ATHENS, Greece, Dec. 15, 2016 /PRNewswire/ -- Danaos Corporation
("Danaos") (NYSE: DAC), one of the world's largest independent
owners of containerships, today reported unaudited results for the
period ended September 30, 2016.
Highlights for the Third Quarter and Nine Months Ended
September 30, 2016:
- Adjusted net income1 of $22.8 million, or $0.21 per share, for the three months ended
September 30, 2016 compared to
$43.8 million, or $0.40 per share, for the three months ended
September 30, 2015, a decrease of
47.9%. Adjusted net income1 of $117.7
million, or $1.07 per share,
for the nine months ended September 30,
2016 compared to $112.3
million, or $1.02 per share,
for the nine months ended September 30,
2015, an increase of 4.8%.
- Operating revenues of $111.8
million for the three months ended September 30, 2016 compared to $144.6 million for the three months ended
September 30, 2015, a decrease of
22.7%. Operating revenues of $386.2
million for the nine months ended September 30, 2016 compared to $424.6 million for the nine months ended
September 30, 2015, a decrease of
9.0%.
- Adjusted EBITDA1 of $75.5
million for the three months ended September 30, 2016 compared to $106.8 million for the three months ended
September 30, 2015, a decrease of
29.3%. Adjusted EBITDA1 of $274.7
million for the nine months ended September 30, 2016 compared to $312.6 million for the nine months ended
September 30, 2015, a decrease of
12.1%.
- Total contracted operating revenues were $2.2 billion as of September 30, 2016, with charters extending
through 2028 and remaining average contracted charter duration of
6.5 years, weighted by aggregate contracted charter hire.
- Charter coverage of 95% for the next 12 months on current
operating revenues and 79% in terms of contracted operating
days.
- On September 1, 2016, Hanjin
Shipping, a charterer of eight of our vessels, filed for
receivership with the Seoul Central District Court, which had a
negative impact on our current operating results, contracted
operating revenue and our debt.
- In July 2016, we reached a
charter restructuring agreement with Hyundai Merchant Marine
("HMM").
Three and Nine
Months Ended September 30, 2016 Financial
Summary (Expressed in thousands of United States
dollars, except per share amounts)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$111,752
|
|
$144,542
|
|
$386,225
|
|
$424,616
|
Net
income/(loss)
|
|
$(8,397)
|
|
$42,068
|
|
$80,372
|
|
$110,482
|
Adjusted net
income1
|
|
$22,781
|
|
$43,783
|
|
$117,723
|
|
$112,336
|
Earnings/(loss) per
share
|
|
$(0.08)
|
|
$0.38
|
|
$0.73
|
|
$1.01
|
Adjusted earnings per
share1
|
|
$0.21
|
|
$0.40
|
|
$1.07
|
|
$1.02
|
Weighted average
number of shares (in thousands)
|
|
109,800
|
|
109,785
|
|
109,800
|
|
109,785
|
Adjusted
EBITDA1
|
|
$75,504
|
|
$106,772
|
|
$274,713
|
|
$312,626
|
|
1Adjusted
net income, adjusted earnings per share and adjusted EBITDA are
non-GAAP measures. Refer to the reconciliation of net income to
adjusted net income and net income to adjusted EBITDA.
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Danaos' CEO Dr. John Coustas
commented:
We report our results for the third quarter of 2016 in the
aftermath of the bankruptcy of Hanjin Shipping, one of Danaos'
large customers. As a result of the bankruptcy, we did not
recognize any operating revenues for the vessels that had been
chartered to Hanjin during the quarter. This reduced our operating
revenues by $24.8 million and was the
main contributor to the $21 million
reduction in our adjusted net income to $22.8 million compared to an adjusted net income
of $43.8 million in the third quarter
of 2015.
Setting aside the significant effect of the Hanjin bankruptcy on
our operating revenues and our bottom line, we have otherwise
managed to improve our adjusted net income by $3.8 million, mainly due to a $10.2 million improvement in our net finance
costs resulting from the continued de-leveraging of our balance
sheet, interest rate swap expirations and a $1.3 million reduction in total operating
expenses, partially offset by a $8
million reduction in operating revenues attributed to lower
fleet utilization, the sale of the Federal during the first
quarter and lower re-chartering rates for certain of our vessels in
a softer charter market.
As a result of the Hanjin bankruptcy we also recorded a
write-off of $15.8 million,
representing the outstanding charter hire owed to us by Hanjin as
of June 30, 2016. Additionally,
principally as a result of the effects of the cancellation of the
Hanjin charters, the Company was in breach of certain financial
covenants as at September 30, 2016
for which we have obtained waivers until April 1, 2017. Because the waivers are for a
period of less than 12 months, all of the debt has been classified
as current on the September 30, 2016
financial statements. Notwithstanding the negative consequences of
the Hanjin bankruptcy, the Company is currently in a position to
fully service all of its operational and contractual financial
obligations.
All the Hanjin vessels have been discharged and re-delivered to
us. We have already re-chartered 5 x 3,400 TEU vessels at market
rates while we are still in negotiations to charter the remaining 3
x 10,100 TEU vessels, which we expect to be deployed after the end
of the first quarter of 2017.
During the third quarter we sold all the shares that the Company
had received as compensation pursuant to the HMM restructuring for
a consideration of $38.1 million.
This constitutes a 98% recovery of the $39
million charter hire concession for which we were
compensated with HMM shares. Despite the effective recovery at par
on a cash basis, we recorded a non-cash accounting loss of
$12.9 million on the sale of these
shares, reflecting the difference between the book value and the
sale price of the shares, which has been included within our
adjusted net income calculation.
Danaos continues to have low near term exposure to the weak spot
market compared to current operating revenues with 95% of charter
cover in terms of third quarter operating revenues and 79% in terms
of contracted operating days for the next 12 months. Additionally,
our continued focus on cost containment has reduced our daily
operating costs to $5,462 per day for
the third quarter, a decline of nearly 4% versus the same period in
the prior year. This clearly positions us as one of the most
efficient operators in the industry, which is particularly
beneficial in today's environment.
Amidst this challenging economic environment we will remain
singularly focused on preserving value, de-levering our balance
sheet, managing our fleet efficiently and capitalizing on the
resilience of our business model.
