Achieves Strong Operating Results, Grows
Operating Fleet and Further Strengthens Financial Position
HONG KONG, July 30, 2017 Seaspan Corporation ("Seaspan")
(NYSE: SSW) announced today its financial results for the three and
six months ended June 30, 2017.
Key Financial Metrics
- Total revenues of $204.6 million
for the second quarter and $405.9
million for the six months.
- Earnings per diluted share of $0.11 for the second quarter and $0.33 for the six months.
- Normalized earnings per diluted share(1) of
$0.17 for the second quarter and
$0.32 for the six months.
- Cash available for distribution to common
shareholders(1) of $95.0
million for the second quarter and $155.4 million for the six months.
- Adjusted EBITDA(1) of $153.9
million for the second quarter and $273.2 million for the six months.
___________________________________
|
(1)
|
Refer to the selected
financial information accompanying this press release for
definitions of these non-GAAP measures and reconciliations of these
non-GAAP financial measures as used in this release to the most
directly comparable financial measures under U.S. generally
accepted accounting principles (GAAP).
|
Highlights
- Accepted delivery of one 14000 TEU vessel on long-term charter
with Yang Ming Marine Transport Corp. ("Yang Ming Marine").
- Achieved reductions of 13.8% and 12.3% in ship operating
expense per ownership day during the three and six months ended
June 30, 2017, respectively, compared
to the same periods in 2016.
- Achieved vessel utilization of 98.2% and 95.0% for the three
and six months ended June 30, 2017,
respectively.
- Raised gross proceeds of $33.9
million through common equity sales in "at-the-market"
offerings during the three months ended June
30, 2017 and $58.6 million for
the six months ended June 30,
2017.
- Currently eight unencumbered vessels in the Company's operating
fleet: 2 x 3500 TEUs, 2 x 4500 TEUs and 4 x 4250 TEUs.
- In July 2017, declared a
quarterly dividend of $0.125 per
common share for the second quarter of 2017.
Gerry Wang, Chief Executive
Officer and Co-Founder of Seaspan, commented, "During the second
quarter, Seaspan grew its operating fleet with the delivery of the
YM Wind, a 14000 TEU containership on a long-term fixed rate time
charter. We also achieved strong operating results, highlighted by
our ongoing success in reducing costs and our high utilization rate
for the quarter."
Mr. Wang added, "We took important steps to further strengthen
our financial position during the quarter, including entering into
a sale-leaseback transaction to fund the YM Wind delivery and
renewing our unsecured revolving loan facility. Both of these
transactions demonstrate the company's strong access to capital. We
remain committed to creating long-term shareholder value and are
pleased to enter the second half of the year with a strong cash
position and the financial flexibility to capitalize on future
opportunities."
Summary of Key Financial Results (in thousands of US
dollars):
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
Revenue
|
|
$
|
204,609
|
|
|
$
|
224,314
|
|
|
$
|
405,930
|
|
|
$
|
439,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net
earnings
|
|
$
|
28,284
|
|
|
$
|
36,425
|
|
|
$
|
68,307
|
|
|
$
|
43,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized net
earnings(1)
|
|
$
|
35,538
|
|
|
$
|
43,977
|
|
|
$
|
67,367
|
|
|
$
|
89,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share,
basic and diluted
|
|
$
|
0.11
|
|
|
$
|
0.23
|
|
|
$
|
0.33
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized earnings
per share, diluted(1)
|
|
$
|
0.17
|
|
|
$
|
0.30
|
|
|
$
|
0.32
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash available for
distribution to common
|
|
$
|
95,007
|
|
|
$
|
111,223
|
|
|
$
|
155,356
|
|
|
$
|
211,750
|
|
shareholders(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
153,862
|
|
|
$
|
177,150
|
|
|
$
|
273,235
|
|
|
$
|
340,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
These are non-GAAP
financial measures. Please read "Description of Non-GAAP Financial
Measures" for (a) descriptions of Normalized net earnings and
Normalized earnings per share, Cash available for distribution to
common shareholders, and Adjusted EBITDA and (b) reconciliations of
these Non-GAAP financial measures as used in this release to the
most directly comparable financial measures under GAAP.
|
Second Quarter Developments
Vessel Delivery and Financing
In May 2017, Seaspan accepted
delivery of one 14000 TEU vessel, the YM Wind. The vessel was
constructed at CSBC Corporation, Taiwan using our fuel-efficient SAVER design
and commenced a 10-year fixed rate time charter with Yang Ming Marine in June
2017.
In May 2017, Seaspan entered into
a sale-leaseback transaction with special purpose companies
("SPCs") for the YM Wind for gross proceeds of $144.0 million. Under the lease, Seaspan sold the
vessel to the SPCs and leased the vessel back for 12 years, with an
option to purchase the vessel at the 9.5 year anniversary for a
pre-determined fair value purchase price. Seaspan used
approximately $53.2 million of the
proceeds to repay a credit facility.
Revolving Credit Facility
In April 2017, Seaspan completed
the renewal of its 364-day unsecured, revolving loan facility for a
total commitment of up to $120.0
million. The facility includes features providing for an
increase in commitments by up to $30.0
million, enabling a total facility size of up to
$150.0 million.
At-the-Market Offering of Class A Common Shares
During the first quarter of 2017, Seaspan entered into an equity
distribution agreement under which it may, from time to time, issue
Class A common shares in at-the-market ("ATM") offerings for up to
an aggregate of $75.0 million. During
the three and six months ended June 30,
2017, Seaspan issued a total of 5,650,000 and 9,350,000
Class A common shares under the ATM offerings for gross proceeds of
approximately $33.9 million and
$58.6 million, respectively.
Subsequent Events
Dividends
In July 2017, Seaspan declared
quarterly cash dividends on its common and preferred shares.
Results for the Three and Six Months Ended June 30, 2017
At the beginning of 2017, Seaspan had 87 vessels in operation.
