SOURCE: Danaos Corporation

April 21, 2008 16:05 ET

Danaos Corporation Reports First Quarter Results for the Period Ended March 31, 2008

ATHENS, GREECE--(Marketwire - April 21, 2008) - Danaos Corporation ("Danaos") (NYSE: DAC), a leading international owner of containerships, today reported unaudited results for the period ended March 31, 2008.

Highlights for the First Quarter Ended March 31, 2008:

--  Net earnings of $31.5 million or $0.58 per share for the first quarter
    ended March 31, 2008 compared to $23.9 million or $0.44 per share from
    continuing operations for the respective period of 2007.
--  Operating Revenues from continuing operations of $69.9 million for the
    quarter ended March 31, 2008 compared to $62.0 million for the respective
    period of 2007.
--  EBITDA of $52.0 million for the quarter ended March 31, 2008 compared
    to $39.3 million from continuing operations for the respective period of
    2007.
--  Paid dividends of $0.465 per share on February 14, 2008 for the fourth
    quarter of 2007.
    


Danaos' CEO Dr. John Coustas commented: "We are very pleased with our first quarter 2008 achievements. During the first quarter we continued to successfully implement our growth strategy. We took delivery of three second-hand 2,200 TEU containerships, each of which has been chartered out for 10 years. Danaos' contracted revenues have increased to approximately $7.3 billion, with charters extending as far as 2028.

"We time-chartered the 30 year old Sederberg to CMA-CGM at a fixed one year accretive rate and we sold another 30 year old containership, the Winterberg, to an undisclosed and unrelated third party. We also sold and delivered the APL Belgium to APL following the exercise of the purchase option APL had for this vessel. We incurred a gain on this sale of the above two vessels of $5.6 million. Further, we re-chartered the 30 year old Eagle Express to MSC for two years at accretive rates and we also chartered the Pacific Bridge to Senator lines, a subsidiary of Hanjin Shipping, for two years.

"During the first quarter of 2008, the containership market marginally improved due to continued demand in the Far East-Europe and Middle East-India-Far East trades which counterbalanced a decline in the rate of growth in the Transpacific trades, although the increase was lower than the first quarter of 2007. The lack of available vessels for new charters, especially in the 3,000 TEU and above sizes, explains our success in re-chartering our older vessels. The weakness in the US housing market which contributed to slow growth in the Transatlantic and Transpacific trades is likely to persist throughout 2008. However, vessel demand keeps strong due to the slow steaming that is increasingly becoming a practice due to the sustainable high oil prices. In our industry asset backed borrowing and long charters have supported further extension of loans by the credit institutions despite the overall market turmoil. During the first quarter we secured a further $560 million in long term debt at very competitive terms and at an overall cost of 67bps over LIBOR to finance our growth.

"Vessel prices during the first quarter of 2008 have further strengthened as a result of strong new building demand for large containerships, significant increases in commodity prices and further dollar weakness. The slow-down of the US economy will likely have a spill-over effect triggering some caution in the ordering of additional containerships.

"Earlier in April, our board of directors declared a dividend of $0.465 per share for the first quarter, which will be paid on May 14, 2008. The dividend reflects our dedication to increase shareholder value through enhanced distributable cash flows, resulting from the successful implementation of our growth strategy."

Three months ended March 31, 2008 compared to the three months ended March 31, 2007

During the quarter ended March 31, 2008, Danaos had an average of 36.3 containerships as opposed to 31.0 containerships for the same period of 2007. During the quarter, we acquired three vessels, the Hyundai Progress on February 11, 2008, the Hyundai Highway on March 18, 2008 and the Hyundai Bridge on March 20, 2008. In addition, we sold two vessels, the APL Belgium on January 15, 2008 and the Winterberg on January 25, 2008.

Given the sale of our entire dry bulk fleet in the beginning of 2007, management has determined that the dry bulk business constituted discontinued operations. The management and discussion analysis solely reflects results from continuing operations (containerships), unless otherwise noted.

Our net income was $31.5 million or $0.58 per share for the first quarter of 2008 compared to $23.9 million or $0.44 per share for the first quarter of 2007, an increase in net income of 31.8% or $7.6 million. Earnings per share, excluding the gain on sale of vessels of $5.6 million, was $0.48 for the first quarter of 2008. Distributable cash flow, defined as net income before depreciation & amortization, less payments for drydocking and special survey costs, was $41.7 million for the first quarter of 2008. Stockholders' Equity decreased by $118.3 million mainly as a result of the decrease in Accumulated other comprehensive income, a non cash item, by $124.5 million due to the decrease in the fair value of interest rate swaps used to hedge our exposure to our floating interest rate debt. We declared a dividend of $25.4 million which represents 60.9% of our distributable cash flow for the first quarter of 2008.

