ATHENS, Greece, Feb. 21,
2017 /PRNewswire/ -- Danaos Corporation ("Danaos") (NYSE:
DAC), one of the world's largest independent owners of
containerships, today reported unaudited results for the fourth
quarter and the year ended December 31,
2016.
Highlights for the Fourth Quarter and Year Ended December 31, 2016:
- Adjusted net income1 of $23.2 million, or $0.21 per share, for the three months ended
December 31, 2016 compared to
$47.2 million, or $0.43 per share, for the three months ended
December 31, 2015, a decrease of
50.8%. Adjusted net income1 of $140.9
million, or $1.28 per share,
for the year ended December 31, 2016
compared to $159.5 million, or
$1.45 per share, for the year ended
December 31, 2015, a decrease of
11.7%.
- Operating revenues of $112.1
million for the three months ended December 31, 2016 compared to $143.3 million for the three months ended
December 31, 2015, a decrease of
21.8%. Operating revenues of $498.3
million for the year ended December
31, 2016 compared to $567.9
million for the year ended December
31, 2015, a decrease of 12.3%.
- Adjusted EBITDA1 of $75.9 million for the three months ended
December 31, 2016 compared to
$105.7 million for the three months
ended December 31, 2015, a decrease
of 28.2%. Adjusted EBITDA1 of $350.6 million for the year ended December 31, 2016 compared to $418.3 million for the year ended December 31, 2015, a decrease of 16.2%.
- On September 1, 2016, Hanjin
Shipping ("Hanjin"), formerly the 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.
- We recognized an impairment loss of $415.1 million for our vessels and $29.4 million impairment loss on
securities.
- Total contracted operating revenues were $2.1 billion as of December 31, 2016, with charters extending
through 2028 and remaining average contracted charter duration of
6.6 years, weighted by aggregate contracted charter hire.
- Charter coverage of 92% for the next 12 months based on
current operating revenues and 74% in terms of contracted operating
days.
Three Months and
Year Ended December 31, 2016
Financial Summary (Expressed in thousands of
United States dollars, except per share
amounts)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Year
ended
|
|
Year
ended
|
December
31,
|
December
31,
|
December
31,
|
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$112,107
|
|
$143,320
|
|
$498,332
|
|
$567,936
|
Net
income/(loss)
|
$(446,567)
|
|
$6,534
|
|
$(366,195)
|
|
$117,016
|
Adjusted net
income1
|
$23,158
|
|
$47,152
|
|
$140,881
|
|
$159,488
|
Earnings/(loss) per
share
|
$(4.07)
|
|
$0.06
|
|
$(3.34)
|
|
$1.07
|
Adjusted earnings per
share1
|
$0.21
|
|
$0.43
|
|
$1.28
|
|
$1.45
|
Weighted average
number of shares (in thousands)
|
109,805
|
|
109,788
|
|
109,802
|
|
109,785
|
Adjusted
EBITDA1
|
$75,874
|
|
$105,698
|
|
$350,587
|
|
$418,324
|
1 Adjusted net income, adjusted earnings per
share and adjusted EBITDA are non-GAAP measures. Refer to the
reconciliation of net income/(loss) to adjusted net income and net
income/(loss) to adjusted EBITDA.
Danaos' CEO Dr. John Coustas
commented:
Danaos' results for the fourth quarter of 2016 reflect the
impact of the bankruptcy of Hanjin Shipping, which previously
chartered eight of our vessels on long term charter party
agreements representing approximately 20% of our fixed contracted
revenue. These charter party agreements were terminated, and each
of the chartered vessels were returned to us, as we have previously
announced. The $24.0 million decrease
in our adjusted net income is primarily the result of a
$23.3 million decrease in operating
revenues resulting from the Hanjin bankruptcy. During the fourth
quarter, our fleet utilization decreased to 90.4% after the Hanjin
charter cancellations. We have re-chartered five 3,400 TEU vessels
on short term charters at market rates that reflect the prevailing
weak chartering environment and managed to secure employment of up
to 12 months starting from April 2017
for the remaining three 10,100 TEU vessels. Excluding the
effect of these cancellations, our fleet utilization increased to
99.5% compared to 98.3% in the fourth quarter of 2015.
As a result of the decrease in our operating income and charter
attached values, primarily caused by the Hanjin bankruptcy, as of
December 31, 2016 we were in breach
of certain financial covenants for which we have obtained waivers
until April 1, 2017 and continue to
engage in discussions with our lenders to address the matter.
Because the waivers are for a period of less than 12 months after
the balance sheet date, all of the debt has been classified as
current on the December 31, 2016
financial statements. Otherwise the Company is currently in a
position to fully service all of its operational and contractual
financial obligations.
During 2016 we continued de-leveraging our balance sheet and
reduced indebtedness by $251 million,
although we expect the rate at which we reduce our leverage to
decrease as a result of the cancellation of our Hanjin charters.
Additionally, in the context of prudently evaluating the assets on
our balance sheet we have also recorded an impairment loss of
$415.1 million in relation to the
market value of certain of our vessels, primarily in relation to
the Hanjin vessels as a result of the loss of their charter and the
impairment of the Panamax asset class.