Seaspan acquired one 4250 TEU vessel and accepted delivery of one
14000 TEU vessel during the six months ended June 30, 2017, bringing its operating fleet to a
total of 89 vessels as at June 30,
2017. Revenue is determined primarily by the number of
operating days, and ship operating expense is determined primarily
by the number of ownership days.
|
|
Three Months
Ended
June
30,
|
|
|
Increase
|
|
|
Six Months
Ended
June
30,
|
|
|
Increase
|
|
|
|
2017
|
|
|
2016
|
|
|
Days
|
|
|
%
|
|
|
2017
|
|
|
2016
|
|
|
Days
|
|
|
%
|
|
Operating
days(1)
|
|
|
7,895
|
|
|
|
7,468
|
|
|
|
427
|
|
|
|
5.7
|
%
|
|
|
15,150
|
|
|
|
14,640
|
|
|
|
510
|
|
|
|
3.5
|
%
|
Ownership
days(1)
|
|
|
8,037
|
|
|
|
7,612
|
|
|
|
425
|
|
|
|
5.6
|
%
|
|
|
15,954
|
|
|
|
14,987
|
|
|
|
967
|
|
|
|
6.5
|
%
|
The following table summarizes Seaspan's vessel utilization by
quarter and for the six months ended June
30, 2017 and 2016:
|
|
Three Months
Ended
March
31,
|
|
|
Three Months
Ended
June
30,
|
|
|
Year To
Date-
June
30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Vessel
Utilization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ownership
Days(1)
|
|
|
7,917
|
|
|
|
7,375
|
|
|
|
8,037
|
|
|
|
7,612
|
|
|
|
15,954
|
|
|
|
14,987
|
|
Less Off-hire
Days:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scheduled 5-Year
Survey
|
|
|
—
|
|
|
|
(75)
|
|
|
|
—
|
|
|
|
(19)
|
|
|
|
—
|
|
|
|
(94)
|
|
|
Unscheduled
Off-hire(2)
|
|
|
(662)
|
|
|
|
(128)
|
|
|
|
(142)
|
|
|
|
(125)
|
|
|
|
(804)
|
|
|
|
(253)
|
|
Operating
Days(1)
|
|
|
7,255
|
|
|
|
7,172
|
|
|
|
7,895
|
|
|
|
7,468
|
|
|
|
15,150
|
|
|
|
14,640
|
|
Vessel
Utilization
|
|
|
91.6
|
%
|
|
|
97.2
|
%
|
|
|
98.2
|
%
|
|
|
98.1
|
%
|
|
|
95.0
|
%
|
|
|
97.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Operating and
ownership days include leased vessels and exclude vessels under
bareboat charter.
|
(2)
|
Unscheduled off-hire
includes days related to vessels off-charter.
|
The following table summarizes Seaspan's consolidated financial
results for the quarter and six months ended June 30, 2017 and 2016:
Financial
Summary
(in millions of US
dollars)
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
204.6
|
|
|
$
|
224.3
|
|
|
$
|
405.9
|
|
|
$
|
439.8
|
Ship operating
expense
|
|
|
44.8
|
|
|
|
49.2
|
|
|
|
90.4
|
|
|
|
96.8
|
Depreciation and
amortization expense
|
|
|
49.8
|
|
|
|
54.5
|
|
|
|
99.7
|
|
|
|
113.4
|
General and
administrative expense
|
|
|
7.5
|
|
|
|
9.1
|
|
|
|
15.0
|
|
|
|
16.9
|
Operating lease
expense
|
|
|
28.1
|
|
|
|
20.7
|
|
|
|
54.7
|
|
|
|
35.5
|
Interest expense and
amortization of deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financing
fees
|
|
|
28.3
|
|
|
|
30.1
|
|
|
|
56.7
|
|
|
|
60.2
|
Change in fair value
of financial instruments
|
|
|
13.6
|
|
|
|
23.6
|
|
|
|
17.0
|
|
|
|
75.8
|
Revenue
Revenue decreased by 8.8% to $204.6
million for the three months ended June 30, 2017, compared to the same period in
2016, primarily due to lower average charter rates for vessels that
were on short-term charters. The decrease was partially offset by
the delivery of newbuilding vessels in 2016 and 2017 and the
addition of two leased-in vessels in 2016.
Revenue decreased by 7.7% to $405.9
million for the six months ended June
30, 2017, compared to the same period in 2016, primarily due
to lower average charter rates for vessels that were on short-term
charters and an increase in unscheduled off-hire, primarily
relating to vessels being off-charter. For the six months ended
June 30, 2017, 200 of the off-charter
days related to three 10000 TEU vessels that were previously on
long-term charters and commenced short-term charters with
Hapag-Lloyd AG commencing in March and April
2017. The remaining off-charter days primarily related to
panamax vessels, including four secondhand vessels purchased in
December 2016. The decrease was
partially offset by the delivery of newbuilding vessels in 2016 and
2017 and the addition of two leased-in vessels in 2016.
The increase in operating days and the related financial impact
thereof for the three and six months ended June 30, 2017, relative to the same periods in
2016, are attributable to the following:
|
|
Three Months
Ended
June 30,
2017
|
|
|
Six Months
Ended
June 30,
2017
|
|
|
Operating
Days
Impact
|
|
|
$
Impact
(in
millions
of US
dollars)
|
|
|
Operating
Days
Impact
|
|
|
$
Impact
(in
millions
of US
dollars)
|
2017 vessel
deliveries
|
|
|
120
|
|
|
|
1.7
|
|
|
|
207
|
|
|
|
2.0
|
Full period
contribution for 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
vessel
deliveries
|
|
|
487
|
|
|
|
9.8
|
|
|
|
1,203
|
|
|
|
27.8
|
Change in daily
charter hire rate and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
re-charters
|
|
|
—
|
|
|
|
(25.5)
|
|
|
|
—
|
|
|
|
(44.7)
|
Fewer days due to
leap year
|
|
|
—
|
|
|
|
—
|
|
|
|
(81)
|
|
|
|
(2.4)
|
Unscheduled
off-hire
|
|
|
(17)
|
|
|
|
(2.0)
|
|
|
|
(551)
|
|
|
|
(13.0)
|
Scheduled
off-hire
|
|
|
19
|
|
|
|
1.1
|
|
|
|
94
|
|
|
|
4.8
|
Supervision fee
revenue
|
|
|
—
|
|
|
|
(3.8)
|
|
|
|
—
|
|
|
|
(5.1)
|
Vessel
disposals
|
|
|
(182)
|
|
|
|
(0.5)
|
|
|
|
(362)
|
|
|
|
(2.3)
|
Other
|
|
|
—
|
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
(1.0)
|
Total
|
|
|
427
|
|
|
$
|
(19.7)
|
|
|
|
510
|
|
|
$
|
(33.9)
|
Vessel utilization remained stable for the three months ended
June 30, 2017, compared to the same
period in 2016. Vessel utilization decreased for the six months
ended June 30, 2017, compared to the
same period in 2016, primarily due to an increase in off-charter
days as previously described.
