UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 6-K


REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934


For the month of May 2021


Commission File Number:  001-34153


Global Ship Lease, Inc.
(Translation of registrant's name into English)
 
c/o Global Ship Lease Services Limited
25 Wilton Road
London SW1V 1LW
United Kingdom
(Address of principal executive office)



Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F [X]       Form 40-F [  ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [  ].

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [  ].

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.


INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached to this Report on Form 6-K (this “Report”) as Exhibit 99.1 is a copy of the press release of Global Ship Lease, Inc. (the “Company”), dated May 10, 2021, reporting the Company’s financial results for the three months ended March 31, 2021.  Attached to this Report as Exhibit 99.2 are the Company’s interim unaudited consolidated financial statements for the three months ended March 31, 2021.
The information contained in this Report, except for the commentary of George Youroukos and Ian Webber contained in Exhibit 99.1, is hereby incorporated by reference into the Company's registration statements on Form F-3 (File Nos. 333-231509, 333-234343 and 333-235305).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



 
GLOBAL SHIP LEASE, INC.
 
 
(registrant)
 
 
 
 
 
 
 
Dated: May 11, 2021
By:
/s/ Ian J. Webber
 
 
 
Ian J. Webber
 
 
 
Chief Executive Officer
 
 
 
 
 

Exhibit 99.1



Investor and Media Contacts:
The IGB Group
Bryan Degnan
646-673-9701
or
Leon Berman
212-477-8438


Global Ship Lease Reports Results for the First Quarter of 2021

Declares Dividend of $0.25 per Common Share

LONDON, ENGLAND — May 10, 2021 - Global Ship Lease, Inc. (NYSE:GSL) (the “Company”, “Global Ship Lease” or “GSL”), a containership charter owner, announced today its unaudited results for the three months ended March 31, 2021.
First Quarter 2021
- Reported operating revenue of $73.0 million for the first quarter 2021.
- Reported net income available to common shareholders of $4.2 million for the first quarter 2021 after $5.8 million premium paid on the full optional redemption of our outstanding 9.875% Senior Secured Notes due 2022 (“2022 Notes”) on January 20, 2021, an associated non-cash write off of deferred financing charges of $3.7 million and of original issue discount of $1.1 million, a non-cash charge of $1.3 million for accelerated stock based compensation expense due to vesting and new awards of fully vested incentive shares, and a prepayment fee of $1.6 million on the partial repayment of our Blue Ocean Junior Credit Facility, giving normalized net income(3) of $17.8 million.
- Generated $44.7 million of Adjusted EBITDA(3) for the first quarter 2021.
- Declared a dividend today of $0.25 per Class A common share for the first quarter 2021 to be paid on June 3, 2021 to common shareholders of record as of May 24, 2021, more than double the $0.12 per Class A common share announced on January 12, 2021, as a result of subsequent fleet growth and success in rechartering.
- During the first quarter 2021, raised a further $10.7 million net proceeds under our ATM program for our 8.75% Series B Preferred Shares (“Series B Preferred Shares”). During the period from April 1, 2021 through May 7, 2021, a further $10.3 million net proceeds was raised under this ATM program.
- During the first quarter 2021, raised a further $15.1 million net proceeds under our ATM program for our 8.00% Senior Unsecured Notes due 2024 (“2024 Notes”). During the period from April 1, 2021 through May 7, 2021, a further $7.6 million net proceeds was raised under this ATM program.
- On January 12, 2021, Moody’s upgraded our Corporate Family Rating and the issue rating of our 2022 Notes to B2 / Positive from B3 / Positive.
- On January 19, 2021, fully drew down a new $236.2 million senior secured loan facility with Hayfin Capital Management, LLP (the “New Hayfin Facility”).  The proceeds, together with cash on hand, were used to complete on January 20, 2021 the full optional redemption of our outstanding 2022 Notes.
Page 1



- On January 20, 2021, upon the redemption in full of our 2022 Notes, the 250,000 Series C Perpetual Convertible Preferred Shares held by KEP VI (Newco Marine) Ltd. and KIA VIII (Newco Marine) Ltd. (together, “Kelso”), both affiliates of Kelso & Company, a U.S. private equity firm, were converted into 12,955,188 of our Class A common shares.
- On January 26, 2021, closed our fully underwritten public offering of 5,400,000 Class A common shares, at a public offering price of $13.00 per share. The underwriters exercised, in part, their 30-day option to purchase on February 17, 2021, an additional 141,959 Class A common shares. The aggregate net proceeds, after underwriting discounts and commissions and expenses, were approximately $67.8 million.
- On February 9, 2021, announced that we had agreed to purchase from and charter back to Maersk Line, seven 6,000 TEU Post-Panamax containerships with an average age of approximately 20 years for an aggregate purchase price of $116.0 million.  During the period from April 1, 2021 through May 9, 2021, four ships have been delivered. The remaining ships are scheduled for delivery during the second and third quarter of 2021. In April 2021, we entered into a new credit facility with HCOB for six of these seven ships and have drawn down three tranches of $10.7 million each, amounting to a total of $32.1 million. We expect to enter into a new credit facility shortly to finance the fourth ship delivered to date.
- On April 13, 2021,  Kelso and Maas Capital Investments B.V. sold an aggregate of 5,175,000 Class A common shares in an underwritten public offering at $12.50 per share (including 675,000 Class A common shares that were sold pursuant to the underwriters’ exercise, in full, of their option to purchase additional shares). We did not receive any proceeds from the sale of these Class A common shares.
- On April 16, 2021, we drew down in full on a new $51.7 million secured credit facility to refinance one of the three existing tranches of the $180.5 million Deutsche, CIT, HCOB, Entrust, Blue Ocean Credit Facility that had a maturity date on June 30, 2022.
- On May 7, 2021, we drew down in full on a new $51.7 million secured credit facility to refinance the second of the three existing tranches of the $180.5 million Deutsche, CIT, HCOB, Entrust, Blue Ocean Credit Facility that had a maturity date on June 30, 2022.
- Since January 1, 2021 and excluding the seven ships we have contracted to purchase, agreed 11 charter extensions or new charters for our existing fleet, adding approximately $280.9 million of contracted revenues and $204.1 million of expected aggregate Adjusted EBITDA. The charters were for five 2,200 – 2,800 TEU feeder ships, one 5,100 TEU Panamax, and five 5,900 – 6,800 TEU Post-Panamaxes. Charter durations ranged from approximately 21 months to over four years, with shorter durations for the smaller ships and longer durations for the larger ships. Rates were up significantly against those previously contracted. Including the seven ships contracted for purchase, we have added approximately $300 million of expected aggregate Adjusted EBITDA since January 1, 2021 calculated on the basis of the median firm periods of the respective charters.
George Youroukos, Executive Chairman of Global Ship Lease, stated, “The strong containership market momentum of late 2020 has further accelerated in 2021, positioning the sector for levels of profitability not seen in many years. While factors such as port delays, shortage of equipment, and congestion in the Suez Canal have provided support at the margin in tying up containership capacity, the present market conditions are based on the fundamentals of underlying strong demand growth set against limited supply, resulting in effectively full employment of the global containership fleet. Given the multi-year construction time for new containerships, we expect constrained supply to persist through at least the medium term – particularly in the workhorse mid-sized and smaller classes where we focus – resulting in continued market tightness.”
Page 2



“In the meantime, we continue to agree new charters for lengthening durations at increasingly attractive rates. We have also maintained our disciplined but active approach to growth through opportunistic secondhand vessel acquisitions, utilizing our balance sheet and strong cashflows to add immediately accretive, charter-attached tonnage with compelling upside potential and limited downside risk. We have made continued progress in this regard, having already taken delivery of four of the seven 6,000 TEU ships that we have agreed this year to acquire, and we remain optimistic that further such opportunities exist in the market. Having transformed our balance sheet, established a track record of continuous, disciplined growth, substantially expanded our charter durations and contracted revenue, and with today’s declaration of an increase to $0.25 per common share of the previously announced sustainable quarterly dividend based upon reliable, long-term cashflows, Global Ship Lease is advancing on all fronts as we utilize the strengths of our fleet and charter portfolio to create lasting value for our shareholders.”
Ian Webber, Chief Executive Officer of Global Ship Lease, commented, “Even as we have remained very active in pursuing growth and additional long-term charter cover, we have also taken the opportunity of the highly supportive market backdrop to further strengthen our balance sheet, reduce our cost of capital, and enhance our overall financial resilience and capacity to pursue opportunistic growth. In the first four months of 2021, by the full redemption of our restrictive 2022 Notes and our other refinancing initiatives, we have refinanced $330.6 million of debt, removed all but $54.4 million of maturities through end 2022, and dramatically improved our debt service and amortization profile while reducing our blended cost of debt from 6.4% to 5.5%. With these enhancements, an improved credit rating, the initiation of a sustainable quarterly dividend at an increased level due to our fleet expansion and the continuing success in rechartering ships at higher rates for longer periods, and increased trading liquidity enabled by our improved free float as a result of our recent equity offerings, we believe that we have materially improved Global Ship Lease’s attractiveness as an investment at this very exciting time in our history.”
SELECTED FINANCIAL DATA – UNAUDITED
(thousands of U.S. dollars)
   
Three
   
Three
 
   
months ended
   
months ended
 
   
March 31, 2021
   
March 31, 2020
 
             
Operating Revenue (1)
   
72,980
     
70,947
 
Operating Income
   
30,272
     
20,396
 
Net Income (2)
   
4,159
     
621
 
Adjusted EBITDA (3)
   
44,743
     
39,979
 
Normalized Net Income (3)
   
17,765
     
10,477
 
                 

(1) Operating Revenue is net of address commissions which represents a discount provided directly to a charterer based on a fixed percentage of the agreed upon charter rate. Brokerage commissions are included in “Time charter and voyage expenses”.
(2) Net Income available to common shareholders.
(3) Adjusted EBITDA and Normalized Net Income are non-U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) financial measures, as explained further in this press release, and are considered by Global Ship Lease to be a useful measure of its performance. For reconciliations of these non-U.S. GAAP financial measure to net income, the most directly comparable U.S. GAAP financial measure, please see “Reconciliation of Non-U.S. GAAP Financial Measures” below.
Page 3


Revenue and Utilization
Revenue from fixed-rate, mainly long-term, time-charters was $73.0 million in the three months ended March 31, 2021, up $2.1 million (or 3.0%) on revenue of $70.9 million for the prior year period, despite a 3.6% reduction in ownership days, due to the sale of GSL Matisse and Utrillo during the second quarter 2020, to 3,870 in the quarter, compared to 4,016 in the first quarter 2020. The increase in revenue is principally due to (i) a reduction in planned offhire days from 224 in the first quarter of 2020 to 27, (ii) increased revenue on renewals at higher rates from Maira, Nikolas, Dolphin II, GSL Ningbo and GSL Valerie partially offset by decreases in revenue on renewals at lower rates from Maira XL, CMA CGM Alcazar, and CMA CGM Chateau d’If, (iii) full contribution in the quarter from GSL Christen and GSL Nicoletta which were delivered during the first quarter 2020 and, (iv) less idle time, down to 15 days in the first quarter 2021 from 56, offset by the lower ownership days.
The 27 days of offhire for dry dockings in the first quarter 2021 were attributable to one regulatory dry-docking. With 15 days idle time for Maira between charters and 25 days of unplanned offhire days, utilization for the first quarter 2021 was 98.3%. In the comparative period of 2020, the 224 days of planned offhire were for three regulatory dry dockings and two scrubber installations, with extended completion times due to congestion in shipyards. With 56 days idle time for GSL Matisse and Utrillo and 39 days of unplanned offhire, utilization for the first quarter 2020 was 92.1%.
The table below shows fleet utilization for the three months ended March 31, 2021 and 2020, and for the years ended December 31, 2020, 2019, 2018 and 2017.
   