Operating Revenue

Operating revenue increased 12.7%, or $7.9 million, to $69.9 million in the quarter ended March 31, 2008 from $62.0 million in the quarter ended March 31, 2007. The increase was primarily attributable to the addition to our fleet of 11 vessels, as follows:

                                            Vessel Size
Vessel Name                                    (TEU)       Date Delivered
-----------                                 ------------ ------------------
YM Singapore                                   4,300     October 9, 2007
YM Seattle                                     4,253     September 10, 2007
YM Vancouver                                   4,253     November 27, 2007
Hyundai Vladivostok                            2,200     July 23, 2007
Hyundai Advance                                2,200     August 20, 2007
Hyundai Stride                                 2,200     September 5, 2007
Hyundai Future                                 2,200     October 2, 2007
Hyundai Sprinter                               2,200     October 15, 2007
Hyundai Progress                               2,200     February 11, 2008
Hyundai Highway                                2,200     March 18, 2008
Hyundai Bridge                                 2,200     March 20, 2008

These additions to our fleet contributed revenues of $15.6 million during the three months ended March 31, 2008. Moreover, a 4,300 TEU containership, the YM Colombo which was added to our fleet on March 12, 2007, contributed incremental revenues of $1.9 million during the three months ended March 31, 2008 compared to the same period in 2007. In addition, the Company sold five vessels as follows:

                                            Vessel Size
Vessel Name                                    (TEU)          Date Sold
-----------                                 ------------   ----------------
APL England                                    5,506       March 7, 2007
APL Scotland                                   5,506       June 22, 2007
APL Holland                                    5,506       August 3, 2007
APL Belgium                                    5,506       January 15, 2008
Winterberg                                     3,101       January 25, 2008

The vessel sales reduced operating revenue by $9.2 million during the three months ended March 31, 2008, in comparison to the same period in the previous year. The balance of $0.4 million is attributed to more scheduled off-hire days, partially offset by higher charter rates achieved due to the re-chartering of certain vessels. During the first quarter of 2008 our fleet utilization reached 95%, reflecting additional drydocking days for certain of our older vessels including those above 30 years of age, which we re-chartered during this quarter.

Vessel Operating Expenses

Vessel operating expenses increased 29.4% or $4.5 million, to $19.8 million in the quarter ended March 31, 2008, from $15.3 million in the quarter ended March 31, 2007. The increase was mainly due to the increase in the average number of our vessels in our fleet and a general increase in costs experienced by the overall industry during the quarter ended March 31, 2008 compared to the quarter ended March 31, 2007.

Depreciation & Amortization

Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.

Depreciation

Depreciation expense increased 20.4%, or $2.0 million, to $11.8 million in the quarter ended March 31, 2008, from $9.8 million in the quarter ended March 31, 2007. The increase in depreciation expense was due to the increased average number of vessels in our fleet during the quarter ended March 31, 2008, compared to the same period of 2007.

Amortization of Deferred Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs expense increased 14.3%, or $0.2 million, to $1.6 million in the quarter ended March 31, 2008, from $1.4 million in the quarter ended March 31, 2007. The increase reflects higher drydocking costs over the course of the last twelve months, which were subject to amortization during the three months ended March 31, 2008 as compared to the same period of 2007.

General and Administrative Expenses

General and administrative expenses increased 27.3%, or $0.6 million, to $2.8 million in the quarter ended March 31, 2008, from $2.2 million in the same quarter of 2007. The increase was mainly a result of increased fees of $0.3 million paid to our Manager in the first quarter 2008 compared to the same period of 2007 based on an increase in the average number of our vessels in our fleet. Moreover, public company related costs were higher in the quarter ended March 31, 2008 compared with the quarter ended March 31, 2007 by $0.3 million.

Gain / (loss) on sale of vessels

The gain on sale of vessels for the period ended March 31, 2008, reflects the sale of the APL Belgium and the Winterberg for $44.5 million and $11.2 million respectively, resulting in a gain of $5.6 million over the depreciated book value of these vessels at the time of their sale.