During the six months ended June 30,
2017, Seaspan completed dry-dockings for two 4250 TEU
vessels, which were completed between their time charters.
Ship Operating Expense
Ship operating expense decreased by 9.0% to $44.8 million and by 6.6% to $90.4 million for the three and six months ended
June 30, 2017, respectively, compared
to the same periods in 2016, primarily due to cost savings
initiatives. These decreases were achieved while the ownership days
increased by 5.6% and 6.5% for the three and six months ended
June 30, 2017. As a result, ship
operating expense per ownership day declined by 13.8% and 12.3% for
the three and six months ended June 30,
2017, compared to the same periods in 2016.
Depreciation and Amortization Expense
Depreciation and amortization expense decreased by 8.7% to
$49.8 million and by 12.0% to
$99.7 million for the three and six
months ended June 30, 2017,
respectively, compared to the same periods in 2016, primarily due
to lower depreciation on 16 vessels that were impaired as of
December 31, 2016.
General and Administrative Expense
General and administrative expense decreased by 17.4% to
$7.5 million and 11.2% to
$15.0 million for the three and six
months ended June 30, 2017,
respectively, compared to the same periods in 2016, primarily due
to higher professional fees and other expenses incurred in 2016,
partially offset by an increase in non-cash stock-based
compensation expense related to grants of restricted and
performance stock units in 2016.
Operating Lease Expense
Operating lease expense increased to $28.1 million and $54.7
million for the three and six months ended June 30, 2017, respectively, from $20.7 million and $35.5
million for the same periods in 2016. The increase was
primarily due to the delivery of two vessels in 2016 and one vessel
in 2017 that were financed through sale-leaseback transactions and
two operating leases entered into in 2016. For the six months ended
June 30, 2017, the increase was also
due to the delivery of one 10000 TEU vessel financed through a
sale-leaseback transaction in the first quarter of 2016.
Interest Expense and Amortization of Deferred Financing
Fees
The following table summarizes Seaspan's borrowings:
(in millions
of US dollars)
|
|
As at June
30,
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Long-term debt,
excluding deferred financing fees
|
|
$
|
2,675.9
|
|
|
$
|
3,316.6
|
Long-term obligations
under capital lease, excluding
|
|
|
|
|
|
|
|
|
deferred financing
fees
|
|
|
485.9
|
|
|
|
411.7
|
Total
borrowings
|
|
|
3,161.8
|
|
|
|
3,728.3
|
Less: Vessels under
construction
|
|
|
(278.2)
|
|
|
|
(289.8)
|
Operating
borrowings
|
|
$
|
2,883.6
|
|
|
$
|
3,438.5
|
Interest expense and amortization of deferred financing fees
decreased by $1.8 million and
$3.5 million to $28.3 million and $56.7
million for the three and six months ended June 30, 2017, respectively, compared to the same
periods in 2016, primarily due to repayments made on existing
operating borrowings in 2016 and 2017, partially offset by an
increase in LIBOR.
Change in Fair Value of Financial Instruments
The change in fair value of financial instruments resulted in
losses of $13.6 million and
$17.0 million for the three and six
months ended June 30, 2017,
respectively, which losses were primarily due to the impact
of swap settlements, partially offset by an increase in the forward
LIBOR curve.
About Seaspan
Seaspan provides many of the world's major shipping lines with
creative outsourcing alternatives to vessel ownership by offering
long-term leases on large, modern containerships combined with
industry-leading ship management services. Seaspan's managed fleet
consists of 114 containerships representing a total capacity of
over 915,000 TEU, including nine newbuilding containerships on
order scheduled for delivery to Seaspan and third parties by the
end of 2018. Seaspan's current operating fleet of 89 vessels has an
average age of approximately six years and an average remaining
lease period of approximately four years, on a TEU-weighted
basis.
Seaspan has the following securities listed on The New York
Stock Exchange:
Symbol
|
|
Description
|
|
|
|
SSW
|
|
Class A common
shares
|
SSW PR D
|
|
Series D preferred
shares
|
SSW PR E
SSW PR G
SSW PR H
|
|
Series E preferred
shares
Series G preferred
shares
Series H preferred
shares
|
SSWN
|
|
6.375% senior
unsecured notes due 2019
|
Conference Call and Webcast
Seaspan will host a conference call and webcast presentation for
investors and analysts to discuss its results for the three and six
months ended June 30, 2017 on
August 1, 2017 at 5:30 a.m. PT / 8:30 a.m.
ET. Participants should call 1-877-246-9875 (US/Canada) or 1-707-287-9353 (International) and
request the Seaspan call. A telephonic replay will be available for
anyone unable to participate in the live call. To access the
replay, call 1-855-859-2056 or 1-404-537-3406 and enter the replay
passcode 62493328. The recording will be available from
August 1, 2017 at 8:30 a.m. PT / 11:30 a.m.
ET through 8:30 p.m. PT /
11:30 p.m. ET on August 15, 2017. The conference call will also be
broadcast live over the Internet and will include a slide
presentation. To access the live webcast of the conference call, go
to www.seaspancorp.com and click on "News & Events" then
"Events & Presentations" for the link. The webcast will be
archived on the site for one year.
