Good day, ladies and gentlemen. And welcome to the Global Ship Lease Fourth Quarter 2018 Earnings Conference call. At this time, all participants are in a listen only mode. [Operator Instructions] As a reminder, this conference call is being recorded. I'd now like to introduce your host for today's conference Mr. Ian Webber. Sir, you may begin.

Thank you very much. Good morning, good afternoon, everybody, and welcome to the Global Ship Lease Fourth Quarter and Full Year 2018 earnings conference call. The slides that are accompanying today's presentation are available on our website at www.globalshiplease.com. Slide 1 and 2 as usual remind you today's call may include forward-looking statements that are based on current expectations and assumptions and are, by their nature, inherently uncertain and outside of the company's control. Actual results may differ materially from these forward-looking statements due to many factors, including those described in the safe harbor section of the slide presentation. We also draw your attention to the Risk Factors section of our most recent annual report on Form 20-F, which is for 2017 and was filed with the SEC on March 29, 2018. And which you can obtain this via our website or via the SEC's. All of our statements are qualified by these and other disclosures in our reports filed with the SEC. We do not undertake any duty to update forward-looking statements. For reconciliations of the non-GAAP financial measures to which we will refer during this call, to the most directly comparable measures calculated and presented in accordance with GAAP, you should refer to the earnings release that we issued this morning, which is also available on our website. I am joined today by our Executive Chairman, George Youroukos; and our Chief Financial Officer, Tassos Psaropoulos and our Chief Commercial Officer, Tom Lister. George will provide opening remarks and Tassos, Tom and I will take you through quartering results and financial and the current market environment. George will summarize and after that we will be delighted to take your questions. So turning now to Slide 3, I'll pass the call over to George.

Good morning, everyone. It is a pleasure to join you all today in order to give you further insight in what we have created up Global Ship Lease. Fully transaction with Poseidon and through our subsequent actions, as well as to give you our thoughts on the opportunities ahead and the numerous steps that we are taking to unlock GSL's great potential. First of all, let may be clear that the Poseidon transaction did a great deal more than simply double the number of ships in our fleet. Following transaction, GSL's fleet of mid-sized and smaller containerships is younger, larger and better specified. In particular, we have added nine modern eco wide beam vessels, six of 6,900 TEUs and three of 9,000 - 100 TEUs. That truly state of the art and which have market leading reefer capacity that makes these vessels extremely attractive to charters due to their fuel efficiency and substantial capacity to carry premium rated reefer containers and enables them to command a substantial income premium. In fact, the merger has improved Global Ship Lease across all major operational and financial metrics. The increased fleet size and combination of our short and long-term charters provides greater upside potential, more downside protection and better forward visibility in terms of both total contracted revenue and average remaining contract duration. We will also have now access to an integrated management platform to create value in a variety of ways. One excellent example of this is the work that we are doing to extract additional value from the legacy GSL fleet by expanding some vessels cargo and refill capacity which in turn makes them more competitive and desirable to the liner companies, allowing them to earn a premium compared to their more ordinary peers. Also through both an existing diversified our…

Thank you, George. If you could all turn to Slide 4, I'll quickly run through the highlights for the fourth quarter and for the full year. Needless to say the strategic combination that we completed in November with Poseidon is the single most significant event for us during the year. And I'll come back to that shortly. But we've also made important steps in reducing our debt, improving our leverage profile, chartering vessels at rates superior to prevailing market rates and maintaining high vessel utilization to maximize revenue and therefore cash flow. The six week contribution from the addition of the 19 Poseidon vessels on November the 15th makes some of our standard period comparisons less illustrative, but I'll highlight a few important points here. On a normalized basis that strips out mainly the impact of the non-cash impairment charge of $71.8 million and certain non-recurring costs related solely to the Poseidon transaction. We were profitable for the quarter and the year, earning $13.8 million of normalized net income for 2018. We also generated adjusted EBITDA of $97.2 million during the year and $26.6 million for the fourth quarter. Of that $26.6 million, $9.1 million was contributed by the Poseidon fleet. Following completion of the transaction, GSL's asset base has expanded to over $1.3 billion on a charter attached basis. Net asset value per share has increased by almost 40% from $1.94 to $2.71 and this benefits from a $48 million debt reduction crystallized by opportunistic refinancing of some of Poseidon's secure bank debts in November just before completion of the transaction. We'll come back onto NAV shortly. As George mentioned, we've recently secured attractive new charters and extensions for a number of vessels, most prominently the six five-year charters for the Eco wide beam high reefer 6,900 TEU containerships…

