Danaos Corporation ("Danaos") (NYSE: DAC), a leading international
owner of containerships, today reported unaudited results for the
quarter ended March 31, 2012.
Highlights for the First Quarter Ended March
31, 2012:
- Operating revenues of $134.2 million for the
three months ended March 31, 2012 compared to $99.0 million for the
three months ended March 31, 2011, an increase of 35.6%.
- Adjusted EBITDA(1) of
$96.4 million for the three months ended March 31, 2012 compared to
$65.2 million for the three months ended March 31, 2011, an
increase of 47.9%.
- Adjusted net income(1) of $17.6 million, or $0.16 per share, for the three months
ended March 31, 2012 compared to $11.4 million, or $0.10 per share,
for the three months ended March 31, 2011.
- During the first quarter of 2012, we took
delivery of three newly built containerships with an aggregate
carrying capacity of 34,730 TEU, which have been all deployed on
12-year time charters.
- The remaining average charter duration of our
fleet was 10.0 years as of March 31, 2012 (weighted by aggregate
contracted charter hire).
- Total contracted operating revenues were $5.4
billion as of March 31, 2012, through 2028.
- Charter coverage of 88% for the remainder of
2012 in terms of contracted operating days and 95% in terms of
operating revenues.
Three Months Ended March 31, 2012
Financial Summary
(Expressed in thousands of United States dollars, except per share amounts):
Three months Three months
ended ended
March 31, March 31,
------------- -------------
2012 2011
------------- -------------
(unaudited) (unaudited)
Operating revenues $ 134,237 $ 98,989
Net income $ 9,342 $ 5,443
Adjusted net income1 $ 17,587 $ 11,354
Earnings per share $ 0.09 $ 0.05
Adjusted earnings per share1 $ 0.16 $ 0.10
Weighted average number of shares (in thousands) 109,605 108,611
Adjusted EBITDA1 $ 96,438 $ 65,178
Danaos' CEO Dr. John Coustas
commented:
During this first quarter, we evidenced the seeds of the
container market recovery. The Liner companies were aligned in box
rate hikes which, until now, have been pretty successful. The
charter market became more active with rates on some post-panamax
vessels almost doubling and we evidence a trickle down effect on
the large panamaxes. This development will put most liner companies
back in the black for 2012 and will greatly reduce the counterparty
risk that was troubling the market.
On the supply front, we continue to experience restraint in new
orders with the notable exception of the much awaited Evergreen
contract for 10 large post-panamaxes.
On the Company front, we continue with the delivery of our
fleet. As of today, we have taken delivery of all but two 13,100
TEU vessels, which are scheduled to be delivered until the end of
June 2012.
Our financial performance continues to improve. We recorded for
the quarter an adjusted EBITDA of $96.4 million and adjusted net
income of $17.6 million and 16 cents per share compared to $11.4
million and 10 cents per share for the 1st quarter of 2011.
Our charter coverage for the remainder of 2012 stands at 95% in
terms of operating revenues. We still have three vessels in cold
layup and we are evaluating their employment possibilities.
We are getting very close to the successful completion of one of
the most ambitious new building programs within the next quarter to
maximize the cash generating capacity of our company.
Three months ended March 31, 2012 compared to
the three months ended March 31, 2011
During the quarter ended March 31, 2012, Danaos had an average
of 60.1 containerships compared to 51.0 containerships for the same
period in 2011. During the first quarter of 2012, we took delivery
of three vessels, the Hyundai Together, on February 16, 2012, the
CMA CGM Melisande, on February 28, 2012 and the Hyundai Tenacity,
on March 8, 2012. Our fleet utilization was reduced to 94.5% in the
three months ended March 31, 2012 compared to 96.7% in the same
period of 2011, mainly due to the 246 days for which three of our
vessels were off-charter and laid-up by us in the first quarter of
2012.
