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Global Ship Lease Reports Results For The Fourth Quarter Of 2010

Impairment

On November 8, 2010, the Company signed agreements with the sellers of two 4,250 TEU container vessels which terminated the Company's purchase obligations totaling $154.8 million.   Under the agreements the Company (i) released deposits, including accrued interest and totaling approximately $8.1 million per vessel (ii) made further cash payment of approximately $6.2 million per vessel and (iii) transferred to the sellers certain supplies purchased for the vessels which are valued at approximately $0.4 million per vessel.   The total value of these items was $14.7 million per vessel.  In exchange, the Company acquired purchase options giving it the right, but not the obligation, to purchase each vessel on the first anniversary of its delivery by the builder to the seller, for a final payment of $61.25 million per vessel.  Each purchase option is to be exercised no later than 270 days after the delivery of the vessel by the builder to the seller. The vessels were delivered by the builder in December 2010 and January 2011 respectively.

Under US GAAP, an impairment charge totalling $17.1 million has been recognised in the three months ended December 31, 2010 comprised of $15.5 million released deposits not including interest earned, $1.3 million interest capitalised thereon and $0.3 million other predelivery capital expenditure.

EBITDA

EBITDA, before the impairment charge of $17.1 million, was $26.4 million the three months ended December 31, 2010 compared to $27.9 million for the three months ended December 31, 2009 and was $108.9 million for the year ended December 31, 2010 compared to $99.0 million for the year ended December 31, 2009.

Other operating (income) expense

Other operating income in the three months ended December 31, 2010 was $0.2 million up slightly on $0.1 million for the three months ended December 31, 2009. 

For the year ended December 31, 2010 other operating income was $0.4 million, the same as for 2009.

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