SEASPAN
CORPORATION
UNAUDITED CONSOLIDATED BALANCE
SHEET
AS OF JUNE 30, 2017
(IN THOUSANDS OF US
DOLLARS)
|
|
|
|
|
|
|
|
|
June 30,
2017
|
|
|
December 31,
2016
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
305,592
|
|
|
$
|
367,901
|
|
Short-term
investments
|
|
|
103
|
|
|
|
411
|
|
Accounts
receivable
|
|
|
18,938
|
|
|
|
30,793
|
|
Loans to
affiliate
|
|
|
36,100
|
|
|
|
62,414
|
|
Prepaid expenses and
other
|
|
|
41,375
|
|
|
|
37,252
|
|
Fair value of
financial instruments
|
|
|
—
|
|
|
|
11,338
|
|
|
|
402,108
|
|
|
|
510,109
|
|
|
|
|
|
|
|
|
Vessels
|
|
|
4,499,228
|
|
|
|
4,577,667
|
Vessels under
construction
|
|
|
278,186
|
|
|
|
306,182
|
Deferred
charges
|
|
|
65,345
|
|
|
|
68,099
|
Goodwill
|
|
|
75,321
|
|
|
|
75,321
|
Other
assets
|
|
|
137,614
|
|
|
|
120,451
|
|
|
$
|
5,457,802
|
|
|
$
|
5,657,829
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
53,783
|
|
|
$
|
62,157
|
|
Current portion of
deferred revenue
|
|
|
15,611
|
|
|
|
28,179
|
|
Current portion of
long-term debt
|
|
|
350,472
|
|
|
|
314,817
|
|
Current portion of
long-term obligations under capital lease
|
|
|
30,443
|
|
|
|
27,824
|
|
Current portion of
other long-term liabilities
|
|
|
23,648
|
|
|
|
21,115
|
|
Fair value of
financial instruments
|
|
|
4,707
|
|
|
|
30,752
|
|
|
|
478,664
|
|
|
|
484,844
|
|
|
|
|
|
|
|
|
Deferred
revenue
|
|
|
1,040
|
|
|
|
1,528
|
Long-term
debt
|
|
|
2,309,344
|
|
|
|
2,569,697
|
Long-term obligations
under capital lease
|
|
|
445,107
|
|
|
|
459,395
|
Other long-term
liabilities
|
|
|
213,336
|
|
|
|
195,104
|
Fair value of
financial instruments
|
|
|
200,560
|
|
|
|
200,012
|
|
|
|
3,648,051
|
|
|
|
3,910,580
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
1,507
|
|
|
|
1,385
|
|
Treasury
shares
|
|
|
(377)
|
|
|
|
(367)
|
|
Additional paid in
capital
|
|
|
2,658,389
|
|
|
|
2,580,274
|
|
Deficit
|
|
|
(825,359)
|
|
|
|
(807,496)
|
|
Accumulated other
comprehensive loss
|
|
|
(24,409)
|
|
|
|
(26,547)
|
|
|
|
1,809,751
|
|
|
|
1,747,249
|
|
|
$
|
5,457,802
|
|
|
$
|
5,657,829
|
SEASPAN
CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS AND DEFICIT
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2017 AND 2016
(IN THOUSANDS OF US DOLLARS, EXCEPT
SHARE AND PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
204,609
|
|
|
$
|
224,314
|
|
|
$
|
405,930
|
|
|
$
|
439,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ship
operating
|
|
|
44,823
|
|
|
|
49,233
|
|
|
|
90,430
|
|
|
|
96,840
|
|
Cost of services,
supervision fees
|
|
|
—
|
|
|
|
3,900
|
|
|
|
—
|
|
|
|
5,200
|
|
Depreciation and
amortization
|
|
|
49,798
|
|
|
|
54,515
|
|
|
|
99,744
|
|
|
|
113,352
|
|
General and
administrative
|
|
|
7,486
|
|
|
|
9,064
|
|
|
|
14,975
|
|
|
|
16,857
|
|
Operating
leases
|
|
|
28,148
|
|
|
|
20,662
|
|
|
|
54,658
|
|
|
|
35,513
|
|
Expenses related to
customer bankruptcy
|
|
|
—
|
|
|
|
—
|
|
|
|
1,013
|
|
|
|
—
|
|
|
|
130,255
|
|
|
|
137,374
|
|
|
|
260,820
|
|
|
|
267,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
|
74,354
|
|
|
|
86,940
|
|
|
|
145,110
|
|
|
|
172,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
(income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and
amortization of deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financing
fees
|
|
|
28,261
|
|
|
|
30,095
|
|
|
|
56,729
|
|
|
|
60,238
|
|
Interest
income
|
|
|
(1,193)
|
|
|
|
(2,768)
|
|
|
|
(2,365)
|
|
|
|
(5,845)
|
|
Undrawn credit
facility fees
|
|
|
635
|
|
|
|
741
|
|
|
|
1,265
|
|
|
|
1,153
|
|
Refinancing
expenses
|
|
|
—
|
|
|
|
772
|
|
|
|
—
|
|
|
|
772
|
|
Change in fair value
of financial instruments
|
|
|
13,610
|
|
|
|
23,614
|
|
|
|
17,027
|
|
|
|
75,765
|
|
Equity income on
investment
|
|
|
(1,642)
|
|
|
|
(2,168)
|
|
|
|
(2,529)
|
|
|
|
(3,968)
|
|
Other
expenses
|
|
|
6,399
|
|
|
|
229
|
|
|
|
6,676
|
|
|
|
407
|
|
|
|
46,070
|
|
|
|
50,515
|
|
|
|
76,803
|
|
|
|
128,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
28,284
|
|
|
$
|
36,425
|
|
|
$
|
68,307
|
|
|
$
|
43,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit, beginning of
period
|
|
|
(823,690)
|
|
|
|
(503,690)
|
|
|
|
(807,496)
|
|
|
|
(460,425)
|
Dividends - common
shares
|
|
|
(13,698)
|
|
|
|
(36,875)
|
|
|
|
(53,393)
|
|
|
|
(73,755)
|
Dividends - preferred
shares
|
|
|
(16,103)
|
|
|
|
(16,999)
|
|
|
|
(32,208)
|
|
|
|
(30,153)
|
Other
|
|
|
(152)
|
|
|
|
(265)
|
|
|
|
(569)
|
|
|
|
(624)
|
Deficit, end of
period
|
|
$
|
(825,359)
|
|
|
$
|
(521,404)
|
|
|
$
|
(825,359)
|
|
|
$
|
(521,404)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares, basic
|
|
|
113,963
|
|
|
|
101,480
|
|
|
|
110,362
|
|
|
|
99,616
|
Weighted average
number of shares, diluted
|
|
|
113,980
|
|
|
|
101,616
|
|
|
|
110,406
|
|
|
|
99,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share,
basic and diluted
|
|
$
|
0.11
|
|
|
$
|
0.23
|
|
|
$
|
0.33
|
|
|
$
|
0.17
|
SEASPAN
CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2017 AND 2016
(IN THOUSANDS OF US
DOLLARS)
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
28,284
|
|
|
$
|
36,425
|
|
|
$
|
68,307
|
|
|
$
|
43,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts reclassified
to net earnings during the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
