Global Ship Lease, Inc. (NYSE: GSL)(NYSE: GSL.U)(NYSE: GSL.WS), a
containership charter owner, announced today its unaudited results
for the three months ended June 30, 2009.
Second Quarter and Year-to-Date 2009 Highlights
- Generated $14.8 million of cash in the second quarter of 2009
and $30.1 million six months ended June 30, 2009
- Reported revenue of $36.2 million for the second quarter of
2009 up 58% on $22.9 million for the second quarter 2008 due to the
purchase of four additional vessels in December 2008 and $71.2
million for the six months ended June 30, 2009 up 59% on $44.8
million for the six months ended June 30, 2008
- Reported normalized net earnings of $6.1 million, or $0.11 per
share, for the second quarter of 2009, excluding a $16.7 million
non-cash interest rate derivative mark-to-market gain. For the six
months ended June 30, 2009 normalized net earnings were $13.0
million excluding $21.0 million non-cash mark-to-market gain
- Including the non-cash mark-to-market gain, reported net
income of $22.8 million, or $0.42 per share, for the second quarter
of 2009 and $33.9 million, or $0.63 per share, for the six months
ended June 30, 2009
- Extended until August 31, 2009 the suspension of loan-to-value
tests under the $800 million credit facility whilst a longer term
amendment regarding loan-to-value covenants is finalized. No common
dividends can be declared or paid during the waiver period
- Paid a fourth quarter 2008 dividend of $0.23 per share on
March 5, 2009 to Class A common shareholders and unit holders and
Class B common shareholders of record as of February 20, 2009
Ian Webber, Chief Executive Officer of Global Ship Lease,
stated, "During a difficult time for the container shipping
industry, Global Ship Lease's long-term time charters continue to
perform as expected. With our entire 16 vessel operating fleet on
non cancelable time charters with an average remaining term of 10
years, the Company posted strong and consistent revenue and cash
flow in the second quarter. We are also pleased to have once again
maintained our ship operating costs under the capped amount for the
fourth consecutive quarter. As previously disclosed, we continue to
work closely with our lenders and expect to finalize an amendment
to our $800 million credit facility during August."
Results for Three And Six Months Ended June 30, 2009
Comparative financial information for the three and six months
ended June 30, 2008 is prepared under predecessor accounting rules
and includes the results of operations of two of the Company's
vessels for a part of January 2008 when they were owned by CMA CGM,
a privately owned French container shipping company, and operated
in CMA CGM's business of earning revenue from carrying cargo.
Global Ship Lease commenced its business of time chartering out
vessels in December 2007 when it purchased 10 container vessels
from CMA CGM. The Company purchased the two additional vessels from
CMA CGM in January 2008. The predecessor and Global Ship Lease
business models are not comparable.
Further, there were significant changes to the Company's legal
and capital structure arising from the merger on August 14, 2008,
which resulted in the Company being listed on the New York Stock
Exchange. Accordingly, selected comparative information is
presented.
SELECTED FINANCIAL DATA - UNAUDITED
(thousands of U.S. dollars
except per share data)
Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
-------------------------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------------------------
Revenue (1) 36,193 22,939 71,201 44,761
Operating Income (1) 14,304 10,301 27,723 19,534
Net income (1) 22,762 9,140 33,918 10,426
Earnings per A and B share (2) 0.42 - 0.63 -
Normalised net earnings (2)(3) 6,110 - 12,957 -
Normalised earnings per A
and B share (2)(3) 0.11 - 0.24 -
Cash available for
distribution (2)(3) 14,796 - 30,101 -
(1) Comparative data for the three and six months ended June 30,
2008 relates to the Company's time charter business only and
therefore excludes the results from containerized transportation
undertaken by the predecessor group.
(2) Comparative data is not presented due to the significant
changes to the legal and capital structure arising from the merger
on August 14, 2008 resulting in the Company being listed on the New
York Stock Exchange.
(3) Normalized net earnings, normalized earnings per share, and
cash available for distribution are non-U.S. Generally Accepted
Accounting Principles (US GAAP) measures, as explained further in
this press release, and reconciliation is provided to the interim
unaudited financial information.