Idle containership capacity currently sits at approximately 7%
of the global fleet. The charter rate environment has stabilized,
albeit at levels at or below daily operating expenses. Also, very
few long term charters have been achieved in the market. The
orderbook remains large at approximately 15% of the global fleet,
and supply continues to exceed demand. The orderbook is
predominantly comprised of larger vessels, which, upon delivery
will put further pressure on the market for smaller, less
economical vessels. As such, we do not expect rates to meaningfully
improve for another 18-24 months absent a significant increase in
demand combined with increased scrapping activity. Following the
Hanjin bankruptcy, our near term exposure to the weak spot market
has increased, with 92% of charter cover in terms of current
operating revenues and 74% in terms of contracted operating days
for the next 12 months versus 88% for the same period in the prior
year.
During this extended period of market weakness which has
presented many challenges, we remain focused on taking necessary
actions to preserve the value of our company by managing our fleet
efficiently and taking prudent measures to manage and ultimately
deleverage our balance sheet.
Three months ended December 31,
2016 compared to the three months ended December 31, 2015
During the three months ended December
31, 2016, Danaos had an average of 55 containerships
compared to 56 containerships for the three months ended
December 31, 2015. Our fleet
utilization for the fourth quarter of 2016 was 90.4%, while fleet
utilization for the vessels under employment, excluding the off
charter days of the vessels that were previously chartered to
Hanjin, increased to 99.5% in the three months ended December 31, 2016 compared to 98.3% in the three
months ended December 31, 2015.
Our adjusted net income amounted to $23.2
million, or $0.21 per share,
for the three months ended December 31,
2016 compared to $47.2
million, or $0.43 per share,
for the three months ended December 31,
2015. We have adjusted our net income/(loss) in the three
months ended December 31, 2016 for
(i) an impairment loss on vessels of $415.1
million accompanied by accelerated amortization of
accumulated other comprehensive loss of $7.7
million, (ii) an impairment loss on our equity in Zim and
debt securities of $29.4 million,
(iii) an impairment loss related to our 49% equity participation in
Gemini Shipholdings Corporation of $14.6
million, (iv) unrealized gains on derivatives of
$0.9 million and (v) a non-cash
amortization charge of $3.8 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 $24.0 million in
adjusted net income for the three months ended December 31, 2016 compared to the three months
ended December 31, 2015 is mainly
attributable to a $23.3 million
decrease in operating revenues as a result of the Hanjin
bankruptcy. A further decline in revenues of $7.9 million as a result of weaker charter market
conditions was partially offset by a $5.2
million decrease in net finance costs mainly due to lower
debt balances and interest rate swap expirations, a $1.1 million decrease in total operating expenses
and a $0.9 million improvement in the
operating performance of our equity investment in Gemini
Shipholdings Corporation.
On a non-adjusted basis, we incurred a loss of $446.6 million, or $4.07 loss per share, for the three months ended
December 31, 2016 compared to net
income of $6.5 million, or
$0.06 earnings per share, for the
three months ended December 31,
2015.
Operating Revenues
Operating revenues decreased by
21.8%, or $31.2 million, to
$112.1 million in the three months
ended December 31, 2016 from
$143.3 million in the three months
ended December 31, 2015.
Operating revenues for the three months ended December 31, 2016 reflect:
- $23.3 million decrease in
revenues in the three months ended December
31, 2016 compared to the three months ended December 31, 2015 due to loss of revenue from
cancelled charters with Hanjin for eight of our vessels, for which
we ceased recognizing revenue effective as of July 1, 2016. See "Hanjin Update" below.
- $0.5 million decrease in revenues
in the three months ended December 31,
2016 compared to the three months ended December 31, 2015 due to the sale of the
Federal on January 8,
2016.
- $7.4 million decrease in revenues
in the three months ended December 31,
2016 compared to the three months ended December 31, 2015 due to the re-chartering of
certain of our vessels at lower rates.
Vessel Operating Expenses
Vessel operating expenses
decreased by 6.5%, or $1.8 million,
to $25.9 million in the three
months ended December 31, 2016 from
$27.7 million in the three
months ended December 31, 2015. The
decrease was attributable to a 4.8% decrease in the average daily
operating cost per vessel while the average number of vessels in
our fleet during the three months ended December 31, 2016 decreased by 1.8% compared to
the three months ended December 31,
2015.
The average daily operating cost per vessel decreased to
$5,303 per day for the three months
ended December 31, 2016 from
$5,571 per day for the three months
ended December 31, 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
December 31, 2016 from $33.2 million in the three months ended
December 31, 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 December 31, 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 $0.7
million, to $1.6 million in
the three months ended December 31,
2016 from $0.9 million in the
three months ended December 31, 2015.
The increase was mainly due to the increased payments for
dry-docking and special survey costs related to certain vessels
over the last year.
General and Administrative Expenses
General and
administrative expenses increased by $0.3
million to $6.0 million in the
three months ended December 31, 2016
from $5.7 million in the three months
ended December 31, 2015.
Other Operating Expenses
Other Operating Expenses
include Voyage Expenses.
Voyage Expenses
Voyage expenses increased by
$0.8 million, to $3.9 million in the three months ended
December 31, 2016 from $3.1 million in the three months ended
December 31, 2015. The increase was
mainly due to increased bunkering expenses.
