August 15, 2011
Global Ship Lease Reports Results for the Second Quarter of 2011

LONDON, Aug. 15, 2011 (GLOBE NEWSWIRE) -- Global Ship Lease, Inc. (NYSE:GSL), a containership charter owner, announced today its unaudited results for the three and six months ended June 30, 2011.

Second Quarter and Year To Date Highlights


- Reported revenue of $38.8 million for the second quarter 2011, down slightly from $39.6 million for the second quarter 2010 due mainly to 27 days offhire in second quarter 2011 for planned drydockings. Revenue for the six months ended June 30, 2011 was $77.9 million compared to $78.8 million for the six months ended June 30, 2010 due to planned drydockings in 2011

- Reported net loss of $11.7 million for the second quarter 2011, after $13.6 million non-cash impairment charge relating to the fair value of purchase options and $3.8 million non-cash interest rate derivative mark-to-market loss. For the second quarter 2010 the reported net loss was $5.0 million, after $12.5 million non-cash mark-to-market loss. Excluding the impairment charge and mark-to-market items, normalized net income(1) was $5.8 million for the second quarter 2011 compared to normalized net income of $7.5 million for the second quarter 2010

- For the six months ended June 30, 2011 the reported net loss was $0.9 million, after the impairment charge and $1.2 million mark-to-market gain. The reported net loss of $1.7 million for the six months ended June 30, 2010 was after a mark-to-market loss of $17.3 million. Normalized net income for the six months ended June 30, 2011 was $11.6 million compared to $15.7 million for the six months ended June 30, 2010

- Generated $25.7 million EBITDA(1) for the second quarter 2011, down on $27.4 million for the second quarter 2010 due mainly to reduced revenue and increased costs as a result of planned drydockings. EBITDA for the six months ended June 30, 2011 was $52.0 million, compared to $55.7 million for the six months ended June 30, 2010 due mainly to planned drydockings in first quarter 2011and increased crew costs

- Repaid $10.0 million in debt during the second quarter of 2011; Repaid $23.9 million year-to-date and $90.1 million since August of 2009

Ian Webber, Chief Executive Officer of Global Ship Lease, stated, "With EBITDA of $25.7 million for the second quarter, our 17 long-term fixed rate time charters continue to generate consistent, stable and predictable cash flows. During the quarter, utilization levels once again remained high. Although we are currently seeing a slowdown in the recovery of containerized shipping, our business model insulates us from the direct impact of volatile freight markets. The average remaining term of our charters is more than 8.8 years on a weighted basis with no renewals until the end of 2012; our fleet represents a total contracted revenue stream of $1.3 billion. We continue to believe that the Company's business model supports the delivery of dividends to shareholders over the long term and the Board will continue to evaluate the dividend policy on a quarterly basis."

Mr. Webber continued, "We do not have any purchase obligations and have continued to use our cash flow to pay down debt. Since August 2009, we have paid down $90.1 million including $23.9 million year-to-date. We remain committed to maintaining a strong balance sheet for the benefit of our shareholders."

SELECTED FINANCIAL DATA — UNAUDITED        
(thousands of U.S. dollars)        
 Three ThreeSix Six
  months ended months endedmonths ended months ended
 June 30,
2011
June 30,
2010
June 30,
2011
June 30,
2010
         
Revenue 38,774 39,61177,878 78,762
Operating Income2,102 17,43818,378 35,843
Net (Loss)(11,693) (4,954)(854) (1,672)
EBITDA (1)25,736 27,42251,961 55,698
Normalised Net Income (1)5,754 7,50011,631 15,661

(1) EBITDA and Normalized net income are non-US Generally Accepted Accounting Principles (US GAAP) measures, as explained further in this press release, and are considered by Global Ship Lease to be useful measures of its performance. Reconciliations of such non-GAAP measures to the interim unaudited financial information are provided in this Earnings Release.