Revenue and Utilization
Global Ship Lease owned sixteen vessels throughout the first
half of 2009. The fleet generated revenue from fixed rate long-term
time charters of $36.2 million in the three months ended June 30,
2009, up 58% on revenue of $22.9 million for the comparative period
in 2008 due to the purchase of four additional ships in December
2008. These four vessels have an average daily charter rate of
$30,800 compared to an average daily charter rate of $22,685 for
the previous fleet of 12 vessels. During the three months ended
June 30, 2009 there were 1,456 ownership days, up 364 or 33% on
1,092 ownership days in the comparable period. There were four
unplanned off-hire days in the three months ended June 30, 2009
giving utilization of 99.7% . In the comparable period of 2008,
there were seven unplanned off-hire days, giving utilization of
99.4% .
For the six months ended June 30, 2009 revenue was $71.2
million, an increase of 59% compared to time charter revenue of
$44.8 million in the comparative period. Ownership days at 2,896
were up 737, or 34%, on 2,159 in the comparative period.
Utilization in the six months ended June 30, 2009 was 98.7% and was
the same in the comparative period.
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew,
lubricating oil, spares and insurance, were $10.5 million for the
three months ended June 30, 2009. The average cost per ownership
day was $7,217 up 2% from the average daily cost of $7,076 for the
previous quarter, and up 15% from the average daily cost of $6,246
for the comparative period in 2008. The increase on prior year is
primarily due to increased crew costs in the intervening period,
the incremental average costs of the four larger vessels that
joined the fleet in December 2008, including, for example,
additional lubricating oil consumption and $400,000 of spend in
second quarter 2009 on crane jib improvements and replacing radars
and turbo charger grids.
Vessel operating expenses were $21.2 million for the six months
ended June 30, 2009 equivalent to $7,331 per ownership day. This
compares to $14.0 million vessel operating expenses associated with
the time charter business in the comparative period or $6,477 per
ownership day.
Vessel operating expenses include regular ship operating costs
under Global Ship Lease's ship management agreements and are at
less than the capped amounts included in these agreements.
Depreciation
Depreciation was $9.0 million for the three months ended June
30, 2009, including the effect of the purchase during December 2008
of four additional vessels, compared to $4.8 million for the
comparative period. In the six months to June 30, 2009 depreciation
was $17.8 million, up from $9.6 million for the time charter
business in the comparative period in 2008.
General and Administrative Costs
General and administrative costs incurred were $2.4 million in
the three months ended June 30, 2009 compared to $1.2 million for
the time charter business in the comparable period in 2008 when the
Company was a wholly-owned subsidiary of CMA CGM. In the six months
ended June 30, 2009 general and administrative costs were $4.6
million compared to $1.8 million in the comparative period.
Interest Expense
Net interest expense, excluding the effect of interest rate
derivatives which do not qualify for hedge accounting, for the
three months ended June 30, 2009 was $5.4 million based on the
Company's borrowings under its credit facility of $542.1 million
and $48.0 million preferred shares throughout the period. Net
interest expense in the comparative period in 2008 was $6.3 million
based on borrowings of $578.0 million, including a loan of $176.9
million from the then shareholder, throughout the quarter.
For the six months ended June 30, 2009 net interest expense was
$9.9 million based on total borrowings as above of $590.1 million
compared to $14.2 million net interest expense for the comparative
period in 2008 based on total borrowings of $578.0 million
throughout the comparative period and which was adversely affected
by substantially higher prevailing interest rates in the first
quarter.
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 change in the fair value caused a
$13.9 million gain in the three months ended June 30, 2009,
reflecting movements in the forward curve for interest rates. Of
this amount, a $2.8 million charge is for settlements of swaps in
the period and $16.7 million gain is unrealized revaluation of the
balance sheet position. This compares to a $5.2 million gain in the
three months ended June 30, 2008 of which $0.1 million charge was
realized and $5.3 million gain was unrealized. For the six months
ended June 30, 2009 the reported gain was $16.1 million of which
$4.8 million charge was realized and $21.0 million gain was
unrealized. For the six months ended June 30, 2008 the reported
gain was $5.2 million of which $0.1 million charge was realized and
$5.3 million gain was unrealized. Mark-to-market adjustments have
no impact on operating performance or cash generation and do not
affect the Company's ability to make distributions to
shareholders.
Net Earnings
Normalized net earnings was $6.1 million, or $0.11 per Class A
and B common share, for the three months ended June 30, 2009
excluding the $16.7 million non-cash interest rate derivative
mark-to-market gain. Including the mark-to-market gain, net income
was $22.8 million or $0.42 per Class A and B common share.