Three months ended September 30,
2016 compared to the three months ended September 30, 2015
During the three months ended September
30, 2016, Danaos had an average of 55 containerships
compared to 56 containerships for the three months ended
September 30, 2015. Our fleet
utilization decreased to 96.7% in the three months ended
September 30, 2016 compared to 100.0%
in the three months ended September 30,
2015.
Our adjusted net income amounted to $22.8
million, or $0.21 per share,
for the three months ended September 30,
2016 compared to $43.8
million, or $0.40 per share,
for the three months ended September 30,
2015. We have adjusted our net income in the three months
ended September 30, 2016 mainly for
bad debt expense of $15.8 million
related to Hanjin Shipping, loss on sale of HMM securities of
$12.9 million, unrealized gains on
derivatives of $1.6 million and a
non-cash amortization charge of $4.0
million for fees related to our comprehensive financing plan
(comprised of non-cash, amortizing and accrued finance fees).
Please refer to the Adjusted Net Income reconciliation table, which
appears later in this earnings release.
The decrease of $21.0 million in
adjusted net income for the three months ended September 30, 2016 compared to the three months
ended September 30, 2015 is
attributable to a $32.8 million
decrease in operating revenues, which were partially offset by
$10.2 million decrease in net finance
costs mainly due to lower debt balances and interest rate swap
expirations, a $1.3 million decrease
in total operating expenses and a $0.3
million decrease in loss on equity investments.
On a non-adjusted basis, we incurred a loss of $8.4 million, or $0.08 loss per share, for the three months ended
September 30, 2016 compared to net
income of $42.1 million, or
$0.38 earnings per share, for the
three months ended September 30,
2015.
Operating Revenues
Operating revenues decreased by 22.7%, or $32.8 million, to $111.8
million in the three months ended September 30, 2016 from $144.6 million in the three months ended
September 30, 2015.
Operating revenues for the three months ended September 30, 2016 reflect:
- $24.8 million decrease in
revenues in the three months ended September
30, 2016 compared to the three months ended September 30, 2015 due to loss of revenue from
cancelled charters with Hanjin Shipping for eight of our vessels,
for which we ceased recognizing revenue effective as of
July 1, 2016. See "Recent news"
below.
- $1.1 million decrease in revenues
in the three months ended September 30,
2016 compared to the three months ended September 30, 2015 due to the sale of the
Federal on January 8,
2016.
- $4.5 million decrease in revenues
in the three months ended September 30,
2016 compared to the three months ended September 30, 2015 due to the re-chartering of
certain of our vessels at lower rates.
- $2.4 million decrease in revenues
due to lower fleet utilization in the three months ended
September 30, 2016 compared to the
three months ended September 30,
2015.
Vessel Operating Expenses
Vessel operating expenses decreased by 5.7%, or $1.6 million, to $26.6 million in the three months ended
September 30, 2016 from $28.2 million in the three months ended
September 30, 2015. The decrease is
attributable to a 3.7% decrease in the average daily operating cost
per vessel while the average number of vessels in our fleet during
the three months ended September 30,
2016 decreased by 1.8% compared to the three months ended
September 30, 2015.
The average daily operating cost per vessel decreased to
$5,462 per day for the three months
ended September 30, 2016 from
$5,669 per day for the three months
ended September 30, 2015. Management
believes that our daily operating cost ranks as one of the most
competitive in the industry.
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and
Amortization of Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by 2.1%, or $0.7 million, to $32.5
million in the three months ended September 30, 2016 from $33.2 million in the three months ended
September 30, 2015, mainly due to
decreased depreciation expense for twelve vessels for which we
recorded an impairment charge on December
31, 2015 and due to the decreased average number of vessels
in our fleet in the three months ended September 30, 2016 following the sale of the
Federal on January 8,
2016.
Amortization of Deferred Dry-docking and Special Survey
Costs
Amortization of deferred dry-docking and special survey costs
increased by $0.6 million, to
$1.5 million in the three months
ended September 30, 2016 from
$0.9 million in the three months
ended September 30, 2015. The
increase is mainly due to the increased payments for
dry-docking and special survey costs related to certain vessels
over the last nine months.
General and Administrative Expenses
General and administrative expenses remained stable, amounting
to $5.5 million both in the three
months ended September 30, 2016 and
in the three months ended September 30,
2015.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses and Bad Debt
Expense.
Voyage Expenses
Voyage expenses increased by $0.4
million, to $3.3 million in
the three months ended September 30,
2016 from $2.9 million in the
three months ended September 30,
2015.
Bad Debt Expense
Bad debt expense of $15.8 million
in the three months ended September 30,
2016 compared to nil in the three months ended September 30, 2015 relates to receivables from
Hanjin Shipping, which were written-off.
Interest Expense and Interest Income
Interest expense decreased by 0.5%, or $0.1 million, to $21.0 million in the three months ended
September 30, 2016 from $21.1 million in the three months ended
September 30, 2015 including the
amortization of deferred finance costs reclassified from other
finance expenses to interest expense of $3.2
million and $3.5 million,
respectively. The decrease in interest expense was mainly due to
the decrease in our average debt by $243.0
million, to $2,632.0 million
in the three months ended September 30,
2016, from $2,875.0 million in
the three months ended September 30,
2015 and a $0.3 million
decrease in the amortization of deferred finance costs, which were
partially offset by an increase in average cost of debt due to the
increase in US$ Libor.
The Company is deleveraging its balance sheet. As of
September 30, 2016, the debt
outstanding gross of deferred finance costs was $2,615.4 million compared to $2,860.1 million as of September 30, 2015. As a result principally of
the cancellation of eight charters with Hanjin Shipping, we expect
the rate at which we reduce our leverage to decline.
Interest income increased by $0.5
million to $1.4 million in the
three months ended September 30, 2016
compared to $0.9 million in the three
months ended September 30, 2015. The
increase is mainly attributed to the interest income recognized on
HMM notes receivable.
Other finance expenses
Other finance expenses decreased by $0.1
million, to $1.1 million in
the three months ended September 30,
2016 from $1.2 million in the
three months ended September 30,
2015, following the reclassification of the amortization of
deferred finance costs from other finance expenses to interest
expense of $3.2 million and
$3.5 million, respectively.
Equity loss on investments
Equity loss on investments decreased by $0.3 million, to $0.7
million in the three months ended September 30, 2016 compared to a loss of
$1.0 million in the three months
ended September 30, 2015 and relates
to the investment in Gemini Shipholdings Corporation ("Gemini"),
acquired in August 2015, in which the
Company has a 49% shareholding interest. This loss is attributed to
operating losses of two out of the four vessels that have been
acquired by Gemini.
