Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR

15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2023

Commission File Number 001-33060

DANAOS CORPORATION

(Translation of registrant’s name into English)

Danaos Corporation

c/o Danaos Shipping Co. Ltd.

14 Akti Kondyli

185 45 Piraeus

Greece

Attention: Secretary

011 030 210 419 6480

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ⌧ Form 40-F ◻

AGM Results

On July 28, 2023, at our annual meeting of stockholders, Mr. Iraklis Prokopakis was re-elected as a Class II director for a three-year term expiring at the annual meeting of our stockholders in 2026. Our stockholders also ratified the appointment of Deloitte Certified Public Accountants, S.A. as our independent auditors.

EXHIBIT INDEX

99.1	Operating and Financial Review and Prospects and Condensed Consolidated Financial Statements (Unaudited) for the Three and Six Months Ended June 30, 2023.
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

*****

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 7, 2023

	DANAOS CORPORATION

	By:	/s/ Evangelos Chatzis
	Name:	Evangelos Chatzis
	Title:	Chief Financial Officer

Table of Contents

EXHIBIT 99.1

DANAOS CORPORATION

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis should be read in conjunction with our interim condensed consolidated financial statements (unaudited) and the notes thereto included elsewhere in this report.

Results of Operations

Three months ended June 30, 2023 compared to 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.

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.

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.

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

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.

Table of Contents

Amortization of Deferred Drydocking 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.

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. See “Liquidity and Capital Resources”.

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 Shipping Inc. (“Eagle Bulk”) of 1,552,865 shares of common stock. This gain compares to a loss on investments of $168.6 million, which consisted of the change in fair value of our shareholding interest in ZIM recognized in the three months ended June 30, 2022. In September 2022, we sold all of our remaining ordinary shares of ZIM for net proceeds of $161.3 million.

Dividend Income

Dividend income of $16.2 million was recognized on ZIM ordinary shares in the three months ended June 30, 2022 compared to none in the three months ended June 30, 2023.

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.

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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.

Six months ended June 30, 2023 compared to 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.

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.

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.

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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

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 Drydocking 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.

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.

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.

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Gain/(loss) 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 loss on investments of $69.1 million, which consisted of the change in fair value of our shareholding interest in ZIM recognized in the six months ended June 30, 2022. In September 2022, we sold all of our remaining ordinary shares of ZIM for net proceeds of $161.3 million.

Dividend Income

Dividend income of $138.4 million was recognized on ZIM ordinary shares in the six months ended June 30, 2022 compared to none in the six months ended June 30, 2023.

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.

Liquidity and Capital Resources

Our principal source of funds has been operating cash flows, vessel sales, and long-term bank borrowings, as well as equity provided by our stockholders from our initial public offering in October 2006; common stock sales in August 2010 and the fourth quarter of 2019, the capital contribution of Danaos Investment Limited as Trustee of the 883 Trust (“DIL”) on August 10, 2018 and dividends and sales proceeds from our divested investment in ZIM ordinary shares in 2021 and 2022. In February 2021, we sold $300 million of 8.500% senior unsecured notes due 2028 (the “Senior Notes”). In December 2022, we repurchased $37.2 million aggregate principal amount of our Senior Notes in a privately negotiated transaction. We may also at any time and from time to time, seek to retire or purchase our outstanding debt securities through cash purchases, in open-market purchases, privately negotiated transactions or otherwise. Our principal uses of funds have been capital expenditures to establish, grow and maintain our fleet, comply with international shipping standards, environmental laws and regulations and to fund working capital requirements and repayment of debt.

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Our short-term liquidity needs primarily relate to the funding of our vessel operating expenses, drydocking costs, installment payments for our ten contracted newbuildings and the five capsize bulk carriers we in principle agreed to acquire in July 2023 for $103 million, debt interest payments, servicing our debt obligations, payment of dividends and repurchase of our common stock. Our long-term liquidity needs primarily relate to installment payments for our ten contracted newbuildings and any additional vessel acquisitions in the containership or drybulk sector and debt repayment. We anticipate that our primary sources of funds will be cash from operations and equity or debt financings. We currently expect that the sources of funds available to us will be sufficient to meet our short-term liquidity (for the next 12 months after the issuance of the condensed consolidated financial statements) and long-term liquidity requirements.

Under our existing multi-year charters as of June 30, 2023, we had $2.5 billion of total contracted cash revenues, or $454.1 million for the remainder of 2023, $797.8 million for 2024 and thereafter $1.3 billion. Although these contracted cash revenues are based on contracted charter rates, we are dependent on the ability and willingness of our charterers to meet their obligations under these charters. In May 2022, we received a $238.9 million charter hire prepayment related to charter contracts for 15 of our vessels, representing partial prepayment of charter hire payable during the period from May 2022 through January 2027. This prepayment is recorded as unearned revenue on our balance sheet and recognized as revenue in our income statement over the term of the applicable charters.

As of June 30, 2023, we had cash and cash equivalents of $293.3 million. As of June 30, 2023, we had $360.0 million of remaining borrowing availability under a reducing revolving credit facility, the availability under which reduces on a quarterly basis. As of June 30, 2023, we had $424.3 million of outstanding indebtedness (gross of deferred finance costs), including $262.8 million relating to our Senior Notes. As of June 30, 2023, we were obligated to make quarterly fixed amortization payments, totaling $27.5 million to June 30, 2024, related to the long-term bank debt. We are also obligated to make certain payments to our Manager, Danaos Shipping, under our management agreement which has a term through December 31, 2024.

