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 December 31, 2009.
Fourth Quarter and Full Year 2009 Highlights
- Generated $16.5 million of cash in the fourth quarter of 2009
up 29% on $12.8 million on cash generated in fourth quarter 2008.
$62.0 million cash was generated in the year ended December 31,
2009
- Reported revenue of $39.9 million for the fourth quarter of
2009, up 52% on $26.3 million for the fourth quarter 2008 due to
the purchase of four additional vessels in December 2008 and one
additional vessel in August 2009. Revenue was $148.7 million for
the year ended December 31, 2009 up 57% on $95.0 million for the
year ended December 31, 2008
- Reported normalized net earnings of $7.3 million, or $0.13 per
share, for the fourth quarter of 2009, excluding a $5.1 million
non-cash interest rate derivative mark-to-market gain. For the year
ended December 31, 2009 normalized net earnings was $26.6 million,
or $0.49 per share, excluding $17.9 million non-cash mark-to-market
gain and $2.2 million deferred financing costs written off on an
accelerated basis
- Including the non-cash mark-to-market and deferred financing
costs items, reported net income was $12.3 million, or $0.23 income
per share, for the fourth quarter of 2009 compared to $43.7 million
loss for the fourth quarter 2008. The reported net income was $42.4
million, or $0.79 per share, for the year ended December 31,
2009
- Purchased CMA CGM Berlioz, a 2001-built 6,627 TEU container
vessel, in August 2009 for $82 million. The vessel is chartered to
CMA CGM for 12 years
- Amended the credit facility in August 2009 to suspend
loan-to-value tests effectively until second quarter 2011. The
amendment also allowed further borrowings to finance the purchase
of CMA CGM Berlioz, cancelled all undrawn commitments and requires
prepayments based on free cash flow. No common dividends can be
declared or paid until the later of November 30, 2010 or when
loan-to-value falls to 75% or below
Ian Webber, Chief Executive Officer of Global Ship Lease,
stated, "During a challenging year for the industry and global
economy, our entire fleet remained secured on long-term contracts.
We also achieved strong utilization for the year and grew both
revenue and cash flow during a time when we finalized an amendment
to our credit facility. With the amended credit facility, we have
mitigated loan-to-value covenant concerns effectively until April
2011 and protected the Company from short-term volatility in asset
values. We are now paying down debt aggressively with approximately
$68 million expected to be repaid in 2010."
Results for Three Months And Year Ended December 31, 2009
Comparative financial information for the year ended December
31, 2008 is prepared under predecessor accounting rules and
includes the results of operations of two of the Company's vessels
for 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 containerized
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 and has subsequently purchased an
additional five vessels. 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 becoming 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
months months Year Year
ended ended ended ended
Dec 31, Dec 31, Dec 31, Dec 31,
-------------------------------------------------------------------------
2009 2008 2009 2008 (4)
-------------------------------------------------------------------------
Revenue (1) 39,884 26,305 148,708 94,978
Operating Income (1) 17,862 9,875 61,717 38,823
Net Income (Loss) (1) 12,348 (43,655) 42,374 (34,451)
Earnings (Loss) per
A and B share (2) 0.23 (1.06) 0.79 -
Normalised net earnings (2)(3) 7,254 7,020 26,637 -
Normalised earnings per
A and B share (2)(3) 0.13 0.17 0.49 -
Adjusted Cash
From Operations (2)(3) 16,482 12,777 61,967 -
(1) Comparative data for the year ended December 31, 2008 relates to the
Company's time charter business only and therefore excludes the
results from containerized transportation undertaken by the
predecessor group
(2) Certain comparative data is not presented for the year ended December
31, 2008 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 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
(4) Based on the combination of time charter activity for Predecessor and
Successor periods
Revenue and Utilization
Global Ship Lease owned sixteen vessels up to August 26, 2009
when CMA CGM Berlioz was purchased. The fleet generated revenue
from fixed rate long-term time charters of $39.9 million in the
three months ended December 31, 2009, up 52% on revenue of $26.3
million for the comparative period in 2008 due to the purchase of
four additional ships in December 2008 and one in August 2009.
