the three months ended June 30, 2009 excludes the effect of outstanding warrants and stock based incentives as these were antidilutive. For the six months ended June 30, 2009, the diluted weighted average number of shares includes the incremental effect of outstanding stock based incentive awards but excludes the effect of outstanding warrants as these were antidilutive. 

Safe Harbor Statement

This communication contains forward-looking statements. Forward-looking statements provide Global Ship Lease's current expectations or forecasts of future events. Forward-looking statements include statements about Global Ship Lease's expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as "anticipate," "believe," "continue," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential," "predict," "project," "will" or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. These forward-looking statements are based on assumptions that may be incorrect, and Global Ship Lease cannot assure you that these projections included in these forward-looking statements will come to pass. Actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors.

The risks and uncertainties include, but are not limited to:

  • future operating or financial results;
  • expectations regarding the future growth of the container shipping industry, including the rates of annual demand and supply growth;
  • the financial condition of CMA CGM, our charterer and sole source of operating revenue, and its ability to pay charterhire in accordance with the charters;
  • Global Ship Lease's financial condition and liquidity, including its ability to obtain additional waivers which might be necessary under the existing credit facility or obtain additional financing to fund capital expenditures, contracted and yet to be contracted vessel acquisitions including the two newbuildings to be purchased from German interests in the fourth quarter of 2010, and other general corporate purposes;
  • Global Ship Lease's ability to meet its financial covenants and repay its credit facility;
  • Global Ship Lease's expectations relating to dividend payments and forecasts of its ability to make such payments including the availability of cash and the impact of constraints under its credit facility;
  • future acquisitions, business strategy and expected capital spending;
  • operating expenses, availability of crew, number of off-hire days, drydocking and survey requirements and insurance costs;
  • general market conditions and shipping industry trends, including charter rates and factors affecting supply and demand;
  • assumptions regarding interest rates and inflation;
  • changes in the rate of growth of global and various regional economies;
  • risks incidental to vessel operation, including piracy, discharge of pollutants and vessel accidents and damage including total or constructive total loss;
  • estimated future capital expenditures needed to preserve its capital base;
  • Global Ship Lease's expectations about the availability of ships to purchase, the time that it may take to construct new ships, or the useful lives of its ships;
  • Global Ship Lease's continued ability to enter into or renew long-term, fixed-rate charters;
  • the continued performance of existing long-term, fixed-rate time charters;
  • Global Ship Lease's ability to capitalize on its management team's and board of directors' relationships and reputations in the containership industry to its advantage;
  • changes in governmental and classification societies' rules and regulations or actions taken by regulatory authorities;
  • expectations about the availability of insurance on commercially reasonable terms;
  • unanticipated changes in laws and regulations including taxation;
  • potential liability from future litigation.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Global Ship Lease's actual results could differ materially from those anticipated in forward-looking statements for many reasons specifically as described in Global Ship Lease's filings with the SEC.  Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this communication. Global Ship Lease undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this communication or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks Global Ship Lease describes in the reports it will file from time to time with the SEC after the date of this communication.

Global Ship Lease, Inc.
Interim Unaudited ConsolidatedStatements of Income
(Expressed in thousands of U.S. dollars except share data)
     
 Three months ended
June 30,
Six months ended
June 30,
 2010200920102009
     
     
Operating Revenues    
Time charter revenue $39,611 $36,193 $78,762 $71,201
                 
     
Operating Expenses    
Vessel operating expenses  10,156 10,508 19,748 21,231
Depreciation 9,984 8,986 19,855 17,772
General and administrative 2,084 2,445 3,919 4,581
Other operating income (51) (50) (603) (106)
                 
Total operating expenses 22,173 21,889 42,919 43,478
                 
     
Operating Income 17,438 14,304 35,843 27,723
     
Non Operating Income (Expense)    
Interest income 60 163 95 305
Interest expense (6,048) (5,554) (11,904) (10,208)
Realized and unrealized (loss) gain on interest rate derivatives (16,389) 13,872 (25,663) 16,146
                 
     
(Loss) Income before Income Taxes (4,939) 22,785 (1,629) 33,966
     
Income taxes (15) (23) (43) (48)
                
Net (Loss) Income  $(4,954) $22,762 $(1,672) $33,918
             
     
     
Earnings per Share    
     
Weighted average number of Class A common
shares outstanding
    
Basic 46,830,467 46,380,194 46,830,467 46,380,194
Diluted 46,830,467 46,380,194 46,830,467 46,516,824
     
Net income in $ per Class A common share     
Basic $(0.11) $0.42 $(0.04) $0.63
Diluted $(0.11) $0.42 $(0.04) $0.63
     