Normalized net earnings was $13.0 million, or $0.24 per Class A
and B common share, for the six months ended June 30, 2009
excluding the $21.0 million non-cash interest rate derivative
mark-to-market gain. Including the mark-to-market gain, net income
was $33.9 million or $0.63 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 and other items that do not
affect the Company's ability to make distributions on common
shares.
Credit Facility
On April 29, 2009, due to current challenges in the ship
valuation environment, Global Ship Lease agreed with its lenders
under its $800 million credit agreement, to waive for two months
the requirement under the credit facility to submit vessel
valuations and undertake the consequent loan-to-value test.
Valuations were otherwise due by April 30, 2009. In June, the
waiver was extended to July 31, 2009 and recently was further
extended to August 31, 2009 to allow the Company to finalize
discussions with its lenders on an amendment to the credit facility
to address loan to value. The facility bears an interest margin of
2.75% over LIBOR during this waiver period and no dividend to
common shareholders may be declared or paid.
Management expects that an agreement will be reached with the
Company's lenders and, accordingly, the interim unaudited combined
financial information have been prepared on a going concern basis.
In the event that the Company does not successfully amend the
facility agreement by August 31, 2009 or obtain a further waiver of
the need to perform loan to value tests, and its loan to value
ratio is above 100%, the lenders may declare an event of default
and accelerate some or all of the debt. Any amount of the long term
debt which is declared to be immediately repayable will be
reclassified as current.
Dividend
Global Ship Lease has agreed with its lenders that it will not
declare or pay any dividend to common shareholders during the
waiver period noted above. The board of directors will review the
dividend policy once an amendment to the credit facility has been
agreed upon with the bank group.
Cash Available for Common Dividends
Cash available for common dividends was $14.8 million for the
three months ended June 30, 2009 and was $30.1 million for the six
months ended June 30, 2008. Cash available for common dividends is
a non-US GAAP measure and is reconciled to the financial
information further in this press release. We believe that it is a
useful measure with which to assess the Company's operating
performance as it adjusts for the effects of non-cash items that do
not affect the Company's ability to make distributions on common
shares.
Fleet Utilization
The table below shows vessel utilization for the three and six
months to June 30 2009 and 2008. Unplanned offhire in the six
months ended June 30, 2009 includes 18 days in first quarter for
drydock and associated repairs following a grounding and a seven
day deviation to land a sick crew member.
Three months ended Six months ended
--------------------------------------------------------------------------
Days 30-Jun-09 30-Jun-08 Increase 30-Jun-09 30-Jun-08 Increase
--------------------------------------------------------------------------
Ownership
days 1,456 1,092 33% 2,896 2,159 34%
Planned
offhire -
scheduled
drydock - - - (15)
Unplanned
offhire -
other (4) (7) (38) (12)
--------------------------------------------------------------------------
Operating
days 1,452 1,085 34% 2,858 2,132 34%
Utilization 99.7% 99.4% 98.7% 98.7%
Fleet
The following table provides information about the on-the-water fleet of 16
vessels chartered to CMA CGM.
Charter Daily
Remaining Charter
Capacity Year Purchase Date Duration Rate ($)
Vessel Name in TEUs (1) Built by GSL (years)
--------------------------------------------------------------------------
Ville d'Orion 4,113 1997 December 2007 3.5 $28,500
Ville d'Aquarius 4,113 1996 December 2007 3.5 $28,500
CMA CGM Matisse 2,262 1999 December 2007 7.5 $18,465
CMA CGM Utrillo 2,262 1999 December 2007 7.5 $18,465
Delmas Keta 2,207 2003 December 2007 8.5 $18,465
Julie Delmas 2,207 2002 December 2007 8.5 $18,465
Kumasi 2,207 2002 December 2007 8.5 $18,465
Marie Delmas 2,207 2002 December 2007 8.5 $18,465
CMA CGM La Tour 2,272 2001 December 2007 7.5 $18,465
CMA CGM Manet 2,272 2001 December 2007 7.5 $18,465
CMA CGM Alcazar 5,100 2007 January 2008 11.5 $33,750
CMA CGM Chateau d'If 5,100 2007 January 2008 11.5 $33,750
CMA CGM Thalassa 10,960 2008 December 2008 16.5 $47,200
CMA CGM Jamaica 4,298 2006 December 2008 13.5 $25,350
CMA CGM Sambhar 4,045 2006 December 2008 13.5 $25,350
CMA CGM America 4,045 2006 December 2008 13.5 $25,350
(1) Twenty-foot Equivalent Units.