Three months ended
   
Year ended
 
   
March 31,
   
March 31,
   
Dec 31,
   
Dec 31,
   
Dec 31,
   
Dec 31,
 
Days
 
2021
   
2020
   
2020
   
2019
   
2018
   
2017
 
                                     
Ownership days
   
3,870
     
4,016
     
16,044
     
14,326
     
7,675
     
6,570
 
Planned offhire - dry-dockings
   
(27
)
   
(224
)
   
(687
)
   
(537
)
   
(34
)
   
(62
)
Unplanned offhire
   
(25
)
   
(39
)
   
(95
)
   
(105
)
   
(17
)
   
(40
)
Idle time
   
(15
)
   
(56
)
   
(338
)
   
(164
)
   
(47
)
   
0
 
Operating days
   
3,803
     
3,697
     
14,924
     
13,520
     
7,577
     
6,468
 
                                                 
Utilization
   
98.3
%
   
92.1
%
   
93.0
%
   
94.4
%
   
98.7
%
   
98.4
%

One dry-docking for regulatory requirements was completed in the quarter and as of March 31, 2021, one such dry-docking was in progress. In 2021, we anticipate eight further dry dockings for the existing fleet.  We anticipate that four of the seven 6,000 TEU ships we have contracted to purchase will be dry-docked in 2021 for regulatory requirements.
Vessel Operating Expenses
Vessel operating expenses, which primarily include costs of crew, lubricating oil, repairs, maintenance, insurance and technical management fees, were down 4.7% to $24.3 million for the first quarter 2021, compared to $25.5 million in the comparative period. The decrease of $1.2 million was mainly due to fewer ownership days as a result of the disposal of GSL Matisse and Utrillo. The average cost per ownership day in the quarter was $6,275, compared to $6,353 for the prior year period, down $78 per day, or 1.2%.
Page 4



Time Charter and Voyage Expenses
Time charter and voyage expenses comprise mainly commission paid to ship brokers, the cost of bunker fuel for owner’s account when a ship is off-hire or idle and miscellaneous owner’s costs associated with a ship’s voyage. Time charter and voyage expenses were $1.8 million for the first quarter 2021, compared to $3.5 million in the first quarter of 2020. The decrease is mainly due to the decrease in idle days and unplanned off hire days resulting in lower costs for bunker fuel for owner’s account.
Depreciation and Amortization
Depreciation and amortization for the first quarter 2021 was $12.4 million, compared to $11.5 million in the first quarter of 2020. The increase in the amortization expense is due to the six drydockings that have been completed since April 1, 2020. Depreciation was slightly increased due to additions of scrubbers and BWTS, offset by the sale of GSL Matisse and Utrillo.
Loss on sale of vessels - vessel impairment losses
As of March 31, 2020, we had an expectation that GSL Matisse and Utrillo would be sold before the end of their previously estimated useful life, and as a result performed an impairment test of these two asset groups and an impairment charge of $7.6 million was recognized in the first quarter 2020. As there were no trigger events, no impairment testing was performed for the first quarter of 2021.
General and Administrative Expenses
General and administrative expenses were $4.3 million in the first quarter 2021, compared to $2.4 million in the first quarter of 2020. The average general and administrative expense per ownership day for the first quarter 2021 was $1,104, compared to $607 in the comparative period, an increase of $497 or 81.9%. The increase was mainly due to the non-cash effect of accelerated stock based compensation expense due to vesting and new awards of fully vested incentive shares.
Adjusted EBITDA
Adjusted EBITDA was $44.7 million for the first quarter 2021, up from $40.0 million for the first quarter of 2020, with the net increase being mainly due to the increased operating days.
Interest Expense and Interest Income
Debt as at March 31, 2021 totaled $769.0 million, comprising $694.1 million secured debt collateralized by our vessels and $74.9 million of unsecured indebtedness on our 2024 Notes. As of March 31, 2021, none of our vessels were unencumbered.
Debt as at March 31, 2020 totaled $866.1 million, comprising $267.6 million of indebtedness under our 2022 Notes, $12.1 million of indebtedness under the Citi secured term loan, both cross collateralized by 18 ships in the legacy GSL fleet, $527.5 million of bank debt collateralized by the rest of the fleet and $59.0 million of indebtedness under our 2024 Notes. Five vessels were unencumbered as at March 31, 2020.
Page 5



Interest and other finance expenses for the first quarter 2021 were $25.3 million, an increase of $5.7 million, or 29.1%, on the interest and other finance expenses for the first quarter of 2020 of $19.6 million. The increase is mainly due to $5.8 million premium paid on the redemption in full of our 2022 Notes in January 2021 compared to $2.3 million premium paid on the redemption $46.0 million of the 2022 Notes in March 2020 plus the acceleration of deferred financing charges of $3.7 million, and the acceleration of amortization of original issue discount associated with the redemption of the 2022 Notes of $1.1 million plus a prepayment fee of $1.6 million paid on the partial repayment of our Blue Ocean Junior Credit Facility using a portion of the net proceeds from our ATM programs, offset by the effect of a decrease in LIBOR.
Interest income for the first quarter 2021 was $0.2 million, compared to $0.6 million for the first quarter of 2020 with the decrease being due to lower deposit interest rates.
Other Income Net
Other income, net was $0.4 million in the three months ended March 31, 2021, compared to $21,000 in the first quarter of 2020.
Earnings Allocated to Preferred Shares
Our Series B Preferred Shares carry a coupon of 8.75%, the cost of which for the first quarter 2021 was $1.5 million, compared to $0.9 million for the first quarter of 2020. The increase is due to additional Series B Preferred Shares issued under our ATM program since March 2020.
Net Income Available to Common Shareholders
Net income available to common shareholders for the three months ended March 31, 2021 was $4.2 million, after $5.8 million premium paid on the redemption in full of our 2022 Notes in January 2021, $3.7 million acceleration of deferred financing charges and $1.1 million acceleration of the amortization of the original issue discount both associated with the redemption of the 2022 Notes.  Net income available to common shareholders for the prior period was $0.6 million after $2.3 million premium paid on the redemption $46.0 million of our 2022 Notes in March 2020 and $7.6 million impairment charges associated with the decision to dispose of GSL Matisse and Utrillo.
Normalized net income for the three months ended March 31, 2021, was $17.8 million, before the $5.8 million premium paid on the redemption in full of our 2022 Notes in January 2021, the acceleration of deferred financing charges of $3.7 million and the acceleration of the amortization of the original issue discount of $1.1 million and the non-cash effect of $1.3 million for accelerated stock based compensation expense due to vesting and new awards of fully vested incentive shares, plus a prepayment fee of $1.6 million paid on the partial repayment of our Blue Ocean Junior Credit Facility. Normalized net income in the comparative period was $10.5 million, before the $2.3 million premium paid on the redemption $46.0 million of our 2022 Notes in March 2020 and the non-cash impairment charge of $7.6 million.
Page 6


Fleet
The following table provides information about our on-the-water fleet of 47 ships including ships delivered and charters agreed up to May 9, 2021
Vessel Name
Capacity in TEUs
Lightweight (tons)
Year Built
Charterer
Earliest Charter Expiry Date
Latest Charter Expiry Date
Daily Charter Rate $
               
