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, 2023.

Highlights for the Fourth Quarter and Year Ended December 31, 2023:

 

Financial Summary Three Months Ended December 31, 2023 and Three Months Ended December 31, 2022 Unaudited (Expressed in thousands of United States dollars, except as otherwise stated)

   

 

 

Three Months Ended

 

 

Three Months Ended

 

 

December 31, 2023

 

 

December 31, 2022

Financial & Operating Metrics

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

 

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

Operating Revenues

 

$238,924

 

$10,391

 

-

 

$249,315

 

 

$252,483

 

-

 

-

 

$252,483

Voyage Expenses, excl. commissions

 

$(437)

 

$(6,446)

 

-

 

$(6,883)

 

 

$(455)

 

-

 

-

 

$(455)

Time Charter Equivalent Revenues (1)

 

$238,487

 

$3,945

 

-

 

$242,432

 

 

$252,028

 

-

 

-

 

$252,028

Net income / (loss)

 

$130,996

 

$(1,851)

 

$20,776

 

$149,921

 

 

$152,721

 

-

 

-

 

$152,721

Adjusted net income / (loss) (2)

 

$137,582

 

$(1,631)

 

$14

 

$135,965

 

 

$141,651

 

-

 

-

 

$141,651

Earnings per share, basic

 

 

 

 

 

 

 

$7.73

 

 

 

 

 

 

 

 

$7.54

Earnings per share, diluted

 

 

 

 

 

 

 

$7.70

 

 

 

 

 

 

 

 

$7.54

Adjusted earnings per share, diluted (2)

 

 

 

 

 

 

 

$6.99

 

 

 

 

 

 

 

 

$6.99

Operating Days

 

6,109

 

337

 

-

 

 

 

 

6,090

 

-

 

-

 

 

Time Charter Equivalent $/day (1)

 

$39,039

 

$11,706

 

-

 

 

 

 

$41,384

 

-

 

-

 

 

Ownership days

 

6,256

 

412

 

-

 

 

 

 

6,424

 

-

 

-

 

 

Average number of vessels

 

68.0

 

4.5

 

-

 

 

 

 

69.8

 

-

 

-

 

 

Fleet Utilization

 

97.7%

 

81.8%

 

-

 

 

 

 

94.8%

 

-

 

-

 

 

Adjusted EBITDA (2)

 

$173,083

 

$(488)

 

$14

 

$172,609

 

 

$176,422

 

-

 

-

 

$176,422

Consolidated Balance Sheet

& Leverage Metrics

As of December 31, 2023

 

 

 

 

 

 

As of December 31, 2022

Cash and cash equivalents

 

 

 

$271,809

 

 

 

 

 

 

 

 

$267,668

Undrawn revolving credit facility

 

 

 

337,500

 

 

 

 

 

 

 

 

382,500

Total available liquidity (3)

 

 

 

609,309

 

 

 

 

 

 

 

 

650,168

Debt, gross of deferred finance costs

 

 

 

410,516

 

 

 

 

 

 

 

 

510,941

Net Debt (4)

 

 

 

138,707

 

 

 

 

 

 

 

 

243,273

LTM Adjusted EBITDA (5)

 

 

 

707,002

 

 

 

 

 

 

 

 

851,160

Net Debt / LTM Adjusted EBITDA

 

 

 

0.20x

 

 

 

 

 

 

 

 

0.29x

1.

Time charter equivalent revenues, time charter equivalent US$/day are non-GAAP measures. Refer to the reconciliation provided below.

2.

Adjusted net income/(loss), 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.

3.

Total available liquidity is defined as cash and cash equivalents plus undrawn revolving credit facility

4.

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

5.

Last twelve months Adjusted EBITDA

 

For management purposes, the Company is organized based on operating revenues generated from containership vessels and dry bulk vessels and has two reporting segments: (1) a container vessels segment and (2) a dry bulk vessels segment. The Company measures segment performance based on net income. Items included in the applicable segment’s net income are directly allocated to the extent that the items are directly or indirectly attributable to the segments. With regards to the items that are allocated by indirect calculations, their allocation is commensurate to the utilization of key resources. The Other segment includes components that are not allocated to any of the Company’s reportable segments and includes investments in an affiliate accounted for using the equity method accounting and investments in marketable securities.

 

Financial Summary Year Ended December 31, 2023 and Year Ended December 31, 2022 Unaudited (Expressed in thousands of United States dollars, except as otherwise stated)

   

 

 

Year Ended

 

 

Year Ended

 

 

December 31, 2023

 

 

December 31, 2022

Financial & Operating Metrics

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

 

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

Operating Revenues

 

$963,192

 

$10,391

 

-

 

$973,583

 

 

$993,344

 

-

 

-

 

$993,344

Voyage Expenses, excl. commissions

 

$(1,662)

 

$(6,446)

 

-

 

$(8,108)

 

 

$(1,392)

 

-

 

-

 

$(1,392)

Time Charter Equivalent Revenues (1)

 

$961,530

 

$3,945

 

-

 

$965,475

 

 

$991,952

 

-

 

-

 

$991,952

Net income / (loss)

 

$563,279

 

$(1,910)

 

$14,930

 

$576,299

 

 

$588,447

 

-

 

$(29,237)

 

$559,210

Adjusted net income / (loss) (2)

 

$572,215

 

$(1,690)

 

$(2,937)

 

$567,588

 

 

$563,831

 

-

 

$147,149

 

$710,980

Earnings per share, basic

 

 

 

 

 

 

 

$28.99

 

 

 

 

 

 

 

 

$27.30

Earnings per share, diluted

 

 

 

 

 

 

 

$28.95

 

 

 

 

 

 

 

 

$27.28

Adjusted earnings per share, diluted (2)

 

 

 

 

 

 

 

$28.52

 

 

 

 

 

 

 

 

$34.68

Operating Days

 

24,286

 

337

 

-

 

 

 

 

25,111

 

-

 

-

 

 

Time Charter Equivalent $/day (1)

 

$39,592

 

$11,706

 

-

 

 

 

 

$39,503

 

-

 

-

 

 

Ownership days

 

24,850

 

417

 

-

 

 

 

 

25,807

 

-

 

-

 

 

Average number of vessels

 

68.1

 

1.1

 

-

 

 

 

 

70.7

 

-

 

-

 

 

Fleet Utilization

 

97.7%

 

80.8%

 

-

 

 

 

 

97.3%

 

-

 

-

 

 

Adjusted EBITDA (2)

 

$710,476

 

$(537)

 

$(2,937)

 

$707,002

 

 

$704,011

 

-

 

$147,149

 

$851,160

1.