Our adjusted net income was $17.6 million, or $0.16 per share,
for the three months ended March 31, 2012 compared to $11.4
million, or $0.10 per share, for the three months ended March 31,
2011. We have adjusted our net income in the first quarter of 2012
for unrealized gain on derivatives of $2.3 million, realized losses
on swaps of $6.9 million attributable to our over-hedging position
(as described below), as well as a non-cash expense of $3.7 million
for fees related to our comprehensive financing plan (related to
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 54.4%, or $6.2 million, in adjusted net income
for the three months ended March 31, 2012 compared to the three
months ended March 31, 2011, was attributable to the increased
Income from Operations, which was partially off-set by an increase
in realized losses on our interest rate swap contracts (after the
adjustment of the over-hedging portion), as well as increased
interest expense (mainly due to the higher average indebtedness)
during the three months ended March 31, 2012 compared to the same
period in 2011.
On a non-adjusted basis our net income was $9.3 million, or
$0.09 per share, for the first quarter of 2012, compared to net
income of $5.4 million, or $0.05 per share, for the first quarter
of 2011.
As a result of our comprehensive financing plan, we are in an
over-hedged position under our cash flow interest rate swaps, which
is due to deferred progress payments to shipyards, cancellation of
three newbuildings in 2011, the replacement of variable interest
rate debt with fixed interest rate Vendor Financing and equity
proceeds from our private placement in 2010, all of which reduced
initially forecasted variable interest rate debt and resulted in
notional cash flow interest rate swaps being above our variable
interest rate debt eligible for hedging. The over-hedged position
described above will be gradually reduced and ultimately eliminated
during the second half of 2012, following the delivery of all of
our remaining newbuildings and the full drawdown of our committed
debt.
Operating Revenue Operating revenue
increased 35.6%, or $35.2 million, to $134.2 million in the three
months ended March 31, 2012, from $99.0 million in the three months
ended March 31, 2011. The increase was primarily attributable to
the addition of ten vessels to our fleet, as follows:
Vessel Name Vessel Size (TEU) Date Delivered
------------------------- ----------------- -----------------
Hanjin Italy 10,100 April 6, 2011
Hanjin Constantza 3,400 April 15, 2011
Hanjin Greece 10,100 May 4, 2011
CMA CGM Attila 8,530 July 8, 2011
CMA CGM Tancredi 8,530 August 22, 2011
CMA CGM Bianca 8,530 October 26, 2011
CMA CGM Samson 8,530 December 15, 2011
Hyundai Together 13,100 February 16, 2012
CMA CGM Melisande 8,530 February 28, 2012
Hyundai Tenacity 13,100 March 8, 2012
These additions to our fleet contributed revenues of $32.6
million during the three months ended March 31, 2012 (739 operating
days in total).
Furthermore, operating revenues for the three months ended March
31, 2012, reflect:
- $4.0 million of incremental revenues in the three months ended
March 31, 2012 compared to the same period of 2011, related to one
3,400 TEU containership (the Hanjin Algeciras, which was added to
our fleet on January 26, 2011) and one 10,100 TEU containership
(the Hanjin Germany, which was added to our fleet on March 10,
2011).
- $1.4 million decrease in revenues in the three months ended
March 31, 2012 compared to the same period of 2011. This was mainly
attributable to increased off-hire days by 153 days, to 303 days
(mainly due to the three vessels that were off-charter and laid up)
in the three months ended March 31, 2012, from 150 days in the
three months ended March 31, 2011, which was partially offset by
the increased revenue of our fleet in the first quarter of 2012
compared to the same period of 2011, due to the one additional
operating day in February 2012 compared to February 2011.
Vessel Operating Expenses Vessel operating
expenses increased 13.2%, or $3.5 million, to $30.1 million in the
three months ended March 31, 2012, from $26.6 million in the three
months ended March 31, 2011. The increase is mainly attributable to
the increased average number of vessels in our fleet during the
three months ended March 31, 2012 compared to the same period of
2011. The average daily operating cost per vessel decreased to
$5,945 for the three months ended March 31, 2012, from $6,162 for
the three months ended March 31, 2011 (excluding vessels on
lay-up).