Other Operating Expenses

Other Operating Expenses include Voyage Expenses

Voyage Expenses

Voyage expenses decreased 11.1% or $0.2 million, to $1.6 million in the quarter ended March 31, 2008, from $1.8 million for the quarter ended March 31, 2007.

Interest Expense and Interest Income

Interest expense increased 49.1%, or $2.7 million, to $8.2 million in the quarter ended March 31, 2008, from $5.5 million in the quarter ended March 31, 2007. The change in interest expense was primarily due to the increase in our average indebtedness by 114.3%. This resulted in an increase in interest of approximately $10.1 million, partially offset by the financing of our extensive new-building program which resulted in interest capitalization of $10.2 million for the quarter ended March 31, 2008 as opposed to $2.8 million of capitalized interest for the quarter ended March 31, 2007. Interest income decreased by $0.2 million, to $1.1 million in the quarter ended March 31, 2008, from $1.3 million in the quarter ended March 31, 2007. The decrease in interest income is mainly attributable to lower interest rates, partially offset by higher average bank deposits during the three months ended March 31, 2008 as opposed to the three months ended March 31, 2007.

Other income/(expenses), net

Other income (expenses) increased by $2.5 million, to $(0.3) million for the quarter ended March 31, 2008, from $(2.8) million in the quarter ended March 31, 2007. The increase was mainly due to a non recurring loss of $2.6 million for the first quarter of 2007 attributable to an adjustment on the fair value of our debt in JPY currency.

EBITDA

EBITDA from continuing operations increased by $12.7 million, or 32.3%, to $52.0 million in the quarter ended March 31, 2008, from $39.3 million in the quarter ended March 31, 2007. A table reconciling EBITDA to net income can be found at the end of this earnings release.

Dividend Payment

On January 23, 2008, we declared a dividend of $0.465 per common share for the fourth quarter of 2007 for all shareholders of record as of January 30, 2008, which was paid on February 14, 2008. On April 18, 2008 the Board of Directors declared a dividend of $0.465 per common share for the first quarter of 2008 payable on May 14, 2008 to all shareholders of record as of April 30, 2008.

Recent News

During the first months of 2008 Danaos Corporation has entered into three credit agreements for term loan facilities in the total amount of $560 million to finance part of its new-building program. The facilities have been fully underwritten by Credit Swiss, Deutsche Bank and Emporiki Bank, a subsidiary of Credit Agricole at a weighted average rate of 0.67% over LIBOR.

Conference Call and Webcast

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (US Toll Free Dial In), 0800 953 0329 (UK Toll Free Dial In) or +44 (0)1452 542 301 (Standard International Dial In). Please quote "Danaos."

In case of any problems with the above numbers, please dial 1 866 223 0615 (US Toll Free Dial In), 0800 694 1503 (UK Toll Free Dial In) or +44 (0)1452 586 513 (Standard International Dial In). Please quote "Danaos."

A telephonic replay of the conference call will be available until April 29, 2008 by dialing 1 866 247 4222 (US Toll Free Dial In), 0800 953 1533 (UK Toll Free Dial In) or +44 (0)1452 550 000 (Standard International Dial In). Access Code: 1186615#

Audio webcast:

There will also be a live and then archived webcast of the conference call through the Danaos website (www.danaos.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About Danaos Corporation

Danaos Corporation is an international owner of containerships, chartering its vessels to many of the world's largest liner companies. Our current fleet of 38 containerships aggregating 149,718 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Danaos is the largest US listed containership company based on fleet size. Furthermore, the company has a contracted fleet of 34 additional containerships aggregating 243,468 TEU with scheduled deliveries up to 2011. The company's shares trade on the New York Stock Exchange under the symbol "DAC."

Forward-Looking Statement

Matters discussed in this release may constitute forward-looking statements within the meaning of the safeharbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although Danaos Corporation believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, Danaos Corporation cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, shipyard performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in Danaos Corporation's operating expenses, including bunker prices, dry-docking and insurance costs, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

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

Visit our website at www.danaos.com

                                  Appendix
                                  --------

Fleet Utilization
-----------------

Danaos had 160 off-hire days in total in the first quarter of 2008.
The following tables summarize vessel utilization and the impact of the
off-hire days on the company's revenue relating to the last four quarters.


