Danaos Corporation (“Danaos”) (NYSE: DAC), one of the world’s largest independent owners of containerships, today reported unaudited results for the period ended June 30, 2023.

Highlights for the Second Quarter and Half Year Ended June 30, 2023:

  • Adjusted net income1 of $143.4 million, or $7.14 per share, for the three months ended June 30, 2023 compared to $157.1 million, or $7.59 per share, for the three months ended June 30, 2022, a decrease of $13.7 million or $0.45 per share. Adjusted net income for the three months ended June 30, 2022 had included a non-recurring $13.9 million dividend from ZIM that accounted for $0.67 per share.
  • Adjusted net income of $288.7 million, or $14.28 per share, for the six months ended June 30, 2023 compared to $392.4 million, or $18.95 per share, for the six months ended June 30, 2022, a decrease of $103.7 million or $4.67 per share. Adjusted net income for the six months ended June 30, 2022 had included a non-recurring $123.9 million dividend from ZIM that accounted for $5.98 per share.
  • Net income of $147.0 million, or $7.32 per share, for the three months ended June 30, 2023 compared to $8.2 million, or $0.40 per share, for the three months ended June 30, 2022, an increase of $138.8 million, or $6.92 per share. Net income of $293.2 million, or $14.51 per share, for the six months ended June 30, 2023 compared to $339.7 million, or $16.40 per share, for the six months ended June 30, 2022, a decrease of $46.5 million, or $1.89 per share.
  • Adjusted EBITDA1 of $177.3 million for the three months ended June 30, 2023 compared to $192.1 million for the three months ended June 30, 2022, a decrease of $14.8 million. Adjusted EBITDA for the three months ended June 30, 2022 had included a non-recurring $13.9 million dividend from ZIM.
  • Adjusted EBITDA of $356.3 million for the six months ended June 30, 2023 compared to $461.6 million for the six months ended June 30, 2022, a decrease of $105.3 million. Adjusted EBITDA for the six months ended June 30, 2022 had included a non-recurring $123.9 million dividend from ZIM.
  • Cash and cash equivalents were $293.3 million as of June 30, 2023.
  • As of June 30, 2023, Net Debt2 was $131.0 million, and Net Debt / LTM Adjusted EBITDA was 0.18x, while 44 of our vessels are debt-free currently.
  • Total liquidity was $653.3 million as of June 30, 2023, including undrawn available commitments under our Revolving Credit Facility.
  • As of the date of this release, Danaos has repurchased a total of 1,080,547 shares of its common stock in the open market for $65.6 million, under its share repurchase program of up to $100 million announced in June 2022.
  • During the three months ended June 30, 2023 we acquired 1,552,865 shares of common stock of Eagle Bulk Shipping Inc. (“Eagle Bulk”) for a total of $68.2 million that currently represents a 16.7% shareholding stake. Eagle Bulk is listed on the New York Stock Exchange (Ticker: EGLE) and currently owns and operates a fleet of 52 Ultramax and Supramax bulk carriers that aggregate to approximately 3.2 million deadweight tons (“DWT”).
  • On June 20, 2023, we entered into contracts for the construction of two 8,258 TEU containerships. These containerships are expected to be delivered to us in 2026.
  • This brings the total tally of our newbuilding order-book to 10 vessels with an aggregate capacity of 74,914 TEU, with expected deliveries of seven vessels in 2024, one vessel in 2025 and two vessels in 2026. All our newbuildings are designed with the latest eco characteristics, will be methanol fuel ready, fitted with Alternative Maritime Power Units and will all be built in accordance with the latest requirements of the International Maritime Organization in relation to Tier III emission standards and Energy Efficiency Design Index (EEDI) Phase III.
  • In July 2023, we reached an in principle agreement to acquire 5 Capesize bulk carriers built in 2010 through 2012 that aggregate to 879,306 DWT for a total of $103 million. The agreement is subject to entry into definitive documentation. These vessels are expected to be delivered to us between September and October 2023.
  • During the last three months we added approximately $469 million to our contracted revenue backlog through the arrangement of new charters for 12 containerships in our fleet. The new fixtures notably include additional contracted revenues of $177 million for three 13,100 TEU vessels that were forward fixed on new 3-year charters and $227 million for five 8,530 TEU vessels that were extended forward for an additional 3.6 years.
  • As a result, total contracted cash operating revenues, on the basis of concluded charter contracts through the date of this release, had increased to $2.5 billion as of June 30, 2023. The remaining average contracted charter duration was 3.3 years, weighted by aggregate contracted charter hire.
  • Contracted operating days charter coverage for our containership fleet is currently 99.4% for 2023 and 86.1% for 2024.
  • Danaos has declared a dividend of $0.75 per share of common stock for the second quarter of 2023, which is payable on September 1, 2023, to stockholders of record as of August 23, 2023.

Three and Six Months Ended June 30, 2023

Financial Summary - Unaudited

(Expressed in thousands of United States dollars, except per share amounts)

 

Three months ended

 

Three months ended

 

Six months ended

 

Six months ended

June 30,

June 30,

June 30,

June 30,

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

Operating revenues

$241,479

 

$250,923

 

$485,053

 

$480,824

Net income

$147,021

 

$8,224

 

$293,222

 

$339,689

Adjusted net income1

$143,405

 

$157,110

 

$288,660

 

$392,407

Earnings per share, diluted

$7.32

 

$0.40

 

$14.51

 

$16.40

Adjusted earnings per share, diluted1

$7.14

 

$7.59

 

$14.28

 

$18.95

Diluted weighted average number of shares (in thousands)

20,081

 

20,708

 

20,214

 

20,712

Adjusted EBITDA1

$177,326

 

$192,148

 

$356,366

 

$461,632

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 provided below.