Time charter equivalent revenues, time charter equivalent US$/day are non-GAAP measures. Refer to the reconciliation provided below.

2.

Adjusted net income/(loss), 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.

 
  • In December 2023, we completed the acquisition of our 7th Capesize bulk carrier. This brings the total aggregate capacity of our Capesize bulk carriers fleet to 1,231,157 DWT as of December 31, 2023. Additionally, in February 2024, we entered into agreements to acquire 2 Capesize bulk carriers that aggregate 354,579 DWT.
  • In February 2024 we added two additional 8,258 TEU newbuildings to our orderbook with expected deliveries during the fourth quarter of 2026 and first quarter of 2027, respectively. As a result, we now have 12 container vessels under construction with an aggregate capacity of 91,430 TEU, with expected deliveries of six vessels in 2024, two vessels in 2025, three vessels in 2026 and one vessel in 2027. 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.
  • As of the date of this release, Danaos has repurchased a total of 1,597,995 shares of its common stock in the open market for $99.2 million, under its share repurchase program of up to $100 million announced in June 2022. A $100 million increase to this program, for a total aggregate amount of $200 million, was approved by our Board on November 10, 2023.
  • During the last three months we added approximately $43 million to our contracted revenue backlog through the arrangement of new charters for five container vessels in our fleet.
  • As a result, total contracted cash operating revenues, on the basis of concluded charter contracts through the date of this release, are $2.3 billion. The remaining average contracted charter duration is 3.0 years, weighted by aggregate contracted charter hire.
  • Contracted operating days charter coverage for our containership fleet is currently 95.8% for 2024 and 62.0% for 2025.
  • Danaos has declared a dividend of $0.80 per share of common stock for the fourth quarter of 2023, which is payable on March 14, 2024, to stockholders of record as of February 28, 2024.

Danaos’ CEO Dr. John Coustas commented:

“Danaos continued to deliver strong results in the fourth quarter of 2023, as geopolitical events continued to impact global shipping markets. Mostly recently, the conflict in the Middle East expanded to the seas with attacks on vessels in the Red Sea area. This dramatically altered trade routes and the performance of liner companies as most major companies decided to reroute their vessels away from the Suez Canal, sailing longer distances around the Cape of Good Hope to reach Europe. This in turn increased ton mile demand, leading to a capacity shortage that drove box rates significantly higher by up to 300%, while it is expected that box rates will remain elevated as long as the disruption continues. Against this backdrop, we have some secured additional charters for our vessels at very healthy levels.

In the fourth quarter of 2023, Danaos completed delivery of all seven Capesize vessels that we had agreed to acquire earlier in 2023. Subsequent to the end of the year, we entered into agreements to acquire two additional Capesize vessels as we continue to diversify our revenues and look to capture upside from a healthy dry bulk market. The market for Capesize vessels is showing unusual seasonal strength as Brazilian iron ore exports increase, the coal trade remains elevated, and demand for minor bulks like bauxite and agricultural commodities is following a global recovery. Recent stimulus measures in China aimed at supporting construction, infrastructure projects, and consumer demand is expected to keep demand steady as fleet growth begins to slow over the next two years. We continue to explore interesting opportunities in the dry bulk sector.

Danaos has also recently ordered two more 8,258 TEU vessels at Yangzijiang shipyard and we now have a total of four vessels under construction at that shipyard with deliveries scheduled for the second half of 2026 and the first quarter of 2027. All twelve vessels in our newbuilding program are methanol ready and are designed with the latest eco characteristics. Demand for shipyard delivery slots is very high as the industry is quickly moving to reduce carbon emissions by operating green vessels.

As we continue to execute our strategy, we remain focused on taking actions that will ultimately benefit our shareholders. Danaos is well positioned with a very strong balance sheet and significant revenue visibility into 2025. This provides us with the flexibility to return value to our shareholders through dividends and share repurchases and also pursue opportunities to ensure the long-term resilience of the company.”

Three months ended December 31, 2023 compared to the three months ended December 31, 2022

During the three months ended December 31, 2023, Danaos had an average of 68.0 container vessels and 4.5 Capesize bulk carriers compared to 69.8 container vessels during the three months ended December 31, 2022. Our container vessels utilization for the three months ended December 31, 2023 was 97.7% compared to 94.8% for the three months ended December 31, 2022. The increase in container vessels utilization was mainly due to the decreased days of scheduled dry-docking of our vessels.

Our adjusted net income amounted to $136.0 million, or $6.99 per share, for the three months ended December 31, 2023 compared to $141.7 million, or $6.99 per share, for the three months ended December 31, 2022. We have adjusted our net income in the three months ended December 31, 2023 for a $20.8 million change in fair value of investments, $6.3 million of stock based compensation and a $0.5 million non-cash fees amortization.

Adjusted net income of our container vessels segment amounted to $137.6 million for the three months ended December 31, 2023 compared to $141.7 million for the three months ended December 31, 2022. We adjusted net income of container vessels segment in the three months ended December 31, 2023 for $6.1 million of stock based compensation and a $0.5 million non-cash fees amortization.

Adjusted net loss of our drybulk vessels segment amounted to $1.6 million for the three months ended December 31, 2023 compared to none for the three months ended December 31, 2022, as we were not engaged in the drybulk vessels segment during that period. We adjusted net loss of our drybulk vessels segment in the three months ended December 31, 2023 for $0.2 million of stock based compensation.

Please refer to the Adjusted Net Income reconciliation tables, which appear later in this earnings release.

The $5.7 million decrease in adjusted net income for the three months ended December 31, 2023 compared to the three months ended December 31, 2022 is primarily attributable to a $17.0 million increase in total operating expenses, a $3.2 million decrease in operating revenues and a $0.1 million equity loss on investments, which were partially offset by a $7.5 million decrease in prior service cost of our defined benefit retirement plan, a $6.9 million decrease in net finance expenses and a $0.2 million increase in dividends received.

On a non-adjusted basis, our net income amounted to $149.9 million, or $7.70 earnings per diluted share, for the three months ended December 31, 2023 compared to net income of $152.7 million, or $7.54 earnings per diluted share, for the three months ended December 31, 2022. On a non-adjusted basis, the net income of our container vessels segment amounted to $131.0 million for the three months ended December 31, 2023. On a non-adjusted basis, the net loss of our drybulk vessels segment amounted to $1.9 million for the three months ended December 31, 2023.

Operating Revenues

Operating revenues decreased by 1.3%, or $3.2 million, to $249.3 million in the three months ended December 31, 2023 from $252.5 million in the three months ended December 31, 2022.