Thanks very much, Ian. Let's take a quick look at the market backdrop. From a macroeconomic perspective the IMF in its January update to the World Economic Outlook acknowledged negative sentiment and the risk of rising trade tensions particularly between the US and China. And notch down its global GDP growth projections to 3.5% in 2019 and 3.6% in 2020. Despite some slowing in China, emerging markets and developing economies are expected to continue to be the main engines of the global economy, growing by 4.5% in 2019 and 4.9% in 2020. World trade volumes are forecast to grow by 4% per annum over the same period. And while container shipping industry sentiment understandably faced headwinds during the second half of 2018, the favorable fundamentals for midsize and smaller ships remain intact. The next few slides provide our usual market analysis through which run a handful of recurring themes summarized at the top of slide 10. Essentially our thesis is that, one, despite headwinds to sentiment industry fundamentals is supportive. The demand expected to grow faster than supply in 2019 particularly for the mid-sized and smaller fleet segment. Two, the containership order book has reduced significantly over time as the industry adjusts to a combination of liner consolidation and alliances, capital constraints and a new demand growth paradigm. This year the global fleet is anticipated to grow by about 3.6% but more importantly for us the increase in the 2,000, to 10,000 TEU segment GSL focus is projected to be only 1% in 2.19 after scrapping and slippage. Three, short-term negative sentiment is helpful to longer-term fundamentals, having ground to a virtual standstill in the first half of 2018, scrapping activity appears to be picking up. First 60 days of 2019 saw the removal of around 38,000 TEU which is…

Thank you very much, Tom. If you will now turn to slide 18, I will guide you through the financial highlights for the fourth quarter. Rather than going through every line item, let me point out a few key items. We generated revenue of $50 million during the fourth quarter and a net loss of $72.5 million after non cash impairment charge of $71.8 million on three vessels. The $12.1 million increase in revenue year-over-year was principally due to the addition of the 19 Poseidon vessels partially offset by the effect of the new charters of GSL Ningbo and OOCL Qingdao renewed at lower rate. In the fourth quarter of 2018, there was no plan to hire, seven days of unplanned of hire and 50 days of vital time for one vessel between charters giving an overall utilization of 98.6%. The average cost per ownership day including management fees in the fourth quarter was $6,818 down $41 per day year-over-year. Now slide 19 shows unaudited pro forma financial information for the enlarged business based on full year 2018. You can see that pro forma revenue was $278 million and adjusted EBITDA of $174 million. Please note that we have adjusted for the six new charters to CMA CGM and have backed out certain cost and charges associated only with the transaction. On slide 20 is a balance sheet. As of December 31, 2018, we have $19.1 million of cash. Slide 21 shows the significant improvement in loan-to-value as a result of the Poseidon transaction. With a gross debt of $889.2 million, our charter-attached LTV as of December 31, 2018 was 67%, a decrease of 23% points from each free transaction level of 90% while our Charter-free LTV was 86%, a decrease of 58% of points from substantially over 100% previously. On a net debt basis, charter-attached LTV was 60% and charter free 77%. We believe that these much improved loan-to-value metrics put us in a greatly improved position and one that compares favorably to our peer group. For the record, slide 22 shows our cost flow. Now I would like to turn the call back to George for closing remarks.