These five vessels have an average daily charter rate of $31,450
compared to an average daily charter rate of $22,685 for the
previous fleet of 12 vessels. During the three months ended
December 31, 2009 there were 1,564 ownership days, up 411 or 36% on
1,153 ownership days in the comparable period. CMA CGM Utrillo was
dry-docked, at a cost of $0.9 million, for 16 days in the quarter.
There were no unplanned off-hire days in the three months ended
December 31, 2009 giving an overall utilization of 99.0%. In the
comparable period of 2008, there were no off-hire days, giving
utilization of 100.0%.
For the year ended December 31, 2009 revenue was $148.7 million,
an increase of 57% compared to time charter revenue of $95.0
million in the comparative period. Ownership days at 5,968 were up
1,552, or 35%, on 4,416 in the comparative period. Utilization in
the year ended December 31, 2009 was 98.8% down slightly on 99.0%
in the comparative period.
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew,
lubricating oil, spares and insurance, were $9.9 million for the
three months ended December 31, 2009. The average cost per
ownership day was $6,299 down 8% from the average daily cost of
$6,820 for the previous quarter due mainly to rebilling of certain
items for the charterer's account, and down 8% from the average
daily cost of $6,873 for the comparative period in 2008.
Vessel operating expenses were $41.4 million for the year ended
December 31, 2009 or $6,932 per ownership day. This compares to
$29.8 million vessel operating expenses associated with the time
charter business in the comparative period or $6,748 per ownership
day. The increase over 2008 is due mainly to the impact of the four
vessels delivered in December 2008 which are on average larger than
the previous vessels and are thus more expensive to operate.
Vessel operating expenses are at less than the capped amounts
included in Global Ship Lease's ship management agreements.
Depreciation
Depreciation was $10.1 million for the three months ended
December 31, 2009, including the effect of the purchase of four
additional vessels in December 2008 and one in August 2009,
compared to $5.9 million for the comparative period. In the year
ended December 31, 2009 depreciation was $37.3 million, up from
$20.6 million for the time charter business in the comparative
period in 2008.
General and Administrative Costs
General and administrative costs incurred were $2.2 million in
the three months ended December 31, 2009, including $0.4 million
non-cash charge for stock based incentives, compared to $2.7
million for the time charter business in the comparable period in
2008, including $0.8 million non-cash charge for stock based
incentives. In the year ended December 31, 2009 general and
administrative costs were $8.7 million, including $2.5 million
non-cash charge for stock based incentives, compared to $6.0
million in the comparative period (when up to August 14, 2008 the
Company was a wholly-owned subsidiary of CMA CGM) including $1.2
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 December 31, 2009 was $6.1 million. The
Company's borrowings under its credit facility averaged $593.8
million during fourth quarter and were $588.2 million as at
December 31, 2009 after repayment in November of $10.9 million.
There were $48.0 million preferred shares throughout the period.
Interest expense in the comparative period in 2008 was $2.6 million
based on average borrowings, including the preferred shares, of
$357.2 million in the quarter.
For the year ended December 31, 2009 interest expense was $24.2
million including $2.2 million write off of deferred financing
costs as a result of reduced borrowing capacity following
amendments to the credit facility in 2009 and based on average
borrowings, including the preferred shares, of $608.7 million
compared to $21.4 million interest expense for the comparative
period in 2008 based on average borrowings, including the preferred
shares, of $490.5 million.
Interest income for the three months ended December 31, 2009 was
$36,000 and was $195,000 in the comparative period. For the year
ended December 31, 2009 interest income was $0.5 million compared
to $0.8 million in 2008.
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 $0.7 million gain in the three months ended
December 31, 2009, reflecting primarily movements in the forward
curve for interest rates. Of this amount, $4.4 million was a
realized loss for settlements of swaps in the period and $5.1
million was unrealized gain for revaluation of the balance sheet
position. This compares to a $51.0 million loss in the three months
ended December 31, 2008 of which $0.3 million was realized loss and
$50.7 million was unrealized loss. For the year ended December 31,
2009 the reported gain was $4.8 million comprising $13.1 million
realized loss and $17.9 million unrealized gain. For the year ended
December 31, 2008 the reported loss was $52.5 million of which $0.8
million was realized and $51.8 million was unrealized.