Revenue and Utilization

The 17 vessel fleet generated revenue from fixed rate long-term time charters of $38.8 million in the three months ended June 30, 2011, down $0.8 million on revenue of $39.6 million for the comparative period in 2010. The decrease in revenue is due mainly to 27 days offhire for planned dry-docking of three vessels.  During the three months ended June 30, 2011, there were 1,547 ownership days, the same as the comparable period in 2010. The 27 days offhire for dry-dockings and five unplanned offhire days in the three months ended June 30, 2011, gives a utilization of 97.9%.  In the comparable period of 2010, there was no offhire, representing utilization of 100.0%.

For the six months ended June 30, 2011, revenue was $77.9 million, down $0.9 million on revenue of $78.8 million in the comparative period, mainly due to the effect of the drydockings noted above.

The table below shows fleet utilization for the three and six months ended June 30, 2011 and 2010 and for the year ended December 31, 2010.

  Three months ended Six months ended Year ended
  June 30, June 30,   June 30, June 30,   Dec 31,
Days 2011 2010 Change 2011 2010 Change 2010
               
Ownership days 1,547 1,547 0% 3,077 3,077 0% 6,205
Planned offhire - scheduled drydock (27) 0   (30) 0   0
Unplanned offhire (5) 0   (5) (2)   (3)
Operating days 1,515 1,547 (2)% 3,042 3,092 (1)% 6,202
               
Utilization 97.9% 100.0%   98.9% 99.9%   99.9%

The drydocking of two vessels had been completed by June 30, 2011 with a further five vessels due to be drydocked in the second half of 2011 and six in 2012. This will lead to increased planned offhire compared to 2010 when no vessels were drydocked.

Vessel Operating Expenses

Vessel operating expenses, which include costs of crew, lubricating oil, spares and insurance, were $11.3 million for the three months ended June 30, 2011. The average cost per ownership day was $7,275, up $261 or 3.7% on $7,014 for the rolling four quarters ended March 31, 2011. The increase is due to increased crew costs, from the third quarter 2010, as a result of inflation and adverse exchange rate movements as a portion of crew costs are denominated in euros, together with costs expensed in the three months ended June 30, 2011 relating to the drydockings such as for bunker fuel consumed in steaming to and from the drydock facilities.  The second quarter 2011 average daily cost was up 11% from the average daily cost of $6,565 for the comparative period in 2010 due to increased crew costs and costs incurred in connection with drydocking.

For the six months ended June 30, 2011 vessel operating expenses were $22.3 million or an average of $7,247 per day compared to $19.7 million in the comparative period or $6,418 per day.

Depreciation

Depreciation of $10.0 million for the three months ended June 30, 2011 was the same as in the comparative period in 2010 as there were no changes to the fleet.

Depreciation for the six months ended June 30, 2011 was $19.9 million, the same as in the comparative period.

General and Administrative Costs

General and administrative costs incurred were $1.9 million in the three months ended June 30, 2011, compared to $2.1 million for the comparable period in 2010.

For the six months ended June 30, 2011, general and administrative costs were $3.8 million compared to $3.9 million for the comparable period in 2010.

Impairment charge

On November 8, 2010, the Company signed agreements with the sellers of two 4,250 TEU newbuildings to (i) terminate the Company's obligations under contracts entered into in September 2008 to purchase the vessels on their delivery to the sellers by the builder, which was anticipated to be at the end of 2010 and (ii) grant the Company options to purchase the vessels on the first anniversary of their delivery by the builder to the sellers. Intangible assets totaling $13.6 million relating to these purchase options were recognized at the fair value of the purchase options on the date of the agreement.

The purchase options are to be declared by September 16, 2011 for one vessel and October 4, 2011 for the other, with the purchases to be completed approximately 90 days later. The purchase of these vessels was always predicated on achieving a strong return for shareholders by acquiring the vessels, which had time charters attached, at an attractive price and securing financing on favorable terms. While the Company continues to discuss the financing of these vessels with various providers of capital, obtaining committed finance on terms that will deliver the required returns will be challenging. Accordingly, the Company has decided to write off the intangible assets relating to these purchase options. The underlying agreements providing the purchase options are not affected.