In June 2022, we drew down $130.0 million under a new senior secured term loan facility from BNP Paribas and Credit Agricole, which is secured by six 5,466 TEU sister vessels acquired in 2021. This facility is repayable in 8 quarterly instalments of $5.0 million, followed by 12 quarterly instalments of $1.9 million together with a balloon payment of $67.2 million payable over five-year term. In December 2022, we early extinguished the remaining $437.75 million of the Citibank/Natwest $815 mil. Facility and replaced it with the $382.5 mil. Revolving Credit Facility with Citibank, out of which nil is drawn down as of June 30, 2023 and with the Alpha Bank $55.25 mil. Facility, which was drawn down in full and under which $51.5 million is outstanding as of June 30, 2023. The Citibank $382.5 mil. Revolving Credit Facility is reducing and repayable over 5 years in 20 quarterly reductions of $11.25 million each together with a final reduction of $157.5 million at maturity in December 2027. We pay a commitment fee at a rate of 0.8% per annum on the undrawn amount of this facility. The Alpha Bank $55.25 mil. Facility is repayable over 5 years with 20 consecutive quarterly instalments of $1.875 million each, together with a balloon payment of $17.75 million at maturity in December 2027.

On March 11, 2022, we entered into contracts for the construction of two 7,100 TEU container vessels with expected vessels delivery in 2024. On April 1, 2022, as amended on April 21, 2022, we entered into contracts for the construction of four 8,000 TEU container vessels with expected vessels delivery in 2024. On April 28, 2023, we entered into contracts for the construction of two 6,000 TEU container vessels with expected vessels delivery in 2024 and 2025. On June 20, 2023, we entered into contracts for the construction of two 8,200 TEU container vessels with expected vessels delivery in 2026. The aggregate purchase price of the vessel construction contracts amounts to $834.9 million. The remaining contractual commitments under these vessel construction contracts are analyzed as follows as of June 30, 2023 (in millions of U.S. dollars):


Remainder of 2023	$	73.3
2024		365.6
2025		82.4
2026		113.1
Total contractual commitments	$	634.4

Additionally, a supervision fee of $725 thousand per newbuilding vessel will be payable to Danaos Shipping Company Limited (“the Manager”) over the construction period starting from steel cutting. Supervision fees totaling $1.1 million were charged by the Manager and capitalized to the vessels under construction in the six months ended June 30, 2023. Interest expense amounting to $5.0 million and $7.2 million was capitalized to the vessels under construction in the year ended December 31, 2022 and in the six months ended June 30, 2023, respectively.

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Subsequent to June 30, 2023, we declared a dividend of $0.75 per share of common stock payable on September 1, 2023 to holders of record on August 23, 2023. We intend to pay a regular quarterly dividend on our common stock, which will have an impact on our liquidity. Payments of dividends are subject to the discretion of our board of directors, provisions of Marshall Islands law affecting the payment of distributions to stockholders and the terms of our credit facilities, which permit the payment of dividends so long as there has been no event of default thereunder nor would occur as a result of such dividend payment, and Senior Notes, which include limitations on the amount of dividends and other restricted payments that we may make, and will be subject to conditions in the container shipping industry, our financial performance and us having sufficient available excess cash and distributable reserves.

In June 2022, we announced a share repurchase program of up to $100 million of our common stock. We had repurchased 466,955 shares of our common stock in the open market for $28.6 million as of December 31, 2022. In the six months ended June 30, 2023, we repurchased an additional 597,697 shares for $36.0 million, out of which 3,400 shares valued at $0.2 million remained unsettled as of June 30, 2023. Subsequent to June 30, 2023, we repurchased 15,895 shares of our common stock in the open market for $1.0 million. All purchases have been made on the open market within the safe harbor provisions of Regulation 10b-18 under the Exchange Act. Under the share repurchase program, shares of our common stock may be purchased in open market or privately negotiated transactions, at times and prices that are considered to be appropriate by the Company, and the program may be suspended or discontinued at any time.

Marketable Securities

In the three months ended June 30, 2023, we acquired marketable securities, comprising 1,552,865 shares of common stock of Eagle Bulk for $68.2 million (out of which $24.4 million from Virage International Ltd., our related company). As of June 30, 2023, these marketable securities were fair valued at $74.6 million and we recognized a $6.4 million gain on these marketable securities. 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”).

ZIM Equity Securities

On January 27, 2021, ZIM completed its initial public offering and listing on the New York Stock Exchange of its ordinary shares. Following this offering the Company owned 10,186,950 ordinary shares of ZIM. These shares were recorded at a book value of $75 thousands as of December 31, 2020. In 2021, we sold 3,000,000 ZIM ordinary shares resulting in net proceeds to us of $120.7 million. In April 2022, we sold 1,500,000 ZIM ordinary shares resulting in net proceeds to us of $85.3 million and we sold our remaining shareholding interest in ZIM of 5,686,950 ordinary shares for $161.3 million in September 2022. For the year ended December 31, 2022 we recognized a $176.4 million loss on these shares. Additionally we recognized dividend income on these shares amounting to $165.4 million gross of withholding taxes of $18.3 million in the year ended December 31, 2022. See Note 6, “Other Current and Non-current Assets” to our condensed consolidated financial statements included in this report.

Investments in Affiliates

In March 2023, we invested $4.3 million in the common shares of a newly established company Carbon Termination Technologies Corporation (“CTTC”), incorporated in the Republic of the Marshall Islands, which represents a 49% ownership interest. CTTC currently engages in research and development of decarbonization technologies for the shipping industry. We use equity method of accounting for this investment. Our share of CTTC’s initial expenses amounted to $3.3 million and is presented under “Equity loss on investments” in the condensed consolidated statement of income in the six months ended June 30, 2023.

Acquisition of Capesize Bulk Carriers

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. The vessels are expected to be delivered to us between September and October 2023.