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and
Amortization of Deferred Dry-docking and Special Survey Costs.
Depreciation Depreciation expense increased 41.5%, or $9.3
million, to $31.7 million in the three months ended March 31, 2012,
from $22.4 million in the three months ended March 31, 2011. The
increase in depreciation expense was due to the increased average
number of vessels in our fleet (with higher cost base) during the
three months ended March 31, 2012 compared to the same period of
2011.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs
decreased 20.0%, or $0.3 million, to $1.2 million in the three
months ended March 31, 2012, from $1.5 million in the three months
ended March 31, 2011.
General and Administrative Expenses
General and administrative expenses increased 4.3%, or $0.2
million, to $4.8 million in the three months ended March 31, 2012,
from $4.6 million in the same period of 2011. The increase was the
result of increased fees of $0.6 million to our Manager, due to the
increase in the average number of vessels in our fleet, which were
partially offset by a $0.4 million reduction mainly in legal and
advisory fees recorded in the three months ended March 31, 2012
compared to the same period of 2011.
Other Operating Expenses Other Operating
Expenses includes Voyage Expenses
Voyage Expenses Voyage expenses increased by $0.7 million, to
$2.9 million in the three months ended March 31, 2012, from $2.2
million in the three months ended March 31, 2011. The increase was
the result of increased commissions to our Manager, due to the
increase in the average number of vessels in our fleet and the
increase in the commission on gross charter hires to our Manager,
to 1.0% from 0.75%, effective January 1, 2012.
Interest Expense and Interest Income
Interest expense increased by 55.9%, or $6.6 million, to $18.4
million in the three months ended March 31, 2012, from $11.8
million in the three months ended March 31, 2011. The change in
interest expense was due to the increase in our average debt by
$525.8 million, to $3,125.1 million in the quarter ended March 31,
2012, from $2,599.3 million in the quarter ended March 31, 2011, as
well as the increased average LIBOR payable on interest under our
credit facilities in the three months ended March 31, 2012 compared
to the three months ended March 31, 2011. Furthermore, the
financing of our newbuilding program resulted in interest being
capitalized, rather than such interest being recognized as an
expense, of $2.6 million for the three months ended March 31, 2012
compared to $5.9 million of capitalized interest for the three
months ended March 31, 2011.
Interest income was $0.4 million in each of the three months
ended March 31, 2012 and 2011, respectively.
Other finance costs, net Other finance
costs, net, decreased by $0.5 million, to $3.9 million in the three
months ended March 31, 2012, from $4.4 million in the three months
ended March 31, 2011. This decrease was primarily because in the
first quarter of 2011, we had recorded an expense of $2.3 million
due to non-cash changes in fair value of warrants. This was offset
in part by increased amortization of $1.9 million in relation to
finance fees (which were deferred and are amortized over the life
of the respective credit facilities) in the first quarter of 2012
compared to the same period in 2011.
Other income/(expenses), net Other
income/(expenses), net, was an income of $0.2 million in the three
months ended March 31, 2012, compared to an expense of $1.9 million
in the three months ended March 31, 2011. This was mainly the
result of legal and advisory fees of $2.1 million attributable to
fees related to preparing and structuring the comprehensive
financing plan, which were recorded during the three months ended
March 31, 2011.
Unrealized (loss)/gain on derivatives
Unrealized gain on interest rate swap hedges decreased by $7.5
million, to $2.3 million in the three months ended March 31, 2012,
from $9.8 million in the three months ended March 31, 2011, which
is attributable to hedge accounting ineffectiveness and mark to
market valuation of two of our swaps not qualifying for hedge
accounting.