Other operating income

Other operating income in the three months ended June 30, 2011 was $0.1 million, the same as the comparative period.

For the six months ended June 30, 2011, other operating income was $0.2 million compared to $0.6 million in the comparative period which included $0.5 million tax refund relating to Marathon Acquisition Corp. prior to August 14, 2008. 

EBITDA

As a result of the above, EBITDA was $25.7 million for the three months ended June 30, 2011 down from  $27.4 million for the three months ended June 30, 2010.

EBITDA for the six months ended June 30, 2011 was $52.0 million compared to $55.7 million in the comparative period.

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, 2011 was $5.1 million.  The Company's borrowings under its credit facility averaged $519.0 million during the three months ended June 30, 2011. There were $48.0 million preferred shares throughout the period giving total average borrowings through the three months ended June 30, 2011 of $567.0 million. Interest expense in the comparative period in 2010 was $6.0 million on average borrowings, including the preferred shares, of $632.1 million.

For the six months ended June 30, 2011, interest expense, excluding the effect of interest rate derivatives which do not qualify for hedge accounting, was $10.7 million. The Company's borrowings under its credit facility averaged $525.8 million during first half 2011. There were $48.0 million preferred shares throughout the period. Interest expense in first half 2010 was $11.9 million based on average borrowings, including the preferred shares, of $633.2 million in the period.

Interest income for the three and six months ended June 30, 2011 and 2010 was not material.

Change in Fair Value of Financial Instruments

The Company hedges 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 an $8.7 million loss in the three months ended June 30, 2011, reflecting current LIBOR rates and movements in the forward curve for interest rates. Of this amount, $4.9 million was a realized loss for settlements of swaps in the period and $3.8 million was an unrealized loss for revaluation of the balance sheet position. This compares to a $16.4 million loss in the three months ended June 30, 2010 of which $3.9 million was a realized loss and $12.5 million was an unrealized loss. 

For the six months ended June 30, 2011 the total loss from derivative hedging instruments was $8.5 million of which $9.7 million was realized and $1.2 million was an unrealized gain compared to a total loss in the six months ended June 30, 2010 of $25.7 million of which $8.3 million was a realized loss and $17.3 million was an unrealized loss.

At June 30, 2011, the total mark-to-market unrealized loss recognized as a liability on the balance sheet was $43.3 million.

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

Taxation

Taxation for the three and six months ended June 30, 2011 and 2010 was not material. 

Net Income/Loss

Net loss for the three months ended June 30, 2011 was $11.7 million after $13.6 million non-cash impairment charge relating to the fair value of purchase options and $3.8 million non-cash interest rate derivative mark-to-market loss. For the three months ended June 30, 2010 net loss was $5.0 million, after $12.5 million non-cash interest rate derivative mark-to-market loss. Normalized net income, excluding the effect of the non-cash impairment charge and non-cash interest rate derivative mark-to-market and losses, was $5.8 million for the three months ended June 30, 2011 and $7.5 million for the three months ended June 30, 2010. 

Net loss was $0.9 million for the six months ended June 30, 2011 after the non-cash impairment charge and $1.2 million non-cash interest rate derivative mark-to-market gain. For the six months ended June 30, 2010 net loss was $1.7 million including $17.3 million non-cash interest rate derivative mark-to-market loss. Normalized net income was $11.6 million for the six months ended June 30, 2011 and $15.7 million for the six months ended June 30, 2010. 

Credit Facility

The leverage ratio under the loan-to-value test as at April 30, 2011 was less than 75% and greater than 65%. Accordingly, the interest margin applied on amounts borrowed under the credit facility decreased by 50 basis points to 3.00% with effect from May 1, 2011.  Further, the full cash sweep to prepay borrowings no longer applies and prepayments are fixed at $10 million per quarter. 