Unrealized gain on derivatives
Unrealized gains on interest rate swaps amounted to $1.6 million in the three months ended
September 30, 2016 compared to
unrealized gains of $2.6 million in
the three months ended September 30,
2015. The unrealized gains were attributable to mark to
market valuation of our swaps.
Realized loss on derivatives
Realized loss on interest rate swaps decreased by $10.0 million, to $2.2
million in the three months ended September 30, 2016 from $12.2 million in the three months ended
September 30, 2015. This decrease is
attributable to a $375.0 million
decrease in the average notional amount of swaps during the three
months ended September 30, 2016
compared to the three months ended September
30, 2015 as a result of swap expirations.
Other income/(expenses),net
Other income/(expenses), net decreased by $12.9 million, to $12.8
million net expenses in the three months ended September 30, 2016 from $0.1 million net income in the three months ended
September 30, 2015 due to a
$12.9 million recognized loss on sale
of HMM equity securities for cash proceeds of $38.1 million, which were acquired by Danaos in
July 2016 as part of the charter
restructuring agreement with HMM.
Adjusted EBITDA
Adjusted EBITDA decreased by 29.3%, or $31.3 million, to $75.5 million in the three months ended
September 30, 2016 from $106.8 million in the three months ended
September 30, 2015. As outlined
earlier, this decrease is mainly attributed to a $32.8 million decrease in operating revenues,
which were partially offset by a $0.3
million decrease in loss on equity investments and a
$1.2 million decrease in voyage and
vessel operating expenses. Adjusted EBITDA for the three months
ended September 30, 2016 is adjusted
mainly for bad debt expenses of $15.8
million, loss on sale of HMM securities of $12.9 million, unrealized gain on derivatives of
$1.6 million and realized losses on
derivatives of $1.2 million. Tables
reconciling Adjusted EBITDA to Net Income can be found at the end
of this earnings release.
Nine months ended September 30,
2016 compared to the nine months ended September 30, 2015
During the nine months ended September
30, 2016, Danaos had an average of 55 containerships
compared to 56 containerships for the nine months ended
September 30, 2015. Our fleet
utilization decreased to 96.0% in the nine months ended
September 30, 2016 compared to 99.2%
in the nine months ended September 30,
2015.
Our adjusted net income amounted to $117.7 million, or $1.07 per share, for the nine months ended
September 30, 2016 compared to
$112.3 million, or $1.02 per share, for the nine months ended
September 30, 2015. We have adjusted
our net income in the nine months ended September 30, 2016 mainly for bad debt expense of
$15.8 million related to Hanjin
Shipping, loss on sale of HMM securities of $12.9 million, unrealized gains on derivatives of
$3.7 million and a non-cash
amortization charge of $12.3 million
for fees related to our comprehensive financing plan (comprised of
non-cash, amortizing and accrued finance fees). Please refer to the
Adjusted Net Income reconciliation table, which appears later in
this earnings release.
The increase of $5.4 million in
adjusted net income for the nine months ended September 30, 2016 compared to the nine months
ended September 30, 2015 is mainly
attributable to a reduction of $42.4
million in net finance costs mainly due to lower debt
balances and interest rate swap expirations, a $1.6 million decrease in total operating
expenses, which were partially offset by a decrease of $38.4 million in operating revenues and a
$0.6 million increase in loss on
equity investments.
On a non-adjusted basis, our net income amounted to $80.4 million, or $0.73 per share, for the nine months ended
September 30, 2016 compared to net
income of $110.5 million, or
$1.01 per share, for the nine months
ended September 30, 2015.
Operating Revenues
Operating revenues decreased by 9.0%, or $38.4 million, to $386.2
million in the nine months ended September 30, 2016 from $424.6 million in the nine months ended
September 30, 2015.
Operating revenues for the nine months ended September 30, 2016 reflect:
- $24.8 million decrease in
revenues in the nine months ended September
30, 2016 compared to the nine months ended September 30, 2015 due to loss of revenue from
cancelled charters with Hanjin Shipping for eight of our vessels,
for which we ceased recognizing revenue effective as of
July 1, 2016. See "Recent news"
below.
- $2.3 million decrease in revenues
in the nine months ended September 30,
2016 compared to the nine months ended September 30, 2015 due to the sale of the
Federal on January 8,
2016.
- $7.1 million decrease in revenues
in the nine months ended September 30,
2016 compared to the nine months ended September 30, 2015 due to the re-chartering of
certain of our vessels at lower rates.
- $4.2 million decrease in revenues
due to lower fleet utilization in the nine months ended
September 30, 2016 compared to the
nine months ended September 30,
2015.
Vessel Operating Expenses
Vessel operating expenses decreased by 1.8%, or $1.5 million, to $83.6 million in the nine months ended
September 30, 2016, from $85.1 million in the nine months ended
September 30, 2015. The decrease is
due to a decrease in average number of vessels in our fleet by 1.8%
and due to a 0.4% decrease in the average daily operating cost per
vessel during the nine months ended September 30, 2016 compared to the nine months
ended September 30, 2015.
The average daily operating cost per vessel decreased to
$5,749 per day for the nine months
ended September 30, 2016 from
$5,770 per day for the nine months
ended September 30, 2015. Management
believes that our daily operating cost ranks as one of the most
competitive in the industry.
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and
Amortization of Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by 2.0%, or $2.0 million, to $96.6
million in the nine months ended September 30, 2016 from $98.6 million in the nine months ended
September 30, 2015, mainly due to
decreased depreciation expense for twelve vessels for which we
recorded an impairment charge on December
31, 2015 and due to the decreased average number of vessels
in our fleet in the nine months ended September 30, 2016 following the sale of the
Federal on January 8,
2016.
Amortization of Deferred Dry-docking and Special Survey
Costs
Amortization of deferred dry-docking and special survey costs
increased by $1.1 million, to
$4.0 million in the nine months ended
September 30, 2016 from $2.9 million in the nine months ended
September 30, 2015. The increase is
mainly due to the increased payments for dry-docking and special
survey costs related to certain vessels over the last nine
months.