Thank you, Tassos. So guys I will bit summarize before moving to our questions. And we have slide 24 which places a simple question. Why GSL? So I'll try to give you the elevator pitch on why GSL. Number one, our shares trade at very attractive level on an NAV basis where the current share prices have an approximate 70% discount. And also an enterprise value to be their multiple basis where we have approximately 5.6x. So there is a lot of upside potential in our stock. Number two, the industry fundamentals in the container sector. And more particularly in the sub sectors which represent our fleet are very supportive. Why? More specifically. The order book is low like we said for between 2,000 to 10,000 TEU where we are. The total order book to fleet ratio is only 3.8% with a potential increase with the projected increase in this fleet of only 1% through 2019. There is lack of available finance. These and the negative sentiment due to the concerns over tariffs have put a brake on new orders. That is the most fundamental issue in shipping as shipping is a cyclical business but cargo volumes year-over-year are only growing containers. Therefore, the cyclicality obviously comes from supply. And that's where we should really focus rather than anything else. And this for our industry is moving to the right direction. We have no supply. Scrapping, rates have increased which come to help this supply theory that I've given you. And year-to-date represents 40% already of what the whole 2018 had scrapping. The IMO 2020 mission control is expected to lead to increase slow steaming for charters and for liner companies to achieve reduce fuel consumption, thus it will reduce the effective supply of ships. So the fleet will shrink…

[Operator Instructions] Our first question comes from the line of Steve O'Hara of Sidoti & Company. Your line is now open.

Hi, good morning. Thanks for taking the questions. Can you just and talk about maybe with IMO 2020, what your expectations are on scrubber inflation within your fleet potentially and would that ends with the partnership with customers? And then the other thing is in your meetings with the investors I mean what is the biggest delta between the way you guys see the company and the way investors see the company and what -- how do we close that gap? Thank you.

Okay. Tom, do you want to talk about this scrubbers and our policy?

Sure. And, Steve, first of all, I point out that all of our ships in our fleet are compatible with the new fuel that's going to come in starting 2020. There are some strict protocols for switching from one fuel to the other, but our entire fleet is fully compatible with low sulfur fuel. That's point one. As for scrubbers, that's an initiative that's going to be driven by the charters themselves. So if a charter has a strong preference for a scrubber and is prepared to support us with a long-term charter by which I mean call it three or five years or so and provide us with a suitable charter rate premium to offset the economics of installing that scrubber then clearly we will look carefully at scrubbers. And would be willing to install them. So it's a charter -- it's all to do with being Charter focused. Okay. Then as far as the second question you raised, Steve, the meetings that we've had with investors since the transaction have all been extremely positive I would say. And once we have spent time explaining the GSL story, explaining why we see our fleet is being focused in the right industry segments, and why we see our fleet as being best-in-class in certain instances. Then it's a story that they get by and large. So I wouldn't say there's a very significant gap between the way we see the world and the way investors see the world, but it does require that we engage more closely I think with investors to explain our story more clearly. And George referred to that in his prepared remarks, Steve, about introducing the new GSL to the investment community where we're stepping up our attendance at conferences, one-on-one meetings, and non-deal road shows. We've always made ourselves available to talk with investors on the phone or in person, and we're very keen to continue to explain the supportive dynamics of the industry, particularly the fleet sector that we are exposed to the midsize and smaller tonnage. And really run home some of the messages which have become even more important with the addition of Poseidon, the quality of our fleet, the extremely low in fact zero order book for many of the ships segments that we have in our portfolio, and the opportunities post- 2020 with modern the eco vessels that we have.

Okay and then maybe just on made to me sounds like they had picked up after the first of the year I mean you see this mostly as macro driven and with concerns about trade is that kind of what's driving some of the other than maybe typical seasonality mezack is that mostly what's driving the swings or variation here in terms of the rates. If I mean I assume given 6,000 that typically what it is but are you seeing any rate pressure either positive or negative more acutely based on expectations around IMO 2020 or what the order book looks like. I mean seeing any customers move on those terms as well.