Finally, Global Ship Lease may resume the payment of dividends to common shareholders.  

The next loan-to-value test including updated market values of the Company's vessels will be as at November 30, 2011. 

In the three months ended June 30, 2011 a total of $10.0 million of debt was prepaid leaving a balance outstanding of $509.0 million.

Dividend

Global Ship Lease is not currently paying a dividend on common shares.

In order to achieve the objective of distributing sustainable dividends to shareholders over the long-term and grow the Company accretively, the Board of Directors reviews the Company's dividend policy on a quarterly basis, taking into consideration capital structure, growth opportunities, industry fundamentals, asset value trends and future financial performance including cash flow, among others factors.  

Fleet

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

       Remaining  
 Capacity  Purchase Date Charter TermDaily Charter
Vessel Name in TEUs (1)Year Builtby GSL (years)Rate
Ville d'Orion 4,113 1997 December 2007 1.50 $28,500
Ville d'Aquarius 4,113 1996 December 2007 1.50 $28,500
CMA CGM Matisse 2,262 1999 December 2007 5.50 $18,465
CMA CGM Utrillo 2,262 1999 December 2007 5.50 $18,465
Delmas Keta 2,207 2003 December 2007 6.50 $18,465
Julie Delmas 2,207 2002 December 2007 6.50 $18,465
Kumasi 2,207 2002 December 2007 6.50 $18,465
Marie Delmas 2,207 2002 December 2007 6.50 $18,465
CMA CGM La Tour 2,272 2001 December 2007 5.50 $18,465
CMA CGM Manet 2,272 2001 December 2007 5.50 $18,465
CMA CGM Alcazar 5,089 2007 January 2008 9.50 $33,750
CMA CGM Château d'If 5,089 2007 January 2008 9.50 $33,750
CMA CGM Thalassa 11,040 2008 December 2008 14.50 $47,200
CMA CGM Jamaica  4,298 2006 December 2008 11.50 $25,350
CMA CGM Sambhar  4,045 2006 December 2008 11.50 $25,350
CMA CGM America 4,045 2006 December 2008 11.50 $25,350
CMA CGM Berlioz 6,621 2001 August 2009 10.25 $34,000
(1)  Twenty-foot Equivalent Units.      

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, 2011 today, Monday, August 15, 2011 at 10:30 a.m. Eastern Time. There are two ways to access the conference call:

(1) Dial-in:  (866) 966-9439 or (631) 510-7498; Passcode: 87071587 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 Monday, August 29, 2011 at (866) 247-4222 or (631) 510-7499. Enter the code 87071587 to access the audio replay. The webcast will also be archived on the Company's website: http://www.globalshiplease.com.

Annual Report on Form 20F

Global Ship Lease, Inc has filed its Annual Report for 2010 with the Securities and Exchange Commission. A copy of the report can be found under the Investor Relations section (Annual Reports) of the Company's website at http://www.globalshiplease.com. Shareholders may request a hard copy of the audited financial statements free of charge by contacting the Company at info@globalshiplease.com or by writing to Global Ship Lease, Inc, care of Global Ship Lease Services Limited, Portland House, Stag Place, London SW1E 5RS or by telephoning +44 (0) 207 869 8806.

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 top tier container liner companies. 

Global Ship Lease owns 17 vessels with a total capacity of 66,349 TEU with an average age, weighted by TEU capacity, at June 30, 2011 of 7.3 years. All of the current vessels are fixed on long-term charters to CMA CGM with an average remaining term of 7.6 years, or 8.8 years on a weighted basis.