Impairment Loss
We have recognized an impairment loss
of $415.1 million in relation to 25
of our vessels as of December 31,
2016 compared to an impairment loss of $41.1 million in relation to 13 of our vessels as
of December 31, 2015. The
impairment loss as of December 31,
2016 was (i) due to the impairment loss of $205.2 million recognized for five 3,400 TEU
vessels formerly chartered to Hanjin, and (ii) the impairment loss
of $209.9 million recognized for 18
of our vessels less than 4,300 TEU and for two 6,400 TEU vessels as
a result of the continued weakness of containership market and the
other than temporary nature of the decline in these vessels'
values.
Interest Expense and Interest Income
Interest expense
increased by 4.4%, or $0.9 million,
to $21.2 million in the three
months ended December 31, 2016 from
$20.3 million in the three months
ended December 31, 2015 including the
amortization of deferred finance costs reclassified from other
finance expenses to interest expense of $3.0
million and $3.4 million,
respectively. The increase in interest expense was mainly due to
the increase in average cost of debt due to the increase in US$
Libor, which was partially offset by a decrease in our average debt
by $248.7 million, to $2,553.1 million in the three months ended
December 31, 2016, from $2,801.8 million in the three months ended
December 31, 2015 and a $0.4 million decrease in the amortization of
deferred finance costs.
The Company is deleveraging its balance sheet. As of
December 31, 2016, the debt
outstanding gross of deferred finance costs was $2,527.3 million compared to $2,775.4 million as of December 31, 2015. As a result principally of the
cancellation of eight charters with Hanjin, we expect the rate at
which we reduce our leverage to decline.
Interest income increased by $0.6
million to $1.5 million in the
three months ended December 31, 2016
compared to $0.9 million in the three
months ended December 31, 2015. The
increase was mainly attributed to the interest income recognized on
Hyundai Merchant Marine ("HMM") notes receivable.
Other finance expenses
Other finance expenses
increased by $0.5 million, to
$1.6 million in the three months
ended December 31, 2016 from
$1.1 million in the three months
ended December 31, 2015, following
the reclassification of the amortization of deferred finance costs
from other finance expenses to interest expense of $3.0 million and $3.4
million, respectively.
Equity loss on investments
Equity loss on investments
increased by $13.7 million, to
$14.6 million in the three months
ended December 31, 2016 compared to a
loss of $0.9 million in the three
months ended December 31, 2015 and
relates to the investment in Gemini Shipholdings Corporation
("Gemini"), in which the Company has a 49% shareholding interest.
This loss increase was mainly attributed to our share of impairment
loss for Gemini vessels amounting to $14.6
million in the three months ended December 31, 2016.
Unrealized gain/(loss) on derivatives
Unrealized loss
on interest rate swaps amounted to $6.8
million in the three months ended December 31, 2016 compared to unrealized gains of
$4.7 million in the three months
ended December 31, 2015. The
accelerated amortization of accumulated other comprehensive loss of
$7.7 million was partially offset by
the unrealized gains of $0.9 million
attributable to mark to market valuation of our swaps in the three
months ended December 31, 2016.
Realized loss on derivatives
Realized loss on interest
rate swaps decreased by $6.4 million,
to $1.9 million in the three months
ended December 31, 2016 from
$8.3 million in the three months
ended December 31, 2015. This
decrease was mainly attributable to lower interest swap rates
combined with a $65.5 million
decrease in the average notional amount of swaps during the three
months ended December 31, 2016
compared to the three months ended December
31, 2015 as a result of swap expirations.
Other income/(expenses), net
Other income/(expenses),
net increased to $29.2 million
expenses in the three months ended December
31, 2016 from nil in the three months ended December 31, 2015 mainly due to a $29.4 million impairment loss on Zim equity and
debt securities.
Adjusted EBITDA
Adjusted EBITDA decreased by 28.2%, or
$29.8 million, to $75.9 million in the three months ended
December 31, 2016 from $105.7 million in the three months ended
December 31, 2015. As outlined
earlier, this decrease was mainly attributed to a $31.2 million decrease in operating revenues,
which was partially offset by a $0.5
million decrease in total expenses and a $0.9 million operating performance improvement on
equity investments before impairment loss. Adjusted EBITDA for the
three months ended December 31, 2016
is adjusted mainly for impairment loss on vessels of $415.1 million accompanied by accelerated
amortization of accumulated other comprehensive loss of
$7.7 million, impairment loss on Zim
equity and debt securities of $29.4
million and impairment loss component of equity loss on
investments of $14.6 million. Tables
reconciling Adjusted EBITDA to Net income/(loss) can be found at
the end of this earnings release.
Year ended December 31, 2016
compared to the year ended December 31,
2015
During the year ended December 31,
2016, Danaos had an average of 55 containerships compared to
56 containerships for the year ended December 31, 2015. Our fleet utilization for 2016
was 94.6%, while the effective fleet utilization for the fleet
under employment, excluding the off charter days of the ex-Hanjin
vessels, decreased to 97.3% in the year ended December 31, 2016 compared to 99.0% in the year
ended December 31, 2015.