Realized (loss)/gain on derivatives
Realized loss on interest rate swap hedges, increased by $6.7
million, to $34.8 million in the three months ended March 31, 2012,
from $28.1 million in the three months ended March 31, 2011, which
is attributable to the higher average notional amount of swaps
during the three months ended March 31, 2012 compared to the same
period of 2011, as well as the reduction in the realized losses
being deferred for the respective periods (as discussed below)
following the gradual delivery of our vessels under construction,
which is partially offset by the higher floating LIBOR rates during
the three months ended March 31, 2012 compared to the same period
of 2011.
In addition, realized losses on cash flow hedges of $4.8 million
and $9.9 million in the three months ended March 31, 2012 and 2011,
respectively, were deferred in "Accumulated Other Comprehensive
Loss", rather than such realized losses being recognized as
expenses, and will be reclassified into earnings over the
depreciable lives of these vessels under construction, which are
financed by loans with interest rates that have been hedged by our
interest rate swap contracts. The table below provides an analysis
of the items discussed above, and which were recorded in the three
months ended March 31, 2012 and 2011:
Three months Three months
ended ended
March 31, March 31,
------------- -------------
2012 2011
------------- -------------
(in millions)
Total realized losses of swaps $ (39.6) $ (38.0)
Realized losses of swaps deferred in OCL 4.8 9.9
------------- -------------
Realized losses of swaps expensed in P&L (34.8) (28.1)
Realized losses attributable to overhedging 6.9 9.8
------------- -------------
Adjusted realized losses attributable to
hedged debt $ (27.9) $ (18.3)
============= =============
Adjusted EBITDA Adjusted EBITDA increased
47.9%, or $31.2 million, to $96.4 million in the three months ended
March 31, 2012, from $65.2 million in the three months ended March
31, 2011. Adjusted EBITDA for the first quarter of 2012, is
adjusted for an unrealized gain on derivatives of $3.0 million and
realized losses on derivatives of $34.8 million. Tables reconciling
Adjusted EBITDA to Net Income can be found at the end of this
earnings release.
Recent News On April 27, 2012, we sold and
delivered the Montreal. The net sale consideration was $6.6
million. The Montreal was 28 years old and was generating revenue
under its time charter, which expired on March 31, 2012.
On May 3, 2012, we took delivery of the newbuilding 13,100 TEU
vessel, the Hyundai Smart. The vessel has been deployed on a
12-year time charter with one of the world's major liner
companies.
Conference Call and Webcast On Thursday,
May 10, 2012, at 9:00 A.M. EDT, 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: 1 866 819 7111 (US Toll
Free Dial In), 0800 953 0329 (UK Toll Free Dial In) or +44 (0)1452
542 301 (Standard International Dial In). Please quote "Danaos" to
the operator.
A telephonic replay of the conference call will be available
until May 17, 2012 by dialing 1 866 247 4222 (US Toll Free Dial
In), 0800 953 1533 (UK Toll Free Dial In) or +44 (0)1452 550 000
(Standard International Dial In). Access Code: 1186615#
There will also be a live and then archived webcast of the
conference call through the Danaos website (www.danaos.com).
Participants to the live webcast should register on the website
approximately 10 minutes prior to the start of the webcast.
About Danaos Corporation Danaos
Corporation is an international owner of containerships, chartering
its vessels to many of the world's largest liner companies. Our
current fleet of 62 containerships aggregating 336,849 TEUs ranks
Danaos among the largest containership charter owners in the world
based on total TEU capacity. Danaos is one of the largest US listed
containership companies based on fleet size. Furthermore, the
company has a contracted fleet of 2 additional containerships
aggregating 26,200 TEU with scheduled deliveries in June 2012. The
company'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 safe harbor 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, shipyard 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 303 off-hire days in the first quarter of 2012
(including 246 days related to Marathonas, Independence and Honour,
which have been off-charter and laid up). The following table
summarizes vessel utilization and the impact of the off-hire days
on the company's revenue relating to the last four quarters.