CMA CGM Thalassa
11,040
38,577
2008
CMA CGM
4Q25
1Q26
47,200
UASC Al Khor(1)
9,115
31,764
2015
Hapag-Lloyd
1Q22
2Q22
34,000
Anthea Y(1)
9,115
31,890
2015
COSCO
3Q23
4Q23
38,000
Maira XL(1)
9,115
31,820
2015
ONE
2Q22
3Q22
31,650
MSC Tianjin
8,603
34,325
2005
MSC
2Q24
3Q24
Note (2)
MSC Qingdao
8,603
34,609
2004
MSC
2Q24
3Q24
23,000 (2)
GSL Ningbo
8,603
34,340
2004
MSC
1Q23
3Q23
22,500
GSL Eleni
7,847
29,261
2004
Maersk
3Q24
4Q24 (3)
16,500 (3)
GSL Kalliopi
7,847
29,105
2004
Maersk
4Q22
4Q24 (3)
14,500 (3)
GSL Grania
7,847
29,190
2004
Maersk
4Q22
4Q24 (3)
14,500 (3)
Mary(1)
6,927
23,424
2013
CMA CGM
3Q23
4Q23
25,910
Kristina(1)
6,927
23,421
2013
CMA CGM
2Q24
3Q24
25,910
Katherine (1)
6,927
23,403
2013
CMA CGM
1Q24
2Q24
25,910
Alexandra (1)
6,927
23,348
2013
CMA CGM
1Q24
2Q24
25,910
Alexis (1)
6,882
23,919
2015
CMA CGM
1Q24
2Q24
25,910
Olivia I (1)
6,882
23,864
2015
CMA CGM
1Q24
2Q24
25,910
GSL Christen
6,840
27,954
2002
Maersk
3Q23
4Q23
Note (4)
GSL Nicoletta
6,840
28,070
2002
MSC(5)
3Q24
4Q24
Note(5)
CMA CGM Berlioz
6,621
26,776
2001
CMA CGM
4Q25
1Q26
Note(6)
Agios Dimitrios
6,572
24,931
2011
MSC
4Q23
1Q24
20,000
GSL Vinia
6,080
23,737
2004
Maersk
3Q24
1Q25
13,250
GSL Christel Elisabeth
6,080
23,745
2004
Maersk
2Q24
1Q25
13,250
GSL Dorothea
6,008
24,243
2001
Maersk
2Q24
3Q26
Note(7)
GSL Arcadia
6,008
24,858
2000
Maersk
2Q24
3Q27
Note(7)
GSL Violetta
6,008
24,873
2000
WHL/Maersk
4Q24
4Q25
Note(7)
GSL Maria
6,008
24,414
2001
ONE/Maersk
3Q24
2Q27
Note(7)
Tasman
5,936
25,010
2000
Maersk
1Q22
3Q23(8)
12,500(8)
ZIM Europe
5,936
25,010
2000
ZIM
1Q24
2Q24
Note(9)
Ian H
5,936
25,128
2000
ZIM
2Q24
3Q24
Note(9)
Dolphin II
5,095
20,596
2007
OOCL
1Q22
2Q22
24,500
Orca I
5,095
20,633
2006
Maersk
2Q24
3Q25
Note (10)
CMA CGM Alcazar
5,089
20,087
2007
CMA CGM
3Q21
4Q21
16,000
GSL Château d’If
5,089
19,994
2007
Hapag-Lloyd
4Q21
4Q21
14,500
CMA CGM Jamaica
4,298
17,272
2006
CMA CGM
3Q22
1Q23
25,350
CMA CGM Sambhar
4,045
17,429
2006
CMA CGM
3Q22
1Q23
25,350
CMA CGM America
4,045
17,428
2006
CMA CGM
3Q22
1Q23
25,350
GSL Valerie
2,824
11,971
2005
ZIM
3Q21
1Q22
13,250
Athena
2,762
13,538
2003
MSC(10)
1Q24
2Q24
Note(11)
Maira
2,506
11,453
2000
Hapag-Lloyd
1Q23
2Q23
14,450
Nikolas
2,506
11,370
2000
CMA CGM
1Q23
1Q23
16,000
Newyorker
2,506
11,463
2001
CMA CGM
1Q24
2Q24
20,700(12)
La Tour
2,272
11,742
2001
MSC
2Q21
2Q21
7,250
Manet
2,272
11,727
2001
Sea-Lead
4Q21
4Q21
12,850
Keta
2,207
11,731
2003
OOCL
3Q21
3Q21
9,400
Julie
2,207
11,731
2002
Sea Consortium
Note
Note
Note(13)
Kumasi
2,207
11,791
2002
CMA CGM
4Q21
4Q21
9,300
Marie Delmas
2,207
11,731
2002
CMA CGM
4Q21
4Q21
9,300

(1)
Modern design, high reefer capacity, fuel-efficient vessel.
(2)
MSC Tianjin. Chartered at $23,000 per day through dry-docking in 2Q2021; thereafter at $19,000 per day, due to cancellation of scrubber installation. MSC Qingdao has a scrubber installed and will continue to trade at a rate of $23,000 per day.
(3)
GSL Eleni delivered 2Q2019 and is chartered for five years; GSL Kalliopi (delivered 4Q2019) and GSL Grania (delivered 3Q2019) are chartered for three years plus two successive periods of one year at the option of the charterer. During the option periods the charter rates for GSL Kalliopi and GSL Grania are $18,900 per day and $17,750 per day respectively.
(4)
GSL Christen. Chartered at $15,000 per day through May 2021, at which time the rate will increase to $35,000 per day.
(5)
GSL Nicoletta. Chartered to MSC at $13,500 per day to 3Q21; thereafter to be chartered to Maersk at $35,750 per day.
(6)
CMA CGM Berlioz. Chartered at $34,000 per day through December 2021, at which time the rate will increase to $37,750 per day.


Page 7

(7)
On February 9, 2021 we announced that we had contracted to purchase seven ships. Four of these vessels (GSL Dorothea, GSL Arcadia, GSL Violetta, and GSL Maria) have been delivered. The remaining three are scheduled for delivery in 2Q & 3Q 2021. Contract cover for each vessel is for a firm period of at least three years from the date each vessel is delivered, with charterers holding a one-year extension option on each charter,  followed by a second option with the period determined by (and terminating prior to) each vessel’s 25th year dry-docking & special survey. During the firm periods of cover the seven charters are expected to generate aggregate annualized Adjusted EBITDA of approximately $29.0 million. All seven ships will be chartered to Maersk, with the completion of short charters to Wan Hai and ONE on two ships (GSL Maria and GSL Violetta).
(8)
Tasman. 12-month extension at charterer’s option callable in 2Q2022, at an increased rate of $20,000 per day.
(9)
A package agreement with ZIM, for direct charter extensions on two 5,900 TEU ships: Ian H, at a rate of $32,500 per day from May 2021 to 3Q2024, and ZIM Europe (formerly Dimitris Y), at a rate of $24,250 per day, from May 2022 to median expiry of the charter in 2Q2024.
(10)
Orca I. Chartered at $10,000 per day through April 2021, at which time the rate will increase to $21,000 per day through to the median expiry of the charter in 3Q2024; thereafter the charterer has the option to charter the vessel for a further 12-14 months at the same rate.
(11)
Athena. Chartered to MSC at a rate of $9,000 per day through April 2021, at which time the vessel will be drydocked. Thereafter to be chartered to Hapag-Lloyd at $21,500 per day.
(12)
Newyorker. To be drydocked in 2Q2021; thereafter to be chartered to CMA CGM at $20,700 per day.
(13)
Julie. Chartered to Sea Consortium at a rate of $9,250 per day through May 2021; thereafter extended at a confidential rate and for a confidential term.

On February 9, 2021 we announced that we had contracted to purchase seven ships. Contract cover for each vessel is for a firm period of at least three years from the date each vessel is delivered, with charterers holding  one year extension option thereafter plus another option until three months before their scheduled dry-docking. During the firm periods of cover the charters are expected to generate aggregate annualized Adjusted EBITDA of approximately $29.0 million. The vessels and their respective delivery dates are shown in the table below; those vessels delivered by May 9, 2021 are also included in the main fleet table above.
 
Vessel Name
Capacity in TEUs     
Lightweight (tons)
Year Built
 
Actual/Expected Delivery date
         
GSL Dorothea
6,008
24,243
2001
26/04/2021
GSL Arcadia
6,008
24,858
2000
26/04/2021
GSL Violetta
6,008
24,873
2000
28/04/2021
GSL Maria
6,008
24,414
2001
28/04/2021
GSL MYNY
6,008
24,873
2000
3Q21
GSL Melita
6,008
24,848
2001
2Q21
GSL Tegea
6,008
24,308
2001
2Q21
         
Page 8


Conference Call and Webcast
Global Ship Lease will hold a conference call to discuss the Company's results for the three months ended March 31, 2021 today, Monday May 10, 2021 at 10:30 a.m. Eastern Time. There are two ways to access the conference call:
(1) Dial-in: (877) 445-2556 or (908) 982-4670; Passcode: 2098687
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 Wednesday, May 26, 2021 at (855) 859-2056 or (404) 537-3406. Enter the code 2098687 to access the audio replay. The webcast will also be archived on the Company’s website: http://www.globalshiplease.co
Annual Report on Form 20-F
The Company’s Annual Report for 2020 was filed with the Securities and Exchange Commission (the “Commission”) on March 19, 2021. A copy of the report can be found under the Investor Relations section (Annual Reports) of the Company’s website at http://www.globalshiplease.com or on the Commission’s website at www.sec.gov.  Shareholders may request a hard copy of the audited financial statements free of charge by contacting the Company at info@globalshiplease.com or by writing to Global Ship Lease, Inc, care of Global Ship Lease Services Limited, 25 Wilton Road, London SW1V ILW.
About Global Ship Lease
Global Ship Lease is a leading independent owner of containerships with a diversified fleet of mid-sized and smaller containerships. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under fixed-rate charters to top tier container liner companies. On November 15, 2018, it completed a strategic combination with Poseidon Containers.
Global Ship Lease owns 47 containerships and has contracted to purchase a further three ships, ranging from 2,207 to 11,040 TEU, with a total capacity (when fully delivered) of 287,336 TEU. 32 ships are Post-Panamax, of which nine are fuel-efficient new-design wide-beam.

Adjusted to include all charters agreed, and ships acquired or divested, up to May 9, 2021, the average remaining term of the Company’s charters as at March 31, 2021, to the mid-point of redelivery, including options under the Company’s control, was 2.6 years on a TEU-weighted basis. Contracted revenue on the same basis was $984.3 million. Contracted revenue was $1,134.9 million, including options under charterers’ control and with latest redelivery date, representing a weighted average remaining term of 3.1 years.
Page 9



Reconciliation of Non-U.S. GAAP Financial Measures
A.
Adjusted EBITDA
Adjusted EBITDA represents net income before interest income and expense, earnings allocated to preferred shares, income taxes, depreciation and amortization of drydocking costs, gains or losses on the sale of vessels, share based compensation and impairment losses.  Adjusted EBITDA is a non-U.S. GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash from its operations.  We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Adjusted EBITDA is not defined in U.S. GAAP and should not be considered to be an alternative to net income or any other financial metric required by such accounting principles. Our use of Adjusted EBITDA may vary from the use of similarly titled measures by others in our industry.
Adjusted EBITDA is presented herein both on a historic basis and on a forward-looking basis in certain instances. We have not provided a reconciliation of such forward looking non-U.S. GAAP financial measure to the most directly comparable U.S. GAAP measure because such U.S. GAAP financial measure on a forward-looking basis is not available to us without unreasonable effort.
ADJUSTED EBITDA - UNAUDITED
(thousands of U.S. dollars)
      
Three
   
Three
 
      
months
   
months
 
      
ended
   
ended
 
      
March 31,
   
March 31,
 
     
2021
   
2020
 
               
Net income available to Common Shareholders
   
4,159
     
621
 
                   
Adjust:                          
Depreciation and amortization    
12,383
     
11,548
 
                                       
Impairment charges    
-
     
7,585
 
                                       
Interest income    
(243
)
   
(638
)
                                       