General and Administrative Expenses
General and administrative expenses remained stable, amounting
to $16.1 million both in the nine
months ended September 30, 2016 and
in the nine months ended September 30,
2015.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses and Bad Debt
Expense
Voyage Expenses
Voyage expenses increased by $0.8
million, to $10.0 million in
the nine months ended September 30,
2016 from $9.2 million in the
nine months ended September 30, 2015.
The increase is mainly due to increased bunkering expenses.
Bad Debt Expense
Bad debt expense of $15.8 million
in the nine months ended September 30,
2016 compared to nil in the nine months ended September 30, 2015 relates to receivables from
Hanjin Shipping, which were written-off.
Interest Expense and Interest Income
Interest expense decreased by 3.7%, or $2.4 million, to $61.8 million in the nine months ended
September 30, 2016 from $64.2 million in the nine months ended
September 30, 2015 including the
amortization of deferred finance costs reclassified from other
finance expenses to interest expense of $9.7
million and $10.7 million,
respectively. The change in interest expense was mainly due to the
decrease in our average debt by $240.5
million, to $2,685.5 million
in the nine months ended September 30,
2016, from $2,926.0 million in
the nine months ended September 30,
2015 and due to a $1.0 million
decrease in the amortization of deferred finance costs, which were
partially offset by an increase in average cost of debt due to the
increase in US$ Libor.
The Company is deleveraging its balance sheet. As of
September 30, 2016, the debt
outstanding gross of deferred finance costs was $2,615.4 million compared to $2,860.1 million as of September 30, 2015. As a result principally of
the cancellation of eight charters with Hanjin Shipping, we expect
the rate at which we reduce our leverage to decline.
Interest income increased by $0.7
million to $3.2 million in the
nine months ended September 30, 2016
compared to $2.5 million in the nine
months ended September 30, 2015. The
increase is mainly attributed to the interest income recognized on
HMM notes receivable.
Other finance expenses
Other finance expenses decreased by $0.2
million, to $3.3 million in
the nine months ended September 30,
2016 from $3.5 million in the
nine months ended September 30, 2015,
following the reclassification of the amortization of deferred
finance costs from other finance expenses to interest expense of
$9.7 million and $10.7 million, respectively.
Equity loss on investments
Equity loss on investments of $1.6
million in the nine months ended September 30, 2016 compared to a loss of
$1.0 million in the nine months ended
September 30, 2015 relate to the
investment in Gemini Shipholdings Corporation ("Gemini"), acquired
in August 2015, in which the Company
has a 49% shareholding interest. This loss is attributed to
operating losses of two out of the four vessels that have been
acquired by Gemini.
Unrealized gain on derivatives
Unrealized gains on interest rate swaps amounted to $3.7 million in the nine months ended
September 30, 2016 compared to
unrealized gains of $11.6 million in
the nine months ended September 30,
2015. The unrealized gains were attributable to mark to
market valuation of our swaps, as well as reclassification of
unrealized losses from Accumulated Other Comprehensive Loss to our
earnings due to the discontinuation of hedge accounting since
July 1, 2012.
Realized loss on derivatives
Realized loss on interest rate swaps decreased by $40.3 million, to $7.5
million in the nine months ended September 30, 2016 from $47.8 million in the nine months ended
September 30, 2015. This decrease is
attributable to a $675.8 million
decrease in the average notional amount of swaps during the nine
months ended September 30, 2016
compared to the nine months ended September
30, 2015 as a result of swap expirations.
Other income/(expenses),net
Other income/(expenses), net decreased by $12.5 million, to $12.4
million net expenses in the nine months ended September 30, 2016 from $0.1 million net income in the nine months ended
September 30, 2015 mainly due to a
$12.9 million recognized loss on sale
of HMM equity securities for cash proceeds of $38.1 million, which were acquired by Danaos in
July 2016 as part of the charter
restructuring agreement with HMM.
Adjusted EBITDA
Adjusted EBITDA decreased by 12.1%, or $37.9 million, to $274.7 million in the nine months ended
September 30, 2016 from $312.6 million in the nine months ended
September 30, 2015. As outlined
earlier, this decrease is mainly attributed to a $38.4 million decrease in operating revenues and
a $0.6 million increased loss on
equity investments, which were partially offset by a $0.7 million decrease in voyage and vessel
operating expenses. Adjusted EBITDA for the nine months ended
September 30, 2016 is adjusted mainly
for bad debt expenses of $15.8
million, loss on sale of HMM securities of $12.9 million, unrealized gain on derivatives of
$3.7 million and realized losses on
derivatives of $4.5 million. Tables
reconciling Adjusted EBITDA to Net Income can be found at the end
of this earnings release.
Recent news
Hanjin Shipping
On September 1, 2016, Hanjin
Shipping, a charterer of eight of our vessels under long term,
fixed rate charter party agreements, referred to the Bankruptcy
Court of Seoul in South Korea, which issued an order to commence
the rehabilitation proceedings of Hanjin Shipping. Hanjin Shipping
has cancelled all eight of its charter party agreements with us,
which represented approximately $560
million of our $2.8 billion of
contracted revenue as of June 30,
2016, and returned each of the vessels to us. We have
rechartered five 3,400 TEU vessels on short-term charters at market
rates and are seeking chartering opportunities for the other three
vessels in the prevailing weak containership charter market. As a
result of these events, we ceased recognizing revenue from Hanjin
Shipping effective from July 1, 2016
onwards and recognized a bad debt expense amounting to $15.8 million relating to unpaid charter hire
recorded as accounts receivable as of June
30, 2016 in our condensed consolidated statements of income
for the nine month period ended September
30, 2016. We have an unsecured claim for unpaid charter
hire, charges, expenses and loss of profit against Hanjin Shipping
totaling $597.9 million submitted to
the Bankruptcy Court of Seoul.
As a result of a decrease in our operating income and
charter-attached market value of certain of our vessels caused
mainly by the cancellation of our eight charters with Hanjin
Shipping, we were in breach of the minimum security cover,
consolidated net leverage and consolidated net worth financial
covenants contained in our Bank Agreement and our other credit
facilities as of September 30, 2016.
We have obtained waivers of the breaches of these financial
covenants covering the period until April 1,
2017. As these waivers were obtained for a period of less
than the next 12 months, and in accordance with the guidance
related to the classification of obligations that are callable by
the lenders, we have classified our long-term debt, net of deferred
finance costs as current. Notwithstanding the negative consequences
of the Hanjin bankruptcy, the Company is currently in a position to
fully service all of its operational and contractual financial
obligations.