relating to cash flow
hedging
instruments
|
|
|
662
|
|
|
|
1,047
|
|
|
|
2,138
|
|
|
|
2,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
$
|
28,946
|
|
|
$
|
37,472
|
|
|
$
|
70,445
|
|
|
$
|
45,661
|
SEASPAN
CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF
CASH FLOWS
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2017 AND 2016
(IN THOUSANDS OF US
DOLLARS)
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
|
2016
|
Cash from (used
in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
28,284
|
|
|
$
|
36,425
|
|
|
$
|
68,307
|
|
|
$
|
43,553
|
|
Items not involving
cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
49,798
|
|
|
|
54,515
|
|
|
|
99,744
|
|
|
|
113,352
|
|
|
Share-based
compensation
|
|
1,989
|
|
|
|
1,472
|
|
|
|
3,870
|
|
|
|
2,418
|
|
|
Amortization of
deferred financing fees
|
|
3,185
|
|
|
|
3,055
|
|
|
|
6,213
|
|
|
|
6,366
|
|
|
Amounts reclassified
from other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to interest
expense
|
|
401
|
|
|
|
784
|
|
|
|
1,680
|
|
|
|
1,595
|
|
|
Unrealized change in
fair value of financial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
instruments
|
|
(1,037)
|
|
|
|
1,491
|
|
|
|
(13,185)
|
|
|
|
30,350
|
|
|
Equity income on
investment
|
|
(1,642)
|
|
|
|
(2,168)
|
|
|
|
(2,529)
|
|
|
|
(3,968)
|
|
|
Refinancing
expenses
|
|
—
|
|
|
|
772
|
|
|
|
—
|
|
|
|
772
|
|
|
Operating
leases
|
|
(5,500)
|
|
|
|
(4,450)
|
|
|
|
(10,767)
|
|
|
|
(8,316)
|
|
|
Other
|
|
6,389
|
|
|
|
20
|
|
|
|
6,467
|
|
|
|
44
|
Changes in assets and
liabilities
|
|
(19,568)
|
|
|
|
(4,232)
|
|
|
|
(20,583)
|
|
|
|
(20,580)
|
Cash from operating
activities
|
|
62,299
|
|
|
|
87,684
|
|
|
|
139,217
|
|
|
|
165,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued,
net of issuance costs
|
|
33,362
|
|
|
|
96,034
|
|
|
|
57,266
|
|
|
|
96,034
|
|
|
Preferred shares
issued, net of issuance costs
|
|
—
|
|
|
|
247,663
|
|
|
|
—
|
|
|
|
247,663
|
|
|
Draws on credit
facilities
|
|
—
|
|
|
|
80,485
|
|
|
|
—
|
|
|
|
220,485
|
|
|
Repayment of credit
facilities
|
|
(75,627)
|
|
|
|
(200,596)
|
|
|
|
(171,157)
|
|
|
|
(291,116)
|
|
|
Draws on long-term
obligations under capital lease
|
|
—
|
|
|
|
81,150
|
|
|
|
—
|
|
|
|
81,150
|
|
|
Repayment of
long-term obligations under
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
capital
lease
|
|
(6,508)
|
|
|
|
(6,142)
|
|
|
|
(12,873)
|
|
|
|
(12,183)
|
|
|
Common shares
repurchased, including
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
related
expenses
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(8,269)
|
|
|
Preferred shares
redeemed, including
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
related
expenses
|
|
—
|
|
|
|
(333,061)
|
|
|
|
—
|
|
|
|
(333,061)
|
|
|
Senior unsecured
notes repurchased, including
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
related
expenses
|
|
(2,665)
|
|
|
|
—
|
|
|
|
(3,122)
|
|
|
|
—
|
|
|
Financing
fees
|
|
(2,314)
|
|
|
|
(9,408)
|
|
|
|
(2,314)
|
|
|
|
(11,018)
|
|
|
Dividends on common
shares
|
|
(6,433)
|
|
|
|
(35,493)
|
|
|
|
(45,711)
|
|
|
|
(71,063)
|
|
|
Dividends on
preferred shares
|
|
(16,103)
|
|
|
|
(16,999)
|
|
|
|
(32,208)
|
|
|
|
(30,153)
|
|
|
Net proceeds from
sale-leaseback of vessels
|
|
90,753
|
|
|
|
144,000
|
|
|
|
90,753
|
|
|
|
254,000
|
Cash from (used in)
financing activities
|
|
14,465
|
|
|
|
47,633
|
|
|
|
(119,366)
|
|
|
|
142,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for
vessels
|
|
(84,453)
|
|
|
|
(98,112)
|
|
|
|
(96,361)
|
|
|
|
(215,536)
|
|
|
Short-term
investments
|
|
—
|
|
|
|
(4)
|
|
|
|
308
|
|
|
|
1,050
|
|
|
Restricted
cash
|
|
408
|
|
|
|
(201)
|
|
|
|
(5,799)
|
|
|
|
(201)
|
|
|
Loans to
affiliate
|
|
(790)
|
|
|
|
(2,670)
|
|
|
|
(1,585)
|
|
|
|
(16,220)
|
|
|
Repayment of loans to
affiliate
|
|
18,068
|
|
|
|
54,306
|
|
|
|
21,233
|
|
|
|
54,306
|
|
|
Other
assets
|
|
(53)
|
|
|
|
(230)
|
|
|
|
44
|
|
|
|
(317)
|
Cash used in
investing activities
|
|
(66,820)
|
|
|
|
(46,911)
|
|
|
|
(82,160)
|
|
|
|
(176,918)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
9,944
|
|
|
|
88,406
|
|
|
|
(62,309)
|
|
|
|
131,137
|
Cash and cash
equivalents, beginning of period
|
|
295,648
|
|
|
|
258,251
|
|
|
|
367,901
|
|
|
|
215,520
|
Cash and cash
equivalents, end of period
|
$
|
305,592
|
|
|
$
|
346,657
|
|
|
$
|
305,592
|
|
|
$
|
346,657
|
SEASPAN CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017
AND 2016
(IN THOUSANDS OF US DOLLARS)
Description of Non-GAAP Financial Measures
A. Cash Available for Distribution to Common
Shareholders
Cash available for distribution to common shareholders is
defined as net earnings adjusted for depreciation and amortization,
interest expense and amortization of deferred financing fees,
refinancing expenses, share-based compensation, change in fair
value of financial instruments, bareboat charter adjustment, gain
on sale, expenses related to customer bankruptcy, termination fee,
amortization of deferred gain, dry-dock reserve adjustment, cash
dividends paid on preferred shares, interest expense at the hedged
rate and certain other items that Seaspan believes are not
representative of its operating performance.