At December 31, 2009 the total mark-to-market unrealized loss
recognized as a liability was $29.1 million.
Unrealized mark-to-market adjustments have no impact on
operating performance or cash generation.
Net Earnings
Normalized net earnings was $7.2 million, or $0.13 per Class A
and B common share, for the three months ended December 31, 2009
excluding the $5.1 million non-cash interest rate derivative
mark-to-market gain. Including the mark-to-market gain, net income
was $12.3 million or $0.23 income per Class A and B common
share.
Normalized net earnings was $26.6 million, or $0.49 per Class A
and B common share, for the year ended December 31, 2009 excluding
the $17.9 million non-cash interest rate derivative mark-to-market
gain and $2.2 million accelerated deferred financing costs written
off. Including these items, net income was $42.4 million or $0.79
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.
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 $16.5 million for the three
months ended December 31, 2009 compared to $12.8 million for the
three months ended December 31, 2008 and was $62.0 million for the
year ended December 31, 2009. Adjusted cash from operations is a
non-US GAAP measure and is reconciled to the financial information
further in this press release. The Company believes that it is a
useful measure with which to assess the Company's operating
performance as it adjusts for the effects of non-cash items.
Fleet Utilization
The table below shows fleet utilization for the three months and
year ended December 31, 2009 and 2008. Unplanned offhire in the
year ended December 31, 2009 includes 18 days in first quarter for
drydock and associated repairs following a grounding and a seven
day deviation to land a sick crew member.
Three months ended Year ended
-------------------------------------------------------------------------
Days Dec 31, Dec 31, Increase Dec 31, Dec 31, Increase
2009 2008 2009 2008
-------------------------------------------------------------------------
Ownership days 1,564 1,153 36% 5,968 4,416 35%
Planned offhire -
scheduled drydock (16) - (32) (15)
Unplanned offhire
- other - - (42) (30)
-------------------------------------------------------------------------
Operating days 1,548 1,153 34% 5,894 4,371 35%
Utilization 99.0% 100.0% 98.8% 99.0%
Fleet
The following table provides information about the on-the-water
fleet of 17 vessels chartered to CMA CGM.
Charter Daily
Remaining Charter
Capacity Year Purchase Date Duration Rate ($)
Vessel Name in TEUs(1) Built by GSL (years)
-------------------------------------------------------------------------
Ville d'Orion 4,113 1997 December 2007 3.00 $28,500
Ville d'Aquarius 4,113 1996 December 2007 3.00 $28,500
CMA CGM Matisse 2,262 1999 December 2007 7.00 $18,465
CMA CGM Utrillo 2,262 1999 December 2007 7.00 $18,465
Delmas Keta 2,207 2003 December 2007 8.00 $18,465
Julie Delmas 2,207 2002 December 2007 8.00 $18,465
Kumasi 2,207 2002 December 2007 8.00 $18,465
Marie Delmas 2,207 2002 December 2007 8.00 $18,465
CMA CGM La Tour 2,272 2001 December 2007 7.00 $18,465
CMA CGM Manet 2,272 2001 December 2007 7.00 $18,465
CMA CGM Alcazar 5,100 2007 January 2008 11.00 $33,750
CMA CGM Chateau d'If 5,100 2007 January 2008 11.00 $33,750
CMA CGM Thalassa 10,960 2008 December 2008 16.00 $47,200
CMA CGM Jamaica 4,298 2006 December 2008 13.00 $25,350
CMA CGM Sambhar 4,045 2006 December 2008 13.00 $25,350
CMA CGM America 4,045 2006 December 2008 13.00 $25,350
CMA CGM Berlioz 6,627 2001 August 2009 11.75 $34,000
(1) Twenty-foot Equivalent Units.
The following table provides information about the contracted fleet.