2 Net Debt is defined as total debt gross of deferred finance costs less cash and cash equivalents.

Danaos’ CEO Dr. John Coustas commented:

“The world economies stagnated in the second quarter of 2023, resulting in a gradual easing of the container market. Danaos active strategy in the current market conditions is made possible by the prudent approach we have taken to manage our balance sheet to conservative levels as well as our successful chartering strategy. The latter is reflected in our operating revenues of $241 million, which is near to previous records despite a charter market drop that is more than 50% lower than a year ago. We continue to be active in the charter market, highlighting the resilience of our business model, and secured nearly $500 million in new charter contracts during the quarter. Our total charter backlog increased to $2.5 billion as of the end of the quarter, and contracted charter coverage currently stands at 99% for 2023 and 86% for 2024.

In the second quarter of 2023, Danaos received the Gold, first place awards in the Governance and Environment categories in the inaugural ESG Shipping Awards. These accolades, which we are proud of, acknowledge the company’s exemplary efforts in promoting sustainable practices, social responsibility, and strong governance and reaffirm our position as a leader in responsible maritime operations. The timing of the awards is notable as the IMO recently reiterated and strengthened its commitment to decarbonize shipping by targeting a net zero by around 2050.

Danaos continues to advance its decarbonization strategy in multiple ways. We are constantly optimizing and retrofitting our existing fleet and have committed to upgrade around 20 vessels with new propellers, fuel saving appendages and low friction paints. We have also expanded our new building program with the order of four additional newbuilding vessels. These vessels, two of which are 6,000 TEU and two of which are 8,200 TEU, will be delivered methanol-ready, ensuring the longevity of our investment. In total, we have 10 vessels, with a total capacity of approximately 75,000 TEU, on order. All of these will be able to utilize alternative fuels. Importantly, six of these vessels are already chartered for multi-year periods beginning on their delivery dates in 2024.

We also deployed capital opportunistically, after identifying weakness in the dry bulk market, a market we are very familiar with. We believe the long-term fundamentals in the dry bulk market are very positive. In particular, the orderbook is at historically low levels, and fleet supply growth is projected to decline significantly over the next several years against a backdrop of rebounding demand. Short-term market sentiment is not as strong, and we were able to make investments at attractive prices. As has been previously reported, Danaos acquired a significant stake in Eagle Bulk Shipping, Inc., a NYSE listed dry bulk company (“Eagle”). Additionally, we acquired five Capesize bulk carriers in the secondhand market.

With respect to Eagle, we were able to purchase shares in a company we believed had best in class corporate governance practices at a significant discount to our perception of the company’s net asset value. Shortly following our investment, the Board of Eagle unilaterally implemented a poison pill and repurchased Oaktree Capital’s 28% stake in the company at nearly a 35% premium to Eagle’s 45-day average share prices and a 32% premium to our cost basis. These transactions, which were done by Eagle’s Board fundamentally alter our view of Eagle’s corporate governance. We are concerned with these developments and are seeking clarification from the Board of Directors of Eagle. As Eagle Bulk’s current largest shareholder, we have a strong vested interest in seeing the company enhance long-term shareholder value and believe that we have a duty to speak up when we think the Board and/or management may be acting outside the best interests of all shareholders. Accordingly, we are committed to working constructively with the Board to identify balanced, well-considered, and effective methods to enhance shareholder value on behalf of all shareholders.

With respect to our interest in the dry bulk market in general, Danaos has significant experience in the dry bulk market as an owner and operator. We exited the segment years ago, which was a well-timed decision in hindsight, and now we again see opportunity. Given the strength of our balance sheet, we are uniquely positioned to deploy capital in various ways to grow our revenue base and earnings. Our fleet of container vessels, which are contracted on multi-year charters, provides strong revenue and cash flow visibility. While we will continue to grow and future-proof our core fleet by adding next generation vessels to it, our ultimate goal is to generate value for our shareholders, and we will consistently pursue the best opportunities to do so.

As I have said before, our healthy balance sheet allows us to be opportunistic and deploy our capital in various ways. During the quarter, we continued our buyback program and have now spent $65.5 million from our $100 million buyback program to retire more than one million shares. Finally, we remain committed to returning capital to shareholders, as evidenced by our $0.75 per share dividend announced this morning.

We will continue to implement our strategy to ensure the long-term growth and profitability of the company and are consistently focused on creating value for our shareholders.”

Three months ended June 30, 2023 compared to the three months ended June 30, 2022

During the three months ended June 30, 2023, Danaos had an average of 68.0 containerships compared to 71.0 containerships during the three months ended June 30, 2022. Our fleet utilization for the three months ended June 30, 2023 was 98.7% compared to 99.9% for the three months ended June 30, 2022.

Our adjusted net income amounted to $143.4 million, or $7.14 per share, for the three months ended June 30, 2023 compared to $157.1 million, or $7.59 per share, for the three months ended June 30, 2022. We have adjusted our net income in the three months ended June 30, 2023 for a $6.4 million change in fair value of investments, a $2.3 million loss on debt extinguishment and a $0.6 million non-cash finance fees amortization. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

The $13.7 million decrease in adjusted net income for the three months ended June 30, 2023 compared to the three months ended June 30, 2022 is primarily attributable to a $13.9 million dividend from ZIM (net of withholding taxes) recognized in the three months ended June 30, 2022. We also incurred a $0.7 million equity loss on investments in the three months ended June 30, 2023 and a $9.4 million decrease in operating revenues, which were partially offset by a $10.2 million decrease in net finance expenses and a $0.1 million decrease in total operating expenses.