Yes. Let me try to answer that question, factually, the trade tensions have not reduced cargoes. So the only thing that they have done so far is increase actually cargoes. Cargoes volumes between United States and China have increased substantially over the past three to four months as people are trying to get to the states as much cargo as I can before the tariffs would possibly kick-in. So, in fact, the trade --the world discussions have only actually helped our industry not reduced by any means the cargo volume. On the other hand, psychologically the liner companies have to make decisions on whether to start services or not and starting a service is a commitment where you commit anything between five to ten six depends on the service and you commit for at least six months to a year. So it's a big financial commitment and as you can imagine with this overhang and the liner companies, this service are initiated by the liner managers for people who are-- who don't want to take unnecessary risks when the whole world is talking about world trade wars et cetera. It is --its human nature that they want to play safe and they don't want to take the risk and be the ones to be blamed for starting a service that would probably cost a few million dollars to the liner company. And that service might be not profitable going forward, if the tariff war goes to full-blown. So it's very psychological, psychological driven. Therefore, that's why I believe in a big part we have seen this reduction in demand and reduction saturate. Of course, it is also the seasonal thing that new services beginning usually just are decided in a beginning just after the Chinese New Year. So given the…

Our next question comes from line of Howard Blum with UBS Financial Services. Your line is now open.

Good morning. Thanks for the update and the additional information you provided in the slides. I had three questions maybe I just spit them out and let you answer them however you wish. You received a delisting notice from the New York Stock Exchange on November 13th and the six-month period ends on May 13th. Does a company anticipate taking steps to maintain the stock exchange listing or in failure to attain an average price of $1.04 30-day period, the stock will be delisted and I guess your list on NASDAQ. I don't know what the company's intentions are. Whether you're going to have a reverse split if you're not able to attain the share price or what your plan is? Second thing is I know this --

Let me answer that very quickly we have called a special meeting of shareholders for March the 20th at which we're seeking shareholder approval to give the board the authority to undertake a reverse stock split. So I think that's the answer to that question.

Okay. Good. There's been a discussion I guess with the increased size of the fleet as to how frequently you'll announce new charters when they come up will you announce new charters on an individual basis or have you decided how you're going to inform shareholders about new charters in the future?

I can answer that very quickly also. Since we want our shareholders to be completely up to date and be able to update their models in line with what we've said that we are going door-to-door to explain our company to the various investors. We will be announcing our renewed charters as soon as they happen and they become confirm.

So that's great news. Okay, the last question is a merger you issued about 24 million shares of stock away from the convertible preferred and the other consideration. The majority owner I guess Poseidon was a private equity fund that had been formed I guess in 2010 or 2011. Where did those 24 million shares go? Did it go to the fund or did it go to the individual limited partners of the fund?

. : And the consideration that we gave to Kelso was in the form of convertible preferred shares Series C which in certain circumstances convert to Part A common shares. So that's how the transaction was structured.

Our next question comes from the line of Peter [Indiscernible] of Ironshore Capital. Your line is now open.

Good morning and thank you for taking my questions. Just let me start with following up on the comment you made before that you might be thinking about, if I heard you right unlocking value of legacy GSL ships by adding reefer capacity. Can you confirm that this is indeed with you intent and also how would it be found that or what are the CapEx and potential benefit in the business case?

Okay. Let me answer to that. This is increasing the refer capacity of ships and we have seen that most of the GSL legacy of ships have the electrical power onboard because increasing the reefer capacity has -- it's about two issues. One is to have the electrical power to power up these extra containers, extra reefer containers and the second leg is to install the necessary plugs in the ship so that you can plug in these extra containers. So the legacy diesel ships most of them or the important ships that we're looking at they do have this electrical power, they have extra electrical power. And so we are making a study which is going to be approved by class, all of that has very minimal cost in the tune of $10, 000 - $20,000 to get the approval for the classification site. So we can do that. Once that is done then we can market the ship with a new capacity which the way we normally do it is we agree with our charters to participate in the CapEx expense which is not something huge by the way. It's hundreds or thousands of dollars to participate in to that increase as that the charter ship will be for a long period of charter. So like anything between three to five years and so it is not going to really matter that much the company with respect over CapEx this increase, Nevertheless by doing this increase naturally the value of the ship increases substantially, given the fact that for example our 7,000 that we are increasing with the reefer capacity are becoming the highest reefer capacity 7,000 worldwide.