Weighted average number of Class B common
shares outstanding
    
 Basic and diluted 7,405,956 7,405,956 7,405,956 7,405,956
     
Net income in $ per Class B common share    
 Basic and diluted $ nil $0.42 $ nil $0.63
 
Global Ship Lease, Inc.
Interim Unaudited ConsolidatedBalance Sheets
(Expressed in thousands of U.S. dollars)
   
   
   
 June 30,
2010
December 31,
2009
   
Assets  
   
Cash and cash equivalents $31,329 $30,810
Restricted cash 3,026 3,026
Accounts receivable 6,551 7,838
Prepaid expenses 1,241 685
Other receivables 724 613
Deferred tax 388 285
Deferred financing costs 903 903
       
Total current assets 44,162 44,160
       
   
Vessels in operation 942,689 961,708
Vessel deposits 16,541 16,243
Other fixed assets 15 9
Deferred tax 217 161
Deferred financing costs 4,626 5,077
       
Total non-current assets 964,088 983,198
       
Total Assets $1,008,250 $1,027,358
       
Liabilities and Stockholders' Equity  
   
Liabilities  
   
Intangible liability – charter agreements $2,119 $2,119
Current portion of long term debt 60,300 68,300
Accounts payable 3,010 3,502
Accrued expenses 5,795 4,589
Derivative instruments 13,784 15,971
       
Total current liabilities 85,008 94,481
       
   
Long term debt 492,841 519,892
Preferred shares 48,000 48,000
Intangible liability – charter agreements 23,229 24,288
Derivative instruments 32,663 13,142
       
Total long-term liabilities 596,733 605,322
       
   
Total Liabilities $681,741 $699,803
       
   
Stockholders' Equity  
   
Class A Common stock – authorized
214,000,000 shares with a $0.01 par value;
46,830,467 shares issued and outstanding
$468 $467
Class B Common stock – authorized
20,000,000 shares with a $0.01 par value;
7,405,956 shares issued and outstanding 
74 74
   
Additional paid in capital 350,944 350,319
Accumulated deficit (24,977) (23,305)
       
Total Stockholders' Equity 326,509 327,555
       
Total Liabilities and Stockholders' Equity $1,008,250 $1,027,358
       
Global Ship Lease, Inc.
Interim Unaudited Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. dollars)
     
 Three months ended
June 30,
Six months ended
June 30,
 2010200920102009
     
     
Cash Flows from Operating Activities    
Net income $(4,954) $22,762 $(1,672) $33,918
     
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities 
    
Depreciation  9,984 8,986 19,855 17,772
Amortization of deferred financing costs 225 251 451 625
Change in fair value of certain derivative instruments 12,454 (16,652) 17,333 (20,961)
Amortization of intangible liability (529) (311) (1,059) (622)
Settlements of hedges which do not qualify for hedge accounting 3,935 2,781 8,330 4,815
Share based compensation 315 863 626 1,579
Decrease (increase) in other receivables and other assets 655 (506) 460 (123)
Increase (decrease) in accounts payable and other liabilities 3,643 67 870 (1,464)
Costs relating to drydocks -- -- (164) --
Unrealized foreign exchange loss  (41) 44 (2) 44
             
Net Cash Provided by Operating Activities  25,687 18,285 45,028 35,583
             
Cash Flows from Investing Activities     
Settlements of hedges which do not qualify for hedge
accounting
(3,935) (2,781) (8,330) (4,815)
Cash paid for purchases of vessels, vessel prepayments
and vessel deposits
(820) (154) (1,128) (734)
             
Net Cash Used in Investing Activities  (4,755) (2,935) (9,458) (5,549)
             
Cash Flows from Financing Activities     
Repayments of debt (30,959) -- (35,051) --
Issuance costs of debt -- -- -- (3,293)
Dividend payments  -- -- -- (12,371)
             
Net Cash Used in Financing Activities  (30,959) -- (35,051) (15,664)
             
Net (Decrease) Increase in Cash and Cash
Equivalents
(10,027) 15,350 519 14,370
Cash and Cash Equivalents at start of Period 41,356 25,383 30,810 26,363
             
Cash and Cash Equivalents at end of Period $31,329 $40,733 $31,329 $40,733
             
     
Supplemental information    
     
Non cash investing and financing activities    
     
Total interest paid  $4,776 $4,968 $10,568 $8,733
     
Income tax paid  $14 $77 $14 $77
             
CONTACT:  The IGB Group
          Investor and Media Contact: 
          Michael Cimini
          212-477-8261

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