On a non-adjusted basis, net income amounted to $147.0 million, or $7.32 earnings per diluted share, for the three months ended June 30, 2023 compared to net income of $8.2 million, or $0.40 earnings per diluted share, for the three months ended June 30, 2022. Our net income for the three months ended June 30, 2022 included a $154.7 million total loss on our investment in ZIM and a $22.9 million gain on debt extinguishment compared to a $6.4 million gain on our investments and a $2.3 million loss on debt extinguishment for the three months ended June 30, 2023.

Operating Revenues

Operating revenues decreased by 3.7%, or $9.4 million, to $241.5 million in the three months ended June 30, 2023 from $250.9 million in the three months ended June 30, 2022.

Operating revenues for the three months ended June 30, 2023 reflected:

  • a $5.5 million increase in revenues in the three months ended June 30, 2023 compared to the three months ended June 30, 2022 mainly as a result of higher charter rates;
  • a $0.3 million increase in revenues in the three months ended June 30, 2023 compared to the three months ended June 30, 2022 due to higher non-cash revenue recognition in accordance with US GAAP;
  • a $5.4 million decrease in revenues in the three months ended June 30, 2023 compared to the three months ended June 30, 2022 due to vessel disposals; and
  • a $9.8 million decrease in revenues in the three months ended June 30, 2023 compared to the three months ended June 30, 2022 due to decreased amortization of assumed time charters.

Vessel Operating Expenses

Vessel operating expenses increased by $1.3 million to $41.9 million in the three months ended June 30, 2023 from $40.6 million in the three months ended June 30, 2022, primarily as a result of an increase in the average daily operating cost for vessels on time charter to $6,970 per vessel per day for the three months ended June 30, 2023 compared to $6,463 per vessel per day for the three months ended June 30, 2022, which was partially offset by a decrease in the average number of vessels in our fleet. The average daily operating cost increased mainly due to increased repair and maintenance expenses. Management believes that our daily operating costs remain among 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 5.3%, or $1.8 million, to $31.9 million in the three months ended June 30, 2023 from $33.7 million in the three months ended June 30, 2022 mainly due to our recent sale of three vessels.

Amortization of Deferred Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs increased by $1.3 million to $4.5 million in the three months ended June 30, 2023 from $3.2 million in the three months ended June 30, 2022.

General and Administrative Expenses

General and administrative expenses increased by $0.1 million to $7.2 million in the three months ended June 30, 2023, from $7.1 million in the three months ended June 30, 2022.

Other Operating Expenses

Other Operating Expenses include Voyage Expenses.

Voyage Expenses

Voyage expenses decreased by $1.0 million to $8.4 million in the three months ended June 30, 2023 from $9.4 million in the three months ended June 30, 2022 primarily as a result of a decrease in the average number of vessels in our fleet.

Interest Expense and Interest Income

Interest expense decreased by 63.4%, or $10.2 million, to $5.9 million in the three months ended June 30, 2023 from $16.1 million in the three months ended June 30, 2022. The decrease in interest expense is a result of:

  • a $5.3 million decrease in interest expense due to a decrease in our average indebtedness by $694.3 million between the two periods. Average indebtedness was $459.9 million in the three months ended June 30, 2023, compared to average indebtedness of $1,154.2 million in the three months ended June 30, 2022. This decrease was partially offset by an increase in our debt service cost by approximately 2.9% as a result of higher interest rates;
  • a $3.0 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the three months ended June 30, 2023;
  • a $2.6 million decrease in the amortization of deferred finance costs and debt discount; and
  • a $0.7 million reduction of accumulated accrued interest that had been accrued in 2018 in relation to two of our credit facilities that were fully repaid in May 2022.

As of June 30, 2023, outstanding debt, gross of deferred finance costs, was $424.3 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $885.1 million, which included $300.0 million principal amount of our Senior Notes, and a leaseback obligation of $105.8 million, gross of deferred finance costs, as of June 30, 2022.

Interest income increased by $3.5 million to $3.6 million in the three months ended June 30, 2023 compared to $0.1 million in the three months ended June 30, 2022 mainly as a result of increased interest rates in the three months ended June 30, 2023.

Gain/(loss) on investments

We recognized a $6.4 million gain on marketable securities in the three months ended June 30, 2023 on our shareholding interest in Eagle Bulk of 1,552,865 shares of common stock. This gain compares to a loss on investments of $152.4 million in the three months ended June 30, 2022, which consisted of the change in fair value of our shareholding interest in ZIM of $168.6 million and dividends recognized on ZIM ordinary shares of $16.2 million. In September 2022, we sold all of our remaining ordinary shares of ZIM for net proceeds of $161.3 million.

Gain/(loss) on debt extinguishment

A $2.3 million loss on early extinguishment of our leaseback obligations in the three months ended June 30, 2023 compares to a $22.9 million gain related to our early extinguishment of debt in the three months ended June 30, 2022.

Equity loss on investments

Equity loss on investments amounting to $0.7 million in the three months ended June 30, 2023 relates to our share of initial expenses of a newly established company, Carbon Termination Technologies Corporation (“CTTC”), currently engaged in the research and development of decarbonization technologies for the shipping industry.

Other finance expenses

Other finance expenses increased by $0.8 million to $1.1 million in the three months ended June 30, 2023 compared to $0.3 million in the three months ended June 30, 2022 mainly due to commitment fees for our recently established revolving credit facility.

Loss on derivatives

Amortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three months ended June 30, 2023 and June 30, 2022.

Other income/(expenses), net

Other income, net was $0.3 million in the three months ended June 30, 2023 compared to other income, net of $0.4 million in the three months ended June 30, 2022.

Income taxes

Income taxes of $2.3 million in the three months ended June 30, 2022, related to the taxes withheld on dividend income earned on ZIM ordinary shares compare to no income tax in the three months ended June 30, 2023.