HMM
In July 2016, we entered into a
charter restructuring agreement with HMM as part of the agreements
it reached with its creditors and owners of its chartered-in fleet
in connection with the restructuring of its obligations. The
charter restructuring agreement provides for a 20% reduction, for
the period until December 31, 2019
(or earlier charter expiration in the case of eight vessels), in
the charter hire rates payable for thirteen of our vessels
currently employed with HMM. In exchange, under the charter
restructuring agreement we received (i) $32.8 million principal amount of senior,
unsecured loan notes, amortizing subject to available cash flows,
which accrue interest at 3% per annum payable on maturity in
July 2024, (ii) $6.2 million principal amount of senior,
unsecured, non-amortizing loan notes, which accrue interest at 3%
per annum payable on maturity in December
2022 and (iii) 4,637,558 HMM shares issued on July 23, 2016, which were sold for cash
proceeds of $38.1 million on
September 1, 2016.
Conference Call and Webcast
On Friday, December 16, 2016 at
9:00 A.M. ET, the Company's
management will host a conference call to discuss the results.
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1 844 802 2437 (US Toll
Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075
441 375 (Standard International Dial In). Please indicate to the
operator that you wish to join the Danaos Corporation earnings
call.
A telephonic replay of the conference call will be available
until December 23, 2016 by dialing 1
877 344 7529 (US Toll Free Dial In) or +44 (0) 2036 088 021
(Standard International Dial In) and using 10098045# as the access
code.
Audio Webcast
There will also be a live and then archived webcast of the
conference call through the Danaos website (www.danaos.com).
Participants of the live webcast should register on the website
approximately 10 minutes prior to the start of the webcast.
About Danaos Corporation
Danaos Corporation is one of the largest independent owners of
modern, large-size containerships. Our current fleet of 59
containerships aggregating 353,586 TEUs, including four vessels
owned by Gemini Shipholdings Corporation, a joint venture, ranks
Danaos among the largest containership charter owners in the world
based on total TEU capacity. Our fleet is predominantly chartered
to many of the world's largest liner companies on fixed-rate,
long-term charters. Our long track record of success is predicated
on our efficient and rigorous operational standards and
environmental controls. Danaos Corporation's shares trade on the
New York Stock Exchange under the symbol "DAC".
Forward-Looking Statements
Matters discussed in this release may constitute forward-looking
statements within the meaning of the safeharbor provisions of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements reflect
our current views with respect to future events and financial
performance and may include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts. The forward-looking statements in
this release are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without
limitation, management's examination of historical operating
trends, data contained in our records and other data available from
third parties. Although Danaos Corporation believes that these
assumptions were reasonable when made, because these assumptions
are inherently subject to significant uncertainties and
contingencies which are difficult or impossible to predict and are
beyond our control, Danaos Corporation cannot assure you that it
will achieve or accomplish these expectations, beliefs or
projections. Important factors that, in our view, could cause
actual results to differ materially from those discussed in the
forward-looking statements include the strength of world economies
and currencies, general market conditions, including changes in
charter hire rates and vessel values, charter counterparty
performance, changes in demand that may affect attitudes of time
charterers to scheduled and unscheduled drydocking, changes in
Danaos Corporation's operating expenses, including bunker prices,
dry-docking and insurance costs, ability to obtain financing and
comply with covenants in our financing arrangements, actions taken
by regulatory authorities, potential liability from pending or
future litigation, domestic and international political conditions,
potential disruption of shipping routes due to accidents and
political events or acts by terrorists.
Risks and uncertainties are further described in reports filed
by Danaos Corporation with the U.S. Securities and Exchange
Commission.
Visit our website at www.danaos.com
Appendix
Fleet Utilization
Danaos had 169 unscheduled off-hire days in the three months
ended September 30, 2016. The
following table summarizes vessel utilization and the impact of the
off-hire days on the Company's revenue.
Vessel Utilization
(No. of Days)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
|
2016
|
2016
|
|
2016
|
|
Total
|
Ownership
Days
|
|
5,013
|
|
5,005
|
|
5,060
|
|
15,078
|
Less Off-hire
Days:
|
|
|
|
|
|
|
|
|
Scheduled Off-hire
Days
|
|