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Impact of the war in Ukraine on our Business

As disclosed in our Annual Report on Form 20-F for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 9, 2023, the current conflict between Russia and Ukraine, and related sanctions imposed by the U.S., EU and others, adversely affect the crewing operations of our Manager, which has crewing offices in St. Petersburg, Odessa and Marioupol (damaged by the war), and trade patterns involving ports in the Black Sea or Russia, and as well as impacting world energy supply and creating uncertainties in the global economy, which in turn impact containership demand. The extent of the impact will depend largely on future developments.

Cash Flows


	Six Months		Six Months
	ended		ended
	June 30, 2023		June 30, 2022

	(In thousands)
Net cash provided by operating activities	$	280,606	$	620,478
Net cash provided by/(used in) investing activities	$	(100,277)	$	14,286
Net cash used in financing activities	$	(154,666)	$	(431,947)

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities decreased by $339.9 million, to $280.6 million provided by operating activities in the six months ended June 30, 2023 compared to $620.5 million provided by operating activities in the six months ended June 30, 2022. The decrease was the result of: (i) $126.6 million in ZIM dividends that were collected during the six months ended June 30, 2022 compared to nil dividends collected from ZIM during the six months ended June 30, 2023 as we no longer held ZIM shares during the latter period, (ii) a $261.4 million decrease in cash operating revenues as a result of the charter revenue prepayment that occurred during the six months ended June 30, 2022, (iii) a $8.7 million decrease in operating revenues due to a decrease in the average number of vessels in our fleet as a result of vessel sales and (iv) a $4.9 million increase in drydocking expenses which were partially offset by: (i) a $35.9 million increase in operating revenues due to higher charter rates, (ii) a $21.0 million decrease in net finance costs and (iii) a $4.8 million improvement in cash operating expenses and working capital between the two periods.

Net Cash Provided by/(Used in) Investing Activities

Net cash flows provided by/(used in) investing activities decreased by $114.6 million, to $100.3 million used in investing activities in the six months ended June 30, 2023 compared to $14.3 million provided by investing activities in the six months ended June 30, 2022. The decrease was due to: (i) $85.3 million in proceeds from the sale of ZIM shares collected during the six months ended June 30, 2022 compared to no such proceeds for the six months ended June 30, 2023 as we no longer held ZIM shares during the latter period, (ii) a $9.1 million decrease in vessel sale proceeds, (iii) a $1.8 million increase in additions to vessel cost and (iv) $74.4 million in net investments during the six months ended June 30, 2023, which include $68.2 million invested in Eagle Bulk Shipping and our investment in Carbon Termination Technologies, which were partially offset by a $56 million decrease in advance payments for vessels under construction between the two periods.

Net Cash Used in Financing Activities

Net cash flows used in financing activities decreased by $277.3 million, to $154.7 million used in financing activities in the six months ended June 30, 2023 compared to $432.0 million used in financing activities in the six months ended June 30, 2022 due to (i) a $417.1 million decrease in payments of long-term debt and leaseback obligations, (ii) a $13.2 million decrease in finance costs, (iii) a $3.4 million decrease in payments of accumulated accrued interest and (iv) a $0.7 million decrease in dividend payments on our common stock, which were partially offset by (i) a $127.7 million decrease in proceeds from long-term debt and (ii) a $29.4 million increase in repurchase of common stock in the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

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Non-GAAP Financial Measures

We report our financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes, however, 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 our performance. See the table below for supplemental financial data and corresponding reconciliation to GAAP financial measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP.

EBITDA and Adjusted EBITDA

EBITDA represents net income before interest income and expense, taxes, depreciation, as well as amortization of deferred drydocking & special survey costs, amortization of assumed time charters, amortization of deferred realized losses of cash flow interest rate swaps, amortization of finance costs, debt discount and commitment fees. Adjusted EBITDA represents net income before interest income and expense, taxes other than withholding taxes on dividends received, depreciation, amortization of deferred drydocking & special survey costs, amortization of assumed time charters, amortization of deferred realized losses of cash flow interest rate swaps, amortization of finance costs, debt discount and commitment fees, gain/loss on investments, gain/loss on debt extinguishment, gain on sale of vessels and stock-based compensation. We believe that EBITDA and Adjusted EBITDA assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. EBITDA and Adjusted EBITDA are also used: (i) by prospective and current customers as well as potential lenders to evaluate potential transactions; and (ii) to evaluate and price potential acquisition candidates. Our EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA/Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA/Adjusted EBITDA do not reflect any cash requirements for such capital expenditures. 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. Because of these limitations, EBITDA/Adjusted EBITDA should not be considered as principal indicators of our performance.

Reconciliation of Net Income to EBITDA and Adjusted EBITDA


	Six Months		Six Months
	ended		ended
	June 30, 2023		June 30, 2022

	(In thousands)
Net income	$	293,222	$	339,689
Depreciation and amortization of right-of-use assets		63,439		67,112
Amortization of deferred drydocking & special survey costs		8,337		5,922
Amortization of assumed time charters		(12,390)		(32,364)
Amortization of deferred realized losses of cash flow interest rate swaps		1,796		1,796
Amortization of finance costs, debt discount and commitment fees		2,762		6,561
Interest income		(6,319)		(121)
Interest expense		11,342		26,632
Income taxes		—		14,480
EBITDA		362,189		429,707
Loss/(gain) on investments and dividend withholding taxes		(6,438)		54,616
Loss/(gain) on debt extinguishment		2,254		(22,939)
Gain on sale of vessels		(1,639)		—
Stock based compensation		—		248
Adjusted EBITDA	$	356,366	$	461,632

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EBITDA decreased by $67.5 million, to $362.2 million in the six months ended June 30, 2023 from $429.7 million in the six months ended June 30, 2022. This decrease was mainly attributed to (i) $138.4 million in dividends from ZIM (gross of withholding taxes) recognized in the six months ended June 30, 2022, (ii) a $25.2 million decrease in gain on debt extinguishment between the two periods, (iii) a $3.3 million equity loss on investments in the six months ended June 30, 2023 and (iv) a $1.9 million increase in total operating expenses between the two periods, which were partially offset by (i) a $75.5 million change in fair value of investments, (ii) a $24.2 million increase in operating revenues (excluding $20.0 million decrease in amortization of assumed time charters) and (iii) a $1.6 million gain on sale of vessel in the six months ended June 30, 2023 compared to no such gain in the six months ended June 30, 2022.