The following table provides information about the contracted fleet.
Estimated Charter Daily
Vessel Capacity Year Delivery Date Duration Charter
Name in TEUs (1) Built to GSL Charterer (years) Rate ($)
--------------------------------------------------------------------------
CMA CGM
Berlioz (2) 6,627 2001 By Sept CMA CGM 12 $34,000
30, 2009
Hull 789 (3) 4,250 2010 October 2010 ZISS 7-8(4) $28,000
Hull 790 (3) 4,250 2010 December 2010 ZISS 7-8(4) $28,000
(1) Twenty-foot Equivalent Units.
(2) Contracted to be purchased from CMA CGM.
(3) Contracted to be purchased from German interests.
(4) 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, 2009 today,
Monday, August 10, 2009 at 10:30 a.m. Eastern Time. There are two
ways to access the conference call:
(1) Dial-in: (877) 741-4249 or (719) 325-4817; Passcode:
3471820
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 24, 2009 at (888)
203-1112 or (719) 457-0820. Enter the code 3471820 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 currently owns 16 vessels and has contracted
to purchase an additional three vessels. The Company has a contract
in place to purchase by September 30, 2009 an additional vessel for
$82 million from CMA CGM, contingent on financing. The Company also
has contracts in place to purchase two newbuildings from German
interests for approximately $77 million each which are scheduled to
be delivered in the fourth quarter of 2010.
Once all of the contracted vessels have been delivered by the
end of 2010, Global Ship Lease will have a 19 vessel fleet with
total capacity of 74,797 TEU and a weighted average age at that
time of 6.1 years and an average remaining charter term of
approximately eight years. All of the vessels including those
contracted for future delivery are fixed on long-term charters.
Reconciliation of Non-U.S. GAAP Financial Measures
A. Cash Available for Common Dividends
Cash available for common dividends is a non-US GAAP measure and
is reconciled to the financial information below. It represents net
earnings adjusted for non-cash items including depreciation,
amortization of deferred financing charges, accretion of earnings
for intangible liabilities, charge for equity based incentive
awards and change in fair value of derivatives. We also deduct an
allowance for the cost of future drydockings, which due to their
substantial and periodic nature could otherwise distort quarterly
cashflow available for common dividends. Cash available for common
dividends is a non-US GAAP quantitative measure used to assist in
the assessment of the Company's ability to pay common dividends.
Cash available for common dividends 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 cash available for common dividends is a useful measure with
which to assess the Company's operating performance as it adjusts
for the effects of non-cash items that do not affect the Company's
ability to make distributions on common shares.
CASH AVAILABLE FOR COMMON DIVIDENDS - UNAUDITED
(thousands of U.S. dollars)
Three Six
months months
ended ended
June 30, 2009 June 30, 2009
--------------------------------------------------------------------------
Net income 22,762 33,918
Add: Depreciation 8,986 17,772
Charge for equity incentive
awards 863 1,579
Amortization of deferred
financing fees 251 625
Less: Change in value of derivatives (16,652) (20,961)
Allowance for future dry-docks (900) (1,800)
Revenue accretion for
intangible liabilities (311) (622)
Deferred taxation (203) (410)
--------------------------------------------------------------------------
Cash from operations available for
common dividends 14,796 30,101
--------------------------------------------------------------------------
--------------------------------------------------------------------------
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.
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 for distribution as dividends. 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 Six months
ended ended
June 30, 2009 June 30, 2009
----------------------------------------------------------------------
Net income as reported 22,762 33,918
Adjust: Change in value of derivatives (16,652) (20,961)
----------------------------------------------------------------------
Normalized net earnings 6,110 12,957
----------------------------------------------------------------------
----------------------------------------------------------------------
Weighted average number of Class A
and B common shares outstanding (1)
Basic 53,786,150 53,786,150
Diluted 53,786,150 53,922,780
Net income per share on reported earnings
Basic 0.42 0.63
Diluted 0.42 0.63
Normalized net income per share
Basic 0.11 0.24
Diluted 0.11 0.24
(1) The weighted average number of shares (basic and diluted)
for the three months ended June 30, 2009 excludes the effect of
outstanding warrants and stock based incentive awards as these were
anti dilutive. For the six months ended June 30, 2009 the diluted
weighted average number of shares includes the effect of
outstanding restricted stock units but excludes the effect of
outstanding warrants as these were anti dilutive.