Cash available for distribution to common shareholders is a
non-GAAP measure used to assist in evaluating Seaspan's ability to
make quarterly cash dividends before reserves for replacement
capital expenditures. Cash available for distribution to common
shareholders is not defined by GAAP and should not be considered as
an alternative to net earnings or any other indicator of Seaspan's
performance required to be reported by GAAP. In addition, this
measure may not be comparable to similar measures presented by
other companies.
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
28,284
|
|
|
$
|
36,425
|
|
|
$
|
68,307
|
|
|
$
|
43,553
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
49,798
|
|
|
|
54,515
|
|
|
|
99,744
|
|
|
|
113,352
|
|
Interest expense and
amortization of deferred financing fees
|
|
|
28,261
|
|
|
|
30,095
|
|
|
|
56,729
|
|
|
|
60,238
|
|
Refinancing
expenses
|
|
|
—
|
|
|
|
772
|
|
|
|
—
|
|
|
|
772
|
|
Share-based
compensation
|
|
|
1,989
|
|
|
|
1,472
|
|
|
|
3,870
|
|
|
|
2,418
|
|
Change
in fair value of financial instruments(1)
|
|
|
13,695
|
|
|
|
23,328
|
|
|
|
17,198
|
|
|
|
75,357
|
|
Bareboat charter
adjustment, net(2)
|
|
|
—
|
|
|
|
4,838
|
|
|
|
—
|
|
|
|
9,608
|
|
Gain on
sale(3)
|
|
|
31,291
|
|
|
|
32,182
|
|
|
|
31,291
|
|
|
|
48,515
|
|
Expenses related to
customer bankruptcy(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
1,013
|
|
|
|
—
|
|
Termination
fee(5)
|
|
|
6,250
|
|
|
|
—
|
|
|
|
6,250
|
|
|
|
—
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
deferred gain(6)
|
|
|
(5,148)
|
|
|
|
(4,450)
|
|
|
|
(10,067)
|
|
|
|
(8,316)
|
|
Dry-dock reserve
adjustment
|
|
|
(5,543)
|
|
|
|
(5,132)
|
|
|
|
(10,854)
|
|
|
|
(10,981)
|
Cash dividends paid
on preferred shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series C
|
|
|
—
|
|
|
|
(11,755)
|
|
|
|
—
|
|
|
|
(19,665)
|
|
Series D
|
|
|
(2,475)
|
|
|
|
(2,475)
|
|
|
|
(4,950)
|
|
|
|
(4,950)
|
|
Series E
|
|
|
(2,769)
|
|
|
|
(2,769)
|
|
|
|
(5,538)
|
|
|
|
(5,538)
|
|
Series F
|
|
|
(2,432)
|
|
|
|
—
|
|
|
|
(4,865)
|
|
|
|
—
|
|
Series G
|
|
|
(3,997)
|
|
|
|
—
|
|
|
|
(7,995)
|
|
|
|
—
|
|
Series H
|
|
|
(4,430)
|
|
|
|
—
|
|
|
|
(8,860)
|
|
|
|
—
|
Net cash flows before
interest payments
|
|
|
132,774
|
|
|
|
157,046
|
|
|
|
231,273
|
|
|
|
304,363
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense at
the hedged rate(7)
|
|
|
(37,767)
|
|
|
|
(45,823)
|
|
|
|
(75,917)
|
|
|
|
(92,613)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash available for
distribution to common shareholders
|
|
$
|
95,007
|
|
|
$
|
111,223
|
|
|
$
|
155,356
|
|
|
$
|
211,750
|
SEASPAN CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017
AND 2016
(IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE DATA)
B. Normalized Net Earnings and Normalized Earnings per
Share
Normalized net earnings is defined as net earnings adjusted for
interest expense, excluding amortization of deferred financing
fees, refinancing expenses, expenses related to customer
bankruptcy, change in fair value of financial instruments,
termination fee, interest expense at the hedged rate, write-off of
vessel equipment and certain other items Seaspan believes affect
the comparability of operating results. Normalized net earnings is
a useful measure because it excludes those items that Seaspan
believes are not representative of its operating performance.
Normalized net earnings and normalized earnings per share are
not defined by GAAP and should not be considered as an alternative
to net earnings, earnings per share or any other indicator of
Seaspan's performance required to be reported by GAAP. In addition,
this measure may not be comparable to similar measures presented by
other companies.