Interest expense    
25,256
     
19,555
 
                                       
Share based compensation    
1,704
     
429
 
                                       
Earnings allocated to preferred shares    
1,484
     
879
 
                   
Adjusted EBITDA
   
44,743
     
39,979
 
Page 10



B.
Normalized net income
Normalized net income represents net income available to common shareholders adjusted for impairment charges, the premium paid on redemption of our 2022 Notes together with the related accelerated amortization of deferred financing costs and original issue discount, accelerated stock based compensation expense due to vesting and new awards of fully vested incentive shares and gains/losses on sale of vessels. Normalized net income is a non-U.S. GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net income for items that do not affect operating performance or operating cash generated. Normalized net income is not defined in U.S. GAAP and should not be considered to be an alternate to net income or any other financial metric required by such accounting principles.  Our use of Normalized net income may vary from the use of similarly titled measures by others in our industry.
NORMALIZED NET INCOME
(thousands of U.S. dollars)

      
Three
   
Three
 
      
months
   
months
 
      
ended
   
ended
 
      
March 31,
   
March 31,
 
     
2021
   
2020
 
               
Net income available to Common Shareholders
   
4,159
     
621
 
                   
Adjust:                  
Impairment charges    
-
     
7,585
 
                              
Premium paid on redemption of 2022 Notes    
5,764
     
2,271
 
                              
Accelerated write off of deferred financing charges related to redemption of 2022 Notes    
3,745
     
-
 
                              
Accelerated write off of original issue discount related to redemption of 2022 Notes    
1,133
     
-
 
                              
Accelerated stock based compensation expense due to vesting and new awards of fully vested incentive shares    
1,346
     
-
 
                              
Prepayment fee on partial repayment of Blue Ocean Credit Facility    
1,618
     
-
 
                   
Normalized net income
   
17,765
     
10,477
 
Page 11


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," “should,” "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 length and severity of the ongoing outbreak of the novel coronavirus (COVID-19) around the world and governmental responses thereto;

the financial condition of our charterers, particularly CMA CGM, our principal charterer and main source of operating revenue, and their ability to pay charterhire in accordance with the charters;

Global Ship Lease’s financial condition and liquidity, including its level of indebtedness or ability to obtain additional financing to fund capital expenditures, ship acquisitions and other general corporate purposes;

Global Ship Lease’s ability to meet its financial covenants and repay its credit facilities;

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 facilities;

risks relating to the acquisition of Poseidon Containers and Global Ship Lease’s ability to realize the anticipated benefits of the acquisition;

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 ship operation, including piracy, discharge of pollutants and ship 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 or other ship employment arrangements;
Page 12



the continued performance of existing long-term, fixed-rate time charters;

Global Ship Lease’s ability to capitalize on its management’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 U.S Securities and Exchange Commission (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.
Page 13

Global Ship Lease, Inc.

Interim Unaudited Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars)

   
March 31, 2021
   
December 31, 2020
 
ASSETS
           
CURRENT ASSETS
           
Cash and cash equivalents
 
$
142,209
   
$
80,757
 
Restricted cash
   
6,859
     
825
 
Accounts receivable, net
   
2,236
     
2,532
 
Inventories
   
5,979
     
6,316
 
Prepaid expenses and other current assets
   
10,872
     
6,711
 
Due from related parties
   
2,739
     
1,472
 
Total current assets
 
$
170,894
   
$
98,613
 
NON - CURRENT ASSETS
               
Vessels in operation
 
$
1,130,840
   
$
1,140,583
 
Advances for vessels acquisitions and other additions
   
1,197
     
1,364
 
Deferred charges, net
   
22,180
     
22,951
 
Restricted cash, net of current portion
   
13,607
     
10,680
 
Total non - current assets
   
1,167,824
     
1,175,578
 
TOTAL ASSETS
 
$
1,338,718
   
$
1,274,191
 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
CURRENT LIABILITIES
               
Accounts payable
 
$
10,545
   
$
10,557
 
Accrued liabilities
   
11,261
     
19,127
 
Current portion of long-term debt and deferred financing costs
   
73,482
     
76,681
 
Deferred revenue
   
5,671
     
5,623
 
Due to related parties
   
257
     
225
 
Total current liabilities
 
$
101,216
   
$
112,213
 
LONG-TERM LIABILITIES
               
Long - term debt, net of current portion and deferred financing costs
 
$
684,484
   
$
692,775
 
Intangible liability-charter agreements
   
3,960
     
4,462
 
Total non - current liabilities
   
688,444
     
697,237
 
Total liabilities
 
$
789,660
   
$
809,450
 
Commitments and Contingencies
               
SHAREHOLDERS' EQUITY
               
Class A common shares - authorized
214,000,000 shares with a $0.01 par value
36,283,468 shares issued and outstanding (2020 – 17,741,008 shares)
   
362
     
177
 
Series B Preferred Shares - authorized
44,000 shares with a $0.01 par value
27,178 shares issued and outstanding (2019 – 22,822 shares)
   
-
     
-
 
Series C Preferred Shares - authorized
250,000 shares with a $0.01 par value
Nil shares issued and outstanding (2020 - 250,000 shares)
   
-
     
3
 
Additional paid in capital
   
666,331
     
586,355
 
Accumulated deficit
   
(117,635
)
   
(121,794
)
Total shareholders' equity
   
549,058
     
464,741
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
1,338,718
   
$
1,274,191
 

Page 14


Global Ship Lease, Inc.

Interim Unaudited Consolidated Statements of Operations

(Expressed in thousands of U.S. dollars except share data)


   
Three months ended March 31,
 
   
2021
   
2020
 
OPERATING REVENUES
           
Time charter revenue (includes related party revenues of $32,195 and $37,676 for each of the three-month periods ended March 31, 2021 and 2020, respectively)
 
$
72,980
   
$
70,947
 
OPERATING EXPENSES:
               
Vessel operating expenses (includes related party vessel operating expenses of $3,290 and $3,037 for each of the three-month periods ended March 31, 2021 and 2020, respectively)
   
24,286
     
25,512
 
Time charter and voyage expenses (includes related party brokerage commissions of $689 and $610 for each of the three-month periods ended March 31, 2021 and 2020, respectively)
   
1,765
     
3,469
 
Depreciation and amortization
   
12,383
     
11,548
 
Impairment of vessels
   
-
     
7,585
 
General and administrative expenses
   
4,274
     
2,437
 
Loss on sale of vessels
   
-
     
-
 
Operating Income
   
30,272
     
20,396
 
 
               
NON-OPERATING INCOME/(EXPENSES)
               
Interest income
   
243
     
648
 
Interest and other finance expenses (including Notes premium)
   
(25,256
)
   
(19,555
)
Other income, net
   
384
     
21
 
Total non-operating expenses
   
(24,629
)
   
(18,896
)
Income before income taxes
   
5,643
     
1,500
 
Income taxes
   
-
     
-
 
Net Income
   
5,643
     
1,500
 
Earnings allocated to Series B Preferred Shares
   
(1,484
)
   
(879
)
Net Income available to Common Shareholders
 
$
4,159
   
$
621
 


Page 15


Global Ship Lease, Inc.

Interim Unaudited Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)


   
Three months ended March 31,
 
   
2021
   
2020
 
Cash flows from operating activities:
           
Net income
 
$
5,643
   
$
1,500
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
 
$
12,383
   
$
11,548
 
Impairment of vessels
   
-
     
7,585
 
Amortization of deferred financing costs
   
4,406
     
927
 
Amortization of original issue discount/premium on repurchase of notes
   
7,044
     
2,139
 
Amortization of intangible liability/asset-charter agreements
   
(502
)
   
479
 
Share based compensation
   
1,704
     
429
 
Changes in operating assets and liabilities:
               
Increase in accounts receivable and other assets
 
$
(3,865
)
 
$
(208
)
Decrease/(increase) in inventories
   
337
     
(396
)
(Decrease)/increase in accounts payable and other liabilities
   
(6,066
)
   
6,595
 
Increase in related parties' balances, net
   
(1,235
)
   
(1,934
)
Decrease/(increase) in deferred revenue
   
48
     
(3,309
)
Net cash provided by operating activities
 
$
19,897
   
$
25,355
 
Cash flows from investing activities:
               
Acquisition of vessels
 
$
-
   
$
(23,060
)
Cash paid for vessel expenditure
   
(1,905
)
   
(1,108
)
Advances for vessel acquisitions and other additions
   
(248
)
   
(200
)
Cash paid for drydockings
   
(1,587
)
   
(4,072
)
Net cash used in investing activities
 
$
(3,740
)
 
$
(28,440
)
Cash flows from financing activities:
               
Proceeds from issuance of 2024 Notes
 
$
15,096
   
$
19,193
 
Repurchase of 2022 Notes, including premium
   
(239,183
)
   
(57,197
)
Proceeds from drawdown of credit facilities
   
236,200
     
47,000
 
Repayment of credit facilities
   
(30,817
)
   
(13,452
)
Repayment of refinanced debt
   
-
     
(44,366
)
Deferred financing costs paid
   
(4,236
)
   
(880
)
Proceeds from offering of Class A common shares, net of offering costs
   
67,984
     
(39
)
Proceeds from offering of Series B preferred shares, net of offering costs
   
10,696
     
3,803
 
Series B Preferred Shares-dividends paid
   
(1,484
)
   
(879
)
Net cash provided by / (used in) financing activities
 
$
54,256
   
$
(46,817
)
Increase/(decrease) in cash and cash equivalents and restricted cash
   
70,413
     
(49,902
)
Cash and cash equivalents and restricted cash at beginning of the period
   
92,262
     
147,636
 
Cash and cash equivalents and restricted cash at end of the period
 
$
162,675
   
$
97,734
 
Supplementary Cash Flow Information:
               
Cash paid for interest
   
14,469
     
11,189
 
Non-cash Investing activities:
               
Unpaid drydocking expenses
   
949
     
2,037
 
Unpaid vessel additions
   
2,461
     
3,436
 
Non-cash financing activities:
               
Unpaid offering costs
   
226
     
-
 


Page 16

Exhibit 99.2




 





GLOBAL SHIP LEASE, INC.

INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PERIOD ENDED MARCH 31, 2021


GLOBAL SHIP LEASE, INC.
 
Index
  
Page
 
       
INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AS AT MARCH 31, 2021 AND DECEMBER 31, 2020
  
F-1
 
       
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
  
F-2
 
       
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
  
F-3
 
       
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
  
F-4
 
       
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
 F-5
 
 


Global Ship Lease, Inc.