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 strength of the future growth of
the shipping industry, including the rate of annual demand growth
in the international containership industry;
- future payments of dividends and the availability of cash for
payment of dividends;
- Global Ship Lease's expectations relating to dividend payments
and forecasts of its ability to make such payments;
- 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;
- Global Ship Lease's ability to repay its credit facility and
grow using the available funds under its credit facility;
- assumptions regarding interest rates and inflation;
- change in the rate of growth of global and various regional
economies;
- risks incidental to vessel operation, including discharge of
pollutants and vessel collisions;
- Global Ship Lease's financial condition and liquidity,
including its ability to obtain additional financing in the future
to fund capital expenditures, acquisitions and other general
corporate activities;
- 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 long-term,
fixed-rate 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; and
- 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 Combined Balance Sheets
The interim unaudited combined financial statements up to June 30, 2009
include two distinct reporting periods (i) before August 15, 2008
("Predecessor") and (ii) from August 15, 2008 ("Successor"), which relate
to the period preceding the merger with Marathon Acquisition Corp. and the
period succeeding the merger, respectively.
(Expressed in thousands of U.S. dollars)
June 30, December 31,
2009 2008
Successor Successor
-----------------------------------------------------------------------
Assets
Cash and cash equivalents $40,733 $26,363
Restricted cash 3,026 3,026
Accounts receivable 1,005 638
Prepaid expenses 513 734
Other receivables 955 1,420
Deferred tax asset 420 176
Deferred financing costs 1,008 526
-----------------------------------------------------------------------
Total current assets 47,660 32,883
-----------------------------------------------------------------------
Vessels in operation 889,066 906,896
Vessel deposits 15,935 15,720
Other fixed assets 15 21
Intangible assets - purchase agreement 7,840 7,840
Deferred tax asset 283 117
Deferred financing costs 5,316 3,131
-----------------------------------------------------------------------
Total non-current assets 918,455 933,725
-----------------------------------------------------------------------
Total Assets $966,115 $966,608
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Liabilities and Stockholders' Equity
Liabilities
Intangible liability - charter agreements $2,045 $1,608
Accounts payable 54 36
Accrued expenses 4,383 6,436
Derivative instruments 15,256 10,940
-----------------------------------------------------------------------
Total current liabilities 21,738 19,020
-----------------------------------------------------------------------
Long term debt 542,100 542,100
Preferred shares 48,000 48,000
Intangible liability - charter agreements 25,289 26,348
Derivative instruments 10,823 36,101
-----------------------------------------------------------------------
Total long-term liabilities 626,212 652,549
-----------------------------------------------------------------------
Total Liabilities $647,950 $671,569
-----------------------------------------------------------------------
Commitments and contingencies - -
Global Ship Lease, Inc.
Interim Unaudited Combined Balance Sheets (continued)
The interim unaudited combined financial statements up to June 30, 2009
include two distinct reporting periods (i) before August 15, 2008
("Predecessor") and (ii) from August 15, 2008 ("Successor"), which relate
to the period preceding the merger with Marathon Acquisition Corp. and the
period succeeding the merger, respectively.
(Expressed in thousands of U.S. dollars)
June 30, December 31,
2009 2008
Successor Successor
-----------------------------------------------------------------------
Stockholders' Equity
Class A Common stock - authorized
214,000,000 shares with a $.01 par value;
46,380,194 shares issued and outstanding 464 339
Class B Common stock - authorized
20,000,000 shares with a $.01 par value;
7,405,956 shares issued and outstanding 74 74
Class C Common stock - authorized
15,000,000 shares with a $.01 par value;
12,375,000 shares issued, converted to
Class A common shares on January 1, 2009 - 124
Retained earnings (deficit) (65,679) (9,338)
Net income (loss) for the period 33,918 (43,970)
Additional paid in capital 349,388 347,810
-----------------------------------------------------------------------
Total Stockholders' Equity 318,165 295,039
-----------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $966,115 $966,608
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Global Ship Lease, Inc.