Reconciliation of Non-U.S. GAAP Financial Measures

A. EBITDA

EBITDA represents Net income (loss) before interest income and expense including amortization of deferred finance costs, realized and unrealized gain (loss) on derivatives, income taxes, depreciation, amortization and impairment charges. EBITDA is a non-US GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash from its operations.  We believe that the presentation of EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is not defined in US GAAP and should not be considered to be an alternate to Net income (loss) or any other financial metric required by such accounting principles.

EBITDA - UNAUDITED        
           
(thousands of U.S. dollars)        
    Three Three Six Six
    months months months Months
    ended ended ended ended
    Jun 30, Jun 30, Jun 30, Jun 30,
    2011 2010 2011 2010
           
Net (loss)   (11,693) (4,954) (854) (1,672)
           
Adjust: Depreciation 9,989 9,984 19,938 19,855
  Impairment charge 13,645 -- 13,645 --
  Interest income (10) (60) (23) (95)
  Interest expense 5,058 6,048 10,668 11,904
  Realized and unrealized loss (gain) on interest rate derivatives 8,671 16,389 8,492 25,663
  Income tax 76 15 95 43
           
EBITDA   25,736 27,422 51,961 55,698

B. Normalized net income

Normalized net income represents Net income (loss) adjusted for the unrealized gain (loss) on derivatives, the accelerated write off of a portion of deferred financing costs and impairment charges. Normalized net income is a non-GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net income 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 income is not defined in US GAAP and should not be considered to be an alternate to Net income (loss) or any other financial metric required by such accounting principles.

NORMALIZED NET INCOME -- UNAUDITED      
(thousands of U.S. dollars)      
           
    Three Three Six Six
    months months months months
    ended ended ended ended
    Jun 30, Jun 30, Jun 30, Jun 30,
    2011 2010 2011 2010
           
           
           
Net loss (11,693) (4,954) (854) (1,672)
           
Adjust: Change in value of derivatives 3,802 12,454 (1,160) 17,333
  Impairment charge 13,645 -- 13,645 --
           
Normalized net income 5,754 7,500 11,631 15,661

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 sole charterer and only 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, vessel acquisitions 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 offhire 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'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,
 2011201020112010
         
Operating Revenues        
Time charter revenue $38,774 $39,611 $77,878 $78,762
         
Operating Expenses 11,254 10,156 22,297 19,748
Vessel operating expenses         
Depreciation 9,989 9,984 19,938 19,855
General and administrative 1,876 2,084 3,818 3,919
Impairment charge 13,645 -- 13,645 --
Other operating income (92) (51) (198) (603)
Total operating expenses 36,672 22,173 59,500 42,919
         
Operating Income 2,102 17,438 18,378 35,843
         
Non Operating Income (Expense)        
Interest income 10 60 23 95
Interest expense (5,058) (6,048) (10,668) (11,904)
Realized loss on interest rate derivatives (4,869) (3,935) (9,652) (8,330)
Unrealized (loss) gain on interest rate derivatives (3,802) (12,454) 1,160 (17,333)
         
Loss before Income Taxes (11,617) (4,939) (759) (1,629)
         
Income taxes (76) (15) (95) (43)
Net Loss ($11,693) ($4,954) ($854) ($1,672)
         
         
Earnings per Share        
         
Weighted average number of Class A common shares outstanding        
Basic 47,188,978 46,830,467 47,187,685 46,830,467
Diluted 47,188,978 46,830,467 47,187,685 46,830,467
         
Net loss in $ per Class A common share         
Basic ($0.25) ($0.11) ($0.02) ($0.04)
Diluted ($0.25) ($0.11) ($0.02) ($0.04)
         
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 $ nil $ nil $ nil
     
Global Ship Lease, Inc.    
Interim Unaudited ConsolidatedBalance Sheets    
(Expressed in thousands of U.S. dollars)    
     
 June 30,December 31,
 20112010
     
Assets    
     
Cash and cash equivalents $32,311 $28,360
Restricted cash 3,027 3,027
Accounts receivable 7,555 7,341
Prepaid expenses 695 712
Other receivables 130 264
Deferred tax 328 265
Deferred financing costs 999 1,009
Total current assets 45,045 40,978
     