Operating revenues of our container vessels segment decreased by 5.4%, or $13.6 million, to $238.9 million in the three months ended December 31, 2023 from $252.5 million in the three months ended December 31, 2022.

Recently acquired drybulk vessels generated $10.4 million of operating revenues in the three months ended December 31, 2023 compared to no operating revenues in the three months ended December 31, 2022.

Operating revenues of container vessels for the three months ended December 31, 2023 reflect:

  • a $3.6 million decrease in revenues in the three months ended December 31, 2023 compared to the three months ended December 31, 2022 due to vessel disposals;
  • a $6.0 million decrease in revenues in the three months ended December 31, 2023 compared to the three months ended December 31, 2022 due to decreased amortization of assumed time charters;
  • a $6.1 million decrease in revenues in the three months ended December 31, 2023 compared to the three months ended December 31, 2022 mainly as a result of lower charter rates; which were partially offset by
  • a $2.1 million increase in revenue in the three months ended December 31, 2023 compared to the three months ended December 31, 2022 due to lower non-cash revenue recognition in accordance with US GAAP.

Vessel Operating Expenses

Vessel operating expenses increased by $0.1 million to $40.1 million in the three months ended December 31, 2023 from $40.0 million in the three months ended December 31, 2022, primarily as a result of the increase in the average number of vessels in our fleet, which was partially offset by the decrease in the average daily operating cost for vessels on time charters and voyage charters to $6,188 per vessel per day for the three months ended December 31, 2023 compared to $6,417 per vessel per day for the three months ended December 31, 2022. The average daily operating cost decreased mainly due to decreased insurance premiums. 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 increased by 1.5%, or $0.5 million, to $33.5 million in the three months ended December 31, 2023 from $33.0 million in the three months ended December 31, 2022 mainly due to increased depreciation of 7 recently acquired Capesize bulk carriers, which was partially offset by a decreased depreciation due to the sale of 3 container vessels in November 2022 through January 2023.

Amortization of Deferred Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs increased by $2.4 million to $5.6 million in the three months ended December 31, 2023 from $3.2 million in the three months ended December 31, 2022.

General and Administrative Expenses

General and administrative expenses increased by $7.5 million, to $22.4 million in the three months ended December 31, 2023 from $14.9 million in the three months ended December 31, 2022. The increase was mainly attributable to increased stock-based compensation.

Other Operating Expenses

Other Operating Expenses include Voyage Expenses.

Voyage Expenses

Voyage expenses increased by $7.6 million to $15.8 million in the three months ended December 31, 2023 from $8.2 million in the three months ended December 31, 2022 primarily as a result of the $7.1 million increase in voyage expenses of our recently acquired 7 Capesize bulk carriers, which generated revenue from voyage charter agreements compared to no such expenses in the three months ended December 31, 2022. Total voyage expenses comprised $8.9 million commissions and $6.9 million other voyage expenses in the three months ended December 31, 2023.

Voyage expenses of container vessels segment increased by $0.5 million to $8.7 million in the three months ended December 31, 2023 from $8.2 million in the three months ended December 31, 2022 mainly due to increased commissions. Total voyage expenses of container vessels comprised $8.2 million commissions and $0.5 million other voyage expenses in the three months ended December 31, 2023.

Voyage expenses of dry bulk vessels segment were $7.1 million in the three months ended December 31, 2023 compared to no voyage expenses in the three months ended December 31, 2022. Total voyage expenses of dry bulk vessels comprised $0.7 million commissions and $6.4 million other voyage expenses in the three months ended December 31, 2023.

Gain on sale of vessels

In November 2022, we completed the sale of the container vessels Catherine C and Leo C for net proceeds of $128.0 million resulting in a gain of $37.2 million compared to no gain on sale of vessels in the three months ended December 31, 2023.

Interest Expense and Interest Income

Interest expense decreased by 72.3%, or $9.4 million, to $3.6 million in the three months ended December 31, 2023 from $13.0 million in the three months ended December 31, 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 $392.8 million between the two periods. Average indebtedness was $415.1 million in the three months ended December 31, 2023, compared to average indebtedness of $807.9 million in the three months ended December 31, 2022. This decrease was partially offset by an increase in our debt service cost by approximately 1.3% as a result of higher interest rates;
  • a $2.4 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the three months ended December 31, 2023; and
  • a $1.7 million decrease in the amortization of deferred finance costs and debt discount.

As of December 31, 2023, our outstanding debt, gross of deferred finance costs, was $410.5 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $438.0 million, which included $262.8 million principal amount of our Senior Notes and our leaseback obligation was $72.9 million, gross of deferred finance costs, as of December 31, 2022.

Interest income decreased by $0.4 million to $2.7 million in the three months ended December 31, 2023 compared to $3.1 million in the three months ended December 31, 2022 mainly as a result of a decrease in average amount of time deposits between the two periods.

Gain on investments

The gain on investments of $20.9 million in the three months ended December 31, 2023 consisted of the change in fair value of our shareholding interest in Eagle Bulk (“EGLE”) of $20.8 million and dividends recognized on these shares of $0.1 million. This compares to no gain in the three months ended December 31, 2022 due to the sale of all our remaining ZIM ordinary shares in September 2022.

Loss on debt extinguishment

The loss on debt extinguishment of $18.6 million in the three months ended December 31, 2022 related to our early extinguishment of debt compared to none in the three months ended December 31, 2023.

Equity loss on investments

Equity loss on investments amounting to $0.1 million in the three months December 31, 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 $0.4 million to $0.9 million in the three months ended December 31, 2023 compared to $0.5 million in the three months ended December 31, 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 December 31, 2023 and December 31, 2022.

Other income/(expenses), net

Other expenses, net were $0.2 million in the three months ended December 31, 2023 compared to other expenses, net of $7.9 million in the three months ended December 31, 2022. The decrease in expenses was mainly due to reclassification of prior service cost of a defined benefit obligation of $7.8 million in the three months ended December 31, 2022.

Adjusted EBITDA

Adjusted EBITDA decreased by 2.2%, or $3.8 million, to $172.6 million in the three months ended December 31, 2023 from $176.4 million in the three months ended December 31, 2022. As outlined above, the decrease is mainly attributable to a $14.2 million increase in total operating expenses and a $0.1 million equity loss on investments, which were partially offset by a $7.5 million decrease in prior service cost of our defined benefit retirement plan, a $2.9 million increase in operating revenues and a $0.1 million increase in dividends received. Adjusted EBITDA for the three months ended December 31, 2023 is adjusted for a $20.8 million change in fair value of investments and stock-based compensation of $6.3 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Adjusted EBITDA of container vessels segment decreased by 1.9%, or $3.3 million, to $173.1 million in the three months ended December 31, 2023 from $176.4 million in the three months ended December 31, 2022.