                               Second    Third   Fourth    First
                               Quarter  Quarter  Quarter  Quarter
                                2007     2007     2007     2008    Totals
                               -------  -------  -------  -------  -------
                               No. of   No. of   No. of   No. of   No. of
Vessel utilization              Days     Days     Days     Days     Days
                               -------  -------  -------  -------  -------

Ownership days continuing ops    2,813    2,861    3,324    3,301   12,299
Ownership days discontinuing
 ops                                30        0        0        0       30
Less Off-hire Days:
Scheduled Drydocking
 continuing ops                    (46)     (49)     (81)    (159)    (335)
Other off-hire Days continuing
 ops                               (16)       0      (24)      (1)     (41)
Other off-hire Days
 discontinuing ops                  (2)       0        0        0       (2)
Operating Days continuing ops    2,751    2,812    3,219    3,141   11,923
Operating Days discontinuing
 ops                                28        0        0        0       28
                               =======  =======  =======  =======  =======
Vessel Utilization continuing
 ops                              97.8%    98.3%    96.8%    95.2%    96.9%
                               =======  =======  =======  =======  =======
Vessel Utilization
 discontinuing ops                93.3%       -        -        -     93.3%
                               =======  =======  =======  =======  =======


                               Second    Third   Fourth    First
                               Quarter  Quarter  Quarter  Quarter
                                2007     2007     2007     2008    Totals
                               -------  -------  -------  -------  -------
Revenue - Impact of Off-hire
 (in '000s of US dollars)      Revenue  Revenue  Revenue  Revenue  Revenue
                               -------  -------  -------  -------  -------
100% fleet utilization
 continuing ops                 64,231   63,698   72,006   70,689  270,624
100% fleet utilization
 discontinuing ops                 993        0        0        0      993
Less Off-hire Days:
Scheduled Drydocking
 continuing ops                 (1,061)  (1,055)     (46)    (796)  (2,958)
Other off-hire Days continuing
 ops                              (331)       0     (625)     (16)    (972)
Other off-hire Days
 discontinuing ops                 (25)       0        0        0      (25)
                               =======  =======  =======  =======  =======
Actual Revenue Earned
 continuing ops                 62,839   62,643   71,335   69,877  266,694
                               =======  =======  =======  =======  =======
Actual Revenue Earned
 discontinuing ops                 968        0        0        0      968
                               =======  =======  =======  =======  =======




Fleet List
----------

The following table describes in detail our current fleet deployment
profile.

                                        Vessel
                                         Size    Year       Expiration of
Vessel Name                              (TEU)   Built        Charter(1)
--------------                         -------- ------- -------------------
Containerships
--------------

CSCL Le Havre                            9,580    2006       September 2018
CSCL Pusan                               9,580    2006            July 2018
MSC Baltic                               8,468    2004       September 2016
CSCL Europe                              8,468    2004            June 2016
Maersk Marathon                          4,814    1991       September 2011
Maersk Messologi                         4,814    1991       September 2011
Maersk Mytilini                          4,814    1991       September 2011
MOL Affinity(2)                          4,651    1992           March 2011
Hyundai Duke                             4,651    1992        February 2011
MOL Confidence                           4,651    1994       September 2012
YM Colombo                               4,300    2004           March 2019
YM Singapore                             4,300    2004         October 2019
YM Seattle                               4,253    2007            July 2019
YM Vancouver                             4,253    2007       September 2019
Maersk Derby                             4,253    2004        February 2009
Maersk Deva                              4,253    2004         January 2009
Al Rayyan                                3,908    1989         January 2011
YM Yantian                               3,908    1989            July 2011
YM Milano                                3,129    1988             May 2011
SA Helderberg                            3,101    1977        November 2008
Sederberg                                3,101    1978         January 2009
CMA CGM Lotus                            3,098    1988            July 2010
CMA CGM Vanille                          3,045    1986            July 2010
CMA CGM Passiflore                       3,039    1986             May 2010
CMA CGM Elbe                             2,917    1991            June 2010
CMA CGM Kalamata                         2,917    1991            June 2010
CMA CGM Komodo                           2,917    1991            June 2010
Hyundai Advance                          2,200    1997            June 2017
Hyundai Future                           2,200    1997          August 2017
Hyundai Sprinter                         2,200    1997          August 2017
Hyundai Stride                           2,200    1997            July 2017
Hyundai Progress                         2,200    1998        December 2017
Hyundai Bridge                           2,200    1998         January 2018
Hyundai Highway                          2,200    1998         January 2018
Hyundai Vladivostok                      2,200    1997             May 2017
Montreal Senator (3)                     2,130    1984           March 2010
MSC Eagle                                1,704    1978         January 2010

-----------------------
Bareboat Containerships
-----------------------
Maersk Constantia                        3,101    1979       September 2008

(1) Earliest date charters could expire. Some charters include options to
    extend their term.
(2) On April 15, 2008, the Hyundai Commodore was renamed to MOL Affinity
    at the request of the charterer of this vessel.
(3) On April 8, 2008, the Pacific Bridge was renamed to Montreal Senator
    at the request of the charterer of this vessel.


