EBITDA represents net income before interest and finance costs, interest income, depreciation and amortization of deferred dry-docking & special survey costs. Adjusted EBITDA represents net income before interest and finance costs, interest income, depreciation, amortization of deferred dry-docking & special survey costs, gain/(loss) on sale of vessels, non-cash changes in fair value of derivatives, non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, realized (gain)/loss on Euro/USD forward contracts and the cash of partial purchases of consumable stores for newly acquired vessels. "Accrued charter revenue" is attributed to the time difference between the revenue recognition and the cash collection. However, EBITDA and Adjusted EBITDA are not recognized measurements under U.S. generally accepted accounting principles, or "GAAP." We believe that the presentation of EBITDA and Adjusted EBITDA are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that EBITDA and Adjusted EBITDA are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that EBITDA and Adjusted EBITDA are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of EBITDA and Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Note: Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to net income. Charges negatively impacting net income are reflected as increases to net income.
Results of Operations
Three-month period ended September 30, 2012 compared to the three-month period ended September 30, 2011
During the three-month periods ended September 30, 2012 and 2011, we had an average of 47.1 and 48.5 vessels, respectively, in our fleet. In the three-month period ended September 30, 2012, we accepted delivery of the secondhand vessels Stadt Luebeck and Messini with an aggregate TEU capacity of 3,536 and we sold the second-hand vessel Horizon for scrap with a TEU capacity of 1,068. In the three-month period ended September 30, 2011, we acquired the secondhand vessel MSC Romanos with a TEU capacity of 5,060. In the three-month period ended September 30, 2012 and 2011 our fleet ownership days totaled 4,337 and 4,460 days, respectively. Ownership days are the primary driver of voyage revenue and vessels' operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.
Three-month (Expressed in millions of U.S. period ended dollars, except percentages) September 30, ---------------- Percentage 2011 2012 Change Change ------- ------- ------- ----------Voyage revenue $ 99.9 $ 94.9 $ (5.0) (5.0%)Voyage expenses (0.8) (1.7) 0.9 112.5%Voyage expenses - related parties (0.8) (0.7) (0.1) (12.5%)Vessels operating expenses (27.6) (28.3) 0.7 2.5%General and administrative expenses (1.1) (1.0) (0.1) (9.1%)Management fees - related parties (3.8) (3.8) - -Amortization of dry-docking and special survey costs (2.1) (2.1) - -Depreciation (20.1) (20.3) 0.2 1.0%Gain (loss) on sale of vessels - (5.6) 5.6 100.0%Foreign exchange gains / (losses) (0.1) (0.1) - -Interest income 0.1 0.4 0.3 300.0%Interest and finance costs (19.8) (19.6) (0.2) (1.0%)Other 0.1 - (0.1) (100.0%)Gain (loss) on derivative instruments (6.5) 0.4 6.9 106.2% ------- -------Net Income $ 17.4 $ 12.5 $ (4.9) (28.2%) ======= ======= Three-month (Expressed in millions of U.S. period ended dollars, except percentages) September 30, --------------- Percentage 2011 2012 Change Change ------- ------- ------- ----------Voyage revenue $ 99.9 $ 94.9 $ (5.0) (5.0%)Accrued charter revenue 7.8 2.9 (4.9) (62.8%) ------- -------Voyage revenue adjusted on a cash basis $ 107.7 97.8 $ (9.9) (9.2%) ======= ======= Three-month period ended September 30, ------------- PercentageFleet operational data 2011 2012 Change Change ------ ------ ------ ----------Average number of vessels 48.5 47.1 (1.4) (2.9%)Ownership days 4,460 4,337 (123) (2.8%)Number of vessels underwent dry-dock during the periods - 4 4