Adjusted EBITDA

Adjusted EBITDA decreased by 7.7%, or $14.8 million, to $177.3 million in the three months ended June 30, 2023 from $192.1 million in the three months ended June 30, 2022. As outlined above, the decrease is primarily attributable to a recognition of a $13.9 million dividend from ZIM in the three months ended June 30, 2022. We also incurred a $0.6 million increase in total operating expenses and a $0.7 million equity loss on investments in the three months ended June 30, 2023, which were partially offset by a $0.4 million increase in operating revenues. Adjusted EBITDA for the three months ended June 30, 2023 is adjusted for a $6.4 million change in fair value of investments and a $2.3 million loss on debt extinguishment. Tables reconciling Net Income to Adjusted EBITDA can be found at the end of this earnings release.

Six months ended June 30, 2023 compared to the six months ended June 30, 2022

During the six months ended June 30, 2023, Danaos had an average of 68.2 containerships compared to 71.0 containerships during the six months ended June 30, 2022. Our fleet utilization for the six months ended June 30, 2023 was 97.8% compared to 98.7% for the six months ended June 30, 2022.

Our adjusted net income amounted to $288.7 million, or $14.28 per share, for the six months ended June 30, 2023 compared to $392.4 million, or $18.95 per share, for the six months ended June 30, 2022. We have adjusted our net income in the six months ended June 30, 2023 for a $6.4 million change in fair value of investments, a $2.3 million loss on debt extinguishment, a $1.6 million gain on sale of vessel and a $1.3 million non-cash fees amortization. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

The $103.7 million decrease in adjusted net income for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 is primarily attributable to a $123.9 million dividend from ZIM (net of withholding taxes) recognized in the six months ended June 30, 2022. We also incurred a $3.3 million equity loss on investments in the six months ended June 30, 2023 and a $1.0 million increase in total operating expenses, which were partially offset by a $4.2 million increase in operating revenues and a $20.3 million decrease in net finance expenses.

On a non-adjusted basis, our net income amounted to $293.2 million, or $14.51 earnings per diluted share, for the six months ended June 30, 2023 compared to net income of $339.7 million, or $16.40 earnings per diluted share, for the six months ended June 30, 2022. Our net income for the six months ended June 30, 2022 included a total gain on our investment in ZIM of $54.8 million, net of withholding taxes on dividends and a gain on debt extinguishment of $22.9 million compared to a $6.4 million gain on our investments and a $2.3 million loss on debt extinguishment for the six months ended June 30, 2023.

Operating Revenues

Operating revenues increased by 0.9%, or $4.2 million, to $485.0 million in the six months ended June 30, 2023 from $480.8 million in the six months ended June 30, 2022.

Operating revenues for the six months ended June 30, 2023 reflect:

  • a $35.9 million increase in revenues in the six months ended June 30, 2023 compared to the six months ended June 30, 2022 mainly as a result of higher charter rates;
  • a $8.7 million decrease in revenues in the six months ended June 30, 2023 compared to the six months ended June 30, 2022 due to vessel disposals;
  • a $3.0 million decrease in revenues in the six months ended June 30, 2023 compared to the six months ended June 30, 2022 due to lower non-cash revenue recognition in accordance with US GAAP; and
  • a $20.0 million decrease in revenues in the six months ended June 30, 2023 compared to the six months ended June 30, 2022 due to decreased amortization of assumed time charters.

Vessel Operating Expenses

Vessel operating expenses increased by $2.8 million to $82.5 million in the six months ended June 30, 2023 from $79.7 million in the six months ended June 30, 2022, primarily as a result of an increase in the average daily operating cost for vessels on time charter to $6,889 per vessel per day for the six months ended June 30, 2023 compared to $6,385 per vessel per day for the six months ended June 30, 2022, which was partially offset by a decrease in the average number of vessels in our fleet. The average daily operating cost increased mainly due to increased repair and maintenance expenses. Management believes that our daily operating costs remain among 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 5.5%, or $3.7 million, to $63.4 million in the six months ended June 30, 2023 from $67.1 million in the six months ended June 30, 2022 due to our recent sale of three vessels.

Amortization of Deferred Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs increased by $2.4 million to $8.3 million in the six months ended June 30, 2023 from $5.9 million in the six months ended June 30, 2022.

General and Administrative Expenses

General and administrative expenses decreased by $0.5 million to $14.0 million in the six months ended June 30, 2023, from $14.5 million in the six months ended June 30, 2022. The decrease was primarily attributable to decreased management fees due to the recent sale of three vessels.

Other Operating Expenses

Other Operating Expenses include Voyage Expenses.

Voyage Expenses

Voyage expenses decreased by $0.3 million to $16.3 million in the six months ended June 30, 2023 from $16.6 million in the six months ended June 30, 2022.

Gain on Sale of Vessels

In January 2023, we completed the sale of the Amalia C for net proceeds of $4.9 million resulting in a gain of $1.6 million.

Interest Expense and Interest Income

Interest expense decreased by 62.0%, or $20.6 million, to $12.6 million in the six months ended June 30, 2023 from $33.2 million in the six months ended June 30, 2022. The decrease in interest expense is a result of:

  • a $10.9 million decrease in interest expense due to a decrease in our average indebtedness by $771.2 million between the two periods. Average indebtedness was $483.7 million in the six months ended June 30, 2023, compared to average indebtedness of $1,254.9 million in the six months ended June 30, 2022. This decrease was partially offset by an increase in our debt service cost by approximately 2.9% as a result of higher interest rates;
  • a $6.5 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the six months ended June 30, 2023;
  • a $5.3 million decrease in the amortization of deferred finance costs and debt discount; and
  • a $2.1 million reduction of accumulated accrued interest that had been accrued in 2018 in relation to two of our credit facilities that were fully repaid in May 2022.