Adjusted EBITDA of dry bulk vessels segment was ($0.5) million in the three months ended December 31, 2023. We did not have drybulk vessel operations in 2022.

Year ended December 31, 2023 compared to the year ended December 31, 2022

During the year ended December 31, 2023, Danaos had an average of 68.1 container vessels and 1.1 Capesize bulk carriers compared to 70.7 container vessels during the year ended December 31, 2022. Our container vessels utilization for the year ended December 31, 2023 was 97.7% compared to 97.3% for the year ended December 31, 2022. The increase in container vessels utilization was mainly due to the decreased days of scheduled dry-docking of our vessels.

Our adjusted net income amounted to $567.6 million, or $28.52 per share, for the year ended December 31, 2023 compared to $711.0 million, or $34.68 per share, for the year ended December 31, 2022. We have adjusted our net income in the year ended December 31, 2023 for a $17.9 million change in fair value on investments, $6.3 million of stock based compensation, a $2.3 million loss on early debt extinguishment, a $2.2 million non-cash fees amortization and a $1.6 million gain on sale of vessel.

Adjusted net income of our container vessels segment amounted to $572.2 million for the year ended December 31, 2023 compared to $563.8 million for the year ended December 31, 2022. We adjusted net income of container vessels in the year ended December 31, 2023 for $6.1 million of stock based compensation, a $2.3 million loss on early debt extinguishment, a $2.2 million non-cash fees amortization and a $1.6 million gain on sale of vessel.

Adjusted net loss of drybulk vessels segment amounted to $1.7 million for the year ended December 31, 2023 compared to none for the year ended December 31, 2022, as we were not engaged in the drybulk vessels segment during that period. We adjusted net loss of our drybulk vessels in the year ended December 31, 2023 for $0.2 million of stock based compensation.

Please refer to the Adjusted Net Income reconciliation tables, which appear later in this earnings release.

The $143.4 million decrease in adjusted net income for the year ended December 31, 2023 compared to the year ended December 31, 2022 is primarily attributable to a $146.1 million decrease in dividends received. We also incurred a $4.0 million equity loss on investments, a $19.7 million decrease in operating revenues and a $17.8 million increase in total operating expenses, which were partially offset by a $37.2 million decrease in net finance expenses and a $7.0 million decrease in prior service costs of our defined benefit retirement plan in the year ended December 31, 2023 compared to the year ended December 31, 2022.

On a non-adjusted basis, our net income amounted to $576.3 million, or $28.95 earnings per diluted share, for the year ended December 31, 2023 compared to net income of $559.2 million, or $27.28 earnings per diluted share, for the year ended December 31, 2022. Our net income for the year ended December 31, 2023 includes a $18.9 million gain on EGLE investment compared to a $29.2 million total loss on our ZIM investment in the year ended December 31, 2022. On a non-adjusted basis, the net income of our container vessels segment amounted to $563.3 million for the year ended December 31, 2023. On a non-adjusted basis, the net loss of our drybulk vessels segment amounted to $1.9 million for the year ended December 31, 2023.

Operating Revenues

Operating revenues decreased by 2.0%, or $19.7 million, to $973.6 million in the year ended December 31, 2023 from $993.3 million in the year ended December 31, 2022.

Operating revenues of our container vessels decreased by 3.0%, or $30.1 million, to $963.2 million in the year ended December 31, 2023 from $993.3 million in the ended December 31, 2022.

Recently acquired drybulk vessels generated $10.4 million operating revenues in the year ended December 31, 2023 compared to no operating revenues in the year ended December 31, 2022.

Operating revenues of container vessels for the year ended December 31, 2023 reflect:

  • a $27.1 million increase in revenues in the year ended December 31, 2023 compared to the year ended December 31, 2022 mainly as a result of higher charter rates;
  • a $35.4 million decrease in revenues in the year ended December 31, 2023 compared to the year ended December 31, 2022 due to decreased amortization of assumed time charters;
  • a $17.8 million decrease in revenues in the year ended December 31, 2023 compared to the year ended December 31, 2022 due to vessel disposals; and
  • a $4.0 million decrease in revenue in the year ended December 31, 2023 compared to the year ended December 31, 2022 due to lower non-cash revenue recognition in accordance with US GAAP.

Vessel Operating Expenses

Vessel operating expenses increased by $3.1 million to $162.1 million in the year ended December 31, 2023 from $159.0 million in the year ended December 31, 2022, primarily as a result of the increase in the average number of vessels in our fleet and an increase in the average daily operating cost for vessels on time charters and voyage charters to $6,607 per vessel per day for the year ended December 31, 2023 compared to $6,339 per vessel per day for the year ended December 31, 2022. 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 3.7%, or $5.0 million, to $129.3 million in the year ended December 31, 2023 from $134.3 million in the year ended December 31, 2022 mainly due to decreased depreciation due to the sale of 3 container vessels in November 2022 through January 2023, which was partially offset by increased depreciation of 7 recently acquired Capesize bulk carriers.

Amortization of Deferred Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs increased by $6.5 million to $18.7 million in the year ended December 31, 2023 from $12.2 million in the year ended December 31, 2022.

General and Administrative Expenses

General and administrative expenses increased by $6.9 million to $43.5 million in the year ended December 31, 2023, from $36.6 million in the year ended December 31, 2022. The increase was mainly attributable to increased stock-based compensation.

Other Operating Expenses

Other Operating Expenses include Voyage Expenses.

Voyage Expenses

Voyage expenses increased by $5.9 million to $41.0 million in the year ended December 31, 2023 from $35.1 million in the year ended December 31, 2022 primarily as a result of the $7.1 million increase in voyage expenses of our recently acquired 7 Capesize bulk carriers, which generated revenue from voyage charter agreements compared to no such expenses in the year ended December 31, 2022. Total voyage expenses comprised $33.0 million commissions and $8.0 million other voyage expenses in the year ended December 31, 2023.

Voyage expenses of container vessels segment decreased by $1.2 million to $33.9 million in the year ended December 31, 2023 from $35.1 million in the year ended December 31, 2022 mainly due to decreased commissions. Total voyage expenses of container vessels comprised $32.3 million commissions and $1.6 million other voyage expenses in the year ended December 31, 2023.