Vessels in operation 905,974 922,498
Other fixed assets  38 10
Intangible assets — vessel purchase options -- 13,645
Intangible assets — other 97 26
Deferred financing costs 3,344 3,865
Total non-current assets 909,453 940,044
Total Assets $954,498 $981,022
Liabilities and Stockholders' Equity    
     
Liabilities    
     
Current portion of long term debt $40,000 $44,500
Intangible liability — charter agreements 2,119 2,119
Accounts payable 3,059 1,391
Accrued expenses 3,961 5,575
Derivative instruments 18,274 17,798
Total current liabilities 67,413 71,383
     
Long term debt 468,953 488,269
Preferred shares 48,000 48,000
Intangible liability — charter agreements 21,110 22,169
Derivative instruments 25,001 26,637
Total long-term liabilities 563,064 585,075
     
Total Liabilities $630,477 $656,458
     
Commitments and contingencies -- --
     
Stockholders' Equity    
     
Class A Common stock — authorized $472 $471
214,000,000 shares with a $0.01 par value;    
47,188,978 shares issued and outstanding (2010 — 47,130,467)    
Class B Common stock — authorized 74 74
20,000,000 shares with a $0.01 par value;    
7,405,956 shares issued and outstanding (2010 — 7,405,956)    
     
Additional paid in capital 351,605 351,295
Accumulated deficit (28,130) (27,276)
Total Stockholders' Equity 324,021 324,564
Total Liabilities and Stockholders' Equity $954,498 $981,022
 
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,
   2011201020112010
           
           
Cash Flows from Operating Activities          
Net loss   ($11,693) ($4,954) ($854) ($1,672)
           
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities           
Depreciation    9,989 9,984 19,938 19,855
Impairment charge   13,645 -- 13,645 --
Amortization of deferred financing costs   262 225 531 451
Change in fair value of certain derivative instruments   3,802 12,454 (1,160) 17,333
Amortization of intangible liability   (530) (529) (1,059) (1,059)
Settlements of hedges which do not qualify for hedge accounting   4,869 3,935 9,652 8,330
Share based compensation   175 315 311 626
(Increase) decrease in accounts receivable and other assets   (25) 655 (340) 460
Increase in accounts payable and other liabilities   (1,302) 3,643 (1,840) 870
Unrealized foreign exchange loss (gain)   2 (41) 11 (2)
                   
Net Cash Provided by Operating Activities    19,194 25,687 38,835 45,192
                   
Cash Flows from Investing Activities           
Settlements of hedges which do not qualify for hedge accounting   (4,869) (3,935) (9,652) (8,330)
Cash paid to acquire intangible assets   (66) -- (92) --
Cash paid for purchases of vessels, vessel prepayments and vessel deposits   -- (820) -- (1,128)
Costs relating to drydockings   (487) -- (1,324) (164)
                   
Net Cash Used in Investing Activities    (5,422) (4,755) (11,068) (9,622)
                   
Cash Flows from Financing Activities           
Repayment of debt   (10,000) (30,959) (23,816) (35,051)
                   
Net Cash Used in Financing Activities    (10,000) (30,959) (23,816) (35,051)
                   
Net Increase (Decrease) in Cash and Cash Equivalents   3,772 (10,027) 3,951 519
Cash and Cash Equivalents at start of Period   28,539 41,356 28,360 30,810
                   
Cash and Cash Equivalents at end of Period   $32,311 $31,329 $32,311 $31,329
                   
Supplemental information          
           
Non cash investing and financing activities          
           
Total interest paid    $6,492 $4,776 $11,866 $10,568
           
Income tax paid    $61 $14 $87 $14
                       
CONTACT: Investor and Media Contacts:

         The IGB Group

         Michael Cimini

         212-477-8261


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