As of June 30, 2023, outstanding debt, gross of deferred finance costs, was $424.3 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $885.1 million, which included $300.0 million principal amount of our Senior Notes, and a leaseback obligation of $105.8 million, gross of deferred finance costs, as of June 30, 2022.

Interest income increased by $6.2 million to $6.3 million in the six months ended June 30, 2023 compared to $0.1 million in the six months ended June 30, 2022 mainly as a result of increased interest rates in the six months ended June 30, 2023.

Gain on investments

We recognized a $6.4 million gain on marketable securities in the six months ended June 30, 2023 on our shareholding interest in Eagle Bulk of 1,552,865 shares of common stock. This gain compares to a gain on investments of $69.3 million in the six months ended June 30, 2022, which consisted of the change in fair value of our shareholding interest in ZIM of $69.1 million and dividends recognized on ZIM ordinary shares of $138.4 million. In September 2022, we sold all of our remaining ordinary shares of ZIM for net proceeds of $161.3 million.

Gain/(loss) on debt extinguishment

A $2.3 million loss on early extinguishment of our leaseback obligations in the six months ended June 30, 2023 compares to a $22.9 million gain related to our early extinguishment of debt in the six months ended June 30, 2022.

Equity loss on investments

Equity loss on investments amounting to $3.3 million in the six months ended June 30, 2023 relates to our share of initial expenses of a newly established company, CTTC, currently engaged in the research and development of decarbonization technologies for the shipping industry.

Other finance expenses

Other finance expenses increased by $1.2 million to $2.1 million in the six months ended June 30, 2023 compared to $0.9 million in the six months ended June 30, 2022 mainly due to commitment fees for our recently established revolving credit facility.

Loss on derivatives

Amortization of deferred realized losses on interest rate swaps remained stable at $1.8 million in each of the six months ended June 30, 2023 and June 30, 2022.

Other income/(expenses), net

Other income, net was $0.5 million in the six months ended June 30, 2023 compared to other income, net of $0.9 million in the six months ended June 30, 2022.

Income taxes

Income taxes of $14.5 million, in the six months ended June 30, 2022, related to the taxes withheld on dividend income earned on ZIM ordinary shares and compared to no income tax in the six months ended June 30, 2023.

Adjusted EBITDA

Adjusted EBITDA decreased by 22.8%, or $105.3 million, to $356.3 million in the six months ended June 30, 2023 from $461.6 million in the six months ended June 30, 2022. As outlined above, the decrease is mainly attributable to a recognition of a $123.9 million dividend from ZIM in the six months ended June 30, 2022. We also incurred a $2.3 million increase in total operating expenses and a $3.3 million equity loss on investments in the six months ended June 30, 2023, which were partially offset by a $24.2 million increase in operating revenues. Adjusted EBITDA for the six months ended June 30, 2023 is adjusted for a $6.4 million change in fair value of investments, a $2.3 million loss on debt extinguishment and a $1.6 million gain on sale of vessel. Tables reconciling Net Income to Adjusted EBITDA can be found at the end of this earnings release.

Dividend Payment

Danaos has declared a dividend of $0.75 per share of common stock for the second quarter of 2023, which is payable on September 1, 2023 to stockholders of record as of August 23, 2023.

Recent Developments

As of the date of this release, we have repurchased a total of 1,080,547 shares of our common stock in the open market for $65.6 million, under our share repurchase program of up to $100 million announced in June 2022.

On June 20, 2023, we entered into contracts for the construction of two 8,258 TEU containerships with the latest eco design characteristics. The containerships are expected to be delivered to us in 2026.

In July 2023, we reached an in principle agreement to acquire 5 Capesize bulk carriers built in 2010 through 2012 that aggregate to 879,306 DWT for a total of $103 million. The agreement is subject to entry into definitive documentation. These vessels are expected to be delivered to us between September and October 2023.

Conference Call and Webcast

On Monday, August 7, 2023 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 August 14, 2023 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 6018489# as the access code.

Audio Webcast

There will also be a live and then archived webcast of the conference call on 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.

Slide Presentation

A slide presentation regarding the Company and the containership industry will also be available on the Danaos website (www.danaos.com).

About Danaos Corporation

Danaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 68 containerships aggregating 421,293 TEUs and 10 under construction containerships aggregating 74,914 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Our containerships fleet is chartered to many of the world's largest liner companies on fixed-rate charters. In addition to our containership fleet, we have recently reached an in principle agreement to acquire 5 Capesize bulk carriers aggregating 879,306 DWT. 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 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. 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 any resurgence of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity, demand for seaborne transportation of containerized and drybulk cargo, the ability and willingness of charterers to perform their obligations to us, charter rates for containerships and drybulk carriers, shipyards constructing our contracted newbuilding vessels, performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing, 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 dry-docking, changes in Danaos Corporation's operating expenses, including bunker prices, dry-docking and insurance costs, our ability to operate profitably in the drybulk sector, 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, including the conflict in Ukraine and related sanctions, 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 2 unscheduled off-hire days in the three months ended June 30, 2023. 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

2023

2023

Total

Ownership Days

6,150

6,188

12,338

Less Off-hire Days:

Scheduled Off-hire Days

(150)

(80)

(230)

Other Off-hire Days

(44)

(2)

(46)

Operating Days

5,956

6,106

12,062

Vessel Utilization

96.8%

98.7%

97.8%

 

Operating Revenues (in '000s of US Dollars)

$243,574

$241,479

$485,053

Average Gross Daily Charter Rate

$40,896

$39,548

$40,213

 

Vessel Utilization (No. of Days)

First

Quarter

Second

Quarter

2022

2022

Total

Ownership Days

6,390

6,461

12,851

Less Off-hire Days:

Scheduled Off-hire Days

(148)

-

(148)

Other Off-hire Days

(16)

(8)

(24)