Charter Daily
Vessel Capacity Year Estimated Duration Charter
Name in TEUs(1) Built Delivery Date Charterer (years) Rate ($)
------------------------------------------------------------------------
Hull 789 (2) 4,250 2010 October 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 December 31, 2009
today, Tuesday, March 2, 2010 at 10:30 a.m. Eastern Time. There are
two ways to access the conference call:
(1) Dial-in: (888) 857-6929 or (719) 457-2639; Passcode:
8427789
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 Tuesday, March 16, 2010 at (888)
203-1112 or (719) 457-0820. Enter the code 8427789 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 17 vessels with a total
capacity of 66,297 TEU with a weighted average age at December 31,
2009 of 5.8 years. All of the current vessels are fixed on
long-term charters to CMA CGM with an average remaining term of 9.1
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 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
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
adjusted cashflow. There is no adjustment for movements in working
capital. 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.
ADJUSTED CASH FROM OPERATIONS - UNAUDITED
(thousands of U.S. dollars)
Three Three
months months Year
ended ended ended
Dec 31, Dec 31, Dec 31,
2009 2008 2009
-------------------------------------------------------------------------
Net income (loss) 12,348 (43,655) 42,374
Adjust: Depreciation 10,066 5,883 37,307
Charge for equity incentive awards 359 812 2,513
Amortization of deferred financing fees 222 133 3,108
Change in value of derivatives (5,094) 50,675 (17,928)
Allowance for future dry-docks (975) (725) (3,705)
Revenue accretion for intangible
liabilities (530) (53) (1,549)
Deferred taxation 86 (293) (153)
-------------------------------------------------------------------------
Adjusted cash from operations 16,482 12,777 61,967
-------------------------------------------------------------------------
-------------------------------------------------------------------------
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 Three
months months Year
ended ended ended
Dec 31, Dec 31, Dec 31,
2009 2008 2009
-------------------------------------------------------------------------
Net income (loss) as reported 12,348 (43,655) 42,374
Adjust: Change in value of derivatives (5,094) 50,675 (17,928)
Deferred financing costs
written off (1) 2,191
-------------------------------------------------------------------------
Normalized net earnings 7,254 7,020 26,637
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of Class A
and B common shares outstanding (2)
Basic 54,081,096 41,373,313 53,865,465
Diluted 54,081,096 41,373,313 54,160,814
Net income per share on reported
earnings
Basic 0.23 (1.06) 0.79
Diluted 0.23 (1.06) 0.78
Normalized net income per share
Basic 0.13 0.17 0.49
Diluted 0.13 0.17 0.49
(1) Following reductions in the company's borrowing capacity under its
credit facility, a proportion of unamortized deferred financing costs
were written off.
(2) The weighted average number of shares (basic and diluted) for the
three months ended December 31, 2009 excludes the effect of
outstanding warrants and stock based incentive awards as these were
anti dilutive. For the year ended December 31, 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 anti dilutive. The weighted average
number of shares (basic and diluted) for the year ended December 31,
2008 excludes 12,375,000 Class C shares which were converted to Class
A Common shares on a one-for-one basis on January 1, 2009.
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 Combined Statements of Income
The interim unaudited combined financial statements up to
December 31, 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 and
the period succeeding the merger, respectively.
(Expressed in thousands of U.S dollars except share data)
Three months ended December 31,
2009 2008
Successor Successor
-------------------------------------------------------------------------
Operating Revenues
Voyage revenue $- $-
Time charter revenue 39,884 26,305
-------------------------------------------------------------------------
39,884 26,305
-------------------------------------------------------------------------
Operating Expenses
Voyage expenses - -
Vessel operating expenses 9,851 7,924
Depreciation 10,066 5,883
General and administrative 2,187 2,686
Other operating (income) expense (82) (63)
-------------------------------------------------------------------------
Total operating expenses 22,022 16,430
-------------------------------------------------------------------------
Operating Income 17,862 9,875
Non Operating Income (Expense)
Interest income 36 195
Interest expense (6,107) (2,647)
Realized and unrealized gain (loss) on
interest rate derivatives 702 (50,986)
-------------------------------------------------------------------------
Income (Loss) before Income Taxes 12,493 (43,563)
Income taxes (145) (92)
-------------------------------------------------------------------------
Net Income (Loss) $12,348 $(43,655)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of
Common shares outstanding basic and diluted n.a. n.a.
Net Income (Loss) per share in $ per
share basic and diluted n.a. n.a.