Second Third Fourth First
Vessel Utilization (No. of Quarter Quarter Quarter Quarter
Days) 2011 2011 2011 2012 Total
-------- -------- -------- -------- --------
Ownership Days 4,953 5,185 5,328 5,471 20,937
Less Off-hire Days:
Scheduled Off-hire Days (86) -- (4) (49) (139)
Other Off-hire Days (42) (32) (163) (254) (491)
-------- -------- -------- -------- --------
Operating Days 4,825 5,153 5,161 5,168 20,307
======== ======== ======== ======== ========
Vessel Utilization 97.4% 99.4% 96.9% 94.5% 97.0%
Operating Revenues(in
'000s of US Dollars) $114,764 $126,004 $128,344 $134,237 $503,349
Average Daily Charter Rate $ 23,785 $ 24,453 $ 24,868 $ 25,975 $ 24,787
Fleet List
The following table describes in detail our fleet deployment
profile as of May 9, 2012.
Vessel Size
Vessel Name (TEU) Year Built Expiration of Charter(1)
----------- ---------- ------------------------
Containerships
Hyundai Smart 13,100 2012 May 2024
Hyundai Tenacity 13,100 2012 March 2024
Hyundai Together 13,100 2012 February 2024
Hanjin Italy 10,100 2011 April 2023
Hanjin Germany 10,100 2011 March 2023
Hanjin Greece 10,100 2011 May 2023
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 September 2016
CSCL Europe 8,468 2004 June 2016
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
YM Mandate 6,500 2010 January 2028
CMA CGM Racine(2) 6,500 2010 July 2022
YM Maturity 6,500 2010 April 2028
Marathonas 4,814 1991 Laid-up
Messologi 4,814 1991 September 2012
Mytilini 4,814 1991 October 2012
Hyundai Commodore(3) 4,651 1992 March 2013
Hyundai Duke(4) 4,651 1992 February 2013
Hyundai Federal(5) 4,651 1994 September 2012
SNL Colombo(6) 4,300 2004 March 2019
YM Singapore 4,300 2004 October 2019
YM Seattle(7) 4,253 2007 July 2019
YM Vancouver 4,253 2007 September 2019
Derby D 4,253 2004 February 2014
Deva 4,253 2004 December 2013
ZIM Rio Grande 4,253 2008 May 2020
ZIM Sao Paolo 4,253 2008 August 2020
ZIM Kingston 4,253 2008 September 2020
ZIM Monaco 4,253 2009 November 2020
ZIM Dalian 4,253 2009 February 2021
ZIM Luanda 4,253 2009 May 2021
Honour 3,908 1989 Laid-up
Hope 3,908 1989 June 2012
Hanjin Constantza 3,400 2011 February 2021
Hanjin Algeciras 3,400 2011 November 2020
Hanjin Buenos Aires 3,400 2010 March 2020
Hanjin Santos 3,400 2010 May 2020
Hanjin Versailles 3,400 2010 August 2020
SCI Pride 3,129 1988 July 2012
Lotus 3,098 1988 July 2012
Independence 3,045 1986 Laid-up
Henry 3,039 1986 July 2012
Elbe 2,917 1991 May 2012
Kalamata 2,917 1991 August 2012
Komodo 2,917 1991 April 2013
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
----------------------------
(1) Earliest date charters could expire. Some charters include
options to extend their terms. (2) Vessel subject to charterer's
option to purchase vessel after first eight years of time charter
term for $78.0 million. (3) On April 20, 2012, the APL Commodore
was renamed to Hyundai Commodore at the request of the charterer of
this vessel. (4) On January 29, 2012, the APL Duke was renamed to
Hyundai Duke at the request of the charterer of this vessel. (5) On
January 31, 2012, the APL Federal was renamed to Hyundai Federal at
the request of the charterer of this vessel. (6) On March 18, 2012,
the YM Colombo was renamed to SNL Colombo at the request of the
charterer of this vessel. (7) On April 9, 2012, the Taiwan Express
was renamed to YM Seattle at the request of the charterer of this
vessel.
New Deliveries
The following table describes the expected additions to our
fleet as a result of our new building containership program.