Interim Unaudited Combined Statements of Income
The interim unaudited combined financial statements up to June 30, 2009
include two distinct reporting periods (i) before August 15, 2008
("Predecessor") and (ii) from August 15, 2008 ("Successor"), which relate
to the period preceding the merger with Marathon Acquisition Corp. and the
period succeeding the merger, respectively.
(Expressed in thousands of U.S. dollars except share data)
Three months ended June 30, Six months ended June 30,
2009 2008 2009 2008
Successor Predecessor Successor Predecessor
------------------------------------------------------------------------
Operating Revenues
Voyage revenue $- $- $- $2,072
Time charter revenue 36,193 22,939 71,201 44,761
------------------------------------------------------------------------
36,193 22,939 71,201 46,833
------------------------------------------------------------------------
Operating Expenses
Voyage expenses - - - 1,944
Vessel operating
expenses 10,508 6,821 21,231 14,166
Depreciation 8,986 4,814 17,772 9,834
General and
administrative 2,445 2,595 4,581 3,318
Other operating
(income) expense (50) (152) (106) 128
------------------------------------------------------------------------
Total operating
expenses 21,889 14,078 43,478 29,390
------------------------------------------------------------------------
Operating Income 14,304 8,861 27,723 17,443
Non Operating Income
(Expense)
Interest income 163 37 305 339
Interest expense (5,554) (6,344) (10,208) (14,577)
Realized and
unrealized gain on
interest
rate derivatives 13,872 5,153 16,146 5,153
------------------------------------------------------------------------
Income before Income
Taxes 22,785 7,707 33,966 8,358
Income taxes (23) (7) (48) (23)
------------------------------------------------------------------------
Net Income $ 22,762 $ 7,700 $ 33,918 $ 8,335
------------------------------------------------------------------------
------------------------------------------------------------------------
Weighted average
number of common
shares
outstanding basic
and diluted n/a 100 n/a 100
Net income per share
in $ per share basic
and diluted n/a 77 n/a 83
Weighted average
number of Class A
common shares
outstanding
Basic 46,380,194 n/a 46,380,194 n/a
Diluted 46,380,194 46,516,824
Net income in $ per
share amount
Basic 0.42 n/a 0.63 n/a
Diluted 0.42 0.63
Weighted average
number of Class B
common shares
outstanding
Basic and diluted 7,405,956 n/a 7,405,956 n/a
Net income in $ per n/a n/a
share amount
Basic and diluted 0.42 0.63
Global Ship Lease, Inc.
Interim Unaudited Combined Statements of Cash Flows
The interim unaudited combined financial statements up to June 30, 2009
include two distinct reporting periods (i) before August 15, 2008
("Predecessor") and (ii) from August 15, 2008 ("Successor"), which relate
to the period preceding the merger with Marathon Acquisition Corp. and the
period succeeding the merger, respectively.
(Expressed in thousands of U.S. dollars)
Three months ended June 30, Six months ended June 30,
2009 2008 2009 2008
Successor Predecessor Successor Predecessor
------------------------------------------------------------------------
Cash Flows from
Operating Activities
Net income $22,762 $7,700 $33,918 $8,335
Adjustments to
Reconcile Net
Income to Net Cash
Provided by
Operating Activities
Unrealized foreign
exchange 44 - 44 -
Depreciation 8,986 4,814 17,772 9,834
Amortization of
deferred financing
costs 251 194 625 384
Change in fair value
of certain financial
derivative
instruments (16,652) (5,341) (20,961) (5,230)
Intangible liability
amortization (311) - (622) -
Settlements of
hedges which do not
qualify for hedge
accounting 2,781 141 4,815 141
Share-based
compensation 863 - 1,579 -
Decrease / (increase)
in accounts receivable
and other
assets (506) 731 (123) (1,212)
Increase /(decrease)
in amounts payable
and other
liabilities 67 2,647 (1,464) 1,325
Decrease in
inventories - - - 1,613
Periodic costs
relating to drydocks - (859) - (1,269)
------------------------------------------------------------------------
Net Cash Provided by
Operating Activities 18,285 10,027 35,583 13,921
------------------------------------------------------------------------
Cash Flows from
Investing Activities
Settlements of
hedges which do not
qualify for hedge
accounting (2,781) (4,871) (4,815) (4,871)
Cash paid for
purchases of
vessels, vessel
prepayments
and vessel deposits (154) - (734) -
------------------------------------------------------------------------
Net Cash Used in
Investing Activities (2,935) (4,871) (5,549) (4,871)
------------------------------------------------------------------------
Cash Flows from
Financing Activities
Variation in
restricted cash - - - 188,000
Issuance costs of