Interim Unaudited Condensed Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars except share data)


         
As of
 
   
Note
   
March 31,
2021
   
December 31,
2020
 
ASSETS
                 
CURRENT ASSETS
                 
Cash and cash equivalents
       
$
142,209
   
$
80,757
 
Restricted cash
         
6,859
     
825
 
Accounts receivable, net
         
2,236
     
2,532
 
Inventories
         
5,979
     
6,316
 
Prepaid expenses and other current assets
         
10,872
     
6,711
 
Due from related parties
 
5
     
2,739
     
1,472
 
Total current assets
       
$
170,894
   
$
98,613
 
NON - CURRENT ASSETS
                     
Vessels in operation
 
3
   
$
1,130,840
   
$
1,140,583
 
Advances for vessels acquisitions and other additions
 
3
     
1,197
     
1,364
 
Deferred charges, net
         
22,180
     
22,951
 
Restricted cash, net of current portion
         
13,607
     
10,680
 
                       
Total non - current assets
         
1,167,824
     
1,175,578
 
TOTAL ASSETS
       
$
1,338,718
   
$
1,274,191
 
LIABILITIES AND SHAREHOLDERS' EQUITY
                     
CURRENT LIABILITIES
                     
Accounts payable
       
$
10,545
   
$
10,557
 
Accrued liabilities
         
11,261
     
19,127
 
Current portion of long - term debt
 
4
     
73,482
     
76,681
 
Deferred revenue
         
5,671
     
5,623
 
Due to related parties
 
5
     
257
     
225
 
Total current liabilities
         
101,216
     
112,213
 
LONG - TERM LIABILITIES
                     
Long - term debt, net of current portion and deferred financing costs
 
4
   
$
684,484
   
$
692,775
 
Intangible liabilities - charter agreements
         
3,960
     
4,462
 
Total non - current liabilities
         
688,444
     
697,237
 
Total liabilities
       
$
789,660
   
$
809,450
 
Commitments and Contingencies
 
6
     
     
 
SHAREHOLDERS' EQUITY
                     
Class A common shares - authorized
214,000,000 shares with a $0.01 par value
36,283,468 shares issued and outstanding (2020 – 17,741,008 shares)
 
7
   
$
362
   
$
177
 
Series B Preferred Shares - authorized
44,000 shares with a $0.01 par value
27,178 shares issued and outstanding (2020 – 22,822 shares)
 
7
     
     
 
Series C Preferred Shares - authorized
250,000 shares with a $0.01 par value
Nil shares issued and outstanding (2020 - 250,000 shares)
 
7
     
     
3
 
Additional paid in capital
         
666,331
     
586,355
 
Accumulated deficit
         
(117,635
)
   
(121,794
)
Total shareholders' equity
         
549,058
     
464,741
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
       
$
1,338,718
   
$
1,274,191
 





See accompanying notes to interim unaudited condensed consolidated financial statements
F-1

Global Ship Lease, Inc.

Interim Unaudited Condensed Consolidated Statements of Operations

(Expressed in thousands of U.S. dollars except share data)


         
Three months ended
March 31,
 
   
 
Note
   
2021
   
2020
 
OPERATING REVENUES
                 
Time charter revenues (include related party revenues of $32,195 and $37,676 for each of the periods ended March 31, 2021 and 2020, respectively)
         
72,980
     
70,947
 
                       
OPERATING EXPENSES
                     
Vessels operating expenses (include related party vessels operating expenses of $3,290 and $3,037 for each of the periods ended March 31, 2021 and 2020, respectively)
         
24,286
     
25,512
 
Time charter and voyage expenses (include related party time charter and voyage expenses of $689 and $610 for each of the periods ended March 31, 2021 and 2020, respectively)
         
1,765
     
3,469
 
Depreciation and amortization
 
3
     
12,383
     
11,548
 
Impairment of vessels
 
3
     
     
7,585
 
General and administrative expenses
         
4,274
     
2,437
 
Operating Income
         
30,272
     
20,396
 
                       
NON-OPERATING INCOME/(EXPENSES)
                     
Interest income
         
243
     
638
 
Interest and other finance expenses (include of $5,764 and $2,271 Notes premium for each of the three months ended March 31, 2021 and 2020, respectively)
         
(25,256
)
   
(19,555
)
Other income, net
         
384
     
21
 
Total non-operating expenses
         
(24,629
)
   
(18,896
)
Income before income taxes
         
5,643
     
1,500
 
Income taxes
         
     
 
Net Income
         
5,643
     
1,500
 
Earnings allocated to Series B Preferred Shares
 
7
     
(1,484
)
   
(879
)
                       
Net Income available to Common Shareholders
       
$
4,159
   
$
621
 
Earnings per Share
                     
                       
Weighted average number of Class A common shares outstanding
                     
Basic
 
9
     
31,965,287
     
17,556,738
 
Diluted
 
9
     
32,019,281
     
17,560,639
 
 
                     
Net Earnings per Class A common share
                     
Basic
 
9
   
$
0.13
   
$
0.02
 
Diluted
 
9
   
$
0.13
   
$
0.02
 



See accompanying notes to interim unaudited condensed consolidated financial statements
F-2


Global Ship Lease, Inc.

Interim Unaudited Condensed Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars except share data)


         
Three months ended
March 31,
 
   
 
Note
   
2021
   
2020
 
Cash flows from operating activities:
                 
Net Income
         
5,643
     
1,500
 
Adjustments to reconcile net income to net cash provided by operating activities:
                     
Depreciation and amortization
         
12,383
     
11,548
 
Impairment of vessels
 
3
     
     
7,585
 
Amortization of deferred financing costs
 
4
     
4,406
     
927
 
Amortization of original issue discount/premium on repurchase of notes
         
7,044
     
2,139
 
Amortization of intangible liabilities/assets - charter agreements
         
(502
)
   
479
 
Share based compensation
 
8
     
1,704
     
429
 
Changes in operating assets and liabilities:
                     
Increase in accounts receivable and other assets
         
(3,865
)
   
(208
)
Decrease/(increase) in inventories
         
337
     
(396
)
(Decrease)/increase in accounts payable and other liabilities
         
(6,066
)
   
6,595
 
Decrease in related parties' balances, net
 
5
     
(1,235
)
   
(1,934
)
Increase/(decrease) in deferred revenue
         
48
     
(3,309
)
                       
Net cash provided by operating activities
       
$
19,897
   
$
25,355
 
Cash flows from investing activities:
                     
Acquisition of vessels
         
     
(23,060
)
Cash paid for vessel expenditures
         
(1,905
)
   
(1,108
)
Advances for vessel acquisitions and other additions
         
(248
)
   
(200
)
Cash paid for drydockings
         
(1,587
)
   
(4,072
)
                       
Net cash used in investing activities
       
$
(3,740
)
 
$
(28,440
)
Cash flows from financing activities:
                     
Proceeds from issuance of 2024 Notes
         
15,096
     
19,193
 
Repurchase of 2022 Notes, including premium
         
(239,183
)
   
(57,197
)
Proceeds from drawdown of credit facilities
         
236,200
     
47,000
 
Repayment of credit facilities
         
(30,817
)
   
(13,452
)
Repayment of refinanced debt
         
     
(44,366
)
Deferred financing costs paid
         
(4,236
)
   
(880
)
Proceeds from offering of Class A common shares, net of offering costs
         
67,984
     
(39
)
Proceeds from offering of Series B preferred shares, net of offering costs
 
7
     
10,696
     
3,803
 
Series B Preferred Shares - dividends paid
         
(1,484
)
   
(879
)
                       
Net cash provided by/(used in) financing activities
       
$
54,256
   
$
(46,817
)
Net increase/(decrease) in cash and cash equivalents and restricted cash
         
70,413
     
(49,902
)
Cash and cash equivalents and restricted cash at beginning of the period
         
92,262
     
147,636
 
Cash and cash equivalents and restricted cash at end of the period
       
$
162,675
   
$
97,734
 
                       
Supplementary Cash Flow Information:
                     
Cash paid for interest
       
$
14,469
   
$
11,189
 
Non-cash investing activities:
                     
Unpaid drydocking expenses
         
949
     
2,037
 
Unpaid vessel expenditures
         
2,461
     
3,436
 
Non-cash financing activities:
                     
Unpaid offering costs
         
226
     
 




See accompanying notes to interim unaudited condensed consolidated financial statements
F-3

Global Ship Lease, Inc.

Interim Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity

(Expressed in thousands of U.S. dollars except share data)


     
Number of Common Shares
at par value $0.01
   
Number of
Series B
Preferred Shares
at par value $0.01
   
Number of
Series C
Preferred Shares
at par value $0.01
   
Common
Shares
   
Series B
Preferred Shares
   
Series C
Preferred Shares
   
Additional
paid-in
capital
   
(Accumulated
Deficit)
   
Total
Shareholders'
Equity
 
Balance
at December 31, 2019
   
17,556,738
     
14,428
     
250,000
   
$
175
   
$
-
   
$
3
   
$
565,586
   
$
(159,362
)
 
$
406,402
 
Issuance of Restricted Stock Units (Note 8)
   
     
     
     
     
     
     
429
     
     
429
 
Issuance of Class A common shares, net of offering costs
   
     
     
     
     
     
     
(39
)
   
     
(39
)
Net Income for the period
   
     
     
     
     
     
     
     
1,500
     
1,500
 
Series B Preferred Shares dividend (Note 7)
   
     
     
     
     
     
     
     
(879
)
   
(879
)
Issuance of Series B Preferred shares, net of offering costs
   
     
1,646
     
     
     
     
     
4,003
     
     
4,003
 
Balance
at March 31, 2020
   
17,556,738
     
16,074
     
250,000
   
$
175
   
$
   
$
3
   
$
569,979
   
$
(158,741
)
 
$
411,416
 
                                                                         
Balance
at December 31, 2020
   
17,741,008
     
22,822
     
250,000
   
$
177
   
$
   
$
3
   
$
586,355
   
$
(121,794
)
 
$
464,741
 
                                                                         
Issuance of Restricted Stock Units (Note 8)
   
45,313
     
     
     
     
     
     
1,704
     
     
1,704
 
Issuance of Class A common shares, net of offering costs
   
5,541,959
     
     
     
55
     
     
     
67,703
     
     
67,758
 
Conversion of Series C Preferred shares to Class A common shares (Note 7)
   
12,955,188
     
     
(250,000
)
   
130
     
     
(3
)
   
(127
)
   
     
 
Net Income for the period
   
     
     
     
     
     
     
     
5,643
     
5,643
 
Series B Preferred Shares dividend (Note 7)
   
     
     
     
     
     
     
     
(1,484
)
   
(1,484
)
Issuance of Series B Preferred Shares, net of offering costs (Note 7)
   
     
4,356
     
     
     
     
     
10,696
     
     
10,696
 
Balance
at March 31, 2021
   
36,283,468
     
27,178
     
   
$
362
   
$
   
$
   
$
666,331
   
$
(117,635
)
 
$
549,058
 







See accompanying notes to interim unaudited condensed consolidated financial statements
F-4

Global Ship Lease, Inc.