Vessel Size
Vessel Name (TEU) Expected Delivery Charter Term
----------- ------------------ ------------
Hull No S-459 13,100 June 2012 12 years
Hull No S-460 13,100 June 2012 12 years
DANAOS CORPORATION
Condensed Statements of Income- Unaudited
(Expressed in thousands of United States dollars, except per share amounts)
Three Three
months ended months ended
March 31, March 31,
------------- -------------
2012 2011
------------- -------------
OPERATING REVENUES $ 134,237 $ 98,989
OPERATING EXPENSES
Vessel operating expenses (30,095) (26,602)
Depreciation & amortization (32,883) (23,966)
General & administrative (4,837) (4,629)
Other operating expenses (2,890) (2,218)
------------- -------------
Income From Operations 63,532 41,574
------------- -------------
OTHER EARNINGS (EXPENSES)
Interest income 353 353
Interest expense (18,390) (11,848)
Other finance cost, net (3,857) (4,427)
Other income/(expenses), net 196 (1,920)
Realized (loss)/gain on derivatives (34,794) (28,109)
Unrealized gain/(loss) on derivatives 2,302 9,820
------------- -------------
Total Other Income (Expenses), net (54,190) (36,131)
------------- -------------
Net Income $ 9,342 $ 5,443
============= =============
EARNINGS PER SHARE
Basic & diluted net income per share $ 0.09 $ 0.05
============= =============
Basic & diluted weighted average number of
common shares (in thousands of shares) 109,605 108,611
============= =============
Non-GAAP Measures*
Reconciliation of Net Income to Adjusted Net Income - Unaudited
Three Three
months ended months ended
March 31, March 31,
------------- -------------
2012 2011
------------- -------------
Net income $ 9,342 $ 5,443
Unrealized gain on derivatives (2,302) (9,820)
Realized losses on over-hedging portion of
derivatives 6,886 9,769
Comprehensive Financing Plan related fees -- 2,089
Amortization of financing fees & finance fees
accrued 3,661 1,620
Non-cash change in fair value of warrants -- 2,253
------------- -------------
Adjusted Net Income $ 17,587 $ 11,354
============= =============
Adjusted Earnings Per Share $ 0.16 $ 0.10
============= =============
Weighted average number of shares 109,605 108,611
* 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 ended March 31, 2012 and 2011. 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
(Expressed in thousands of United States dollars)
As of As of
March 31, December 31,
------------- -------------
2012 2011
------------- -------------
(Unaudited)
ASSETS (Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 41,732 $ 51,362
Restricted cash 97 2,909
Accounts receivable, net 6,020 4,176
Other current assets 24,755 34,844
------------- -------------
72,604 93,291
------------- -------------
NON-CURRENT ASSETS
Fixed assets, net 3,688,152 3,241,951
Advances for vessels under construction 275,697 524,286
Deferred charges, net 97,447 99,711
Vessel held for sale 4,805 --
Fair value of financial instruments 3,765 3,964
Other non-current assets 27,436 24,901
------------- -------------
4,097,302 3,894,813
------------- -------------
TOTAL ASSETS 4,169,906 3,988,104
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Long-term debt, current portion 41,958 41,959
Vendor Financing, current portion 21,618 10,857
Accounts payable, accrued liabilities &
other current liabilities 81,541 58,254
Fair value of financial instruments, current
portion 118,388 120,623
------------- -------------
263,505 231,693
------------- -------------
LONG-TERM LIABILITIES
Long-term debt, net of current portion 3,065,967 2,960,288
Vendor financing, net of current portion 93,514 54,288
Fair value of financial instruments, net of
current portion 275,796 291,829
Other long-term liabilities 7,818 7,471
------------- -------------
3,443,095 3,313,876
------------- -------------
STOCKHOLDERS' EQUITY
Common stock 1,096 1,096
Additional paid-in capital 545,907 545,884
Accumulated other comprehensive loss (444,699) (456,105)
Retained earnings 361,002 351,660
------------- -------------
463,306 442,535
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,169,906 $ 3,988,104
============= =============
DANAOS CORPORATION
Condensed Statements of Cash Flows - (Unaudited)