Our adjusted net income amounted to $140.9 million, or $1.28 per share, for the year ended December 31, 2016 compared to $159.5 million, or $1.45 per share, for the year ended December 31, 2015. We have adjusted our net
income in the year ended December 31,
2016 for (i) an impairment loss on vessels of $415.1 million accompanied by accelerated
amortization of accumulated other comprehensive loss of
$7.7 million, (ii) an impairment loss
on Zim equity and debt securities of $29.4
million, (iii) an impairment loss related to our 49% equity
participation in Gemini Shipholdings Corporation of $14.6 million, (iv) a bad debt expense of
$15.8 million related to Hanjin, (v)
a loss on sale of HMM securities of $12.9
million, (vi) unrealized gain on derivatives of $4.6 million and (vii) a non-cash amortization
charge of $16.1 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 $18.6 million in
adjusted net income for the year ended December 31, 2016 compared to the year ended
December 31, 2015 is mainly
attributable to a $48.1 million
decrease in operating revenues as a result of the Hanjin
bankruptcy. A further decline in revenues of $21.5 million mainly as a result of weaker
charter market conditions and lower fleet utilization was more than
offset by a reduction of $47.6
million in net finance costs mainly due to interest rate
swap expirations and lower debt balances, a $3.1 million decrease in total operating expenses
and a $0.3 million improvement in the
operating performance of our equity investment in Gemini
Shipholdings Corporation.
On a non-adjusted basis, our net loss amounted to $366.2 million, or $3.34 loss per share, for the year ended
December 31, 2016 compared to net
income of $117.0 million, or
$1.07 earnings per share, for the
year ended December 31, 2015.
Operating Revenues
Operating revenues decreased by
12.3%, or $69.6 million, to
$498.3 million in the year ended
December 31, 2016 from $567.9 million in the year ended December 31, 2015.
Operating revenues for the year ended December 31, 2016 reflect:
- $48.1 million decrease in
revenues in the year ended December 31,
2016 compared to the year ended December 31, 2015 due to loss of revenue from
cancelled charters with Hanjin for eight of our vessels, for which
we ceased recognizing revenue effective as of July 1, 2016. See "Hanjin Update" below.
- $2.8 million decrease in revenues
in the year ended December 31, 2016
compared to the year ended December 31,
2015 due to the sale of the Federal on January 8, 2016.
- $14.5 million decrease in
revenues in the year ended December 31,
2016 compared to the year ended December 31, 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 year ended December 31, 2016 compared to the year ended
December 31, 2015.
Vessel Operating Expenses
Vessel operating expenses
decreased by 2.9%, or $3.3 million,
to $109.4 million in the year
ended December 31, 2016, from
$112.7 million in the year ended
December 31, 2015. The decrease was
due to a decrease in average number of vessels in our fleet by 1.8%
and due to a 1.5% decrease in the average daily operating cost per
vessel during the year ended December 31,
2016 compared to the year ended December 31, 2015.
The average daily operating cost per vessel decreased to
$5,637 per day for the year ended
December 31, 2016 from $5,720 per day for the year ended December 31, 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 $2.8 million, to $129.0 million in the year ended December 31, 2016 from $131.8 million in the year ended December 31, 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 year ended December 31,
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 $1.7
million, to $5.5 million in
the year ended December 31, 2016 from
$3.8 million in the year ended
December 31, 2015. The increase was
mainly due to the increased payments for dry-docking and special
survey costs related to certain vessels over the last year.
General and Administrative Expenses
General and
administrative expenses increased by $0.3
million to $22.1 million in
the year ended December 31, 2016 from
$21.8 million in the year ended
December 31, 2015.
Other Operating Expenses
Other Operating Expenses
include Voyage Expenses and Bad Debt Expense.
Voyage Expenses
Voyage expenses increased by
$1.6 million, to $13.9 million in the year ended December 31, 2016 from $12.3 million in the year ended December 31, 2015. The increase was mainly due to
increased bunkering expenses.
Bad Debt Expense
Bad debt expense of $15.8 million in the year ended December 31, 2016 compared to nil in the year
ended December 31, 2015 relates to
receivables from Hanjin, which were written-off.
Impairment Loss
We have recognized an impairment loss
of $415.1 million in relation to 25
of our vessels as of December 31,
2016 compared to an impairment loss of $41.1 million in relation to 13 of our vessels as
of December 31, 2015. The impairment
loss as of December 31, 2016 was (i)
due to the impairment loss of $205.2
million recognized for five 3,400 TEU vessels formerly
chartered to Hanjin, and (ii) the impairment loss of $209.9 million recognized for 18 of our vessels
less than 4,300 TEU and for two 6,400 TEU vessels as a result of
the continued weakness of containership market and the other than
temporary nature of the decline in these vessels' values.
Interest Expense and Interest Income
Interest expense
decreased by 1.7%, or $1.4 million,
to $83.0 million in the year
ended December 31, 2016 from
$84.4 million in the year ended
December 31, 2015. This included the
amortization of deferred finance costs reclassified from other
finance expenses to interest expense of $12.7 million and $14.0
million, respectively. The change in interest expense was
mainly due to a $1.3 million decrease
in the amortization of deferred finance costs and due to a decrease
in our average debt by $242.5
million, to $2,652.2 million
in the year ended December 31, 2016,
from $2,894.7 million in the year
ended December 31, 2015, which were
partially offset by an increase in average cost of debt due to the
increase in US$ Libor.
The Company is deleveraging its balance sheet. As of
December 31, 2016, the debt
outstanding gross of deferred finance costs was $2,527.3 million compared to $2,775.4 million as of December 31, 2015. We expect the rate at which we
reduce our leverage to decline, primarily as a result of the
cancellation of eight charters with Hanjin.