Adjusted EBITDA decreased by $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. This decrease was mainly attributed to (i) recognition of a $123.9 million dividend from ZIM (net of withholding taxes) in the six months ended June 30, 2022 compared to none in the six months ended June 30, 2023, (ii) a $2.3 million increase in total operating expenses and (iii) 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 (excluding a $20.0 million decrease in amortization of assumed time charters). 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.

Credit Facilities

We, as borrower or guarantor, and certain of our subsidiaries, as borrowers or guarantors, have entered into a number of credit facilities in connection with financing the acquisition of certain vessels in our fleet. Our existing credit facilities are secured by, among other things, our vessels (as described below). The following summarizes certain terms of our credit facilities and our Senior Notes:


	Outstanding
	Principal
	Amount
Credit Facility	(in millions)(1)		Collateral Vessels
BNP Paribas/Credit Agricole $130.0 mil. Facility	$	110.0	The Wide Alpha, the Stephanie C, the Maersk Euphrates, the Wide Hotel, the Wide India and the Wide Juliet
Alpha Bank $55.25 mil. Facility	$	51.5	The Bremen and the Kota Santos
Citibank $382.5 mil. Revolving Credit Facility	$	—	The Express Berlin, the Express Rome, the Express Athens, the Hyundai Smart, the Hyundai Speed, the Hyundai Ambition, the Pusan C, the Le Havre, the Europe, the America, the CMA CGM Musset, the Racine (ex CMA CGM Racine), the CMA CGM Rabelais, the CMA CGM Nerval, the YM Maturity and the YM Mandate
Senior Notes	$	262.8	None

(1)	As of June 30, 2023.

As of June 30, 2023, there was $360.0 million of remaining borrowing availability under our Citibank $382.5 mil. Revolving Credit Facility. As of June 30, 2023, 44 of our vessels were unencumbered. For additional information regarding the credit facilities and related repayment schedule, please refer to Note 4 “Fixed Assets, net & Advances for Vessels under Construction” and Note 8 “Long-term Debt, net” in the unaudited condensed consolidated financial statements included in this report.

Senior Notes

On February 11, 2021, we consummated an offering of $300 million aggregate principal amount of 8.500% Senior Notes due 2028 of Danaos Corporation, which we refer to as the Senior Notes. The Senior Notes are general senior unsecured obligations of Danaos Corporation.

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The Senior Notes were issued pursuant to an Indenture, dated as of February 11, 2021, between the Company and Citibank, N.A., London Branch, as trustee, paying agent, registrar and transfer agent. The Senior Notes bear interest at a rate of 8.500% per year, payable in cash on March 1 and September 1 of each year, commencing September 1, 2021. The Senior Notes will mature on March 1, 2028.

In December 2022, we repurchased $37.2 million aggregate principal amount of our Senior Notes in a privately negotiated transaction. For additional details regarding the Senior Notes please refer to Note 8, “Long-term Debt, net” in the unaudited condensed consolidated financial statements included elsewhere in this report and “Item 5. Operating and Financial Review and Prospects –Senior Notes” in our Annual Report on Form 20-F for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 9, 2023.

Qualitative and Quantitative Disclosures about Market Risk

Interest Rate Swaps

In the past, we entered into interest rate swap agreements converting floating interest rate exposure into fixed interest rates in order to hedge our exposure to fluctuations in prevailing market interest rates, as well as interest rate swap agreements converting the fixed rate we paid in connection with certain of our credit facilities into floating interest rates in order to economically hedge the fair value of the fixed rate credit facilities against fluctuations in prevailing market interest rates. All of these interest rate swap agreements have expired and we do not currently have any outstanding interest rate swap agreements. Refer to Note 9, “Financial Instruments”, to our unaudited condensed consolidated financial statements included in this report.

Foreign Currency Exchange Risk

We did not enter into derivative instruments to hedge the foreign currency translation of assets or liabilities or foreign currency transactions during the six months ended June 30, 2023 and 2022.

Impact of Inflation and Interest Rates Risk on our Business

We continue to see near-term impacts on our business due to elevated inflation in the United States of America, Eurozone and other countries, including ongoing global prices pressures in the wake of the war in Ukraine, driving up energy and commodity prices, which continue to affect our operating expenses. Interest rates have increased rapidly and substantially as central banks in developed countries raise interest rates in an effort to subdue inflation. The eventual implications of tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital for our business.

Capitalization and Indebtedness

The table below sets forth our consolidated capitalization as of June 30, 2023.

●

on an actual basis; and

●

on an as adjusted basis to reflect, in the period from July 1, 2023 to August 4, 2023, the $1.0 million repurchase of 15,895 shares of our common stock.

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Other than these adjustments, there have been no other material changes to our capitalization from debt or equity issuances, re-capitalizations, special dividends, or debt repayments as adjusted in the table below between July 1, 2023 and August 4, 2023.