Voyage expenses of dry bulk vessels segment were $7.1 million in the year ended December 31, 2023 compared to no voyage expenses in the year ended December 31, 2022. Total voyage expenses of dry bulk vessels comprised $0.7 million commissions and $6.4 million other voyage expenses in the three months ended December 31, 2023.

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. In November 2022, we completed the sale of the Catherine C and Leo C for net proceeds of $128.0 million resulting in a gain of $37.2 million.

Interest Expense and Interest Income

Interest expense decreased by 67.0%, or $41.6 million, to $20.5 million in the year ended December 31, 2023 from $62.1 million in the year ended December 31, 2022. The decrease in interest expense is a result of:

  • a $22.0 million decrease in interest expense due to a decrease in our average indebtedness by $619.8 million between the two periods. Average indebtedness was $450.9 million in the year ended December 31, 2023, compared to average indebtedness of $1,070.7 million in the year ended December 31, 2022. This decrease was partially offset by an increase in our debt service cost by approximately 2.5% as a result of higher interest rates;
  • a $12.4 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the year ended December 31, 2023;
  • a $9.3 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 December 31, 2023, our outstanding debt, gross of deferred finance costs, was $410.5 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $438.0 million, which included $262.8 million principal amount of our Senior Notes and our leaseback obligation was $72.9 million, gross of deferred finance costs, as of December 31, 2022.

Interest income increased by $7.5 million to $12.1 million in the year ended December 31, 2023 compared to $4.6 million in the year ended December 31, 2022 mainly as a result of increased interest rates and average amount of time deposits in the year ended December 31, 2023.

Gain/(loss) on investments

A $18.9 million gain on investments in the year ended December 31, 2023 consisted of the $17.9 million change in fair value of our shareholding interest in EGLE and $1.0 million of dividends received on this investment. This compares to a $11.0 million loss on investments in the year ended December 31, 2022, which consisted of the change in fair value of our shareholding interest in ZIM of $176.4 million and $165.4 million of dividends received on ZIM ordinary shares. We sold all our remaining ZIM ordinary shares in September 2022.

Gain/(loss) on debt extinguishment

A $2.3 million loss on early extinguishment of our leaseback obligations in the year ended December 31, 2023 compares to a $4.4 million gain on debt extinguishment in the year ended December 31, 2022 related to our early extinguishment of debt.

Equity loss on investments

Equity loss on investments amounting to $4.0 million in the year ended December 31, 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 $2.7 million to $4.3 million in the year ended December 31, 2023 compared to $1.6 million in the year ended December 31, 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 $3.6 million in each of the years ended December 31, 2023 and December 31, 2022.

Other income/(expenses), net

Other expenses, net were $0.8 million in the year ended December 31, 2023 compared to other expenses, net of $6.6 million in the year ended December 31, 2022. The decrease in expenses was mainly due to reclassification of prior service cost of a defined benefit obligation of $7.8 million in the year ended December 31, 2022 compared to $0.8 million in the year ended December 31, 2023.

Income taxes

Income taxes were $18.3 million in the year ended December 31, 2022, related to the taxes withheld on dividend income earned on ZIM ordinary shares and compared to no income taxes in the year ended December 31, 2023.

Adjusted EBITDA

Adjusted EBITDA decreased by 16.9%, or $144.2 million, to $707.0 million in the year ended December 31, 2023 from $851.2 million in the year ended December 31, 2022. As outlined above, the decrease is primarily attributable to a $146.1 million decrease in dividends received. We also incurred a $4.0 million equity loss on investments and a $16.8 million increase in total operating expenses, which were partially offset by a $15.7 million increase in operating revenues and a $7.0 million decrease in prior service costs of our defined benefit retirement plan in the year ended December 31, 2023 compared to the year ended December 31, 2022. Adjusted EBITDA for the year ended December 31, 2023 is adjusted for a $17.9 million change in fair value of investments, $6.3 million of stock based compensation, a $2.3 million loss on debt extinguishment and a $1.6 million gain on sale of vessel. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Adjusted EBITDA of container vessels segment increased by 0.9%, or $6.5 million, to $710.5 million in the year ended December 31, 2023 from $704.0 million in the year ended December 31, 2022.

Adjusted EBITDA of dry bulk vessels segment was ($0.5) million in the year ended December 31, 2023. We did not have drybulk vessel operations in 2022.

Dividend Payment

Danaos has declared a dividend of $0.80 per share of common stock for the fourth quarter of 2023, which is payable on March 14, 2024 to stockholders of record as of February 28, 2024.

Recent Developments

In February 2024, we entered into contracts for the construction of two 8,258 TEU container vessels with the latest eco design characteristics for an aggregate purchase price of $188.4 million. These container vessels are expected to be delivered to us in 2026 and 2027, respectively.

In February 2024, we entered into agreements to acquire two Capesize bulk carriers built in 2010 and 2011, respectively for an aggregate purchase price of $52.8 million. These vessels are expected to be delivered to us in April and July 2024, respectively.

Conference Call and Webcast

On Wednesday, February 14, 2024 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 February 21, 2024 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 2838531# 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 and drybulk 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 12 under construction containerships aggregating 91,430 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Danaos has also recently invested in the dry bulk sector with the acquisition of 7 capesize bulk carriers aggregating 1,231,157 DWT, while we have also agreed to acquire a further 2 capesize bulk carriers aggregating 354,579 DWT. 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 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 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, drydocking 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, the conflict in Israel and the Gaza Strip, potential disruption of shipping routes such as Houthi attacks in the Red Sea and the Gulf of Aden, 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

 

Container vessels fleet utilization

Vessel Utilization (No. of Days)

 

Fourth Quarter

 

Fourth Quarter

Year

Year

 

2023

2022

 

2023

 

2022

Ownership Days

 

6,256

6,424

24,850

25,807

Less Off-hire Days:

 

Scheduled Off-hire Days

 

(123)

(311)

(472)

(628)

Other Off-hire Days

 

(24)

(23)

(92)

(68)

Operating Days

 

6,109

6,090

24,286

25,111

Vessel Utilization

 

97.7%

94.8%

97.7%

97.3%

 

 

Operating Revenues (in '000s of US$)

 

$238,924

$252,483

$963,192

$993,344

Less: Voyage Expenses excluding commissions (in '000s of US$)

 

(437)

(455)

(1,662)

(1,392)

Time Charter Equivalent Revenues (in '000s of US$)

 

$238,487

$252,028

$961,530

$991,952

Time Charter Equivalent US$/per day

 

$39,039

$41,384

 

$39,592

$39,503

 

Drybulk vessels fleet utilization

Vessel Utilization (No. of Days)

 