New Deliveries
--------------

The following table describes the expected additions to our fleet as a
result of our new building containership program as well as the
acquisition of two second hand containerships.


                                       Vessel
                                        Size
Vessel Name                            (TEU)      Expected Delivery
-----------                           -------- --------------------
HN 1670                                 4,253            July 2008
HN 1671                                 4,253       September 2008
HN 1672                                 4,253        November 2008
HN 1673                                 4,253        December 2008
HN 1698                                 4,253           March 2009
HN S4001(1)                             6,500           April 2009
HN 1699                                 4,253            June 2009
HN S4002(1)                             6,500            June 2009
HN S4003(1)                             6,500          August 2009
HN S4004(1)                             6,500         October 2009
HN N-214                                6,500        November 2009
HN N-219                                3,400        November 2009
HN S4005(1)                             6,500        December 2009
HN N-220                                3,400         January 2010
HN N-215                                6,500         January 2010
HN N-221                                3,400        February 2010
HN N-216                                6,500           March 2010
HN N-222                                3,400           April 2010
HN N-223                                3,400             May 2010
HN N-217                                6,500             May 2010
HN Z00001                               8,530             May 2010
HN Z00002                               8,530             May 2010
HN Z00003                               8,530            July 2010
HN Z00004                               8,530            July 2010
HN N-218                                6,500            July 2010
HULL 1022A                              8,530       September 2010
Hull No S-461                          10,100         January 2011
Hull No S-462                          10,100        February 2011
Hull No S-456                          12,600        February 2011
Hull No S-463                          10,100           March 2011
Hull No S-457                          12,600           April 2011
Hull No S-458                          12,600            June 2011
Hull No S-459                          12,600          August 2011
Hull No S-460                          12,600       September 2011

(1) Vessel subject to charterer's option to purchase vessel after
    first eight years of time charter term for $78.0 million.




                            DANAOS CORPORATION
                           Statements of Income
  (Expressed in thousands of United States dollars, except share and per
                              share amounts)

                                                     Three        Three
                                                  months ended months ended
                                                   March 31,    March 31,
                                                  -----------  -----------
                                                      2008         2007
                                                  -----------  -----------
                                                  (unaudited)  (unaudited)

OPERATING REVENUES                                $    69,877  $    62,028

OPERATING EXPENSES
   Vessel operating expenses                          (19,810)     (15,304)
   Depreciation & amortization                        (13,369)     (11,171)
   General & administrative                            (2,813)      (2,194)
   Gain / (loss) on sale of vessels                     5,582         (206)
   Other operating expenses                            (1,636)      (1,754)
                                                  -----------  -----------
Income From Operations                                 37,831       31,399
                                                  -----------  -----------

OTHER EARNINGS (EXPENSES)
   Interest income                                      1,086        1,264
   Interest expense                                    (8,172)      (5,476)
   Other finance cost, net                               (425)        (561)
   Other income / (expenses), net                        (293)      (2,827)
   Gain on derivatives                                  1,490          107
                                                  -----------  -----------
Total Other Income (Expenses), net                     (6,314)      (7,493)
                                                  -----------  -----------

Net income from continuing operations             $    31,517  $    23,906
                                                  -----------  -----------
Net income from discontinued operations           $         5  $    76,460
                                                  -----------  -----------
Net Income                                        $    31,522  $   100,366
                                                  ===========  ===========

EARNINGS PER SHARE (from continuing operations)
Basic and diluted net income per share            $      0.58  $      0.44
                                                  ===========  ===========

EARNINGS PER SHARE
Basic and diluted net income per share            $      0.58  $      1.84
                                                  ===========  ===========
Basic and diluted weighted average number of
 shares (in thousands of shares)                       54,558       54,558
                                                  ===========  ===========




                            DANAOS CORPORATION
                              Balance Sheets
            (Expressed in thousands of United States dollars)

