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Global Ship Lease Reports Results For The Fourth Quarter Of 2012

Stocks in this article: GSL

For the year ended December 31, 2012, the realized loss from hedges was $18.4 million and the unrealized gain was $9.7 million. This compares to a realized loss of $19.4 million and an unrealized loss of $0.9 million in the year ended December 31, 2011.

At December 31, 2012, interest rate derivatives totaled $580.0 million against floating rate debt of $470.7 million, including the preferred shares. As a consequence, the Company is over hedged. This arises from accelerated amortization of the credit facility debt and not incurring additional floating rate debt anticipated to be drawn in connection with the originally intended purchases of the two 4,250 TEU vessels at the end of 2011. $253.0 million of the interest rate derivatives at a fixed rate of 3.40% expire mid March 2013. The total mark-to-market unrealized loss recognized as a liability on the balance sheet at December 31, 2012 was $35.6 million.

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 December 31, 2012 was a charge of $38,000, compared to a credit of $212,000 in the fourth quarter of 2011, mainly for movements in the deferred tax balance.

Taxation for the year ended December 31, 2012 was a charge of $0.1 million, the same as for 2011. 

Net Income/Loss

Net income for the three months ended December 31, 2012 was $8.1 million after a $4.7 million non-cash interest rate derivative mark-to-market gain. For the three months ended December 31, 2011 net income was $10.9 million, after $4.0 million non-cash interest rate derivative mark-to-market gain. Normalized net income was $3.5 million for the three months ended December 31, 2012 and $6.8 million for the three months ended December 31, 2011, which excludes the effect of the non-cash interest rate derivative mark-to-market gains. 

Net income was $31.9 million for the year ended December 31, 2012 after a $9.7 million non-cash interest rate derivative mark-to-market gain. For the year ended December 31, 2011, net income was $9.1 million after the $13.6 million non-cash impairment charge and a $0.9 million non-cash interest rate derivative mark-to-market loss. Normalized net income was $22.2 million for the year ended December 31, 2012, and $23.6 million for the year ended December 31, 2011. 

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