(31)
|
|
(45)
|
|
-
|
|
(76)
|
Other Off-hire
Days
|
|
(242)
|
|
(110)
|
|
(169)
|
|
(521)
|
Operating
Days
|
|
4,740
|
|
4,850
|
|
4,891
|
|
14,481
|
Vessel
Utilization
|
|
94.6%
|
|
96.9%
|
|
96.7%
|
|
96.0%
|
|
|
|
|
|
|
|
|
|
Operating Revenues
(in '000s of US Dollars)
|
$137,474
|
|
$136,999
|
|
$111,752
|
|
$386,225
|
Average Gross
Daily Charter Rate
|
|
$29,003
|
|
$28,248
|
|
$22,848
|
|
$26,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Utilization
(No. of Days)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
|
2015
|
2015
|
|
2015
|
|
Total
|
Ownership
Days
|
|
5,040
|
|
5,096
|
|
5,152
|
|
15,288
|
Less Off-hire
Days:
|
|
|
|
|
|
|
|
|
Scheduled Off-hire
Days
|
|
(16)
|
|
(16)
|
|
-
|
|
(32)
|
Other Off-hire
Days
|
|
(64)
|
|
(17)
|
|
(2)
|
|
(83)
|
Operating
Days
|
|
4,960
|
|
5,063
|
|
5,150
|
|
15,173
|
Vessel
Utilization
|
|
98.4%
|
|
99.4%
|
|
100.0%
|
|
99.2%
|
|
|
|
|
|
|
|
|
|
Operating Revenues
(in '000s of US Dollars)
|
$138,605
|
|
$141,469
|
|
$144,542
|
|
$424,616
|
Average Gross
Daily Charter Rate
|
|
$27,945
|
|
$27,942
|
|
$28,066
|
|
$27,985
|
Fleet List
The following table describes in detail our fleet deployment
profile as of December 15, 2016:
Vessel
Name
|
Vessel
Size
(TEU)
|
|
Year
Built
|
|
Expiration of
Charter(1)
|
|
Containerships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hyundai
Ambition
|
13,100
|
|
2012
|
|
June 2024
|
|
Hyundai
Speed
|
13,100
|
|
2012
|
|
June 2024
|
|
Hyundai
Smart
|
13,100
|
|
2012
|
|
May 2024
|
|
Hyundai
Tenacity
|
13,100
|
|
2012
|
|
March 2024
|
|
Hyundai
Together
|
13,100
|
|
2012
|
|
February
2024
|
|
Express Rome (ex
Hanjin Italy)
|
10,100
|
|
2011
|
|
-
|
|
Express Berlin (ex
Hanjin Germany)
|
10,100
|
|
2011
|
|
-
|
|
Express Athens (ex
Hanjin Greece)
|
10,100
|
|
2011
|
|
-
|
|
CSCL Le
Havre
|
9,580
|
|
2006
|
|
September
2018
|
|
CSCL
Pusan
|
9,580
|
|
2006
|
|
July 2018
|
|
CMA CGM
Melisande
|
8,530
|
|
2012
|
|
November 2023
|
|
CMA CGM
Attila
|
8,530
|
|
2011
|
|
April 2023
|
|
CMA CGM
Tancredi
|
8,530
|
|
2011
|
|
May 2023
|
|
CMA CGM
Bianca
|
8,530
|
|
2011
|
|
July 2023
|
|
CMA CGM
Samson
|
8,530
|
|
2011
|
|
September
2023
|
|
CSCL
America
|
8,468
|
|
2004
|
|
July 2017
|
|
Europe (ex CSCL
Europe)
|
8,468
|
|
2004
|
|
June 2017
|
|
CMA CGM
Moliere (2)
|
6,500
|
|
2009
|
|
August
2021
|
|
CMA CGM Musset
(2)
|
6,500
|
|
2010
|
|
February
2022
|
|
CMA CGM Nerval
(2)
|
6,500
|
|
2010
|
|
April 2022
|
|
CMA CGM Rabelais
(2)
|
6,500
|
|
2010
|
|
June 2022
|
|
CMA CGM Racine
(2)
|
6,500
|
|
2010
|
|
July 2022
|
|
YM
Mandate
|
6,500
|
|
2010
|
|
January
2028
|
|
YM
Maturity
|
6,500
|
|
2010
|
|
April 2028
|
|
Performance
|
6,402
|
|
2002
|
|
January
2017
|
|
Priority
|
6,402
|
|
2002
|
|
January
2017
|
|
SNL
Colombo
|
4,300
|
|
2004
|
|
March 2019
|
|
YM
Singapore
|
4,300
|
|
2004
|
|
October
2019
|
|
YM
Seattle
|
4,253
|
|
2007
|
|
July 2019
|
|
YM
Vancouver
|
4,253
|
|
2007
|
|
September
2019
|
|
Derby
D
|
4,253
|
|
2004
|
|
January
2017
|
|
Deva
|
4,253
|
|
2004
|
|
January
2017
|
|
ZIM Rio
Grande
|
4,253
|
|
2008
|
|
May 2020
|
|
ZIM Sao
Paolo
|
4,253
|
|
2008
|
|
August
2020
|
|
OOCL
Istanbul
|
4,253
|
|
2008
|
|
September
2020
|
|
ZIM
Monaco
|
4,253
|
|
2009
|
|
November
2020
|
|
OOCL
Novorossiysk
|
4,253
|
|
2009
|
|
February 2021
|
|
ZIM
Luanda
|
4,253
|
|
2009
|
|
May 2021
|
|
Dimitris
C
|
3,430
|
|
2001
|
|
January
2017
|
|
Express Black Sea
(ex Hanjin Constantza)
|
3,400
|
|
2011
|
|
January
2017
|
|
Express Spain (ex
Hanjin Algeciras)
|
3,400
|
|
2011
|
|
February
2017
|
|
Express Argentina
(ex Hanjin Buenos Aires)
|
3,400
|
|
2010
|
|
May 2017
|
|
Express Brazil (ex
Hanjin Santos)
|
3,400
|
|
2010
|
|
June 2017
|
|
Express France (ex
Hanjin Versailles)
|
3,400
|
|
2010
|
|
June 2017
|
|
MSC
Zebra
|
2,602
|
|
2001
|
|
October
2017
|
|
Amalia
C
|
2,452
|
|
1998
|
|
January
2017
|
|
Danae
C
|
2,524
|
|
2001
|
|
May 2017
|
|
Hyundai
Advance
|
2,200
|
|
1997
|
|
June 2017
|
|
Hyundai
Future
|
2,200
|
|
1997
|
|
August
2017
|
|
Hyundai
Sprinter
|
2,200
|
|
1997
|
|
August
2017
|
|
Hyundai
Stride
|
2,200
|
|
1997
|
|
July 2017
|
|
Hyundai
Progress
|
2,200
|
|
1998
|
|
December
2017
|
|
Hyundai
Bridge
|
2,200
|
|
1998
|
|
January
2018
|
|
Hyundai
Highway
|
2,200
|
|
1998
|
|
January
2018
|
|
Hyundai
Vladivostok
|
2,200
|
|
1997
|
|
May 2017
|
|
|
|
|
|
|
|
|
NYK
Lodestar(3)
|
6,422
|
|
2001
|
|
September
2017
|
|
NYK
Leo(3)
|
6,422
|
|
2002
|
|
February
2019
|
|
Suez
Canal(3)
|
5,610
|
|
2002
|
|
January
2017
|
|
Genoa(3)
|
5,544
|
|
2002
|
|
March 2017
|
|
(1)
|
Earliest date
charters could expire. Some charters include options to extend
their terms.
|
(2)
|
The charters with
respect to the CMA CGM Moliere, the CMA CGM Musset,
the CMA CGM Nerval, the CMA CGM
Rabelais and the CMA CGM Racine include an option for
the charterer, CMA-CGM, to purchase the vessels eight years after
the commencement of the respective charters, which will fall in
September 2017, March 2018, May 2018, July 2018 and August 2018,
respectively, each for $78.0 million.
|
(3)
|
Vessels acquired by
Gemini Shipholdings Corporation, in which Danaos holds a 49% equity
interest.