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
28,284
|
|
|
$
|
36,425
|
|
|
$
|
68,307
|
|
|
$
|
43,553
|
Adjust:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
excluding amortization of deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financing
fees
|
|
|
25,076
|
|
|
|
27,040
|
|
|
|
50,516
|
|
|
|
53,872
|
|
Refinancing
expenses
|
|
|
—
|
|
|
|
772
|
|
|
|
—
|
|
|
|
772
|
|
Expenses related to
customer bankruptcy(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
1,013
|
|
|
|
—
|
|
Change in fair value
of financial instruments(1)
|
|
|
13,695
|
|
|
|
23,328
|
|
|
|
17,198
|
|
|
|
75,357
|
|
Termination
fee(5)
|
|
|
6,250
|
|
|
|
—
|
|
|
|
6,250
|
|
|
|
—
|
|
Interest expense at
the hedged rate(7)
|
|
|
(37,767)
|
|
|
|
(45,823)
|
|
|
|
(75,917)
|
|
|
|
(92,613)
|
|
Write-off of vessel
equipment(8)
|
|
|
—
|
|
|
|
2,235
|
|
|
|
—
|
|
|
|
9,040
|
Normalized net
earnings
|
|
$
|
35,538
|
|
|
$
|
43,977
|
|
|
$
|
67,367
|
|
|
$
|
89,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
preferred share dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series C (including
amortization of issuance costs)
|
|
|
—
|
|
|
|
6,394
|
|
|
|
—
|
|
|
|
14,420
|
|
Series D
|
|
|
2,475
|
|
|
|
2,475
|
|
|
|
4,950
|
|
|
|
4,950
|
|
Series E
|
|
|
2,769
|
|
|
|
2,769
|
|
|
|
5,538
|
|
|
|
5,538
|
|
Series F
|
|
|
2,432
|
|
|
|
1,189
|
|
|
|
4,865
|
|
|
|
1,189
|
|
Series G
|
|
|
3,997
|
|
|
|
393
|
|
|
|
7,995
|
|
|
|
393
|
|
Series H
|
|
|
4,430
|
|
|
|
—
|
|
|
|
8,860
|
|
|
|
—
|
|
|
|
16,103
|
|
|
|
13,220
|
|
|
|
32,208
|
|
|
|
26,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized net
earnings attributable to common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shareholders
|
|
$
|
19,435
|
|
|
$
|
30,757
|
|
|
$
|
35,159
|
|
|
$
|
63,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used to compute
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported,
basic
|
|
|
113,963
|
|
|
|
101,480
|
|
|
|
110,362
|
|
|
|
99,616
|
|
Share-based
compensation
|
|
|
17
|
|
|
|
136
|
|
|
|
44
|
|
|
|
87
|
|
Series F convertible
preferred shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
128
|
Reported and
normalized, diluted(9)
|
|
|
113,980
|
|
|
|
101,616
|
|
|
|
110,406
|
|
|
|
99,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported, basic
and diluted
|
|
$
|
0.11
|
|
|
$
|
0.23
|
|
|
$
|
0.33
|
|
|
$
|
0.17
|
|
Normalized,
diluted(10)
|
|
$
|
0.17
|
|
|
$
|
0.30
|
|
|
$
|
0.32
|
|
|
$
|
0.64
|
SEASPAN CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017
AND 2016
(IN THOUSANDS OF US DOLLARS)
C. Adjusted EBITDA
Adjusted EBITDA is defined as net earnings adjusted for interest
expense and amortization of deferred financing fees, interest
income, undrawn credit facility fees, depreciation and
amortization, refinancing expenses, share-based compensation, gain
on sale, expenses related to customer bankruptcy, termination fee,
amortization of deferred gain, bareboat charter adjustment, change
in fair value of financial instruments and certain other items that
Seaspan believes are not representative of its operating
performance.
Adjusted EBITDA provides useful information to investors in
assessing Seaspan's results of operations. Seaspan believes that
this measure is useful in assessing performance and highlighting
trends on an overall basis. Seaspan also believes that this measure
can be useful in comparing its results with those of other
companies, even though other companies may not calculate this
measure in the same way as Seaspan. The GAAP measure most directly
comparable to Adjusted EBITDA is net earnings. Adjusted EBITDA is
not defined by GAAP and should not be considered as an alternative
to net earnings or any other indicator of Seaspan's performance
required to be reported by GAAP.
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
28,284
|
|
|
$
|
36,425
|
|
|
$
|
68,307
|
|
|
$
|
43,553
|
Adjust:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and
amortization of deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financing
fees
|
|
|
28,261
|
|
|
|
30,095
|
|
|
|
56,729
|
|
|
|
60,238
|
|
Interest
income
|
|
|
(1,193)
|
|
|
|
(2,768)
|
|
|
|
(2,365)
|
|
|
|
(5,845)
|
|
Undrawn credit
facility fees
|
|
|
635
|
|
|
|
741
|
|
|
|
1,265
|
|
|
|
1,153
|
|
Depreciation and
amortization
|
|
|
49,798
|
|
|
|
54,515
|
|
|
|
99,744
|
|
|
|
113,352
|
|
Refinancing
expenses
|
|
|
—
|
|
|
|
772
|
|
|
|
—
|
|
|
|
772
|
|
Share-based
compensation
|
|
|
1,989
|
|
|
|
1,472
|
|
|
|
3,870
|
|
|
|
2,418
|
|
Gain on
sale(3)
|
|
|
31,291
|
|
|
|
32,182
|
|
|
|
31,291
|
|
|
|
48,515
|
|
Expenses related to
customer bankruptcy(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
1,013
|
|
|
|
—
|
|
Termination
fee(5)
|
|
|
6,250
|
|
|
|
—
|
|
|
|
6,250
|
|
|
|
—
|
|
Amortization of
deferred gain(6)
|
|
|
(5,148)
|
|
|
|
(4,450)
|
|
|
|
(10,067)
|
|
|
|
(8,316)
|
|
Bareboat charter
adjustment, net(2)
|
|
|
—
|
|
|
|
4,838
|
|
|
|
—
|
|
|
|
9,608
|
|
Change in fair value
of financial instruments(1)
|
|
|
13,695
|
|
|
|
23,328
|
|
|
|
17,198
|
|
|
|
75,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
153,862
|
|
|
$
|
177,150
|
|
|
$
|
273,235
|
|
|
$
|
340,805
|
Notes to Non-GAAP Financial Measures
(1) Change in fair value of financial instruments
includes realized and unrealized losses (gains) on Seaspan's
interest rate swaps, unrealized losses (gains) on Seaspan's foreign
currency forward contracts and unrealized losses (gains) on
interest rate swaps included in equity income on investment.
(2) In the second half of 2011, Seaspan entered
into agreements to bareboat charter four 4800 TEU vessels to MSC
Mediterranean Shipping Company S.A. ("MSC") for a five-year term,
beginning from vessel delivery dates that occurred in 2011. Upon
delivery of the vessels to MSC, the transactions were accounted for
as sales-type leases. The vessels were disposed of and a gross
investment in lease was recorded, which was amortized to income
through revenue. The bareboat charter adjustment in the applicable
non-GAAP measures is included to reverse the GAAP accounting
treatment and reflect the transaction as if the vessels had not
been disposed of. Therefore, the bareboat charter fees are added
back and the interest income from leasing, which is recorded in
revenue, is deducted resulting in a net bareboat charter
adjustment. During the fourth quarter of 2016, Seaspan sold these
vessels to MSC pursuant to the agreements entered into in 2011.
