Vessel Operating Expenses

Vessel operating expenses, which include costs of crew, lubricating oil, spares and insurance, were $11.5 million for the three months ended December 31, 2012. The average cost per ownership day was $7,363 up $44, or 0.6% on $7,319 for the rolling four quarters ended September 30, 2012. Increased spend on repairs, maintenance and supplies have been offset by a benefit from exchange rate movements on costs denominated in euros, fewer insurance deductibles and lower expenses from fewer drydockings. The fourth quarter 2012 average daily cost was up $30, or 0.4% from the average daily cost of $7,333 for the fourth quarter 2011 for mainly the same reasons.

For the year ended December 31, 2012 vessel operating expenses were essentially flat at $45.6 million or an average of $7,327 per day, compared to $45.5 million in the comparative period or $7,336 per day.

Depreciation

Depreciation for the three months ended December 31, 2012 was $10.1 million, the same as in the fourth quarter of 2011.

Depreciation for the year ended December 31, 2012 was $40.3 million, compared to $40.1 million in the comparative period of 2011.

General and Administrative Costs

General and administrative costs were $1.5 million in the three months ended December 31, 2012, compared to $1.8 million in the fourth quarter of 2011 with the reduction due mainly to lower legal and professional fees.

For the year ended December 31, 2012, general and administrative costs were $5.8 million compared to $7.4 million for 2011. The reduction is due mainly to lower legal and professional fees.

Impairment Charge – 2011

Purchase options in the Company's favor to purchase two 4,250 TEU newbuildings at the end of 2011  were to be declared by September 16, 2011 for one vessel and October 4, 2011 for the other. The purchase of these vessels was always predicated on achieving a strong return for shareholders by acquiring the vessels, which had time charters attached, at an attractive price and securing financing on favorable terms.   As the Company was not able to obtain committed finance on acceptable terms, the purchase options were allowed to lapse and  the intangible assets relating to the options were written off in the Second Quarter 2011.

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