	As of June 30, 2023
	Actual		As adjusted

	(US Dollars in thousands)
Debt:
Senior unsecured notes	$	262,766	$	262,766
BNP Paribas/Credit Agricole $130 mil. Facility		110,000		110,000
Alpha Bank $55.25 mil. Facility		51,500		51,500
Citibank $382.5 mil. Revolving Credit Facility		—		—
Total debt (1)(2)	$	424,266	$	424,266
Stockholders’ equity:
Preferred stock, par value $0.01 per share; 100,000,000 preferred shares authorized and none issued; actual and as adjusted		—		—
Common stock, par value $0.01 per share; 750,000,000 shares authorized; 25,155,948 shares issued and 19,752,025 shares outstanding actual and 19,736,130 shares outstanding as adjusted		197		197
Additional paid-in capital		712,154		711,111
Accumulated other comprehensive loss		(72,041)		(72,041)
Retained earnings (3)		2,149,172		2,149,172
Total stockholders’ equity		2,789,482		2,788,439
Total capitalization	$	3,213,748	$	3,212,705

(1)

All of the indebtedness reflected in the table, other than Danaos Corporation’s unsecured senior notes due 2028 ($262.8 million on an actual basis), is secured and is guaranteed by Danaos Corporation, in the case of indebtedness of our subsidiaries ($51.5 million on an actual basis), or by our subsidiaries, in the case of indebtedness of Danaos Corporation ($110.0 million on an actual basis). See Note 4 “Fixed Assets, net and Advances for Vessels under Construction” and Note 8 “Long-Term Debt, net” to our unaudited condensed consolidated financial statements included elsewhere in this report.

(2)	Total debt is presented gross of deferred finance costs, which amount to $7.2 million.

(3)	Does not reflect dividend of $0.75 per share of common stock declared by the Company payable on September 1, 2023 to holders of record as of August 23, 2023.

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Our Fleet

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


Vessel Details			Charter Arrangements
	Year	Size	Expiration of		Contracted Employment	Charter			Extension Options ⁽⁴⁾
Vessel Name	Built	(TEU)	Charter ⁽¹⁾	Charterer	through ⁽²⁾	Rate ⁽³⁾			Period	Charter Rate
Hyundai Ambition	2012	13,100	June 2024	HMM	June 2024	$	64,918		+ 3 years	$	60,418
Hyundai Speed	2012	13,100	June 2024	HMM	June 2024	$	64,918		+ 3 years	$	60,418
Hyundai Smart	2012	13,100	June 2027	HMM	May 2024	$	64,918
				Confidential ⁽⁶⁾	June 2027	$	54,000		+ 3 to 26 months	$	54,000
Hyundai Respect	2012	13,100	April 2027	HMM	March 2024	$	64,918
				Confidential ⁽⁶⁾	April 2027	$	54,000		+ 3 to 26 months	$	54,000
Hyundai Honour	2012	13,100	March 2027	HMM	February 2024	$	64,918
				Confidential ⁽⁶⁾	March 2027	$	54,000		+ 3 to 26 months	$	54,000
Express Rome	2011	10,100	May 2024	Hapag Lloyd	May 2024	$	30,000		+ 4 months	$	30,000
Express Berlin	2011	10,100	August 2026	Yang Ming	August 2023	$	27,750
				Confidential ⁽⁶⁾	August 2026	$	33,000		+ 4 months	$	33,000
Express Athens	2011	10,100	May 2024	Hapag Lloyd	May 2024	$	30,000		+ 4 months	$	30,000
Le Havre	2006	9,580	June 2028	MSC	August 2023	$	23,000
				Confidential ⁽⁶⁾	June 2028	$	58,500		+ 4 months	$	58,500
Pusan C	2006	9,580	May 2028	Confidential ⁽⁶⁾	May 2028	$	58,500		+ 4 months	$	58,500
Bremen	2009	9,012	January 2028	Confidential ⁽⁶⁾	January 2028	$	56,000		+ 4 months	$	56,000
C Hamburg	2009	9,012	January 2028	Confidential ⁽⁶⁾	January 2028	$	56,000		+ 4 months	$	56,000
Niledutch Lion	2008	8,626	May 2026	Niledutch	May 2026	$	47,500		+ 4 months	$	47,500
Belita	2006	8,533	July 2026	CMA CGM	July 2026	$	45,000		+ 6 months	$	45,000
Kota Manzanillo	2005	8,533	February 2026	PIL	February 2026	$	47,500		+ 4 months	$	47,500
CMA CGM Melisande	2012	8,530	January 2028	CMA CGM	August 2024	$	43,000
				Confidential ⁽⁶⁾	January 2028	$	34,500		+ 3 to 13.5 months	$	34,500
CMA CGM Attila	2011	8,530	May 2027	CMA CGM	January 2024	$	43,000
				Confidential ⁽⁶⁾	May 2027	$	34,500		+ 3 to 13.5 months	$	34,500
CMA CGM Tancredi	2011	8,530	July 2027	CMA CGM	February 2024	$	43,000
				Confidential ⁽⁶⁾	July 2027	$	34,500		+ 3 to 13.5 months	$	34,500
CMA CGM Bianca	2011	8,530	September 2027	CMA CGM	April 2024	$	43,000
				Confidential ⁽⁶⁾	September 2027	$	34,500		+ 3 to 13.5 months	$	34,500
CMA CGM Samson	2011	8,530	November 2027	CMA CGM	June 2024	$	43,000
				Confidential ⁽⁶⁾	November 2027	$	34,500		+ 3 to 13.5 months	$	34,500
America	2004	8,468	April 2028	Confidential ⁽⁶⁾	April 2028	$	56,000		+ 4 months	$	56,000
Europe	2004	8,468	May 2028	Confidential ⁽⁶⁾	May 2028	$	56,000		+ 4 months	$	56,000
Kota Santos (ex Phoebe)	2005	8,463	August 2026	PIL	August 2023	$	60,000
					August 2025	$	55,000
					August 2026	$	50,000		+ 4 months	$	55,000
CMA CGM Moliere	2009	6,500	March 2027	Confidential ⁽⁶⁾	March 2027	$	55,000		+ 2 months	$	55,000
CMA CGM Musset	2010	6,500	September 2025	Confidential ⁽⁶⁾	September 2025	$	60,000		+ 23 to 25 months	$	55,000
CMA CGM Nerval	2010	6,500	November 2025	Confidential ⁽⁶⁾	November 2025	$	40,000		+ 23 to 25 months	$	30,000
CMA CGM Rabelais	2010	6,500	January 2026	Confidential ⁽⁶⁾	January 2026	$	40,000		+ 23 to 25 months	$	30,000
Racine (ex CMA CGM Racine)	2010	6,500	April 2026	Confidential ⁽⁶⁾	April 2024	$	30,000
					April 2026	$	32,500		+ 2 months	$	32,500
YM Mandate	2010	6,500	January 2028	Yang Ming	January 2028	$	26,890	(5)	+ 8 months	$	26,890
YM Maturity	2010	6,500	April 2028	Yang Ming	April 2028	$	26,890	(5)	+ 8 months	$	26,890
Dimitra C	2002	6,402	January 2024	Hapag Lloyd	January 2024	$	21,500		+ 3 months	$	21,500
ZIM Savannah	2002	6,402	May 2024	ZIM	May 2024	$	36,000		+ 6 months	$	36,000
Kota Lima	2002	5,544	November 2024	PIL	November 2024	$	39,999		+ 4 months	$	39,999
									+ 10 to 14 months	$	27,500
									+ 10 to 12 months	$	24,000
Suez Canal	2002	5,610	April 2026	Confidential ⁽⁶⁾	April 2024	$	25,500
					April 2026	$	27,500		+ 2 months	$	27,500
Wide Alpha	2014	5,466	March 2024	ONE	March 2024	$	18,500		+ 3 months	$	18,500
Stephanie C	2014	5,466	June 2025	Confidential ⁽⁶⁾	June 2025	$	55,500		+ 4 months	$	55,500
Maersk Euphrates	2014	5,466	April 2024	Maersk	April 2024	$	17,500		+ 4 months	$	17,500
Wide Hotel	2015	5,466	May 2024	ONE	May 2024	$	18,500		+ 3 months	$	18,500
Wide India	2015	5,466	November 2025	Confidential ⁽⁶⁾	November 2025	$	53,500		+ 4 months	$	53,500
Wide Juliet	2015	5,466	October 2025	ONE	October 2023	$	19,950
				Confidential ⁽⁶⁾	October 2025	$	24,750		+ 4 months	$	24,750
									+ 11 to 13 months	$	25,000
									+ 11 to 13 months	$	30,000
Rio Grande	2008	4,253	November 2024	OOCL	December 2023	$	50,000
					November 2024	$	17,000		+ 2 months	$	45,000
Paolo (ex ZIM Sao Paolo)	2008	4,253	August 2025	Confidential ⁽⁶⁾	August 2023	$	20,000