(3) The gain on sale relates to the proceeds
received in excess of vessel cost upon the sale and leaseback
transaction of one 14000 TEU vessel during the three and six months
ended June 30, 2017. Under this
transaction, Seaspan sold the vessel to special purpose companies
and is leasing the vessel back. For accounting purposes, the gain
is deferred and amortized as a reduction of operating lease expense
over the term of the lease.
(4) Expenses related to customer bankruptcy
primarily relates to costs and expenses related to the Hanjin
bankruptcy in 2016. As of September 1,
2016, after Hanjin declared bankruptcy, no revenue was
recognized on the Hanjin charters.
(5) The termination fee relates to a non-cash
payment in connection with the termination of the financial
services agreement with SFSL, an entity controlled by former
Director Graham Porter.
(6) As of June 30,
2017, 11 vessels have been sold and leased back by Seaspan.
For GAAP accounting purposes, the gain on sales was deferred and is
being amortized as a reduction of operating lease expense over the
term of the lease.
(7) Interest expense at the hedged rate is
calculated as the interest incurred on operating debt at the fixed
rate on the related interest rate swaps plus the applicable margin
on the related variable rate credit facilities and leases, on an
accrual basis. Interest expense on fixed rate borrowings is
calculated using the effective interest rate.
(8) Commencing in May
2015, Seaspan installed upgrades on certain of its vessels
to enhance fuel efficiency. As a result, Seaspan incurred non-cash
write-offs related to the original vessel equipment of $2.2 million and $9.0
million for the three and six months ended June 30, 2016, respectively. These write-offs are
included in depreciation and amortization expense. The costs of the
vessel upgrades are recoverable from the charterer.
(9) Seaspan's shares of common stock issuable
upon conversion of its convertible Series F preferred shares are
not included in the computation of diluted earnings per share
because their effect is anti-dilutive for the period.
(10) The decrease in normalized earnings
per share for the three and six months ended June 30, 2017 is detailed below:
|
|
|
|
|
|
|
|
Normalized
earnings per share, diluted- June 30, 2016
|
|
$
|
0.30
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
Excluding share count
changes:
|
|
|
|
|
|
|
|
|
Decrease in
normalized earnings(a)
|
|
|
(0.06)
|
|
|
|
(0.22)
|
|
Decrease from impact
of preferred shares
|
|
|
(0.05)
|
|
|
|
(0.07)
|
|
|
|
|
|
|
|
|
Share count
changes:
|
|
|
|
|
|
|
|
|
Increase in diluted
share count (from 101,616,248 shares
|
|
|
|
|
|
|
|
|
|
to 113,979,981 shares
and from 99,830,626 shares to
|
|
|
|
|
|
|
|
|
|
110,406,048 shares
for the three and six months ended,
|
|
|
|
|
|
|
|
|
|
respectively)
|
|
|
(0.02)
|
|
|
|
(0.03)
|
|
|
|
|
|
|
|
|
Normalized
earnings per share, diluted- June 30, 2017
|
|
$
|
0.17
|
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The decrease in
normalized earnings for the three months ended June 30, 2017,
compared to the same period in 2016, is primarily due to a decrease
in revenue of $19.7 million and an increase in operating lease
expense of $7.5 million. The decreases in normalized earnings were
partially offset by decreases in interest at the hedged rate of
$8.1 million, depreciation and amortization expense of $4.7 million
and ship operating expense of $4.4 million.
|
|
|
|
The decrease in
normalized earnings for the six months ended June 30, 2017,
compared to the same period in 2016, is primarily due to a decrease
in revenue of $33.9 million and an increase in operating lease
expense of $19.1 million. The decreases in normalized earnings were
partially offset by decreases in interest at the hedged rate of
$16.7 million, depreciation and amortization expense of $13.6
million and ship operating expense of $6.4 million. Please read
"Results for the Three and Six Months Ended June 30, 2017" for
further description of these changes.
|
STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This release contains certain forward-looking statements (as
such term is defined in Section 21E of the Securities Exchange Act
of 1934, as amended), which reflect management's current views with
respect to certain future events and performance, including, in
particular, statements regarding: future operating or financial
results; industry fundamentals, including estimated supply and
demand for containerships; ship operating expense; vessel
dry-docking schedules; Seaspan's access to capital and financial
strength and flexibility; and Seaspan's ability to capitalize on
future opportunities. Although these statements are based upon
assumptions Seaspan believes to be reasonable, they are subject to
risks and uncertainties. These risks and uncertainties include, but
are not limited to: the availability to Seaspan of containership
acquisition or construction opportunities; the availability and
cost to Seaspan of financing, including to refinance existing debt
and to pursue growth opportunities; the number of off-hire days;
dry-docking requirements; general market conditions and shipping
market trends, including chartering rates, scrapping rates and
newbuild orders; increased operating expenses; Seaspan's future
cash flows and its ability to make payments; the time that it may
take to construct new ships; Seaspan's continued ability to enter
into primarily long-term, fixed-rate time charters with customers;
changes in governmental rules and regulations or actions taken by
regulatory authorities; the financial condition of shipyards,
charterers, customers, lenders, refund guarantors and other
counterparties and their ability to perform their obligations under
their agreements with Seaspan; the potential for newbuilding
delivery delays; the potential for early termination of long-term
contracts; changes in accounting rules or treatment; working
capital needs; conditions in the public capital markets and the
price of Seaspan's shares; Seaspan's ability to maintain its
reputation as a leading containership owner and operator; and other
factors detailed from time-to-time in Seaspan's periodic reports
and filings with the Securities and Exchange Commission, including
Seaspan's Annual Report on Form 20-F for the year ended
December 31, 2016. Seaspan
expressly disclaims any obligation to update or revise any of these
forward-looking statements, whether because of future events, new
information, a change in Seaspan's views or expectations, or
otherwise.
For Investor Relations Inquiries:
Mr. David Spivak
Chief Financial Officer
Seaspan Corporation
Tel. 604-638-2580
Mr. Michael
Sieffert
Director, Corporate Finance
Seaspan Corporation
Tel. 778-328-6490
For Media Inquiries:
Mr. Leon Berman
The IGB Group
Tel. 212-477-8438
SOURCE Seaspan Corporation