debt - - (3,293) (276)
Dividend payments - - (12,371) -
(Decrease) in amount
due to CMA CGM - - - (188,716)
Deemed distribution
to CMA CGM - - - (505)
------------------------------------------------------------------------
Net Cash Used in
Financing Activities - - (15,664) (1,497)
------------------------------------------------------------------------
Net Increase in Cash
and Cash Equivalents 15,350 5,156 14,370 7,553
Cash and Cash
Equivalents at start
of Period 25,383 4,288 26,363 1,891
------------------------------------------------------------------------
Cash and Cash
Equivalents at end
of Period $40,733 $9,444 $40,733 $9,444
------------------------------------------------------------------------
------------------------------------------------------------------------
Operating Segments
Segment information reported below has been prepared on the same
basis that it is reported internally to the Company's chief
operating decision maker. The Company operated under two business
models from which it derives its revenues reported within this
summary financial information: (i) the provision of vessels by the
Company under time charters to container shipping companies and
(ii) freight revenues generated by the containerized transportation
of a broad range of industrial and consumer goods by the
Predecessor group. There are no transactions between reportable
segments. Following the delivery of the initial 12 vessels in
December 2007 and January 2008, the activity consists solely of the
ownership and provision of vessels for container shipping under
time charters.
The "Adjustment" columns in the table below includes (i) the
elimination of the Containerized Transportation activity performed
by the Predecessor up to June 30, 2008, and (ii) IPO and merger
costs expensed by the Predecessor.
During the three and six months ended June 30, 2009 and 2008 the
activities can be analyzed as follows:
Three months ended June, 30
------------------------------------------------------------------------
2009 2008
Successor Predecessor
------------------------------------------------------------------------
Time
Time Charter Charter Adjustment Total
------------------------------------------------------------------------
Operating revenues $36,193 $22,939 $- $22,939
------------------------------------------------------------------------
Operating expenses
Voyage expenses - - - -
Vessel operating
expenses 10,508 6,821 - 6,821
Depreciation 8,986 4,814 - 4,814
General and
administrative 2,445 1,155 1,440 2,595
Other operating
(income) expense
(50) (152) - (152)
------------------------------------------------------------------------
Total operating
expenses 21,889 12,638 1,440 14,078
Operating income (loss) 14,304 10,301 (1,440) 8,861
Interest income 163 37 - 37
Interest expense (5,554) (6,344) - (6,344)
Realized and unrealized
gain on derivatives 13,872 5,153 - 5,153
------------------------------------------------------------------------
Income (expense) before
income taxes 22,785 9,147 (1,440) 7,707
Income taxes (23) (7) - (7)
------------------------------------------------------------------------
Net income (expense) $22,762 $9,140 $(1,440) $7,700
------------------------------------------------------------------------
Six months ended June, 30
------------------------------------------------------------------------
2009 2008
Successor Predecessor
------------------------------------------------------------------------
Time Time
Charter Charter Adjustment Total
------------------------------------------------------------------------
Operating revenues $71,201 $44,761 $2,072 $46,833
------------------------------------------------------------------------
Operating expenses
Voyage expenses - - 1,944 1,944
Vessel operating
expenses 21,231 13,985 181 14,166
Depreciation 17,772 9,573 261 9,834
General and
administrative 4,581 1,821 1,497 3,318
Other operating
(income) expense
(106) (152) 280 128
------------------------------------------------------------------------
Total operating
expenses 43,478 25,227 4,163 29,390
Operating income (loss) 27,723 19,534 (2,091) 17,443
Interest income 305 339 - 339
Interest expense (10,208) (14,577) - (14,577)
Realized and unrealized
gain on derivatives 16,146 5,153 - 5,153
------------------------------------------------------------------------
Income (expense) before
income taxes 33,966 10,449 (2,091) 8,358
Income taxes (48) (23) - (23)
------------------------------------------------------------------------
Net income (expense) $33,918 $10,426 $(2,091) $8,335
------------------------------------------------------------------------
Contacts: Investor and Media Contact: The IGB Group Michael
Cimini 212-477-8261
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