|
DANAOS
CORPORATION
Condensed Statements of Income - Unaudited
(Expressed in thousands of United States dollars, except per share
amounts)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
OPERATING
REVENUES
|
|
$111,752
|
|
$144,542
|
|
$386,225
|
|
$424,616
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
Vessel operating
expenses
|
|
(26,633)
|
|
(28,165)
|
|
(83,528)
|
|
(85,058)
|
|
Depreciation &
amortization
|
|
(34,005)
|
|
(34,085)
|
|
(100,557)
|
|
(101,482)
|
|
General &
administrative
|
|
(5,475)
|
|
(5,486)
|
|
(16,137)
|
|
(16,137)
|
|
Loss on sale of
vessels
|
|
-
|
|
-
|
|
(36)
|
|
-
|
|
Other operating
expenses
|
|
(19,146)
|
|
(2,952)
|
|
(25,836)
|
|
(9,170)
|
Income From
Operations
|
|
26,493
|
|
73,854
|
|
160,131
|
|
212,769
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME/(EXPENSES)
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
1,356
|
|
859
|
|
3,196
|
|
2,549
|
|
Interest
expense
|
|
(21,022)
|
|
(21,065)
|
|
(61,796)
|
|
(64,181)
|
|
Other finance
expenses
|
|
(1,109)
|
|
(1,185)
|
|
(3,347)
|
|
(3,520)
|
|
Equity loss on
investments
|
|
(663)
|
|
(992)
|
|
(1,597)
|
|
(992)
|
|
Other
income/(expenses), net
|
|
(12,824)
|
|
108
|
|
(12,424)
|
|
143
|
|
Realized loss on
derivatives
|
|
(2,209)
|
|
(12,159)
|
|
(7,510)
|
|
(47,837)
|
|
Unrealized gain on
derivatives
|
|
1,581
|
|
2,648
|
|
3,719
|
|
11,551
|
Total Other
Expenses, net
|
|
(34,890)
|
|
(31,786)
|
|
(79,759)
|
|
(102,287)
|
|
|
|
|
|
|
|
|
|
|
Net
Income/(loss)
|
|
$(8,397)
|
|
42,068
|
|
80,372
|
|
110,482
|
|
|
|
|
|
|
|
|
|
|
EARNINGS/(LOSS)
PER SHARE
|
|
|
|
|
|
|
|
|
Basic & diluted
earnings/(loss) per share
|
|
$(0.08)
|
|
$0.38
|
|
$0.73
|
|
$1.01
|
Basic & diluted
weighted average number of common shares (in thousands of
shares)
|
|
109,800
|
|
109,785
|
|
109,800
|
|
109,785
|
Non-GAAP
Measures*
Reconciliation of Net Income/(Loss) to Adjusted Net Income –
Unaudited
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net
income/(loss)
|
|
$(8,397)
|
|
42,068
|
|
80,372
|
|
110,482
|
|
Bad debt
expense
|
|
15,834
|
|
-
|
|
15,834
|
|
-
|
|
Loss on sale of HMM
securities
|
|
12,906
|
|
-
|
|
12,906
|
|
-
|
|
Unrealized gain on
derivatives
|
|
(1,581)
|
|
(2,648)
|
|
(3,719)
|
|
(11,551)
|
|
Amortization of
financing fees & finance fees accrued
|
|
4,019
|
|
4,363
|
|
12,294
|
|
13,405
|
|
Loss on sale of
vessels
|
|
-
|
|
-
|
|
36
|
|
-
|
|
Adjusted Net
Income
|
|
$22,781
|
|
$43,783
|
|
$117,723
|
|
$112,336
|
|
Adjusted Earnings
Per Share
|
$0.21
|
|
$0.40
|
|
$1.07
|
|
$1.02
|
|
Weighted average
number of shares (in
thousands of shares)
|
|
109,800
|
|
109,785
|
|
109,800
|
|
109,785
|
* The Company reports its financial results in accordance with
U.S. generally accepted accounting principles (GAAP). However,
management believes that certain non-GAAP financial measures used
in managing the business may provide users of this financial
information additional meaningful comparisons between current
results and results in prior operating periods. Management believes
that these non-GAAP financial measures can provide additional
meaningful reflection of underlying trends of the business because
they provide a comparison of historical information that excludes
certain items that impact the overall comparability. Management
also uses these non-GAAP financial measures in making financial,
operating and planning decisions and in evaluating the Company's
performance. See the Table above for supplemental financial data
and corresponding reconciliations to GAAP financial measures for
the three and nine months ended September
30, 2016 and 2015. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, the Company's
reported results prepared in accordance with GAAP.
DANAOS
CORPORATION
Condensed Balance Sheets - Unaudited
(Expressed in thousands of United States dollars)
|
|
|
|
As
of
|
|
As
of
|
September
30,
|
31,
|
|
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$128,244
|
|
$72,253
|
|
Restricted
cash
|
|
695
|
|
2,818
|
|
Accounts receivable,
net
|
|
4,052
|
|
10,652
|
|
Fair value of
financial instruments
|
|
2
|
|
138
|
|
Other current
assets
|
|
50,475
|
|
41,709
|
|
|
|
183,468
|
|
127,570
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
Fixed assets,
net
|
|
3,354,691
|
|
3,446,323
|
|
Deferred charges,
net
|
|
9,567
|
|
4,751
|
|
Investments in
affiliates
|
|
19,688
|
|
11,289
|
|
Other non-current
assets
|
|
100,474
|
|
72,188
|
|
|
|
3,484,420
|
|
3,534,551
|
TOTAL
ASSETS
|
|
$3,667,888
|
|
$3,662,121
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Long-term debt,
current portion
|
|
$2,590,107
|
|
$269,979
|
|
Accounts payable,
accrued liabilities & other current liabilities
|
|
73,632
|
|
37,628
|
|
Fair value of
financial instruments
|
|
905
|
|
4,538
|
|
|
|
2,664,644
|
|
312,145
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Long-term debt,
net
|
|
-
|
|
2,470,417
|
|
Other long-term
liabilities
|
|
77,758
|
|
37,645
|
|
|
|
77,758
|
|
2,508,062
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Common
stock
|
|
1,098
|
|
1,098
|
|
Additional paid-in
capital
|
|
546,822
|
|
546,822
|
|
Accumulated other
comprehensive loss
|
|
(99,881)
|
|
(103,081)
|
|
Retained
earnings
|
|
477,447
|
|
397,075
|
|
|
|
925,486
|
|
841,914
|
Total liabilities
and stockholders' equity
|
|
$3,667,888
|
|
$3,662,121
|
DANAOS
CORPORATION
Condensed Statements of Cash Flows - Unaudited
(Expressed in thousands of United States dollars)
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
$(8,397)
|
|
42,068
|
|
80,372
|
|
110,482