Fourth Quarter

 

Fourth Quarter

Year

Year

 

2023

2022

 

2023

 

2022

Ownership Days

 

412

-

417

-

Less Off-hire Days:

 

Scheduled Off-hire Days

 

(75)

-

(80)

-

Operating Days

 

337

-

337

-

Vessel Utilization

 

81.8%

80.8%

 

 

Operating Revenues (in '000s of US$)

 

$10,391

-

$10,391

-

Less: Voyage Expenses excluding commissions (in '000s of US$)

 

(6,446)

-

(6,446)

-

Time Charter Equivalent Revenues (in '000s of US$)

 

$3,945

-

$3,945

-

Time Charter Equivalent US$/per day

 

$11,706

-

$11,706

-

   

Fleet List

The following table describes in detail our container vessels deployment profile as of February 12, 2024:

Vessel Name

Vessel Size (TEU)

 

Year Built

 

Expiration of Charter(1)

Hyundai Ambition

13,100

 

2012

 

April 2027

Hyundai Speed

13,100

 

2012

 

April 2027

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

 

April 2027

Express Berlin

10,100

 

2011

 

August 2026

Express Athens

10,100

 

2011

 

April 2027

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 2025

Dimitra C

6,402

 

2002

 

February 2025

Suez Canal

5,610

 

2002

 

April 2026

Kota Lima

5,544

 

2002

 

November 2024

Wide Alpha

5,466

 

2014

 

May 2025

Stephanie C

5,466

 

2014

 

June 2025

Maersk Euphrates

5,466

 

2014

 

July 2025

Wide Hotel

5,466

 

2015

 

July 2025

Wide India

5,466

 

2015

 

November 2025

Wide Juliet

5,466

 

2015

 

September 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

Merve A (ex ZIM Sao Paolo)

4,253

 

2008

 

September 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 2024

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

 

March 2024

Phoenix D

2,200

 

1997

 

March 2025

 

 

 

 

 

 

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

The following table describes the details of our Capesize drybulk vessels as of February 12, 2024:

 

Vessel Name

Capacity (DWT)

Year Built

 

Achievement

175,966

2011

 

Genius

175,580

2012

 

Ingenuity

176,022

2011

 

Integrity

175,966

2010

 

Peace

175,858

2010

 

W Trader

175,879

2009

 

E Trader

175,886

2009

 

 

Container vessels under construction as of February 12, 2024:

 

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

-

Hull No. YZJ2024-1612

8,258

2026

-

Hull No. YZJ2024-1613

8,258

2027

-

 

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

 

Year ended

 

Year ended

December 31,

December 31,

December 31,

December 31,

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

OPERATING REVENUES

$249,315

 

$252,483

 

$973,583

 

$993,344

OPERATING EXPENSES

 

 

 

 

 

 

 

Vessel operating expenses

(40,123)

 

(40,043)

 

(162,117)

 

(158,972)

Depreciation & amortization

(39,077)

 

(36,182)

 

(147,950)

 

(146,441)

General & administrative

(22,377)

 

(14,891)

 

(43,484)

 

(36,575)

Other operating expenses

(15,769)

 

(8,193)

 

(41,010)

 

(35,145)

Gain on sale of vessels

-

 

37,225

 

1,639

 

37,225

Income From Operations

131,969

 

190,399

 

580,661

 

653,436

OTHER INCOME/(EXPENSES)

 

 

 

 

 

 

 

Interest income

2,723

 

3,147

 

12,133

 

4,591

Interest expense

(3,554)

(12,980)

(20,463)

(62,141)

Gain/(loss) on investments

20,917

-

18,923

(10,987)

Gain/(loss) on debt extinguishment

-

(18,588)

(2,254)

4,351

Other finance expenses

(916)

(494)

(4,274)

(1,590)

Equity loss on investments

(141)

 

-

 

(3,993)

 

-

Other income/(expenses), net

(164)

 

(7,850)

 

(812)

 

(6,578)

Realized loss on derivatives

(913)

 

(913)

 

(3,622)

 

(3,622)

Total Other Income/(Expenses), net

17,952

 

(37,678)

 

(4,362)

 

(75,976)

Income Before Income Taxes

149,921

 

152,721

 

576,299

 

577,460

Income taxes

-

 

-

 

-

 

(18,250)

Net Income

$149,921

 

$152,721

 

$576,299

 

$559,210

EARNINGS PER SHARE

 

 

 

 

 

 

 

Basic earnings per share

$7.73

 

$7.54

 

$28.99

 

$27.30

Diluted earnings per share

$7.70

 

$7.54

 

$28.95

 

$27.28

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

19,406

 

20,249

19,879

 

20,482

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

19,461

 

20,268

19,904

20,501

 

Non-GAAP Measures1 Reconciliation of Net Income to Adjusted Net Income – Unaudited

   

 

Three months ended

 

Three months ended

Year ended

 

Year ended

December 31,

December 31,

December 31,

December 31,

 

2023

 

2022

 

2023

 

2022

Net income

$149,921

 

$152,721

$576,299

 

$559,210

Change in fair value of investments

(20,762)

 

-

(17,867)

 

176,386

(Gain)/loss on debt extinguishment

-

 

18,588

2,254

 

(4,351)

Gain on sale of vessels

-

 

(37,225)

(1,639)

 

(37,225)

Amortization of financing fees, debt discount & finance fees accrued

466

 

2,127

2,201

 

11,520

Stock based compensation

6,340

 

5,440

6,340

 

5,440

Adjusted Net Income

$135,965

 

$141,651

$567,588

 

$710,980

Adjusted Earnings Per Share, diluted

$6.99

 

$6.99

$28.52

 

$34.68

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

19,461

 

20,268

19,904

 

20,501

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 months and year ended December 31, 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

December 31,

December 31,

 

 

2023

 

2022

ASSETS

 

 

 

 

CURRENT ASSETS

 

 

 

 

Cash, cash equivalents and restricted cash

 

$271,809

 

$267,668

Accounts receivable, net

 

9,931

 

5,635

Other current assets

 

220,030

 

99,218

 

 

501,770

 

372,521

NON-CURRENT ASSETS

 

 

 

 

Fixed assets, net

 

2,746,541

 

2,721,494

Advances for vessels under construction

 

301,916

 

190,736

Deferred charges, net

 

38,012

 

25,554

Other non-current assets

 

72,897

 

89,923

 

 

3,159,366

 

3,027,707

TOTAL ASSETS

 

$3,661,136

 

$3,400,228

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Long-term debt, current portion

 

$21,300

 

$27,500

Long-term leaseback obligations, current portion

 