Right and how many ships of the legacy do you expect to do -- do you think can be converted in between?

Immediately --

You may not have seen it yet but 12 to the fleet table in the earnings release notes that we're targeting an increase near term in 8,000 TEU vessels to 8, 6000.

So to start with, yes, this is what Ian said that these are three ships that are under progress right now of making this analysis, but there are also other ships into the GSL fleet quite a few more of them that we have identified as possible increases to happen.

Okay and what is the timing of this program?

Well, the first advance of the three ships is almost ready. The analysis --the study, we have already prepared another study for another ship. And probably in the next month or two months we will have finished our preliminary analysis on the rest of the fleet. So we will know which ships we can market to the charters, as well as [Indiscernible] 0:52:36.7 provide this additional reefer capacity if need be. We have done something similar also only on the Poseidon fleet. It's just for commercial reasons we do not advertise publicly the upside potential of reefer plugs of our ships, but when we do negotiate with charters we give this information and the reason we don't put in public lists for competition purposes as you can imagine.

Okay and moving on you also mentioned an effort to address the mid-term maturities. Can you just provide a bit more color and what needs to happen for you to feel that you're in a position to approach the market and would it be a bond market or a bank market?

We are in the process of extending our maturities which was a natural thing we would have done anyway. We in Poseidon and that are going to happen with normal bank debt. We do not anticipate to approach to the bond market. These loans are already with commercial banks. The commercial banks are very comfortable. Actually their position has been improved because the ships have obtained longer charters. So it's only better than before and we are in discussion with all these commercial lenders that we have relationships going back 10-15 years to extend the maturities as a natural thing in our industry.

Okay and moving on to the broader market picture. You mentioned that there was a lot of uncertainty related to the tariffs and the trade war is potentially intensifying. How much of the impact of this uncertainty have you seen on demand and rate in intra-regional especially inter Asia and inter Africa freight?

I would let the Tom talk about this he is commercial head.

Sure. Hi, Peter. How are you? We have --if you go back to slide 8, you can see what's happening to charter rates at the moment in the shape of our most recent fixtures. So broadly speaking for the smaller vessels by which I mean the 22s up to the 27th, 28th, the Charter rates are broadly in line with where they were in 2018. So they're roughly in the sort of $7,000 to $9, 000 per day region, which there's not much change one way or the other there. Now for the larger vessels which were the vessel that George was sort of referring to when talking about what's happened to charter rates. I would say that the 9,000 TEU vessels are probably commanding rates in the low to mid 30s at the moment. The 8,500 have increased by roughly 75% or so from call it $12,000 per day back in the Q4 of last year up to the low 20s today. And the 5.5s and 5.9s are also firming. So it's difficult to sort of break it out and say what's happening to charter rates within the intra-regional trades, but given that I would say that large majority of our vessels tend to be deployed in the non main lane and intra-regional trades that recent recap of charter rates I've just given you should give you a sense of what we're seeing in the market from a charter rate perspective.

Let me add, if I may add to what Tom said and sorry to interrupt. If I may add to what Tom said, you can see that the increases in to our all the containers that have happened on the large ships. The post-panamax ships, the ships have that have a wide beam and they can take a lot of cargo because they have better stability. That is a clear indicator that there are lots of cargoes going forward. If liner companies do not see the cargo volumes, they tend to downsize and not to upsize. So that what we see here is that liner companies are starting to upsize and they are trying to use the ships which have the wider beam and therefore the lower slot cost. The bigger the ship the wider beam the lower the slot cost as a rule of thumb. So it is one thing, yes, the liner companies will definitely always go for the lower slot cost as long as there are cargos to fill a ship there is no point to just make the exercise and then have the ship half empty because then the exercise fails because the slot cost calculation, the slot cost calculation as assuming that the ship is relatively full. So from that I can make the assumptions that nothing is happening to the trades, actually to the opposite. I think the trades are firming up and that's why the demand for bigger ships. That would be my guess.