Notes to the Interim Unaudited Condensed Consolidated Financial Statements

(Expressed in thousands of U.S. dollars except share data)


1.
Description of Business
On August 14, 2008, Global Ship Lease, Inc. (the “Company”) merged indirectly with Marathon Acquisition Corp., a company then listed on The American Stock Exchange, and with the pre-existing Global Ship Lease, Inc. GSL Holdings, Inc. was the surviving entity (the “Marathon Merger”), changed its name to Global Ship Lease, Inc. and became listed on The New York Stock Exchange (the “NYSE”).
On November 15, 2018, the Company completed a transformative transaction and acquired Poseidon Containers’ 20 containerships, one of which, the Argos, was contracted to be sold, which sale was completed in December 2018, (the “Poseidon Transaction”). References herein to the “GSL Fleet” are to the 19 vessels that were owned by the Company prior to the consummation of the Poseidon Transaction, and references to the “Poseidon Fleet” are to the 19 vessels that the Company acquired as a result of the Poseidon Transaction, excluding the Argos.
The Company’s business is to own and charter out containerships to leading liner companies. As of March 31, 2021, the Company owned 43 vessels with average age weighted by TEU capacity of 13.9 years.
The following table provides information about the 43 vessels owned as at March 31, 2021.
Company Name (1)
Fleet
Country of
Incorporation
Vessel
Name
Capacity in TEUs
(2)
Year
Built
Earliest Charter
Expiry Date
Global Ship Lease 54 LLC
GSL
Liberia
CMA CGM Thalassa
11,040
2008
4Q25
Laertis Marine LLC
Poseidon
Marshall Islands
UASC Al Khor
9,115
2015
1Q22
Penelope Marine LLC
Poseidon
Marshall Islands
Maira XL
9,115
2015
2Q22
Telemachus Marine LLC
Poseidon
Marshall Islands
Anthea Y
9,115
2015
3Q23
Global Ship Lease 53 LLC
GSL
Liberia
MSC Tianjin
8,603
2005
2Q24
Global Ship Lease 52 LLC
GSL
Liberia
MSC Qingdao
8,603
2004
2Q24
Global Ship Lease 43 LLC
GSL
Liberia
GSL Ningbo
8,603
2004
1Q23
Global Ship Lease 30 Limited
Marshall Islands
GSL Eleni
7,847
2004
3Q24(3)
Global Ship Lease 31 Limited
Marshall Islands
GSL Kalliopi
7,847
2004
4Q22(3)
Global Ship Lease 32 Limited
Marshall Islands
GSL Grania
7,847
2004
4Q22(3)
Alexander Marine LLC
Poseidon
Marshall Islands
Mary
6,927
2013
3Q23
Hector Marine LLC
Poseidon
Marshall Islands
Kristina
6,927
2013
2Q24
Ikaros Marine LLC
Poseidon
Marshall Islands
Katherine
6,927
2013
1Q24
Philippos Marine LLC
Poseidon
Marshall Islands
Alexandra
6,927
2013
1Q24
Aristoteles Marine LLC
Poseidon
Marshall Islands
Alexis
6,882
2015
1Q24
Menelaos Marine LLC
Poseidon
Marshall Islands
Olivia I
6,882
2015
1Q24
Global Ship Lease 48 LLC
GSL
Liberia
CMA CGM Berlioz
6,621
2001
2Q21
Leonidas Marine LLC
Poseidon
Marshall Islands
Agios Dimitrios
6,572
2011
4Q23
Global Ship Lease 35 LLC
Liberia
GSL Nicoletta
6,840
2002
3Q24(5)
Global Ship Lease 36 LLC
Liberia
GSL Christen
6,840
2002
3Q23(4)
Global Ship Lease 33 LLC
Liberia
GSL Vinia
6,080
2004
3Q24
Global Ship Lease 34 LLC
Liberia
GSL Christel Elisabeth
6,080
2004
2Q24
Tasman Marine LLC
Poseidon
Marshall Islands
Tasman
5,936
2000
1Q22
Hudson Marine LLC
Poseidon
Marshall Islands
Dimitris Y
5,936
2000
1Q24(6)
Drake Marine LLC
Poseidon
Marshall Islands
Ian H
5,936
2000
2Q24(6)
Hephaestus Marine LLC
Poseidon
Marshall Islands
Dolphin II
5,095
2007
1Q22




F-5



Global Ship Lease, Inc.

Notes to the Interim Unaudited Condensed Consolidated Financial Statements (continued)

(Expressed in thousands of U.S. dollars except share data)


1.
Description of Business (continued)
Company Name (1)
Fleet
Country of
Incorporation
Vessel Name
Capacity in TEUs
(2)
Year
Built
Earliest Charter
Expiry Date
Zeus One Marine LLC
Poseidon
Marshall Islands
Orca I
5,095
2006
2Q24(7)
Global Ship Lease 47 LLC
GSL
Liberia
GSL Château d’If
5,089
2007
4Q21
GSL Alcazar Inc.
GSL
Marshall Islands
CMA CGM Alcazar
5,089
2007
3Q21
Global Ship Lease 50 LLC
GSL
Liberia
CMA CGM Jamaica
4,298
2006
3Q22
Global Ship Lease 49 LLC
GSL
Liberia
CMA CGM Sambhar
4,045
2006
3Q22
Global Ship Lease 51 LLC
GSL
Liberia
CMA CGM America
4,045
2006
3Q22
Global Ship Lease 42 LLC
GSL
Liberia
GSL Valerie
2,824
2005
3Q21
Pericles Marine LLC
Poseidon
Marshall Islands
Athena
2,762
2003
1Q24(8)
Aris Marine LLC
Poseidon
Marshall Islands
Maira
2,506
2000
1Q23
Aphrodite Marine LLC
Poseidon
Marshall Islands
Nikolas
2,506
2000
1Q23
Athena Marine LLC
Poseidon
Marshall Islands
Newyorker
2,506
2001
1Q21
Global Ship Lease 46 LLC
GSL
Liberia
La Tour
2,272
2001
2Q21
Global Ship Lease 38 LLC
GSL
Liberia
Manet
2,272
2001
4Q21
Global Ship Lease 40 LLC
GSL
Liberia
Keta
2,207
2003
3Q21
Global Ship Lease 41 LLC
GSL
Liberia
Julie
2,207
2002
2Q21(9)
Global Ship Lease 45 LLC
GSL
Liberia
Kumasi
2,207
2002
3Q21
Global Ship Lease 44 LLC
GSL
Liberia
Marie Delmas
2,207
2002
3Q21

(1) All subsidiaries are 100% owned, either directly or indirectly;
(2) Twenty-foot Equivalent Units;
(3) GSL Eleni delivered 2Q2019 and is chartered for five years; GSL Kalliopi (delivered 4Q2019) and GSL Grania (delivered 3Q2019) are chartered for three years plus two successive periods of one year at the option of the charterer;
(4) GSL Christen is chartered for 2 – 10 months, at charterer’s option. The charter commenced in July 2020; Thereafter the charter will be extended, in direct continuation, for 27—30 months;
(5) GSL Nicoletta commenced a charter with MSC in 3Q2020; upon conclusion of that charter, GSL Nicoletta will be chartered to Maersk for 36—40 months;
(6) A package agreement with ZIM, for direct charter extensions on two 5,900 TEU ships: Ian H, from May 2021 to 3Q2024, and Dimitris Y, from May 2022 to median expiry of the charter in 2Q2024.; On April 9, 2021, Dimiris Y renamed to Zim Europe;
(7) Charter with Maersk ending in 2Q2021. Thereafter, the charter will be extended in direct continuation for 36—39; thereafter Maersk has the option to charter the vessel for a further 12-14 months;
(8) Athena is chartered to MSC until April 2021. Thereafter Athena will be chartered to Hapag-Lloyd for 35—37 months;
(9) Charter to May 2021; thereafter extended in direct continuation on confidential terms.
 

Furthermore, in February 2021 the Company contracted to purchase and charter back seven 6,000 TEU Post-Panamax containerships with an average age of approximately 20 years for an aggregate purchase price of $116,000. On completion of short charters on two of these vessels, the Company has agreed that all seven ships will be chartered to Maersk Line for a minimum firm period of 36 months each, followed by two one-year extensions at charterer’s option. With these additions, the Company’s fleet will comprise 50 vessels with a total capacity of 287,336 TEU. The vessels are scheduled for phased delivery during the second and third quarters of 2021, at which time they will be renamed GSL Arcadia, GSL Dorothea, GSL Maria, GSL Melita, GSL MYNY, GSL Tegea and GSL Violetta.
The following table provides further information about these seven ships:
Vessel Name
Capacity
in TEUs
 
Lightweight
(tons)
 
Year
Built
 
Charterer
GSL Arcadia
6,008
 
24,858
 
2000
 
Maersk
GSL MYNY
6,008
 
24,873
 
2000
 
Maersk
GSL Melita
6,008
 
24,848
 
2001
 
Maersk
GSL Maria
6,008
 
24,414
 
2001
 
Maersk
GSL Violetta
6,008
 
24,873
 
2000
 
Maersk
GSL Tegea
6,008
 
24,308
 
2001
 
Maersk
GSL Dorothea
6,008
 
24,243
 
2001
 
Maersk

F-6


Global Ship Lease, Inc.