-

 

27,469

Accounts payable, accrued liabilities & other current liabilities

 

146,860

 

173,438

 

 

168,160

 

228,407

LONG-TERM LIABILITIES

 

 

 

 

Long-term debt, net

 

382,874

 

402,440

Long-term leaseback obligations, net

 

-

 

44,542

Other long-term liabilities

 

93,785

 

164,425

 

 

476,659

 

611,407

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

Common stock

 

194

 

203

Additional paid-in capital

 

690,190

 

748,109

Accumulated other comprehensive loss

 

(75,979)

 

(74,209)

Retained earnings

 

2,401,912

 

1,886,311

 

 

3,016,317

 

2,560,414

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$3,661,136

 

$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

 

Year ended

 

Year ended

December 31,

December 31,

December 31,

December 31,

 

2023

 

2022

 

2023

 

2022

Operating Activities:

 

 

 

 

 

 

 

Net income

$149,921

 

$152,721

 

$576,299

 

$559,210

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

 

 

 

 

 

 

 

Depreciation and amortization of right-of-use assets

33,523

 

33,018

 

129,287

 

134,271

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

6,020

 

5,291

 

20,864

 

23,690

Amortization of assumed time charters

(4,416)

 

(10,443)

 

(21,222)

 

(56,699)

Prior service cost and periodic cost

507

 

7,846

 

1,613

 

7,846

(Gain)/loss on investments

(20,762)

 

-

 

(17,867)

 

176,386

(Gain)/loss on debt extinguishment

-

 

18,588

 

2,254

 

(4,351)

Gain on sale of vessels

-

 

(37,225)

 

(1,639)

 

(37,225)

Payments for drydocking/special survey

(9,568)

 

(13,780)

 

(31,121)

 

(29,939)

Amortization of deferred realized losses on cash flow interest rate swaps

913

 

913

 

3,622

 

3,622

Equity loss on investments

141

 

-

 

3,993

 

-

Stock based compensation

12,680

 

5,599

 

12,680

 

5,972

Accounts receivable

(2,580)

 

(503)

 

(4,296)

 

1,483

Other assets, current and non-current

(7,208)

 

(13,721)

 

(18,632)

 

(67,274)

Accounts payable and accrued liabilities

7,651

 

6,517

 

(154)

 

5,860

Other liabilities, current and long-term

(20,642)

 

(9,324)

 

(79,389)

 

211,889

Net Cash provided by Operating Activities

146,180

 

145,497

 

576,292

 

934,741

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

 

Vessel additions and advances for vessels under construction

(139,977)

 

(104,001)

 

(268,035)

 

(199,135)

Proceeds and advances received from sale of vessels

-

116,069

3,914

 

129,069

(Purchase)/sale of investments

-

 

-

 

(74,407)

 

246,638

Net Cash provided by/(used in) Investing Activities

(139,977)

 

12,068

 

(338,528)

 

176,572

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

 

Proceeds from long-term debt, net

-

 

55,001

 

-

 

182,726

Debt repayment

(6,875)

 

(491,928)

 

(27,500)

 

(892,928)

Payments of leaseback obligations

-

 

(6,680)

 

(72,925)

 

(153,546)

Dividends paid

(15,533)

 

(15,185)

 

(60,696)

 

(61,483)

Repurchase of common stock

(18,276)

 

-

 

(70,610)

 

(28,553)

Payments of accumulated accrued interest

-

 

-

 

-

 

(3,373)

Finance costs

-

 

(448)

 

(1,892)

 

(16,244)

Net Cash used in Financing Activities

(40,684)

 

(459,240)

 

(233,623)

 

(973,401)

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

(34,481)

 

(301,675)

 

4,141

 

137,912

Cash, cash equivalents and restricted cash, beginning of period

306,290

 

569,343

 

267,668

 

129,756

Cash, cash equivalents and restricted cash, end of period

$271,809

 

$267,668

 

$271,809

 

$267,668

 

DANAOS CORPORATION Reconciliation of Net Income to Adjusted EBITDA - 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,

 

2023

 

2022

 

2023

 

2022

Net income

$149,921

 

$152,721

 

$576,299

 

$559,210

Depreciation and amortization of right-of-use assets

33,523

 

33,018

 

129,287

 

134,271

Amortization of deferred drydocking & special survey costs

5,554

 

3,164

 

18,663

 

12,170

Amortization of assumed time charters

(4,416)

 

(10,443)

 

(21,222)

 

(56,699)

Amortization of deferred finance costs, debt discount and commitment fees

1,171

 

2,382

 

5,136

 

11,775

Amortization of deferred realized losses on interest rate swaps

913

 

913

 

3,622

 

3,622

Interest income

(2,723)

 

(3,147)

 

(12,133)

 

(4,591)

Interest expense

3,088

 

10,852

 

18,262

 

50,620

Income taxes

-

 

-

 

-

 

18,250

(Gain)/loss on investments and dividend withholding taxes

(20,762)

-

(17,867)

158,136

Gain on sale of vessels

-

(37,225)

(1,639)

(37,225)

(Gain)/loss on debt extinguishment

-

18,588

2,254

(4,351)

Stock based compensation

6,340

 

5,599

 

6,340

 

5,972

Adjusted EBITDA(1)

$172,609

 

$176,422

 

$707,002

 

$851,160

  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 months and year ended December 31, 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 Reconciliation of Net Income to Adjusted EBITDA per segment Three Months Ended December 31, 2023 and Three Months Ended December 31, 2022 Unaudited (Expressed in thousands of United States dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

December 31, 2023

 

 

December 31, 2022

 

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

 

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

Net income

 

$130,996

 

$(1,851)

 

$20,776

 

$149,921

 

 

$152,721

 

-

 

-

 

$152,721

Depreciation and amortization of right-of-use assets

 

32,343

 

1,180

 

-

 

33,523

 

 

33,018

 

-

 

-

 

33,018

Amortization of deferred drydocking & special survey costs

 

5,554

 

-

 

-

 

5,554

 

 

3,164

 

-

 

-

 

3,164

Amortization of assumed time charters

 

(4,416)

 

-

 

-

 

(4,416)

 

 

(10,443)

 

-

 

-

 

(10,443)

Amortization of deferred finance costs, debt discount and commitment fees

 

1,171

 

-

 

-

 

1,171

 

 

2,382

 

-

 

-

 

2,382

Amortization of deferred realized losses on interest rate swaps

 

913

 

-

 

-

 

913

 

 

913

 

-

 

-

 

913

Interest income

 

(2,686)

 

(37)

 

-

 