Operating Days

6,226

6,453

12,679

Vessel Utilization

97.4%

99.9%

98.7%

 

Operating Revenues (in '000s of US Dollars)

$229,901

$250,923

$480,824

Average Gross Daily Charter Rate

$36,926

$38,885

$37,923

 

Fleet List

The following table describes in detail our fleet deployment profile of our containerships as of August 3, 2023:

Vessel Name

Vessel Size

(TEU)

 

Year Built

 

Expiration of Charter(1)

Hyundai Ambition

13,100

 

2012

 

June 2024

Hyundai Speed

13,100

 

2012

 

June 2024

Hyundai Smart

13,100

 

2012

 

June 2027

Hyundai Respect

13,100

 

2012

 

April 2027

Hyundai Honour

13,100

 

2012

 

March 2027

Express Rome

10,100

 

2011

 

May 2024

Express Berlin

10,100

 

2011

 

August 2026

Express Athens

10,100

 

2011

 

May 2024

Le Havre

9,580

 

2006

 

June 2028

Pusan C

9,580

 

2006

 

May 2028

Bremen

9,012

 

2009

 

January 2028

C Hamburg

9,012

 

2009

 

January 2028

Niledutch Lion

8,626

 

2008

 

May 2026

Kota Manzanillo

8,533

 

2005

 

February 2026

Belita

8,533

 

2006

 

July 2026

CMA CGM Melisande

8,530

 

2012

 

January 2028

CMA CGM Attila

8,530

 

2011

 

May 2027

CMA CGM Tancredi

8,530

 

2011

 

July 2027

CMA CGM Bianca

8,530

 

2011

 

September 2027

CMA CGM Samson

8,530

 

2011

 

November 2027

America

8,468

 

2004

 

April 2028

Europe

8,468

 

2004

 

May 2028

Kota Santos

8,463

 

2005

 

August 2026

CMA CGM Moliere

6,500

 

2009

 

March 2027

CMA CGM Musset

6,500

 

2010

 

September 2025

CMA CGM Nerval

6,500

 

2010

 

November 2025

CMA CGM Rabelais

6,500

 

2010

 

January 2026

Racine (ex CMA CGM Racine)

6,500

 

2010

 

April 2026

YM Mandate

6,500

 

2010

 

January 2028

YM Maturity

6,500

 

2010

 

April 2028

Zim Savannah

6,402

 

2002

 

May 2024

Dimitra C

6,402

 

2002

 

January 2024

Suez Canal

5,610

 

2002

 

April 2026

Kota Lima

5,544

 

2002

 

November 2024

Wide Alpha

5,466

 

2014

 

March 2024

Stephanie C

5,466

 

2014

 

June 2025

Maersk Euphrates

5,466

 

2014

 

April 2024

Wide Hotel

5,466

 

2015

 

May 2024

Wide India

5,466

 

2015

 

November 2025

Wide Juliet

5,466

 

2015

 

October 2025

Seattle C

4,253

 

2007

 

October 2024

Vancouver

4,253

 

2007

 

November 2024

Derby D

4,253

 

2004

 

January 2027

Tongala

4,253

 

2004

 

November 2024

Rio Grande

4,253

 

2008

 

November 2024

Paolo (ex ZIM Sao Paolo)

4,253

 

2008

 

August 2025

Kingston (ex ZIM Kingston)

4,253

 

2008

 

June 2025

ZIM Monaco

4,253

 

2009

 

October 2024

Dalian

4,253

 

2009

 

March 2026

ZIM Luanda

4,253

 

2009

 

August 2025

Dimitris C

3,430

 

2001

 

November 2025

Express Black Sea

3,400

 

2011

 

January 2025

Express Spain

3,400

 

2011

 

January 2025

Express Argentina

3,400

 

2010

 

September 2023

Express Brazil

3,400

 

2010

 

June 2025

Express France

3,400

 

2010

 

September 2025

Singapore

3,314

 

2004

 

May 2024

Colombo

3,314

 

2004

 

January 2025

Zebra

2,602

 

2001

 

November 2024

Artotina

2,524

 

2001

 

May 2025

Advance

2,200

 

1997

 

January 2025

Future

2,200

 

1997

 

December 2024

Sprinter

2,200

 

1997

 

December 2024

Stride

2,200

 

1997

 

January 2025

Progress C

2,200

 

1998

 

November 2024

Bridge

2,200

 

1998

 

December 2024

Highway

2,200

 

1998

 

November 2023

Phoenix D

2,200

 

1997

 

March 2025

(1)

Earliest date charters could expire. Some charters include options for the charterer to extend their terms.

Dry bulk vessels agreed (in principle) to be acquired:

 

 

Vessel Name

Capacity

(DWT)

 

Year Built

 

 

Bulk Achievement

175,850

 

2011

 

 

Bulk Genius

175,580

 

2012

 

 

Bulk Ingenuity

176,022

 

2011

 

 

Bulk Integrity

175,996

 

2010

 

 

Bulk Peace

175,858

 

2010

 

 

 

Containerships under construction:

 

 

Hull Number

Vessel Size

(TEU)

 

Expected

Delivery Year

 

Minimum Charter

Duration

Hull No. C7100-7

7,165

 

2024

 

3 Years

Hull No. C7100-8

7,165

 

2024

 

3 Years

Hull No. HN4009

8,010

 

2024

 

3 Years

Hull No. HN4010

8,010

 

2024

 

3 Years

Hull No. HN4011

8,010

 

2024

 

3 Years

Hull No. HN4012

8,010

 

2024

 

3 Years

Hull No. CV5900-07

6,014

 

2024

 

-

Hull No. CV5900-08

6,014

 

2025

 

-

Hull No. YZJ2023-1556

8,258

 

2026

 

-

Hull No. YZJ2023-1557

8,258

 

2026

 

