Adjusted EBITDA Reconciliation:
Euroseas Ltd. considers Adjusted EBITDA to represent net earnings before interest, income taxes, depreciation, amortization, gain / loss in derivatives, loss on sale of vessel and amortization of deferred revenues from above or below market time charters acquired. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of Adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is a basis upon which we assess our financial performance and liquidity position and because we believe that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness. The Company's definition of Adjusted EBITDA may not be the same as that used by other companies in the shipping or other industries.
Euroseas Ltd. Reconciliation of Net income / (loss) to Adjusted net income / (loss) (All amounts expressed in U.S. Dollars - except share data and per share amounts)---------------------------------------------------------------------------- Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September September September September 30, 2011 30, 2012 30, 2011 30, 2012----------------------------------------------------------------------------Net income / (loss) 575,147 (826,423) 11,643 (11,180,739)----------------------------------------------------------------------------Unrealized loss / (gain) on derivatives, net 944,941 (206,158) 945,628 (634,420)----------------------------------------------------------------------------Unrealized loss on trading securities 84,790 - 204,556 -----------------------------------------------------------------------------Realized gain on trading securities - - - (20,373)----------------------------------------------------------------------------Realized loss on derivatives 116,798 419,766 551,202 1,270,560----------------------------------------------------------------------------Amortization of deferred revenue of below market time charter acquired - - (1,318,211) -----------------------------------------------------------------------------Loss on sale of vessel - - - 8,568,234----------------------------------------------------------------------------Adjusted net income/ (loss) 1,721,676 (612,815) 394,818 (1,996,738)----------------------------------------------------------------------------Adjusted net income/(loss) per share, basic 0.05 (0.01) 0.01 (0.05)----------------------------------------------------------------------------Weighted average number of shares, basic 31,825,313 45,210,705 31,769,312 36,806,388----------------------------------------------------------------------------Adjusted net income/(loss) per share, diluted 0.05 (0.01) 0.01 (0.05)----------------------------------------------------------------------------Weighted average number of shares, diluted 31,880,335 45,210,705 31,792,558 36,806,388============================================================================