(Expressed in thousands of United States dollars)
Three months Three months
ended ended
March 31, March 31,
------------- -------------
2012 2011
------------- -------------
Operating Activities:
Net income $ 9,342 $ 5,443
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 31,681 22,436
Amortization of deferred drydocking &
special survey costs, finance cost and
other finance fees accrued 4,863 3,150
Stock-based compensation 23 23
Payments for drydocking/special survey (2,035) (4,902)
Non-cash change in fair value of warrants -- 2,253
Amortization of deferred realized losses on
cash flow interest rate swaps 649 227
Unrealized gain on derivatives (2,951) (10,047)
Realized losses on derivatives deferred in
Other Comprehensive Loss (4,839) (9,910)
Changes in operating assets/liabilities:
Accounts receivable (1,844) 612
Other assets, current and non-current 7,554 (4,129)
Accounts payable and accrued liabilities 5,498 (19,278)
Other liabilities, current and non-current 17,878 (1,407)
------------- -------------
Net Cash provided by/(used in) Operating
Activities 65,819 (15,529)
------------- -------------
Investing Activities:
Vessels under construction and vessels
additions (183,874) (121,322)
------------- -------------
Net Cash used in Investing Activities (183,874) (121,322)
------------- -------------
Financing Activities:
Debt draw downs 117,320 98,238
Debt repayment (11,607) (31,967)
Deferred costs (100) (30,217)
Decrease in restricted cash 2,812 2,812
------------- -------------
Net Cash provided by Financing Activities 108,425 38,866
------------- -------------
Net Decrease in cash and cash equivalents (9,630) (97,985)
Cash and cash equivalents, beginning of period 51,362 229,835
------------- -------------
Cash and cash equivalents, end of period $ 41,732 $ 131,850
============= =============
Reconciliation of Net Income to Adjusted EBITDA
(Expressed in thousands of United States dollars)
Three Three
months ended months ended
March 31, March 31,
------------- -------------
2012 2011
------------- -------------
Net income $ 9,342 $ 5,443
Depreciation 31,681 22,436
Amortization of deferred drydocking & special
survey costs 1,202 1,530
Amortization of deferred finance costs and
other finance fees accrued 3,661 1,620
Amortization of deferred realized losses on
cash flow interest rate swaps 649 227
Interest income (353) (353)
Interest expense 18,390 11,848
Unrealized gain on derivatives (2,951) (10,047)
Realized loss on derivatives 34,794 28,109
Stock based compensation 23 23
Comprehensive Financing Plan related fees -- 2,089
Non-cash changes in fair value of warrants -- 2,253
------------- -------------
Adjusted EBITDA(1) $ 96,438 $ 65,178
============= =============
(1) Adjusted EBITDA represents net income before interest income
and expense, depreciation, amortization of deferred drydocking
& special survey costs and deferred finance costs, non-cash
changes in fair value of derivatives and warrants, realized
gain/(loss) on derivatives, stock based compensation and other
items in relation to the Company's comprehensive financing plan.
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 ability to service additional debt and make capital
expenditures. In addition, we believe that Adjusted EBITDA is
useful in evaluating our operating performance and liquidity
position 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 and liquidity. 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 ended March 31, 2012 and 2011. 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.
(1) Adjusted 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.
For further information please contact: Company Contact:
Evangelos Chatzis Chief Financial Officer Danaos Corporation
Athens, Greece Tel.: +30 210 419 6480 E-Mail: cfo@danaos.com
Investor Relations and Financial Media Nicolas Bornozis
President Capital Link, Inc. New York Tel. 212-661-7566 E-Mail:
danaos@capitallink.com Iraklis Prokopakis Senior Vice
President and Chief Operating Officer Danaos Corporation Athens,
Greece Tel.: +30 210 419 6400 E-Mail: coo@danaos.com
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