-

 

DANAOS CORPORATION

Condensed Consolidated Statements of Income - Unaudited

(Expressed in thousands of United States dollars, except per share amounts)

 

 

Three months ended

 

Three months ended

 

Six months ended

 

Six months ended

June 30,

June 30,

June 30,

June 30,

 

 

2023

 

2022

 

2023

 

2022

OPERATING REVENUES

$241,479

 

$250,923

 

$485,053

 

$480,824

OPERATING EXPENSES

 

 

 

 

 

 

 

 

Vessel operating expenses

(41,861)

 

(40,579)

 

(82,500)

 

(79,743)

 

Depreciation & amortization

(36,412)

 

(36,955)

 

(71,776)

 

(73,034)

 

General & administrative

(7,192)

 

(7,136)

 

(14,037)

 

(14,527)

 

Other operating expenses

(8,399)

 

(9,443)

 

(16,282)

 

(16,632)

 

Gain on sale of vessels

-

 

-

 

1,639

 

-

Income From Operations

147,615

 

156,810

 

302,097

 

296,888

 

 

 

 

 

 

 

 

 

OTHER INCOME/(EXPENSES)

 

 

 

 

 

 

 

 

Interest income

3,596

 

120

 

6,319

 

121

 

Interest expense

(5,881)

(16,079)

(12,603)

(33,193)

 

Gain/(loss) on investments

6,438

(152,427)

6,438

69,290

 

Gain/(loss) on debt extinguishment

(2,254)

22,939

(2,254)

22,939

 

Other finance expenses

(1,146)

(336)

(2,122)

(941)

 

Equity loss on investments

(738)

 

-

 

(3,326)

 

-

 

Other income/(expenses), net

294

 

362

 

469

 

861

 

Realized loss on derivatives

(903)

 

(903)

 

(1,796)

 

(1,796)

Total Other Income/(Expenses), net

(594)

 

(146,324)

 

(8,875)

 

57,281

Income Before Income Taxes

147,021

 

10,486

 

293,222

 

354,169

 

Income taxes

-

 

(2,262)

 

-

 

(14,480)

Net Income

$147,021

 

$8,224

 

$293,222

 

$339,689

EARNINGS PER SHARE

 

 

 

 

 

 

 

Basic earnings per share

$7.32

 

$0.40

 

$14.51

 

$16.42

Diluted earnings per share

$7.32

 

$0.40

 

$14.51

 

$16.40

Basic weighted average number of common shares (in thousands of shares)

20,081

 

20,689

20,214

 

20,693

Diluted weighted average number of common shares (in thousands of shares)

20,081

 

20,708

20,214

20,712

 

Non-GAAP Measures1

Reconciliation of Net Income to Adjusted Net Income – Unaudited

 

Three months ended

 

Three months ended

Six months ended

 

Six months ended

June 30,

June 30,

June 30,

June 30,

 

2023

 

2022

2023

 

2022

Net income

$147,021

 

$8,224

$293,222

 

$339,689

Change in fair value of investments

(6,438)

 

168,635

(6,438)

 

69,096

Loss/(gain) on debt extinguishment

2,254

 

(22,939)

2,254

 

(22,939)

Gain on sale of vessels

-

 

-

(1,639)

 

-

Amortization of financing fees and debt discount

568

 

3,190

1,261

 

6,561

Adjusted Net Income

$143,405

 

$157,110

$288,660

 

$392,407

Adjusted Earnings Per Share, diluted

$7.14

 

$7.59

$14.28

 

$18.95

Diluted weighted average number of shares (in thousands of shares)

20,081

 

20,708

20,214

 

20,712

1 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 six months ended June 30, 2023 and 2022. 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 Consolidated Balance Sheets - Unaudited

(Expressed in thousands of United States dollars)

 

 

 

As of

 

As of

June 30,

December 31,

 

 

 

2023

 

2022

ASSETS

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$293,331

 

$267,668

 

Accounts receivable, net

 

8,091

 

5,635

 

Other current assets

 

186,361

 

99,218

 

 

 

487,783

 

372,521

NON-CURRENT ASSETS

 

 

 

 

 

Fixed assets, net

 

2,661,976

 

2,721,494

 

Advances for vessels under construction

 

215,786

 

190,736

 

Deferred charges, net

 

31,777

 

25,554

 

Investments in affiliates

 

937

 

-

 

Other non-current assets

 

86,173

 

89,923

 

 

 

2,996,649

 

3,027,707

TOTAL ASSETS

 

$3,484,432

 

$3,400,228

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Long-term debt, current portion

 

$27,500

 

$27,500

 

Long-term leaseback obligations, current portion

 

-

 

27,469

 

Accounts payable, accrued liabilities & other current liabilities

 

157,572

 

173,438

 

 

 

185,072

 

228,407

LONG-TERM LIABILITIES

 

 

 

 

 

Long-term debt, net

 

389,564

 

402,440

 

Long-term leaseback obligations, net

 

-

 

44,542

 

Other long-term liabilities

 

120,314

 

164,425

 

 

 

509,878

 

611,407

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Common stock

 

197

 

203

 

Additional paid-in capital

 

712,154

 

748,109

 

Accumulated other comprehensive loss

 

(72,041)

 

(74,209)

 

Retained earnings

 

2,149,172

 

1,886,311

 

 

 

2,789,482

 

2,560,414

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$3,484,432

 

$3,400,228

 

DANAOS CORPORATION

Condensed Consolidated Statements of Cash Flows - Unaudited

(Expressed in thousands of United States dollars)

 

 

Three months ended

 

Three months ended

 

Six months ended

 

Six months ended

June 30,

June 30,

June 30,

June 30,

 

 

2023

 

2022

 

2023

 

2022

Operating Activities:

 

 

 

 

 

 

