Overall, unrealized gain/(loss) on interest rate swap hedges (including both our cash flow and interest rate swaps) was a loss of $12.9 million in the three months ended September 30, 2012 compared to a loss of $4.7 million in the three months ended September 30, 2011. The unrealized losses recorded in 2011 were attributable to hedge accounting ineffectiveness and mark to market valuation of two of our swaps not qualifying for hedge accounting.
Realized (loss)/gain on derivatives
Realized loss on interest rate swap hedges, increased by $6.4 million, to $41.7 million in the three months ended September 30, 2012, from $35.3 million in the three months ended September 30, 2011, which is attributable to realized losses being deferred for the three months ended September 30, 2011 (as discussed below), partially offset by the higher floating LIBOR rates during the three months ended September 30, 2012 compared to the same period in 2011.
In addition, following the delivery of all our newbuildings no realized losses on cash flow hedges were deferred during the three months ended September 30, 2012, whereas realized losses on cash flow hedges of $7.0 million in the three months ended September 30, 2011 were deferred in "Accumulated Other Comprehensive Loss", rather than such realized losses being recognized as expenses, and are being reclassified into earnings over the depreciable lives of these vessels that were under construction, which are financed by loans with interest rates that have been hedged by our interest rate swap contracts. The table below provides an analysis of the items discussed above, and which were recorded in the three months ended September 30, 2012 and 2011:
Three months Three months ended ended September 30, September 30, ------------- ------------- 2012 2011 ------------- ------------- (in millions)Total realized losses of swaps $ (41.7) $ (42.3)Realized losses of swaps deferred in OCL -- 7.0 ------------- ------------- Realized losses of swaps expensed in P&L (41.7) (35.3)Realized losses attributable to overhedging 5.0 10.3 ------------- ------------- Adjusted realized losses attributable to hedged debt $ (36.7) $ (25.0) ============= =============
Adjusted EBITDA
Adjusted EBITDA increased 34.8%, or $30.0 million, to $116.2 million in the three months ended September 30, 2012, from $86.2 million in the three months ended September 30, 2011. Adjusted EBITDA for the third quarter of 2012, is adjusted for an unrealized loss on derivatives of $12.9 million and realized losses on derivatives of $40.7 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.
Nine months ended September 30, 2012 compared to the nine months ended September 30, 2011