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Vessel Details			Charter Arrangements
	Year	Size	Expiration of		Contracted Employment	Charter		Extension Options ⁽⁴⁾
Vessel Name	Built	(TEU)	Charter ⁽¹⁾	Charterer	through ⁽²⁾	Rate ⁽³⁾		Period	Charter Rate
					August 2025	$	24,000	+ 4 months	$	24,000
Kingston (ex ZIM Kingston)	2008	4,253	June 2025	Confidential ⁽⁶⁾	June 2025	$	23,900	+ 2 months	$	23,900
ZIM Monaco	2009	4,253	October 2024	Confidential ⁽⁶⁾	October 2024	$	53,000	+ 6 months	$	53,000
Dalian	2009	4,253	March 2026	Confidential ⁽⁶⁾	March 2026	$	48,000	+ 3 months	$	48,000
ZIM Luanda	2009	4,253	August 2025	ZIM	August 2025	$	30,000	+ 4 months	$	30,000
Seattle C	2007	4,253	October 2024	OOCL	November 2023	$	50,000
					October 2024	$	17,000	+ 2 months	$	45,000
Vancouver	2007	4,253	November 2024	OOCL	December 2023	$	50,000
					November 2024	$	17,000	+ 2 months	$	45,000
Derby D	2004	4,253	January 2027	CMA CGM	January 2027	$	36,275	+ 3 months	$	36,275
Tongala	2004	4,253	November 2024	Confidential ⁽⁶⁾	November 2024	$	53,000	+ 6 months	$	53,000
Dimitris C	2001	3,430	November 2025	CMA CGM	November 2025	$	40,000	+ 4 months	$	40,000
Express Argentina	2010	3,400	September 2023	Maersk	September 2023	$	26,500
Express Brazil	2010	3,400	June 2025	CMA CGM	June 2025	$	37,750	+ 2 months	$	37,750
Express France	2010	3,400	September 2025	CMA CGM	September 2025	$	37,750	+ 2 months	$	37,750
Express Spain	2011	3,400	January 2025	Cosco	January 2025	$	40,000	+ 2 months	$	40,000
Express Black Sea	2011	3,400	January 2025	Cosco	January 2025	$	40,000	+ 2 months	$	40,000
Singapore	2004	3,314	May 2024	OOCL	November 2023	$	38,450
					May 2024	$	21,000	+ 6 months	$	37,000
Colombo	2004	3,314	January 2025	Cosco	January 2025	$	40,000	+ 2 months	$	40,000
Zebra	2001	2,602	November 2024	Maersk	November 2024	$	32,000	+ 4 months	$	32,000
Artotina	2001	2,524	May 2025	Confidential ⁽⁶⁾	May 2025	$	28,000	+2 months	$	28,000
Phoenix D	1997	2,200	March 2025	Maersk	March 2025	$	28,000	+ 6 months	$	28,000
Stride	1997	2,200	January 2025	Cosco	January 2025	$	26,250	+ 2 months	$	26,250
Sprinter	1997	2,200	December 2024	Cosco	December 2024	$	26,250	+ 2 months	$	26,250
Future	1997	2,200	December 2024	Cosco	December 2024	$	26,250	+ 2 months	$	26,250
Advance	1997	2,200	January 2025	Cosco	January 2025	$	26,250	+ 2 months	$	26,250
Bridge	1998	2,200	December 2024	Samudera	December 2024	$	23,000	+ 6 months	$	23,000
Highway	1998	2,200	November 2023	Confidential ⁽⁶⁾	November 2023	$	15,000	+ 1 month	$	15,000
Progress C	1998	2,200	November 2024	Cosco	November 2024	$	26,250	+ 2 months	$	26,250