 

 

Net income

$147,021

 

$8,224

 

$293,222

 

$339,689

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization of right-of-use assets

31,910

 

33,753

 

63,439

 

67,112

 

Amortization of deferred drydocking & special survey costs, finance cost and debt discount

5,070

 

6,392

 

9,598

 

12,483

 

Amortization of assumed time charters

(5,854)

 

(15,713)

 

(12,390)

 

(32,364)

 

Prior service cost and periodic cost

394

 

-

 

886

 

-

 

Loss/(gain) on investments

(6,438)

 

168,635

 

(6,438)

 

69,096

 

Loss/(gain) on debt extinguishment

2,254

 

(22,939)

 

2,254

 

(22,939)

 

Gain on sale of vessels

-

 

-

 

(1,639)

 

-

 

Payments for drydocking/special survey

(4,818)

 

(471)

 

(14,560)

 

(9,726)

 

Equity loss on investments

738

 

-

 

3,326

 

-

 

Amortization of deferred realized losses on cash flow interest rate swaps

903

 

903

 

1,796

 

1,796

 

Stock based compensation

-

 

124

 

-

 

248

 

Accounts receivable

(517)

 

1,593

 

(2,456)

 

1,578

 

Other assets, current and non-current

(3,612)

 

89,987

 

(12,406)

 

(43,430)

 

Accounts payable and accrued liabilities

1,934

 

(800)

 

(3,151)

 

4,841

 

Other liabilities, current and long-term

(15,973)

 

231,326

 

(40,875)

 

232,094

Net Cash provided by Operating Activities

153,012

 

501,014

 

280,606

 

620,478

 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

 

 

Vessel additions and advances for vessels under construction

(24,048)

 

(82,004)

 

(29,784)

 

(84,047)

 

Proceeds and advances received from sale of vessels

-

85,333

3,914

 

13,000

 

Proceeds from sale of investments

-

-

-

 

85,333

 

Investments in affiliates/marketable securities

(70,144)

 

-

 

(74,407)

 

-

Net Cash provided by/(used in) Investing Activities

(94,192)

 

3,329

 

(100,277)

 

14,286

 

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from long-term debt

-

 

127,725

 

-

 

127,725

 

Debt repayment

(6,875)

 

(358,825)

 

(13,750)

 

(383,125)

 

Payments of leaseback obligations

(66,296)

 

(104,394)

 

(72,925)

 

(120,687)

 

Dividends paid

(15,099)

 

(15,535)

 

(30,361)

 

(31,070)

 

Repurchase of common stock

(35,157)

 

(6,325)

 

(35,738)

 

(6,325)

 

Payments of accumulated accrued interest

-

 

(1,938)

 

-

 

(3,373)

 

Finance costs

(1,642)

 

(11,142)

 

(1,892)

 

(15,092)

Net Cash used in Financing Activities

(125,069)

 

(370,434)

 

(154,666)

 

(431,947)

Net increase/(decrease) in cash, cash equivalents and restricted cash

(66,249)

 

133,909

 

25,663

 

202,817

Cash, cash equivalents and restricted cash, beginning of period

359,580

 

198,664

 

267,668

 

129,756

Cash, cash equivalents and restricted cash, end of period

$293,331

 

$332,573

 

$293,331

 

$332,573

 

DANAOS CORPORATION

Reconciliation of Net Income to Adjusted EBITDA - Unaudited

(Expressed in thousands of United States dollars)

 

Three months ended

 

Three months ended

 

Six months ended

 

Six months ended

June 30,

June 30,

June 30,

June 30,

 

2023

 

2022

 

2023

 

2022

Net income

$147,021

 

$8,224

 

$293,222

 

$339,689

Depreciation and amortization of right-of-use assets

31,910

 

33,753

 

63,439

 

67,112

Amortization of deferred drydocking & special survey costs

4,502

 

3,202

 

8,337

 

5,922

Amortization of assumed time charters

(5,854)

 

(15,713)

 

(12,390)

 

(32,364)

Amortization of deferred finance costs, debt discount and commitment fees

1,311

 

3,190

 

2,762

 

6,561

Amortization of deferred realized losses on interest rate swaps

903

 

903

 

1,796

 

1,796

Interest income

(3,596)

 

(120)

 

(6,319)

 

(121)

Interest expense

5,313

 

12,889

 

11,342

 

26,632

Income taxes

-

 

2,262

 

-

 

14,480

Loss/(gain) on investments and dividend withholding taxes

(6,438)

166,373

(6,438)

54,616

Loss/(gain) on debt extinguishment

2,254

(22,939)

2,254

(22,939)

Gain on sale of vessels

-

-

(1,639)

-

Stock based compensation

-

 

124

 

-

 

248

Adjusted EBITDA(1)

$177,326

 

$192,148

 

$356,366

 

$461,632

1)

Adjusted EBITDA represents net income before interest income and expense, taxes other than withholding taxes on dividend, depreciation, amortization of deferred drydocking & special survey costs, amortization of assumed time charters, amortization of deferred finance costs, debt discount and commitment fees, amortization of deferred realized losses on interest rate swaps, gain/loss on investments, gain/loss on debt extinguishment, gain on sale of vessels and stock based compensation. 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 six months ended June 30, 2023 and 2022. 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.

 

For further information:

Company Contact: Evangelos Chatzis Chief Financial Officer Danaos Corporation Athens, Greece Tel.: +30 210 419 6480 E-Mail: cfo@danaos.com

Iraklis Prokopakis Senior Vice President and Chief Operating Officer Danaos Corporation Athens, Greece Tel.: +30 210 419 6400 E-Mail: coo@danaos.com

Investor Relations and Financial Media Rose & Company New York Tel. 212-359-2228 E-Mail: danaos@rosecoglobal.com

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