Interest income increased by $1.3
million to $4.7 million in the
year ended December 31, 2016 compared
to $3.4 million in the year ended
December 31, 2015. The increase was
mainly attributed to the interest income recognized on HMM notes
receivable.
Other finance expenses
Other finance expenses
increased by $0.2 million, to
$4.9 million in the year ended
December 31, 2016 from $4.7 million in the year ended December 31, 2015, following the reclassification
of the amortization of deferred finance costs from other finance
expenses to interest expense of $12.7
million and $14.0 million,
respectively.
Equity loss on investments
Equity loss on investments
increased by $14.3 million, to
$16.2 million in the year ended
December 31, 2016 compared to a loss
of $1.9 million in the year ended
December 31, 2015 and relates to the
investment in Gemini Shipholdings Corporation ("Gemini"), in which
the Company has a 49% shareholding interest. This loss increase was
mainly attributed to our share of impairment loss for Gemini
vessels amounting to $14.6 million in
the year ended December 31, 2016.
Unrealized gain/(loss) on derivatives
Unrealized loss
on interest rate swaps amounted to $3.1
million in the year ended December
31, 2016 compared to unrealized gains of $16.3 million in the year ended December 31, 2015. The accelerated amortization
of accumulated other comprehensive loss of $7.7 million was partially offset by the
unrealized gains of $4.6 million
attributable to mark to market valuation of our swaps in the year
ended December 31, 2016.
Realized loss on derivatives
Realized loss on interest
rate swaps decreased by $46.7
million, to $9.4 million in
the year ended December 31, 2016 from
$56.1 million in the year ended
December 31, 2015. This decrease was
attributable to lower interest swap rates combined with a
$522.0 million decrease in the
average notional amount of swaps during the year ended December 31, 2016 compared to the year ended
December 31, 2015 as a result of swap
expirations.
Other income/(expenses), net
Other income/(expenses),
net increased to $41.6 million
expenses in the year ended December 31,
2016 from $0.1 million income
in the year ended December 31, 2015
mainly due to a $29.4 million
impairment loss in Zim equity and debt securities and a
$12.9 million recognized loss on sale
of HMM equity securities, which were acquired by Danaos in
July 2016 as part of the charter
restructuring agreement with HMM, for cash proceeds of $38.1 million.
Adjusted EBITDA
Adjusted EBITDA decreased by 16.2%, or
$67.7 million, to $350.6 million in the year ended
December 31, 2016 from $418.3 million in the year ended December 31, 2015. As outlined earlier, this
decrease was mainly attributed to a $69.6
million decrease in operating revenues, which was partially
offset by a $2.1 million decrease in
total expenses and a $0.3 million
operating performance improvement on equity investments before
impairment loss. Adjusted EBITDA for the year ended December 31, 2016 is adjusted mainly for
impairment loss on vessels of $415.1
million accompanied by accelerated amortization of
accumulated other comprehensive loss of $7.7
million, impairment loss on our equity in Zim and debt
securities of $29.4 million,
impairment loss component of equity loss on investments of
$14.6 million, bad debt expenses of
$15.8 million, loss on sale of HMM
securities of $12.9 million,
unrealized gain on derivatives of $4.6
million and realized loss on derivatives of $5.4 million. Tables reconciling Adjusted EBITDA
to Net income/(loss) can be found at the end of this earnings
release.
Hanjin Update
On September 1,
2016, Hanjin, 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. Hanjin 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 all eight vessels on short-term charters at market
rates. As a result of these events, we ceased recognizing revenue
from Hanjin effective from July 1,
2016 onwards and recognized a bad debt expense of
$15.8 million relating to unpaid
charter hire recorded as accounts receivable as of June 30, 2016 in our condensed consolidated
statements of operations in the year ended December 31, 2016. We have an unsecured claim for
unpaid charter hire, charges, expenses and loss of profit against
Hanjin 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, 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
December 31, 2016. We have obtained
waivers of the breaches of these financial covenants until
April 1, 2017, and we are in
discussions with our lenders regarding this matter. As these
waivers were obtained for a period of less than the next 12 months
after the balance sheet date, 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. Otherwise, the Company
is currently in a position to fully service all of its operational
and contractual obligations.