Weighted average number of Class A
common shares outstanding
Basic 46,675,140 33,967,357
Diluted 46,675,140 33,967,357
Net (Loss) Income in $ per share
Basic $0.26 $(1.29)
Diluted $0.26 $(1.29)
Weighted average number of Class B
common shares outstanding
Basic and diluted 7,405,956 7,405,956
Net income (loss) in $ per share $nil $nil
Year ended December 31,
2009 2008
Successor Successor Predecessor
-------------------------------------------------------------------------
August 15 January 1
to to
December 31 August 14
Operating Revenues
Voyage revenue $- $- $2,072
Time charter revenue 148,708 39,095 55,883
-------------------------------------------------------------------------
148,708 39,095 57,955
-------------------------------------------------------------------------
Operating Expenses
Voyage expenses - - 1,944
Vessel operating expenses 41,368 11,904 18,074
Depreciation 37,307 8,731 12,163
General and administrative 8,748 3,712 3,814
Other operating (income) expense (432) (106) 93
-------------------------------------------------------------------------
Total operating expenses 86,991 24,241 36,088
-------------------------------------------------------------------------
Operating Income 61,717 14,854 21,867
Non Operating Income (Expense)
Interest income 519 413 424
Interest expense (24,224) (3,842) (17,600)
Realized and unrealized gain (loss)
on interest rate derivatives 4,806 (55,293) 2,749
-------------------------------------------------------------------------
Income (Loss) before Income Taxes 42,818 (43,868) 7,440
Income taxes (444) (102) (23)
-------------------------------------------------------------------------
Net Income (Loss) $42,374 $(43,970) $7,417
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of
Common shares outstanding
basic and diluted n.a. n.a. 100
Net Income (Loss) per share in $
per share basic and diluted n.a. n.a. $74,170
Weighted average number of
Class A common shares
outstanding
Basic 46,459,509 33,800,307 n.a.
Diluted 46,754,858 33,800,307 n.a.
Net (Loss) Income in $ per share
Basic $0.91 $(1.30) n.a.
Diluted $0.91 $(1.30) n.a.
Weighted average number of
Class B common shares
outstanding
Basic and diluted 7,405,956 7,405,956 n.a.
Net income (loss) in $ per share $nil $nil n.a.
Global Ship Lease, Inc.
Interim Unaudited Combined Balance Sheets
The interim unaudited combined financial statements up to
December 31, 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 and
the period succeeding the merger, respectively.
(Expressed in thousands of U.S. dollars)
December 31, December 31,
2009 2008
Successor Successor
-------------------------------------------------------------------------
Assets
Cash and cash equivalents $30,810 $26,363
Restricted cash 3,026 3,026
Accounts receivable 7,838 638
Prepaid expenses 685 734
Other receivables 613 1,420
Deferred tax 285 176
Deferred financing costs 903 526
-------------------------------------------------------------------------
Total current assets 44,160 32,883
-------------------------------------------------------------------------
Vessels in operation 961,708 906,896
Vessel deposits 16,243 15,720
Other fixed assets 9 21
Intangible assets - purchase agreement - 7,840
Deferred tax 161 117
Deferred financing costs 5,077 3,131
-------------------------------------------------------------------------
Total non-current assets 983,198 933,725
-------------------------------------------------------------------------
Total Assets $1,027,358 $966,608
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Liabilities
Intangible liability -
charter agreements $2,119 $1,608
Current portion of long term debt 68,300 -
Accounts payable 3,502 36
Accrued expenses 4,589 6,436
Derivative instruments 15,971 10,940
-------------------------------------------------------------------------
Total current liabilities 94,481 19,020
-------------------------------------------------------------------------
Long term debt 519,892 542,100
Preferred shares 48,000 48,000
Intangible liability - charter agreements 24,288 26,348
Derivative instruments 13,142 36,101
-------------------------------------------------------------------------
Total long-term liabilities 605,322 652,549
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Liabilities $699,803 $671,569
-------------------------------------------------------------------------
Commitments and contingencies - -
(Expressed in thousands of U.S. dollars)
December 31, December 31,
2009 2008
Successor Successor
-------------------------------------------------------------------------
Stockholders' Equity
Class A Common stock - authorized
214,000,000 shares with a $.01 par
value; 46,680,194 shares issued
and outstanding 467 339
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 (deficit) (65,679) (9,338)
Net income (loss) for the period 42,374 (43,970)
Additional paid in capital 350,319 347,810
-------------------------------------------------------------------------
Total Stockholders' Equity 327,555 295,039
-------------------------------------------------------------------------
Total Liabilities and Stockholders'
Equity $1,027,358 $966,608
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Global Ship Lease, Inc.