Notes to the Interim Unaudited Condensed Consolidated Financial Statements (continued)

(Expressed in thousands of U.S. dollars except share data)


2.
Summary of Significant Accounting Policies and Disclosures
(a)
Basis of Presentation
The accompanying financial information is unaudited and reflects all adjustments, consisting solely of normal recurring adjustments, which, in the opinion of management, are necessary for a fair statement of financial position and results of operations for the years presented. The financial information does not include all disclosures required under United States Generally Accepted Accounting Principles (“US GAAP”) for annual financial statements. These interim unaudited consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements as of December 31, 2020 filed with the Securities and Exchange Commission on March 19, 2021 in the Company’s Annual Report on Form 20-F.
COVID-19 Pandemic
On March 11, 2020, the World Health Organization declared the novel coronavirus (“COVID-19”) outbreak a pandemic. Since the beginning of calendar year 2020, the outbreak of COVID-19 pandemic has resulted in the implementation of numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus, including, among others, business closures, quarantines, travel restrictions, and physical distancing requirements. These actions have caused substantial disruptions in the global economy and the shipping industry, as well as significant volatility in the financial markets, the severity and duration of which remains uncertain.
While the Company cannot predict the long-term economic impact of the COVID-19 pandemic, it will continue to actively monitor the situation and may take further actions altering the Company’s business operations that it determines are in the best interests of its employees, customers, partners, suppliers, and stakeholders, or as required by authorities in the jurisdictions where the Company operates. As a result, many of the Company’s estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. The ultimate effects that any such alterations or modifications may have on the Company’s business are not clear, including any potential negative effects on its business operations and financial results.





F-7


Global Ship Lease, Inc.

Notes to the Interim Unaudited Condensed Consolidated Financial Statements (continued)

(Expressed in thousands of U.S. dollars except share data)


2.
Summary of Significant Accounting Policies and Disclosures (continued)
(b)
Principles of Consolidation
The accompanying interim unaudited consolidated financial information include the financial statements of the Company and its wholly owned subsidiaries; the Company has no other interests. All significant intercompany balances and transactions have been eliminated in the Company’s interim unaudited consolidated financial statements.
(c)
Use of estimates
The preparation of interim unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates under different assumptions and/or conditions.
(d)
Vessels in operation
Vessels are generally recorded at their historical cost, which consists of the acquisition price and any material expenses incurred upon acquisition. Vessels acquired in a corporate transaction accounted for as an asset acquisition are stated at the acquisition price, which consists of consideration paid, plus transaction costs less any negative goodwill, if applicable. Vessels acquired in a corporate transaction accounted for as a business combination are recorded at fair value. Vessels acquired as part of the Marathon Merger in 2008 were accounted for under ASC 805, which required that the vessels be recorded at fair value, less the negative goodwill arising as a result of the accounting for the merger.
Subsequent expenditures for major improvements and upgrades are capitalized, provided they appreciably extend the life, increase the earnings capacity or improve the efficiency or safety of the vessels.
Borrowing costs incurred during the construction of vessels or as part of the prefinancing of the acquisition of vessels are capitalized. There was no capitalized interest for the three months ended March 31, 2021 and for the year ended December 31, 2020.
Vessels are stated less accumulated depreciation and impairment, if applicable. Vessels are depreciated to their estimated residual value using the straight-line method over their estimated useful lives which are reviewed on an ongoing basis to ensure they reflect current technology, service potential and vessel structure. The useful lives are estimated to be 30 years from original delivery by the shipyard.
Management estimates the residual values of the Company’s container vessels based on a scrap value cost of steel times the weight of the vessel noted in lightweight tons (LWT). Residual values are periodically reviewed and revised to recognize changes in conditions, new regulations or other reasons. Revision of residual values affect the depreciable amount of the vessels and affects depreciation expense in the period of the revision and future periods. Management estimated the residual values of its vessels based on scrap rate of $400 per LWT.
For any vessel group which is impaired, the impairment charge is recorded against the cost of the vessel and the accumulated depreciation as at the date of impairment is removed from the accounts. 
The cost and related accumulated depreciation of assets retired or sold are removed from the accounts at the time of sale or retirement and any gain or loss is included in the interim unaudited Consolidated Statements of Operations.

F-8


Global Ship Lease, Inc.

Notes to the Interim Unaudited Condensed Consolidated Financial Statements (continued)

(Expressed in thousands of U.S. dollars except share data)


2.
Summary of Significant Accounting Policies and Disclosures (continued)
(e)
Assets Held for Sale
The Company classifies assets and disposal groups as being held for sale when the following criteria are met: management has committed to a plan to sell the asset (disposal group); the asset (disposal group) is available for immediate sale in its present condition; an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated; the sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale within one year; the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Long-lived assets or disposal groups classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These assets are not depreciated once they meet the criteria to be held for sale. As of March 31, 2021, and December 31, 2020, there were no assets classified as held for sale.
(f)
Impairment of Long-lived assets
Tangible fixed assets, such as vessels, that are held and used or to be disposed of by the Company are reviewed for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. In these circumstances, the Company performs step one of the impairment test by comparing the undiscounted projected net operating cash flows for each vessel group to its carrying value.  A vessel group comprises the vessel, the unamortized portion of deferred drydocking related to the vessel and the related carrying value of the intangible asset or liability (if any) with respect to the time charter attached to the vessel at its purchase. If the undiscounted projected net operating cash flows of the vessel group are less than its carrying amount, management proceeds to step two of the impairment assessment by comparing the vessel group’s carrying amount to its fair value, including any applicable charter, and an impairment loss is recorded equal to the difference between the vessel group’s carrying value and fair value. Fair value is determined with the assistance from valuations obtained from third party independent ship brokers.
The Company uses a number of assumptions in projecting its undiscounted net operating cash flows analysis including, among others, (i) revenue assumptions for charter rates on expiry of existing charters, which are based on forecast charter rates, where relevant, in the four years from the date of the impairment test and a reversion to the historical mean of time charter rates for each vessel thereafter (ii) off-hire days, which are based on actual off-hire statistics for the Company’s fleet (iii) operating costs, based on current levels escalated over time based on long term trends (iv) dry docking frequency, duration and cost  (v) estimated useful life, which is assessed as a total of 30 years from original delivery by the shipyard and (vi) scrap values.
Revenue assumptions are based on contracted charter rates up to the end of the existing contract of each vessel, and thereafter, estimated time charter rates for the remaining life of the vessel. The estimated time charter rate used for non-contracted revenue days of each vessel is considered a significant assumption. Recognizing that the container shipping industry is cyclical and subject to significant volatility based on factors beyond the Company’s control, management believes that using forecast charter rates in the four years from the date of the impairment assessment and a reversion to the historical mean of time charter rates thereafter, represents a reasonable benchmark for the estimated time charter rates for the non-contracted revenue days, and takes into account the volatility and cyclicality of the market.
Two 1999-built, 2,200 TEU feeder ships, GSL Matisse and Utrillo, were sold on July 3, 2020 and July 20, 2020, respectively.  As of June 30, 2020, the vessels were immediately available for sale and qualified as assets held for sale. As of March 31, 2020, the Company had an expectation that the vessels would be sold before the end of their previously estimated useful life, and as a result performed an impairment test of the specific asset group. An impairment charge of $7,585 was recognized for the three months ended March 31, 2020 and an additional impairment charge of $912 was recognized in the three months ended June 30, 2020.
During the three months ended March 31, 2021, there were no events or changes in circumstances which indicated that the carrying amounts of the Company’s other vessels may not be recoverable. Accordingly, no impairment test was performed.
F-9


Global Ship Lease, Inc.

Notes to the Interim Unaudited Condensed Consolidated Financial Statements (continued)

(Expressed in thousands of U.S. dollars except share data)


2.
Summary of Significant Accounting Policies and Disclosures (continued)
(g)
Revenue recognition and related expense
The Company charters out its vessels on time charters which involves placing a vessel at a charterer’s disposal for a specified period of time during which the charterer uses the vessel in return for the payment of a specified daily hire rate. Such charters are accounted for as operating leases and therefore revenue is recognized on a straight-line basis as the average revenues over the rental periods of such charter agreements, as service is performed. Cash received in excess of earned revenue is recorded as deferred revenue. If a time charter contains one or more consecutive option periods, then subject to the options being exercisable solely by the Company, the time charter revenue will be recognized on a straight-line basis over the total remaining life of the time charter, including any options which are more likely than not to be exercised. Any difference between the charter rate invoiced and the time charter revenue recognized is classified as, or released from, deferred revenue within the interim unaudited Consolidated Balance Sheets.
Revenues are recorded net of address commissions, which represent a discount provided directly to the charterer based on a fixed percentage of the agreed upon charter rate.
Charter revenue received in advance which relates to the period after a balance sheet date is recorded as deferred revenue within current liabilities until the respective charter services are rendered. 
Under time charter arrangements the Company, as owner, is responsible for all the operating expenses of the vessels, such as crew costs, insurance, repairs and maintenance, and such costs are expensed as incurred and are included in vessel operating expenses.
Commission paid to brokers to facilitate the agreement of a new charter are included in time charter and voyage expenses as are certain expenses related to a voyage, such as the costs of bunker fuel consumed when a vessel is off-hire or idle.
The Company elected the practical expedient which allows the Company to treat the lease and non-lease components as a single lease component for the leases where the timing and pattern of transfer for the nonlease component and the associated lease component to the lessees are the same and the lease component, if accounted for separately, would be classified as an operating lease. The combined component is therefore accounted for as an operating lease under ASC 842, as the lease components are the predominant characteristics, in 2020 and 2019.
The Company adopted the new “Leases” standard (Topic 842) on January 1, 2019 using the modified retrospective method. The Company elected the practical expedient to use the effective date of adoption as the date of initial application. Furthermore the Company elected practical expedients, which allow entities (i) to not reassess whether any expired or existing contracts are considered or contain leases; (ii) to not reassess the lease classification for any expired or existing leases (iii) to not reassess initial direct costs for any existing leases and (iv) which allows to treat the lease and non-lease components as a single lease component due to its predominant characteristic. The adoption of this standard did not have a material effect on the interim unaudited consolidated financial statements since the Company is primarily a lessor and the accounting for lessors is largely unchanged under this standard.
(h)
Fair Value Measurement and Financial Instruments
Financial instruments carried on the balance sheet include cash and cash equivalents, restricted cash, trade receivables and payables, other receivables and other liabilities and long-term debt. The particular recognition methods applicable to each class of financial instrument are disclosed in the applicable significant policy description of each item or included below as applicable.
F-10



Global Ship Lease, Inc.
Notes to the Interim Unaudited Condensed Consolidated Financial Statements (continued)

(Expressed in thousands of U.S. dollars except share data)