Conference Call and Webcast
On Wednesday, February 22, 2017 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 March 1, 2017 by dialing 1 877
344 7529 (US Toll Free Dial In) or +44 (0) 2036 088 021 (Standard
International Dial In) and using 10101758# 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 chartered to many of the world's largest
liner companies on fixed-rate 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 484 unscheduled off-hire days in the three months
ended December 31, 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
|
|
Fourth
Quarter
|
|
|
2016
|
2016
|
|
2016
|
|
2016
|
|
Total
|
Ownership
Days
|
5,013
|
|
5,005
|
|
5,060
|
|
5,060
|
|
20,138
|
Less Off-hire
Days:
|
|
|
|
|
|
|
|
|
|
Scheduled Off-hire
Days
|
(31)
|
|
(45)
|
|
-
|
|
-
|
|
(76)
|
Other Off-hire
Days
|
(242)
|
|
(110)
|
|
(169)
|
|
(484)
|
|
(1,005)
|
Operating
Days
|
4,740
|
|
4,850
|
|
4,891
|
|
4,576
|
|
19,057
|
Vessel
Utilization
|
94.6%
|
|
96.9%
|
|
96.7%
|
|
90.4%
|
|
94.6%
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues
(in '000s of US Dollars)
|
$137,474
|
|
$136,999
|
|
$111,752
|
|
$112,107
|
|
$498,332
|
Average Gross
Daily Charter Rate
|
$29,003
|
|
$28,248
|
|
$22,848
|
|
$24,499
|
|
$26,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Utilization
(No. of Days)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
|
2015
|
2015
|
|
2015
|
|
2015
|
|
Total
|
Ownership
Days
|
5,040
|
|
5,096
|
|
5,152
|
|
5,152
|
|
20,440
|
Less Off-hire
Days:
|
|
|
|
|
|
|
|
|
|
Scheduled Off-hire
Days
|
(16)
|
|
(16)
|
|
-
|
|
(16)
|
|
(48)
|
Other Off-hire
Days
|
(64)
|
|
(17)
|
|
(2)
|
|
(70)
|
|
(153)
|
Operating
Days
|
4,960
|
|
5,063
|
|
5,150
|
|
5,066
|
|
20,239
|
Vessel
Utilization
|
98.4%
|
|
99.4%
|
|
100.0%
|
|
98.3%
|
|
99.0%
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues
(in '000s of US Dollars)
|
$138,605
|
|
$141,469
|
|
$144,542
|
|
$143,320
|
|
$567,936
|
Average Gross
Daily Charter Rate
|
$27,945
|
|
$27,942
|
|
$28,066
|
|
$28,291
|
|
$28,062
|
Fleet List
The following table describes in detail our fleet deployment
profile as of February 20, 2017:
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
|
|
August
2017
|
|
Express Berlin (ex
Hanjin Germany)
|
10,100
|
|
2011
|
|
June 2017
|
|
Express Athens (ex
Hanjin Greece)
|
10,100
|
|
2011
|
|
August
2017
|
|
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
|
|
March 2017
|
|
Priority
|
6,402
|
|
2002
|
|
March 2017
|
|
Colombo (ex 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(3)
|
4,253
|
|
2004
|
|
September
2017
|
|
Deva
|
4,253
|
|
2004
|
|
March 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
|
|
March 2017
|
|
Express Black Sea
(ex Hanjin Constantza)
|
3,400
|
|
2011
|
|
March 2017
|
|
Express Spain (ex
Hanjin Algeciras)
|
3,400
|
|
2011
|
|
March 2017
|
|
Express Argentina
(ex Hanjin Buenos Aires)
|
3,400
|
|
2010
|
|
June 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
|
|
May 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(4)
|
6,422
|
|
2001
|
|
September
2017
|
|
NYK
Leo(4)
|
6,422
|
|
2002
|
|
February
2019
|
|
Suez
Canal(4)
|
5,610
|
|
2002
|
|
July 2017
|
|
Genoa(4)
|
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)
|
Currently on subjects
with the charterer.
|
(4)
|
Vessels acquired by
Gemini Shipholdings Corporation, in which Danaos holds a 49% equity
interest.
|
DANAOS
CORPORATION
Condensed Statements of Operations - Unaudited
(Expressed in thousands of United States dollars, except per share
amounts)
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Year
ended
|
|
Year
ended
|
December
31,
|
December
31,
|
December
31,
|
December
31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
OPERATING
REVENUES
|
$112,107
|
|
$143,320
|
|
$498,332
|
|
$567,936
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Vessel operating
expenses
|
(25,856)
|
|
(27,678)
|
|
(109,384)
|
|
(112,736)
|
|
Depreciation &
amortization
|
(34,016)
|
|
(34,146)
|
|
(134,573)
|
|
(135,628)
|
|
Impairment
loss
|
(415,118)
|
|
(41,080)
|
|
(415,118)
|
|
(41,080)
|
|
General &
administrative
|
(5,968)
|
|
(5,694)
|
|
(22,105)
|
|
(21,831)
|
|
Loss on sale of
vessels
|
-
|
|
-
|
|
(36)
|
|
-
|
|
Other operating
expenses
|
(3,923)
|
|
(3,114)
|
|
(29,759)
|
|
(12,284)
|
Income From
Operations
|
(372,774)
|
|
31,608
|
|
(212,643)
|
|
244,377