Interim Unaudited Combined Statements of Cash Flows
The interim unaudited combined financial statements up to
December 31, 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 and
the period succeeding the merger, respectively.
(Expressed in thousands of U.S. dollars)
Three months ended
December 31,
2009 2008
Successor Successor
--------------------------------------------------------------------------
Cash Flows from Operating Activities
Net income (loss) $12,348 $(43,655)
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities
Depreciation 10,066 5,883
Amortization of deferred financing costs 222 133
Change in fair value of certain derivative
instruments (5,094) 50,675
Amortization of intangible liability (530) (53)
Settlements of hedges which do not
qualify for hedge accounting 4,390 350
Share based compensation 359 812
(Increase) decrease in other receivables
and other assets (6,873) (367)
Increase (decrease) in accounts payable
and other liabilities 3,368 1,493
Decrease in inventories - -
Costs relating to drydocks (797) -
Unrealized foreign exchange(gain) loss (5) (80)
--------------------------------------------------------------------------
Net Cash Provided by Operating Activities 17,454 15,191
--------------------------------------------------------------------------
Cash Flows from Investing Activities
Settlements of hedges which do not
qualify for hedge accounting (4,390) (350)
Acquisition of Global Ship Lease, Inc.,
net Of cash acquired - (984)
Release of Trust Account - -
Cash paid for purchases of vessels,
vessel prepayments and vessel deposits (577) (257,450)
--------------------------------------------------------------------------
Net Cash (Used in) Provided by Investing
Activities (4,967) (258,784)
--------------------------------------------------------------------------
Cash Flows from Financing Activities
Proceeds from debt - 256,000
Repayments of debt (10,908) -
Variation in restricted cash - (3,026)
Issuance costs of debt (311) (4)
Proceeds from warrant exercise - 3,026
Buyback of shares - -
Dividend payments - (15,624)
(Decrease) in amount due to CMA CGM - -
Deemed distribution to CMA CGM - -
--------------------------------------------------------------------------
Net Cash (Used in) Provided by Financing
Activities (11,219) 240,372
--------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash
Equivalents 1,268 (3,221)
Cash and Cash Equivalents at start of Period 29,542 29,584
--------------------------------------------------------------------------
Cash and Cash Equivalents at end of Period $30,810 $26,363
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Year ended December 31,
2009 2008
Successor Successor Predecessor
-------------------------------------------------------------------------
August 15 January 1
to to
December 31 August 14
Cash Flows from Operating
Activities
Net income (loss) $42,374 $(43,970) $7,417
Adjustments to Reconcile Net
Income to Net
Cash Provided by Operating
Activities
Depreciation 37,307 8,731 12,164
Amortization of deferred
financing costs 3,108 199 491
Change in fair value of
certain derivative instruments (17,928) 54,851 (3,081)
Amortization of intangible
liability (1,549) (67) -
Settlements of hedges which do
not qualify for hedge accounting 13,121 632 141
Share based compensation 2,513 1,167 -
(Increase) decrease in other
receivables and other assets (6,510) 337 (980)
Increase (decrease) in accounts
payable and other liabilities 2,165 (7,849) 4,420
Decrease in inventories - - 1,613
Costs relating to drydocks (1,706) - (1,459)
Unrealized foreign exchange
(gain) loss 17 (80) -
-------------------------------------------------------------------------
Net Cash Provided by Operating
Activities 72,912 13,951 20,726
-------------------------------------------------------------------------
Cash Flows from Investing
Activities
Settlements of hedges which do
not qualify for hedge accounting (13,121) (632) (4,871)
Acquisition of Global Ship Lease,
Inc., net of cash acquired - (6,547) -
Release of Trust Account - 317,446 -
Cash paid for purchases of
vessels, vessel prepayments
and vessel deposits (83,639) (272,927) -
-------------------------------------------------------------------------
Net Cash (Used in) Provided
by Investing Activities (96,760) 37,340 (4,871)
-------------------------------------------------------------------------