(h)
Fair Value Measurement and Financial Instruments (continued)
Fair value measurement: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date. The hierarchy is broken down into three levels based on the observability of inputs as follows:
Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
As at March 31, 2020, two of the Company’s vessel groups that were held and used with a total aggregate carrying amount of $15,585 were written down to their fair value of $8,000 resulting in a non-cash impairment charge of $7,585 which was allocated to the respective vessels’ carrying values (see note 3). The estimated fair value, measured on a non-recurring basis, of the Company’s relevant three vessel groups that are held and used is calculated with the assistance of valuation obtained by third party independent ship brokers. Therefore, the Company has categorized the fair value of these vessels as Level II in the fair value hierarchy.
Financial Risk Management: The Company activities expose it to a variety of financial risks including fluctuations in, time charter rates, credit and interest rates risk. Risk management is carried out under policies approved by executive management. Guidelines are established for overall risk management, as well as specific areas of operations.
Credit risk: The Company closely monitors its credit exposure to customers and counter-parties for credit risk. The Company has entered into commercial management agreement with Conchart Commercial Inc. (“Conchart”), pursuant to which Conchart has agreed to provide commercial management services to the Company, including the negotiation, on behalf of the Company, vessel employment contracts (see note 5). Conchart has policies in place to ensure that it trades with customers and counterparties with an appropriate credit history.
Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and cash and cash equivalents. The Company does not believe its exposure to credit risk is likely to have a material adverse effect on its financial position, results of operations or cash flows.
Liquidity Risk: Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Company monitors cash balances appropriately to meet working capital needs.
(i)
Recent accounting pronouncements
The Company does not believe that any recently issued, but not yet effective, accounting pronouncements would have a material impact on its interim unaudited consolidated financial statements.
F-11


Global Ship Lease, Inc.
Notes to the Interim Unaudited Condensed Consolidated Financial Statements (continued)

(Expressed in thousands of U.S. dollars except share data)


3.
Vessels in Operation
   
Vessel Cost,
as adjusted for
   
 
Accumulated
   
 
Net Book
 
   
Impairment charges
   
Depreciation
   
Value
 
As of January 1, 2020
 
$
1,306,936
   
$
(151,350
)
 
$
1,155,586
 
                         
Additions
   
41,710
     
     
41,710
 
Disposals
   
(7,058
)
   
     
(7,058
)
Depreciation
   
     
(41,158
)
   
(41,158
)
Impairment loss
   
(43,803
)
   
35,306
     
(8,497
)
As of December 31, 2020
 
$
1,297,785
   
$
(157,202
)
 
$
1,140,583
 
                         
Additions
   
654
     
     
654
 
Depreciation
   
     
(10,397
)
   
(10,397
)
As of March 31, 2021
 
$
1,298,439
   
$
(167,599
)
 
$
1,130,840
 

On July 3, 2020, the Company sold GSL Matisse for net proceeds of $3,441, and the vessel was released as collateral under the Company’s 2022 Notes and Citi Credit Facility.
On July 20, 2020, the Company sold Utrillo for net proceeds of $3,411, and the vessel was released as collateral under the Company’s 2022 Notes and Citi Credit Facility.
On February 21, 2020, the Company took delivery of a 2002-built, 6,840 TEU containership, GSL Nicoletta for a purchase price of $13,000.
On January 29, 2020, the Company took delivery of a 2002-built, 6,840 TEU containership, GSL Christen for a purchase price of $13,000.
Impairment
During the three months ended March 31, 2020, the Company determined that the vessels Utrillo and GSL Matisse should be divested. As at March 31, 2020, the vessels were not immediately available for sale and therefore did not qualify as “assets held for sale”. As of March 31, 2020, the Company had an expectation that the vessels would each be sold before the end of their estimated useful life, and as a result an impairment test of each of the specific asset groups was performed. An impairment loss of $7,585 has been recognized under the line item “Vessel impairment losses” in the interim unaudited Consolidated Statements of Operations for the three months ended March 31, 2020. 
The Company has evaluated the impact of current economic situation on the recoverability of all its other vessel groups and has determined that there were no events or changes in circumstances which indicated that their carrying amounts may not be recoverable. Accordingly, no impairment test was performed during the three months ended March 31, 2021.
Collateral
As of March 31, 2021, 21 vessels were pledged as collateral under the new $236,200 senior secured loan facility with Hayfin Capital Management, LLP (the “New Hayfin Facility”) that the Company entered into on January 7, 2021 (see note 4b) and 22 vessels were pledged as collateral under the Company’s loan facilities. No vessels were unencumbered as of March 31, 2021.

F-12


Global Ship Lease, Inc.

Notes to the Interim Unaudited Condensed Consolidated Financial Statements (continued)

(Expressed in thousands of U.S. dollars except share data)


3.
Vessels in Operation (continued)
Advances for vessel acquisitions and other additions
On February 9, 2021, the Company announced that it has agreed to purchase and charter back seven 6,000 TEU Post-Panamax containerships with an average age of approximately 20 years for an aggregate purchase price of $116,000. The charters are to leading liner operators for a minimum firm period of 36 months each, followed by two one-year extensions at charterer’s option. With these additions, the Company’s fleet will comprise 50 vessels with a total capacity of 287,280 TEU. The vessels are scheduled for phased delivery during the second and third quarters of 2021, at which time they will be renamed GSL Arcadia, GSL Dorothea, GSL Maria, GSL Melita, GSL MYNY, GSL Tegea and GSL Violetta.  In April 2021, deposits amounting to $11,606 were paid in total for the seven vessels.
As of March 31, 2021, and December 31, 2020, the Company has made advances mainly for ballast water treatments and other vessel additions totaling $1,197 and $1,364, respectively.
4.
Long-Term Debt
Facilities
 
March 31,
2021
   
December 31,
2020
 
2022 Notes
 
$
233,436
   
$
322,723
 
Less redemptions and repurchases
   
(233,436
)
   
(89,287
)
2022 Notes (a)
 
$
   
$
233,436
 
New Hayfin Facility (b)
   
229,640
     
 
2024 Notes (c)
   
74,915
     
59,819
 
Syndicated Senior Secured Credit Facility (CACIB, ABN, CIT, Siemens, CTBC, Bank Sinopac, Palatine) (d)
   
231,800
     
238,000
 
Blue Ocean Junior Credit Facility (d, e)
   
26,205
     
38,500
 
Deutsche, CIT, HCOB, Entrust, Blue Ocean Credit Facility (f)
   
145,761
     
149,055
 
Hayfin Credit Facility (g)
   
5,833
     
5,833
 
Hellenic Bank Credit Facility (h)
   
47,700
     
49,700
 
Chailease Credit Facility (i)
   
7,128
     
7,596
 
Total
 
$
768,982
   
$
781,939
 
Less: Current portion of 2022 Notes (a)
   
     
(26,240
)
Less: Current portion of long-term debt
   
(73,482
)
   
(50,441
)
Less: Original issue discount of 2022 Notes (a)
   
     
(1,133
)
Less: Original issue premium/(discount) of 2024 Notes (c)
   
17
     
(147
)
Less: Deferred financing costs (k)
   
(11,033
)
   
(11,203
)
Non-current portion of Long-Term Debt
 
$
684,484
   
$
692,775
 

a)
9.875% First Priority Secured Notes due 2022
On October 31, 2017, the Company completed the sale of $360,000 in aggregate principal amount of its 9.875% First Priority Secured Notes (the “2022 Notes”) which mature on November 15, 2022. Proceeds after the deduction of the original issue discount, but before expenses, amounted to $356,400. The 2022 Notes were fully redeemed in January 2021.
Interest on the 2022 Notes was payable semi-annually on May 15 and November 15 of each year, commencing on May 15, 2018. As at December 31, 2020 the 2022 Notes were secured by first priority vessel mortgages on the 16 vessels in the GSL Fleet and by assignments of earnings and insurances, pledges over certain bank accounts, as well as share pledges over each subsidiary owning a vessel securing the 2022 Notes. In addition, the 2022 Notes were fully and unconditionally guaranteed, jointly and severally, by the Company’s 16 vessel owning subsidiaries as of December 31, 2020 and Global Ship Lease Services Limited.
F-13



Global Ship Lease, Inc.

Notes to the Interim Unaudited Condensed Consolidated Financial Statements (continued)

(Expressed in thousands of U.S. dollars except share data)


4.
Long-Term Debt (continued)
a)
9.875% First Priority Secured Notes due 2022 (continued)
On December 20, 2018, the Company entered into a first supplemental indenture for the 2022 Notes according to which the date beginning on which the Company was permitted to pay dividends to common shareholders in an aggregate amount per year equal to 50% of the consolidated net profit after taxes of the Company for the preceding financial year, was brought forward from January 1, 2021 to January 1, 2020. Also, certain restrictions were agreed in the increase in the permitted transfer basket and the immediate increase in dividend capacity as a result of completing the Poseidon Transaction, and certain other provisions of the Indenture, among other things, the restricted payment covenant, the arm’s length transaction covenant and the reporting covenant were amended.
The Company was required to have a minimum cash balance of $20,000 on each test date, being March 31, June 30, September 30 and December 31 in each year. The original issue discount was being amortized on an effective interest rate basis over the life of the 2022 Notes. The Company was required to repay $40,000 each year for the first three years and $35,000 thereafter, across both the 2022 Notes and the new Citi Credit Facility - see note 4(g) below. The Citi Credit Facility had minimum fixed amortization whereas as long as amounts were outstanding under that Facility amortization of the 2022 Notes was at the option of the noteholders, who could accept or reject an annual tender offer the Company was obliged to make. In December 2018, the tender offer was accepted in full and the Company repurchased $20,000 of the 2022 Notes at a purchase price of 102%. In December 2019, the tender offer of $20,000 was partially accepted by the noteholders and the Company repurchased $17,277 principal amount of the 2022 Notes at a purchase price of 102%. The balance of the offer of $2,723 was applied to repay the Citi Credit Facility at par - see note 4(g) below. The Citi Credit Facility was fully repaid on October 31, 2020, consequently on December 3, 2020, the Company mandatorily redeemed $28,000 principal amount of the 2022 Notes at a redemption price of $28,560 (representing 102.0% of the aggregate principal amount redeemed) plus accrued and unpaid interest.
On February 10, 2020, the Company completed an optional redemption of $46,000 aggregate principal amount of its 2022 Notes at a redemption price of $48,271 (representing 104.938% of the aggregate principal amount) plus accrued and unpaid interest. During the year ended December 31, 2020, the Company purchased $15,287 of aggregate principal amount of 2022 Notes in the open market at a weighted average price of 98.98% of the aggregate principal amount.
On January 20, 2021, the Company optionally redeemed, in full, $233,436 aggregate principal amount of 2022 Notes, representing the entire outstanding amount under the 2022 Notes, using the proceeds the Company received from the New Hayfin Facility, see Note 4(b) below, and cash on hand, at a redemption price of $239,200 (representing 102.469% of the aggregate principal amount of notes redeemed) plus