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME/(EXPENSES)
|
|
|
|
|
|
|
|
|
Interest
income
|
1,486
|
|
870
|
|
4,682
|
|
3,419
|
|
Interest
expense
|
(21,170)
|
|
(20,254)
|
|
(82,966)
|
|
(84,435)
|
|
Other finance
expenses
|
(1,585)
|
|
(1,138)
|
|
(4,932)
|
|
(4,658)
|
|
Equity loss on
investments
|
(14,655)
|
|
(949)
|
|
(16,252)
|
|
(1,941)
|
|
Other
income/(expenses), net
|
(29,178)
|
|
(32)
|
|
(41,602)
|
|
111
|
|
Realized loss on
derivatives
|
(1,915)
|
|
(8,305)
|
|
(9,425)
|
|
(56,142)
|
|
Unrealized
gain/(loss) on derivatives
|
(6,776)
|
|
4,734
|
|
(3,057)
|
|
16,285
|
Total Other
Expenses, net
|
(73,793)
|
|
(25,074)
|
|
(153,552)
|
|
(127,361)
|
|
|
|
|
|
|
|
|
|
Net
Income/(loss)
|
$(446,567)
|
|
$6,534
|
|
$(366,195)
|
|
$117,016
|
|
|
|
|
|
|
|
|
|
EARNINGS/(LOSS)
PER SHARE
|
|
|
|
|
|
|
|
Basic & diluted
earnings/(loss) per share
|
$(4.07)
|
|
$0.06
|
|
$(3.34)
|
|
$1.07
|
Basic & diluted
weighted average number of common
shares (in thousands of shares)
|
109,805
|
|
109,788
|
|
109,802
|
|
109,785
|
Non-GAAP
Measures*
Reconciliation of Net Income/(Loss) to Adjusted Net Income –
Unaudited
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Year
ended
|
|
Year
ended
|
December
31,
|
December
31,
|
December
31,
|
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
income/(loss)
|
$(446,567)
|
|
$6,534
|
|
$(366,195)
|
|
$117,016
|
Bad debt
expense
|
-
|
|
-
|
|
15,834
|
|
-
|
Loss on sale of HMM
securities
|
-
|
|
-
|
|
12,906
|
|
-
|
Impairment
loss
|
415,118
|
|
41,080
|
|
415,118
|
|
41,080
|
Impairment loss on
securities
|
29,384
|
|
-
|
|
29,384
|
|
-
|
Impairment loss
component of equity loss on investments
|
14,642
|
|
-
|
|
14,642
|
|
-
|
Accelerated
amortization of accumulated other comprehensive loss
|
7,706
|
|
-
|
|
7,706
|
|
-
|
Unrealized gain on
derivatives
|
(930)
|
|
(4,734)
|
|
(4,649)
|
|
(16,285)
|
Amortization of
financing fees & finance fees accrued
|
3,805
|
|
4,272
|
|
16,099
|
|
17,677
|
Loss on sale of
vessels
|
-
|
|
-
|
|
36
|
|
-
|
Adjusted Net
Income
|
$23,158
|
|
$47,152
|
|
$140,881
|
|
$159,488
|
Adjusted Earnings
Per Share
|
$0.21
|
|
$0.43
|
|
$1.28
|
|
$1.45
|
Weighted average
number of shares (in thousands)
|
109,805
|
|
109,788
|
|
109,802
|
|
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 months and year ended December 31,
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
|
December
31,
|
December
31,
|
|
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$73,717
|
|
$72,253
|
|
Restricted
cash
|
|
2,812
|
|
2,818
|
|
Accounts receivable,
net
|
|
8,028
|
|
10,652
|
|
Fair value of
financial instruments
|
|
-
|
|
138
|
|
Other current
assets
|
|
51,397
|
|
41,709
|
|
|
|
135,954
|
|
127,570
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
Fixed assets,
net
|
|
2,906,721
|
|
3,446,323
|
|
Deferred charges,
net
|
|
8,199
|
|
4,751
|
|
Investments in
affiliates
|
|
5,033
|
|
11,289
|
|
Other non-current
assets
|
|
71,157
|
|
72,188
|
|
|
|
2,991,110
|
|
3,534,551
|
TOTAL
ASSETS
|
|
$3,127,064
|
|
$3,662,121
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Long-term debt,
current portion
|
|
$2,504,932
|
|
$269,979
|
|
Accounts payable,
accrued liabilities & other current liabilities
|
|
61,349
|
|
37,628
|
|
Fair value of
financial instruments
|
|
-
|
|
4,538
|
|
|
|
2,566,281
|
|
312,145
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Long-term debt,
net
|
|
-
|
|
2,470,417
|
|
Other long-term
liabilities
|
|
73,070
|
|
37,645
|
|
|
|
73,070
|
|
2,508,062
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Common
stock
|
|
1,098
|
|
1,098
|
|
Additional paid-in
capital
|
|
546,898
|
|
546,822
|
|
Accumulated other
comprehensive loss
|
|
(91,163)
|
|
(103,081)
|
|
Retained
earnings
|
|
30,880
|
|
397,075
|
|
|
|
487,713
|
|
841,914
|
Total liabilities
and stockholders' equity
|
|
$3,127,064
|
|
$3,662,121
|
DANAOS
CORPORATION
Condensed Statements of Cash Flows - Unaudited
(Expressed in thousands of United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Year
ended
|
|
Year
ended
|
December
31,
|
December
31,
|
December
31,
|
December
31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
$(446,567)
|
|
$6,534
|
|
$(366,195)
|
|
$117,016
|
|
Adjustments to
reconcile net income/(loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
32,459
|
|
33,225
|
|
129,045
|
|
131,783
|