Cash Flows from Financing
Activities
Proceeds from debt 57,000 256,000 -
Repayments of debt (10,908) (115,000) -
Variation in restricted cash - (3,026) 188,000
Issuance costs of debt (5,426) (3,856) (276)
Proceeds from warrant exercise - 3,026 -
Buyback of shares - (147,053) -
Dividend payments (12,371) (15,624) -
(Decrease) in amount due
to CMA CGM - - (188,713)
Deemed distribution to CMA CGM - - (505)
-------------------------------------------------------------------------
Net Cash (Used in) Provided
by Financing Activities 28,295 (25,533) (1,494)
-------------------------------------------------------------------------
Net Increase (Decrease) in
Cash and Cash Equivalents 4,447 25,758 14,361
Cash and Cash Equivalents
at start of Period 26,363 605 1,891
-------------------------------------------------------------------------
Cash and Cash Equivalents
at end of Period $30,810 $26,363 $16,252
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Global Ship Lease, Inc.
Interim Unaudited Operating Segments
The interim unaudited combined financial statements up to
December 31, 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 and
the period succeeding the merger, respectively.
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 these
interim unaudited combined financial statements: (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" column in the table below includes (i) the
elimination of the containerized transportation activity performed
by the Predecessor up to August 14, 2008, and (ii) the IPO and
merger costs expensed by the Predecessor.
During the three month period and year ended December 31, 2009
and 2008 the activities can be analyzed as follows:
Three months ended
December 31,
2009 2008
Successor Successor
-------------------------------------------------------------------------
Time Charter Time Charter
-------------------------------------------------------------------------
Operating revenues $39,884 $26,305
-------------------------------------------------------------------------
Operating expenses
Voyage expenses - -
Vessel operating expenses 9,851 7,924
Depreciation 10,066 5,883
General and administrative 2,187 2,686
Other operating (income) expense (82) (63)
-------------------------------------------------------------------------
Total operating expenses 22,022 16,430
Operating income (loss) 17,862 9,875
Interest income 36 195
Interest expense (6,107) (2,647)
Realized and unrealized gain
(loss) on derivatives 702 (50,986)
-------------------------------------------------------------------------
Income (loss) before income taxes 12,493 (43,563)
Income taxes (145) (92)
-------------------------------------------------------------------------
Net income (loss) $12,348 $(43,655)
-------------------------------------------------------------------------
Year ended December 31,
2009 2008 2008
Successor Successor Predecessor
-------------------------------------------------------------------------
Time Time
Charter Charter Adjustment Total
-------------------------------------------------------------------------
Operating revenues $148,708 $39,095 $55,883 $2,072 $57,955
-------------------------------------------------------------------------
Operating expenses
Voyage expenses - - - 1,944 1,944
Vessel operating
expenses 41,368 11,904 17,893 181 18,074
Depreciation 37,307 8,731 11,902 261 12,163
General and
administrative 8,748 3,712 2,306 1,508 3,814
Other operating
(income) expense (432) (106) (187) 280 93
-------------------------------------------------------------------------
Total operating
expenses 86,991 24,241 31,914 4,174 36,088
Operating
income (loss) 61,717 14,854 23,969 (2,102) 21,867
Interest income 519 413 424 - 424
Interest expense (24,224) (3,842) (17,600) - (17,600)
Realized and unrealized
gain (loss) on
derivatives 4,806 (55,293) 2,749 - 2,749
-------------------------------------------------------------------------
Income (loss)
before income taxes 42,818 (43,868) 9,542 (2,102) 7,440
Income taxes (444) (102) (23) - (23)
-------------------------------------------------------------------------
Net income (loss) $42,374 $(43,970) $9,519 $(2,102) $7,417
-------------------------------------------------------------------------
Contacts: Investor and Media Contacts: The IGB Group Michael
Cimini 212-477-8261
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