(2,723)

 

 

(3,147)

 

-

 

-

 

(3,147)

Interest expense

 

3,088

 

-

 

-

 

3,088

 

 

10,852

 

-

 

-

 

10,852

(Gain)/loss on investments and dividend withholding taxes

 

-

 

-

 

(20,762)

 

(20,762)

 

 

-

 

-

 

-

 

-

Gain on sale of vessels

 

-

 

-

 

-

 

-

 

 

(37,225)

 

-

 

-

 

(37,225)

(Gain)/loss on debt extinguishment

 

-

 

-

 

-

 

-

 

 

18,588

 

-

 

-

 

18,588

Stock based compensation

 

6,120

 

220

 

-

 

6,340

 

 

5,599

 

-

 

-

 

5,599

Adjusted EBITDA(1)

 

$173,083

 

$(488)

 

$14

 

$172,609

 

 

$176,422

 

-

 

-

 

$176,422

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 months ended December 31, 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 Reconciliation of Net Income to Adjusted EBITDA per segment Year Ended December 31, 2023 and Year Ended December 31, 2022 Unaudited (Expressed in thousands of United States dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

Year Ended

 

 

December 31, 2023

 

 

December 31, 2022

 

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

 

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

Net income

 

$563,279

 

$(1,910)

 

$14,930

 

$576,299

 

 

$588,447

 

-

 

$(29,237)

 

$559,210

Depreciation and amortization of right-of-use assets

 

128,097

 

1,190

 

-

 

129,287

 

 

134,271

 

-

 

-

 

134,271

Amortization of deferred drydocking & special survey costs

 

18,663

 

-

 

-

 

18,663

 

 

12,170

 

-

 

-

 

12,170

Amortization of assumed time charters

 

(21,222)

 

-

 

-

 

(21,222)

 

 

(56,699)

 

-

 

-

 

(56,699)

Amortization of deferred finance costs, debt discount and commitment fees

 

5,136

 

-

 

-

 

5,136

 

 

11,775

 

-

 

-

 

11,775

Amortization of deferred realized losses on interest rate swaps

 

3,622

 

-

 

-

 

3,622

 

 

3,622

 

-

 

-

 

3,622

Interest income

 

(12,096)

 

(37)

 

-

 

(12,133)

 

 

(4,591)

 

-

 

-

 

(4,591)

Interest expense

 

18,262

 

-

 

-

 

18,262

 

 

50,620

 

-

 

-

 

50,620

Income taxes

 

-

 

-

 

-

 

-

 

 

-

 

-

 

18,250

 

18,250

(Gain)/loss on investments and dividend withholding taxes

 

-

 

-

 

(17,867)

 

(17,867)

 

 

-

 

-

 

158,136

 

158,136

Gain on sale of vessels

 

(1,639)

 

-

 

-

 

(1,639)

 

 

(37,225)

 

-

 

-

 

(37,225)

(Gain)/loss on debt extinguishment

 

2,254

 

-

 

-

 

2,254

 

 

(4,351)

 

-

 

-

 

(4,351)

Stock based compensation

 

6,120

 

220

 

-

 

6,340

 

 

5,972

 

-

 

-

 

5,972

Adjusted EBITDA(1)

 

$710,476

 

$(537)

 

$(2,937)

 

$707,002

 

 

$704,011

 

-

 

$147,149

 

$851,160

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 year ended December 31, 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 Reconciliation of Net Income to Adjusted Net Income per segment Three Months Ended December 31, 2023 and Three Months Ended December 31, 2022 Unaudited (Expressed in thousands of United States dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

December 31, 2023

 

 

December 31, 2022

 

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

 

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

Net income

 

$130,996

 

$(1,851)

 

$20,776

 

$149,921

 

 

$152,721

 

-

 

-

 

$152,721

Change in fair value of investments

 

-

 

-

 

(20,762)

 

(20,762)

 

 

-

 

-

 

-

 

-

(Gain)/loss on debt extinguishment

 

-

 

-

 

-

 

-

 

 

18,588

 

-

 

-

 

18,588

Gain on sale of vessels

 

-

 

-

 

-

 

-

 

 

(37,225)

 

-

 

-

 

(37,225)

Amortization of financing fees, debt discount & finance fees accrued

 

466

 

-

 

-

 

466

 

 

2,127

 

-

 

-

 

2,127

Stock based compensation

 

6,120

 

220

 

-

 

6,340

 

 

5,440

 

-

 

-

 

5,440

Adjusted Net Income(1)

 

$137,582

 

$(1,631)

 

$14

 

$135,965

 

 

$141,651

 

-

 

-

 

$141,651

Adjusted Earnings per Share, diluted

 

 

 

 

 

 

 

$6.99

 

 

 

 

-

 

-

 

$6.99

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

 

19,461

 

 

 

 

20,268

 

DANAOS CORPORATION Reconciliation of Net Income to Adjusted Net Income per segment Year Ended December 31, 2023 and Year Ended December 31, 2022 Unaudited (Expressed in thousands of United States dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

Year Ended

 

 

December 31, 2023

 

 

December 31, 2022

 

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

 

 

Container Vessels

 

Dry Bulk Vessels

 

Other

 

Total

Net income

 

$563,279

 

$(1,910)

 

$14,930

 

$576,299

 

 

$588,447

 

-

 

$(29,237)

 

$559,210

Change in fair value of investments

 

-

 

-

 

(17,867)

 

(17,867)

 

 

-

 

-

 

176,386

 

176,386

(Gain)/loss on debt extinguishment

 

2,254

 

-

 

-

 

2,254

 

 

(4,351)

 

-

 

-

 

(4,351)

Gain on sale of vessels

 

(1,639)

 

-

 

-

 

(1,639)

 

 

(37,225)

 

-

 

-

 

(37,225)

Amortization of financing fees, debt discount & finance fees accrued

 

2,201

 

-

 

-

 

2,201

 

 

11,520

 

-

 

-

 

11,520

Stock based compensation

 

6,120

 

220

 

-

 

6,340

 

 

5,440

 

-

 

-

 

5,440

Adjusted Net Income(1)

 

$572,215

 

$(1,690)

 

$(2,937)

 

$567,588

 

 

$563,831

 

-

 

$147,149

 

$710,980

Adjusted Earnings per Share, diluted

 

 

 

 

 

 

 

$28.52

 

 

 

 

 

 

 

 

$34.68

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

 

19,904

 

 

 

 

20,501

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 months and year ended December 31, 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.

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 Rose & Company New York Tel. 212-359-2228 E-Mail: danaos@rosecoglobal.com

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