|
Impairment
losses
|
444,502
|
|
41,080
|
|
444,502
|
|
41,080
|
|
Amortization of
deferred drydocking & special survey costs, finance cost and
other finance fees accrued
|
5,362
|
|
5,193
|
|
21,627
|
|
21,522
|
|
Payments for
drydocking/special survey
|
(189)
|
|
(1,034)
|
|
(8,976)
|
|
(2,341)
|
|
Amortization of
deferred realized losses on cash flow interest rate
swaps
|
8,718
|
|
1,013
|
|
11,734
|
|
4,017
|
|
Bad debt
expense
|
-
|
|
-
|
|
15,834
|
|
-
|
|
Loss on sale of
securities
|
-
|
|
-
|
|
12,906
|
|
-
|
|
Equity loss on
investments
|
14,655
|
|
949
|
|
16,252
|
|
1,941
|
|
Unrealized gain on
derivatives
|
(930)
|
|
(4,734)
|
|
(4,649)
|
|
(16,285)
|
|
Loss on sale of
vessels
|
-
|
|
-
|
|
36
|
|
-
|
|
Stock based
compensation
|
76
|
|
88
|
|
76
|
|
88
|
|
Accounts
receivable
|
(3,976)
|
|
(2,800)
|
|
(13,210)
|
|
(2,748)
|
|
Other assets, current
and non-current
|
(989)
|
|
945
|
|
18,041
|
|
(4,794)
|
|
Accounts payable and
accrued liabilities
|
(5,342)
|
|
(4,761)
|
|
1,067
|
|
(11,662)
|
|
Other liabilities,
current and long-term
|
(10,183)
|
|
(6,189)
|
|
(16,123)
|
|
(7,941)
|
Net Cash provided
by Operating Activities
|
37,596
|
|
69,509
|
|
261,967
|
|
271,676
|
|
|
|
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
Vessel additions and
vessel acquisitions
|
(1,053)
|
|
(378)
|
|
(4,561)
|
|
(1,112)
|
|
Investments in
affiliates
|
-
|
|
(5,880)
|
|
(9,996)
|
|
(13,230)
|
|
Net proceeds from
sale of vessels
|
-
|
|
1,050
|
|
5,178
|
|
1,050
|
Net Cash used in
Investing Activities
|
(1,053)
|
|
(5,208)
|
|
(9,379)
|
|
(13,292)
|
|
|
|
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
Debt
repayment
|
(88,953)
|
|
(85,427)
|
|
(251,130)
|
|
(243,175)
|
|
Deferred finance
costs
|
-
|
|
-
|
|
-
|
|
(692)
|
|
Increase in
restricted cash
|
(2,117)
|
|
(2,818)
|
|
6
|
|
6
|
Net Cash used in
Financing Activities
|
(91,070)
|
|
(88,245)
|
|
(251,124)
|
|
(243,861)
|
Net
(Decrease)/Increase in cash and cash equivalents
|
(54,527)
|
|
(23,944)
|
|
1,464
|
|
14,523
|
Cash and cash
equivalents, beginning of period
|
128,244
|
|
96,197
|
|
72,253
|
|
57,730
|
Cash and cash
equivalents, end of period
|
$73,717
|
|
$72,253
|
|
$73,717
|
|
$72,253
|
DANAOS
CORPORATION
Reconciliation of Net Income/(Loss) to Adjusted EBITDA
(Expressed in thousands of United States dollars)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Year
ended
|
|
Year
ended
|
December
31,
|
December
31,
|
December
31,
|
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
income/(loss)
|
$(446,567)
|
|
$6,534
|
|
$(366,195)
|
|
$117,016
|
Depreciation
|
32,459
|
|
33,225
|
|
129,045
|
|
131,783
|
Amortization of
deferred drydocking & special survey costs
|
1,557
|
|
921
|
|
5,528
|
|
3,845
|
Amortization of
deferred finance costs and write-offs and other finance fees
accrued
|
3,805
|
|
4,272
|
|
16,099
|
|
17,677
|
Amortization of
deferred realized losses on interest rate swaps
|
1,012
|
|
1,013
|
|
4,028
|
|
4,017
|
Interest
income
|
(1,486)
|
|
(870)
|
|
(4,682)
|
|
(3,419)
|
Interest
expense
|
18,195
|
|
16,877
|
|
70,314
|
|
70,397
|
Impairment
loss
|
415,118
|
|
41,080
|
|
415,118
|
|
41,080
|
Impairment loss on
securities
|
29,384
|
|
-
|
|
29,384
|
|
-
|
Impairment loss
component of equity loss on investments
|
14,642
|
|
-
|
|
14,642
|
|
-
|
Accelerated
amortization of accumulated other comprehensive loss
|
7,706
|
|
-
|
|
7,706
|
|
-
|
Bad debt
expense
|
-
|
|
-
|
|
15,834
|
|
-
|
Loss on sale of
securities
|
-
|
|
-
|
|
12,906
|
|
-
|
Loss on sale of
vessels
|
-
|
|
-
|
|
36
|
|
-
|
Stock based
compensation
|
76
|
|
88
|
|
76
|
|
88
|
Realized loss on
derivatives
|
903
|
|
7,292
|
|
5,397
|
|
52,125
|
Unrealized gain on
derivatives
|
(930)
|
|
(4,734)
|
|
(4,649)
|
|
(16,285)
|
Adjusted
EBITDA(1)
|
$75,874
|
|
$105,698
|
|
$350,587
|
|
$418,324
|
1)
|
Adjusted EBITDA
represents net income/(loss) 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, accelerated amortization of
accumulated other comprehensive loss, unrealized gain on
derivatives, realized loss on derivatives, gain/(loss) on sale of
vessels, impairment losses, 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 months and
year ended December 31, 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-results-for-the-fourth-quarter-and-year-ended-december-31-2016-300411042.html
SOURCE Danaos Corporation