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Global Ship Lease Reports Results For The Second Quarter Of 2012

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

Taxation

Taxation for the three months ended June 30, 2012 was $0.1 million, the same as in the second quarter of 2011.

Taxation for the six months ended June 30, 2012 was $0.1 million the same as in 2011. 

Net Income/Loss Net income for the three months ended June 30, 2012 was $7.5 million after $0.9 million non-cash interest rate derivative mark-to-market gain. For the three months ended June 30, 2011 net loss was $11.7 million, after $13.6 million non-cash impairment charge and $3.8 million non-cash interest rate derivative mark-to-market loss. Normalized net income was $6.6 million for the three months ended June 30, 2012 and $5.8 million for the three months ended June 30, 2011, which excludes the effect of the non-cash interest rate derivative mark-to-market gains and losses and the impairment charge. 

Net income was $15.5 million for the six months ended June 30, 2012 after a $3.6 million non-cash interest rate derivative mark-to-market gain. For the six months ended June 30, 2011, net loss was $0.9 million after the $13.6 million non-cash impairment charge and a $1.2 million non-cash interest rate derivative mark-to-market gain. Normalized net income was $11.9 million for the six months ended June 30, 2012 and $11.6 million for the six months ended June 30, 2011. 

Credit Facility

The container shipping industry is currently experiencing a significant cyclical downturn. As a consequence, there has been a decline in charter free market values of containerships commencing July 2011. While the Company's stable business model largely insulates it from volatility in the freight and charter markets, a covenant in the credit facility with respect to the Leverage Ratio, which is the ratio of outstanding drawings under the credit facility and the aggregate charter free market value of the secured vessels, causes the Company to be sensitive to significant declines in vessel values. Under the terms of the credit facility, the Leverage Ratio cannot exceed 75%. The Leverage Ratio has little impact on the Company's operating performance as cash flows are largely predictable under its business model.

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