1.	Earliest date charters could expire. Most charters include options for the charterers to extend their terms as described in the “Extension Options” column.

This column indicates the date through which the charter rate set forth in the column to the immediate right of such date is payable. For charters with the same charter rate throughout the fixed term of the charter, this date is the same as the charter expiration date set forth in the “Expiration of Charter” column.

3.	Gross charter rate, which does not include charter commissions.

4.	At the option of the charterer.

5.	Bareboat charter rate.

6.	Charterer not disclosed due to confidentiality arrangements.

The specifications of 5 Capesize dry bulk vessels we have in principle agreed to acquire, which remains subject to definitive documentation, and are expected to be delivered to us between September and October 2023 are as follows:


	Year	Capacity
Vessel Name	Built	(DWT)
Bulk Achievement	2011	175,850
Bulk Genius	2012	175,580
Bulk Ingenuity	2011	176,022
Bulk Integrity	2010	175,996
Bulk Peace	2010	175,858

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The specifications of our 10 contracted containerships under construction as of August 3, 2023 are as follows:


					Minimum			Extension Options⁽³⁾
				Expected	Charter	Charter			Charter
Hull Number	Year Built	Size (TEU)	Shipyard	Delivery Period	Duration⁽¹⁾	rate⁽²⁾		Period	Rate⁽²⁾
Hull No. C7100-7	2024	7,165	Dalian Shipbuilding	3^rd Quarter 2024	3 Years	$	36,000	+ 4 months	$	36,000
								+ 22 to 26 months	$	40,000
Hull No. C7100-8	2024	7,165	Dalian Shipbuilding	4^th Quarter 2024	3 Years	$	36,000	+ 4 months	$	36,000
								+ 22 to 26 months	$	40,000
Hull No. HN4009	2024	8,010	Daehan Shipbuilding	2^ndQuarter 2024	3 Years	$	42,000	+ 3 months	$	42,000
Hull No. HN4010	2024	8,010	Daehan Shipbuilding	2^ndQuarter 2024	3 Years	$	42,000	+ 3 months	$	42,000
Hull No. HN4011	2024	8,010	Daehan Shipbuilding	3^rd Quarter 2024	3 Years	$	42,000	+ 3 months	$	42,000
Hull No. HN4012	2024	8,010	Daehan Shipbuilding	3^rd Quarter 2024	3 Years	$	42,000	+ 3 months	$	42,000
Hull No. CV5900-07	2024	6,014	Qingdao Yangfan Shipbuilding	4^th Quarter 2024	—
Hull No. CV5900-08	2025	6,014	Qingdao Yangfan Shipbuilding	2^nd Quarter 2025	—
Hull No. YZJ2023-1556	2026	8,258	Jiangsu NewYangzi Shipbuilding	3^rd Quarter 2026	—
Hull No. YZJ2023-1557	2026	8,258	Jiangsu NewYangzi Shipbuilding	4^th Quarter 2026	—

1.	Earliest period charters could expire. Most charters include options for the charterers to extend their terms as described in the “Extension Options” column.

2.	Gross charter rate, which does not include charter commissions.

3.	At the option of the charterer.

Risk Factors

The following should be read in conjunction with the risk factors previously disclosed in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022 filed with the SEC on March 9, 2023.

Charter rates for dry bulk vessels are volatile and may decrease in the future, which may adversely affect our results of operations and financial condition.

The dry bulk shipping industry continues to be cyclical with high volatility in charter rates and profitability among the various types of dry bulk vessels. In 2021, charter rates for dry bulk vessels increased significantly from lower levels that prevailed during previous years. The Baltic Dry Index, or the “BDI”, an index published by The Baltic Exchange of shipping rates for key dry bulk routes, declined in 2020, principally as a result of the global economic slowdown caused by the COVID-19 pandemic. Strong global growth and increased infrastructure spending led to a rise in demand for commodities, which combined with a historically low orderbook and port delays and congestion, resulted in an increase in BDI in 2021 and the first half of 2022, before moderating and declining significantly in the second half of 2022 as port congestion eased and Chinese demand for drybulk commodities weakened and stood at the lows for the year at the end of December 2022, and had declined further in the first half of 2023.

The factors affecting the supply and demand for drybulk vessels are outside of our control and are difficult to predict with confidence. As a result, the nature, timing, direction and degree of changes in industry conditions are also unpredictable.