Okay. Thank you for this color. Maybe let me ask a bit differently. So, obviously, late 2018 you had all the success in extending growing new contract for Poseidon vessels at higher day rate. Do you anticipate that in 2019 we will see the legacy GSL vessels are intrinsic as -- at higher day rate as well?

Yes. I am -- I feel confident on that. How about you, Tom?

Yes. I would echo that particularly the 8.5 that's where we see -- [Multiple speakers] yes, which is of the segments where we are seeing the most promising development.

And the 9s, we have also 9s having up for renewal. One of the eco new design ships. And so we feel very, very comfortable and very confident on these coming up renewals.

Our next question comes from the line of [Indiscernible] Capital. Your line is now open.

Thank you. Thanks very much for taking my questions. I guess I have got two questions. One is about new ballast water legislation that comes in early next year I guess. So maybe you could shed some light on whether we should anticipate any impact any sort of capital expenditure related to that for the fleet? And, if so, could you please sort of comment on the potential size of investments required? And my second question is about sort of the -- how you guys think about sort of refinancing of the bond? I mean I guess you kind of commented that -- I guess kind of we can imply that you are not thinking about your financing at this stage, but it would be helpful to kind of understand your sort of thinking process as you kind of saying the LTV of the structure kind of came down as a result of Poseidon transaction. You got younger fleet. These sort of locked in charters are longer so PV of that is quite helpful as well and the sort of underlying market back job is also supporting. So I guess it would be helpful to understand like what kind of factors you consider when it comes to financing of the bond.

I will answer first on the question of the ballast water treatment and then I will let the other questions to Ian. The ballast water treatment system for our fleet is costing per vessel anything between $300,000 to $350,000 all in turnkey solution. We have budgeted that together with our drydocks and special vessel whenever ship go for special way drydocks, we are installing also the ballast water treatment system. It's not major CapEx issue. We do have that may drydocks every year. And it's all within our financial model. So it's nothing really important.

So is it fair to say that you've got 38 vessels so you have to spend cumulatively around $10 million on that when drydocks happen.

Not really because out of these ships nine already have the system. These are the new design vessels we have. So all these nine ships do have the ballast water treatment when they were built. And on the others, we are planning and we can give you --I mean you can assuming if you want to do modeling on our drydocks something like $300,000 per vessel around $300,000 per vessel on the rest of the fleet when they come for renewal except those nine ships.

Thank you.

Ian you want to take --

On the bond and that's just a little bit of history. First one we issued in 2014 that was opportunistic. It took out a previous very restrictive maintenance covenant ship mortgage financing, and allow us the flexibility to grow which we did increasing EBITDA by third. Then we saw an opportunity of refinancing that bond in 2017 on improved terms with more flexibility. And obviously it pushed out the maturity of the paper. The 2000 that bond that we raised last year is five year paper and non call two, so it's unrealistic to assume that we would look to refinance before at least the paper is callable which is very late this year. It is expensive compared to our other debt and as part of our search to optimize the balance sheet. We are looking at the possibilities no more than that of seeing what we can do on a holistic basis to refinance the entire balance sheet on a more cost effective basis. And that's where loan-to-value that we've discussed on the call is so important. So overall loan-to-value is much reduced for the enlarged GSL compare to the legacy GSL that gives us more opportunity to look at alternate sources of debt. End of Q&A

Thank you. And I'm showing no further questions at this time. I would now like to turn the call over to Mr. Ian Webber for closing remarks.

Great. Thank you very much for joining us. Thank you for your questions. And we look forward to providing you an update on the first quarter 2019. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This conclude today's program. You may all disconnect. Everyone have a great day.