|
|
Adjustments to
reconcile net income/(loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
32,464
|
|
33,217
|
|
96,586
|
|
98,558
|
|
Amortization of
deferred drydocking & special survey costs, finance cost and
other finance fees accrued
|
5,560
|
|
5,231
|
|
16,265
|
|
16,329
|
|
Payments for
drydocking/special survey
|
(2,393)
|
|
(90)
|
|
(8,787)
|
|
(1,307)
|
|
Amortization of
deferred realized losses on cash flow interest rate
swaps
|
1,013
|
|
1,012
|
|
3,016
|
|
3,004
|
|
Bad debt
expense
|
|
15,834
|
|
-
|
|
15,834
|
|
-
|
|
Loss on sale of
securities
|
|
12,906
|
|
-
|
|
12,906
|
|
-
|
|
Equity loss on
investments
|
663
|
|
992
|
|
1,597
|
|
992
|
|
Unrealized gain on
derivatives
|
(1,581)
|
|
(2,648)
|
|
(3,719)
|
|
(11,551)
|
|
Loss on sale of
vessels
|
|
-
|
|
-
|
|
36
|
|
-
|
|
Accounts
receivable
|
|
1,473
|
|
(2,669)
|
|
(9,234)
|
|
52
|
|
Other assets, current
and non-current
|
|
33,344
|
|
1,157
|
|
19,030
|
|
(5,739)
|
|
Accounts payable and
accrued liabilities
|
|
5,397
|
|
(162)
|
|
6,409
|
|
(6,901)
|
|
Other liabilities,
current and long-term
|
|
(5,704)
|
|
(561)
|
|
(5,940)
|
|
(1,752)
|
Net Cash provided
by Operating Activities
|
|
90,579
|
|
77,547
|
|
224,371
|
|
202,167
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
|
Vessel additions and
vessel acquisitions
|
|
(1,518)
|
|
(196)
|
|
(3,508)
|
|
(734)
|
|
Investments in
affiliates
|
|
(4,851)
|
|
(7,350)
|
|
(9,996)
|
|
(7,350)
|
|
Net proceeds from
sale of vessels
|
|
-
|
|
-
|
|
5,178
|
|
-
|
Net Cash used in
Investing Activities
|
|
(6,369)
|
|
(7,546)
|
|
(8,326)
|
|
(8,084)
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
|
Debt
repayment
|
|
(62,211)
|
|
(50,763)
|
|
(162,177)
|
|
(157,748)
|
|
Deferred finance
costs
|
|
-
|
|
-
|
|
-
|
|
(692)
|
|
Increase in
restricted cash
|
|
5,185
|
|
2,824
|
|
2,123
|
|
2,824
|
Net Cash used in
Financing Activities
|
|
(57,026)
|
|
(47,939)
|
|
(160,054)
|
|
(155,616)
|
Net Increase in cash
and cash equivalents
|
|
27,184
|
|
22,062
|
|
55,991
|
|
38,467
|
Cash and cash
equivalents, beginning of period
|
|
101,060
|
|
74,135
|
|
72,253
|
|
57,730
|
Cash and cash
equivalents, end of period
|
|
$128,244
|
|
$96,197
|
|
$128,244
|
|
$96,197
|
DANAOS
CORPORATION
Reconciliation of Net Income to Adjusted EBITDA
(Expressed in thousands of United States dollars)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
income/(loss)
|
|
$(8,397)
|
|
42,068
|
|
80,372
|
|
110,482
|
Depreciation
|
|
32,464
|
|
33,217
|
|
96,586
|
|
98,558
|
Amortization of
deferred drydocking & special survey costs
|
|
1,541
|
|
868
|
|
3,971
|
|
2,924
|
Amortization of
deferred finance costs and write-offs and other finance fees
accrued
|
|
4,019
|
|
4,363
|
|
12,294
|
|
13,405
|
Amortization of
deferred realized losses on interest rate swaps
|
|
1,013
|
|
1,012
|
|
3,016
|
|
3,004
|
Bad debt
expense
|
|
15,834
|
|
-
|
|
15,834
|
|
-
|
Loss on sale of
securities
|
|
12,906
|
|
-
|
|
12,906
|
|
-
|
Interest
income
|
|
(1,356)
|
|
(859)
|
|
(3,196)
|
|
(2,549)
|
Interest
expense
|
|
17,865
|
|
17,604
|
|
52,119
|
|
53,520
|
Loss on sale of
vessels
|
|
-
|
|
-
|
|
36
|
|
-
|
Realized loss on
derivatives
|
|
1,196
|
|
11,147
|
|
4,494
|
|
44,833
|
Unrealized gain on
derivatives
|
|
(1,581)
|
|
(2,648)
|
|
(3,719)
|
|
(11,551)
|
Adjusted
EBITDA(1)
|
|
$75,504
|
|
$106,772
|
|
$274,713
|
|
$312,626
|
1) Adjusted EBITDA represents net income before
interest income and expense, depreciation, amortization of deferred
drydocking & special survey costs and deferred finance costs,
amortization of deferred realized losses on interest rate swaps,
unrealized gain on derivatives, realized loss on derivatives
gain/(loss) on sale of vessels, bad debt expense and loss on sale
of securities. However, Adjusted EBITDA is not a recognized
measurement under U.S. generally accepted accounting principles, or
"GAAP." 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. We also believe that Adjusted EBITDA
is useful in evaluating our operating performance compared to that
of other companies in our industry because the calculation of
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. In evaluating
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 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.
The Company reports
its financial results in accordance with U.S. generally accepted
accounting principles (GAAP). However, management believes that
certain non-GAAP financial measures used in managing the business
may provide users of these financial information additional
meaningful comparisons between current results and results in prior
operating periods. Management believes that these non-GAAP
financial measures can provide additional meaningful reflection of
underlying trends of the business because they provide a comparison
of historical information that excludes certain items that impact
the overall comparability. Management also uses these non-GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the Company's performance. See the
Tables above for supplemental financial data and corresponding
reconciliations to GAAP financial measures for the three and nine
months ended September 30, 2016 and 2015. Non-GAAP financial
measures should be viewed in addition to, and not as an alternative
for, the Company's reported results prepared in accordance with
GAAP.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/danaos-corporation-reports-third-quarter-and-nine-months-results-for-the-period-ended-september-30-2016-300379360.html
SOURCE Danaos Corporation