Factors that influence demand for drybulk vessel capacity include:

●

demand for and production of drybulk products;

●

supply of and demand for energy resources and commodities

●

the COVID-19 pandemic and related factors;

●

global and regional economic and political conditions, including weather, natural or other disasters (including the COVID-19 pandemic), armed conflicts (including the Ukraine conflict), terrorist activities and strikes;

●

environmental and other regulatory developments;

●

the location of regional and global exploration, production and manufacturing facilities and the distance drybulk cargoes are to be moved by sea;

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●

changes in seaborne and other transportation patterns including shifts in the location of consuming regions for energy resources, commodities, and transportation demand for drybulk transportation;

●

international sanctions, embargoes, import and export restrictions, nationalizations and wars, including the conflict in Ukraine;

●

natural disaster and weather

●

trade disputes or the imposition of tariffs on various commodities or finished goods tariffs on imports and exports that could affect the international trade; and

●

currency exchange rates.

Factors that influence the supply of drybulk vessel capacity include:

●

the size of the newbuilding orderbook;

●

the prevailing and anticipated freight rates which in turn affect the rate of newbuilding;

●

availability of financing for new vessels;

●

the number of newbuild deliveries, including slippage in deliveries, which, among other factors, relates to the ability of shipyards to deliver newbuilds by contracted delivery dates and the ability of purchasers to finance such newbuilds;

●

the scrapping rate of older vessels, depending, amongst other things, on scrapping rates and international scrapping regulations;

●

the COVID-19 pandemic and related factors, including port lockdowns, higher crew cost and travel restrictions imposed by governments around the world;

●

port and canal congestion;

●

the speed of vessel operation which may be influenced by several reasons including energy cost and environmental regulations;

●

sanctions;

●

the number of vessels that are in or out of service, delayed in ports for several reasons, laid-up, dry docked awaiting repairs or otherwise not available for hire, including due to vessel casualties;

●

changes in environmental and other regulations that may limit the useful lives of vessels or effectively cause reductions in the carrying capacity of vessels or early obsolescence of tonnage; and

●

our ability to maintain ESG practices acceptable to customers, regulators and financing sources.

Factors influencing the supply of and demand for shipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions. We anticipate that the future demand for our drybulk vessels and, in turn, drybulk charter rates, will be dependent, among other things, upon economic growth in the world’s economies, seasonal and regional changes in demand, changes in the capacity of the global drybulk vessel fleet and the sources and supply of drybulk cargo to be transported by sea. A decline in demand for commodities transported in drybulk vessels or an increase in supply of drybulk vessels could cause a significant decline in charter rates, which could materially adversely affect our business, financial condition and results of operations. There can be no assurance as to the sustainability of future economic growth, if any, due to unexpected demand shocks.

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The operation of dry bulk vessels entails certain unique operational risks.

The operation of certain ship types, such as dry bulk vessels, has certain unique risks. With a dry bulk vessel, the cargo itself and its interaction with the ship can be a risk factor. By their nature, dry bulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure. In addition, dry bulk vessels are often subjected to battering treatment during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the hold), and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatment during unloading procedures may be more susceptible to breach at sea. Furthermore, any defects or flaws in the design of a dry bulk vessel may contribute to vessel damage. Hull breaches in dry bulk vessels may lead to the flooding of the vessels holds. If a dry bulk vessel suffers flooding in its holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel’s bulkheads, leading to the loss of the vessel. If we are unable to adequately maintain our vessels, we may be unable to prevent these events.

Any of these circumstances or events could negatively impact our business, financial condition, results of operations and our ability to pay dividends, if any, in the future. In addition, the loss of any of our dry bulk vessels could harm our reputation as a safe and reliable vessel owner and operator.

Forward Looking Statements

Matters discussed in this report 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 our operations, cash flows, financial position, including with respect to vessel and other asset values, plans, objectives, goals, strategies, future events, performance or business prospects, changes and trends in our business and the markets in which we operate, 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 fulfill 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 drydocking, changes in our operating expenses, including bunker prices, dry-docking and insurance costs, our ability to operate profitably in the drybulk sector, our ability to obtain financing and comply with covenants in our financing arrangements, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events, including the conflict in Ukraine and related sanctions, or acts by terrorists.

Risks and uncertainties are further described in reports filed by us with the U.S. Securities and Exchange Commission.

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INDEX TO FINANCIAL STATEMENTS


Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 (unaudited)	F-2

Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)	F-3

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)	F-4

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2023 and 2022 (unaudited)	F-5

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022 (unaudited)	F-6

Notes to the Unaudited Condensed Consolidated Financial Statements	F-7

F-1

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DANAOS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

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


		As of
		June 30,		December 31,
	Notes	2023		2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	293,331	$	267,668
Accounts receivable, net			8,091		5,635
Inventories			16,022		16,099
Prepaid expenses			2,635		1,312
Due from related parties	14		32,912		34,002
Other current assets	6		134,792		47,805
Total current assets			487,783		372,521
NON-CURRENT ASSETS
Fixed assets at cost, net of accumulated depreciation of $1,245,841 (2022: $1,182,402)	4		2,661,976		2,721,494
Advances for vessels under construction	4		215,786		190,736
Deferred charges, net	5		31,777		25,554
Investments in affiliates	3		937		—
Other non-current assets	6		86,173		89,923
Total non-current assets			2,996,649		3,027,707
Total assets		$	3,484,432	$	3,400,228

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	17,533	$	24,505
Accrued liabilities	7		21,907		21,362
Current portion of long-term debt, net	8		27,500		27,500
Current portion of long-term leaseback obligation, net	4		—		27,469
Unearned revenue			89,912		111,149
Other current liabilities	14		28,220		16,422
Total current liabilities			185,072		228,407

LONG-TERM LIABILITIES
Long-term debt, net	8		389,564		402,440
Long-term leaseback obligation, net of current portion	4		—		44,542
Unearned revenue, net of current portion			82,333		111,564
Other long-term liabilities	14		37,981		52,861
Total long-term liabilities			509,878		611,407
Total liabilities			694,950		839,814

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