                                                     As of       As of
                                                   March 31,  December 31,
                                                  -----------  -----------
                                                      2008         2007
                                                  -----------  -----------
                                                  (unaudited)  (unaudited)
ASSETS
CURRENT ASSETS
   Cash and cash equivalents                      $    63,715  $    63,495
   Restricted cash                                     41,207       46,179
   Accounts receivable, net                             2,967        4,321
   Other current assets                                21,829       18,993
                                                  -----------  -----------
                                                      129,718      132,988
NON-CURRENT ASSETS
   Fixed assets, net                                1,198,387    1,182,505
   Advances for vessel acquisitions and vessels
    under construction                                882,814      745,534
   Deferred charges, net                               12,694       10,431
   Other non-current assets                             3,212          333
                                                  -----------  -----------
                                                    2,097,107    1,938,803

                                                  -----------  -----------
TOTAL ASSETS                                      $ 2,226,825  $ 2,071,791
                                                  ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Long-term debt, current portion                $    25,619  $    25,619
   Accounts payable, accrued liabilities & other
    current liabilities                                27,512       24,092
   Fair value of financial instruments, current
    portion                                             1,326        1,402
                                                  -----------  -----------
                                                       54,457       51,113
LONG-TERM LIABILITIES
   Long-term debt, net of current portion           1,478,894    1,330,927
   Fair value of financial instruments, net of
    current portion                                   179,148       56,537
   Other long-term liabilities                          7,768        8,310
                                                  -----------  -----------
                                                    1,665,810    1,395,774

STOCKHOLDERS' EQUITY
   Common stock                                           546          546
   Additional paid-in capital                         288,530      288,530
   Accumulated other comprehensive income            (179,385)     (54,886)
   Retained earnings                                  396,867      390,714
                                                  -----------  -----------
                                                      506,558      624,904

                                                  -----------  -----------
Total liabilities and stockholders' equity        $ 2,226,825  $ 2,071,791
                                                  ===========  ===========




                            DANAOS CORPORATION
                         Statements of Cash Flows
            (Expressed in thousands of United States dollars)


                                                     Three        Three
                                                  months ended months ended
                                                   March 31,    March 31,
                                                  -----------  -----------
                                                      2008         2007
                                                  -----------  -----------
                                                  (unaudited)  (unaudited)
Cash Flows provided by / (used in):
Operating Activities:
   Net Earnings                                   $    31,522  $   100,366
   Adjustments to reconcile net income to net
    cash provided by operating activities:
   Depreciation                                        11,759       10,169
   Amortization of deferred charges                     1,643        1,547
   Written off amount of deferred charges                 181          284
   Payments for drydocking / special survey            (3,184)      (1,858)
   Change in fair value of debt and financial
    instruments                                        (1,781)       2,409
   Gain / (Loss) on sale of vessels                    (5,582)     (72,696)
   Accounts receivable                                  1,354         (691)
   Other assets, current and non-current               (2,727)      (6,925)
   Accounts payable and accrued liabilities             2,911       (3,421)
   Other liabilities, current and non-current             (33)      (2,017)
                                                  -----------  -----------
Cash provided by Operating Activities                  36,063       27,167
                                                  -----------  -----------

Investing Activities:
   Vessel acquisitions including advances             (76,240)     (55,751)
   Vessels under construction                        (137,280)     (57,580)
   Proceeds from sale of vessels                       54,457      161,487
                                                  -----------  -----------
Cash (used in) /  provided by  Investing
 Activities                                          (159,063)      48,156
                                                  -----------  -----------

Financing Activities:
   Debt draw downs                                    185,013      121,500
   Debt repayment                                     (40,217)    (182,358)
   Dividends paid                                     (25,369)     (24,005)
   Deferred costs                                      (1,179)        (500)
   Increase in restricted cash                          4,972        2,471
                                                  -----------  -----------
Cash provided by  / (used in) Financing
 Activities                                           123,220      (82,892)
                                                  -----------  -----------

                                                  -----------  -----------
Net change in cash and cash equivalents                   220       (7,569)
                                                  -----------  -----------
Cash and cash equivalents, beginning of period         63,495       43,075
                                                  -----------  -----------
Cash and cash equivalents, end of period          $    63,715  $    35,506
                                                  ===========  ===========




 Reconciliation of Net Income to EBITDA


                                                     Three        Three
                                                  months ended months ended
                                                   March 31,    March 31,
                                                  -----------  -----------
                                                      2008         2007
                                                  -----------  -----------
                                                  (unaudited)  (unaudited)
   Net income                                     $    31,517  $    23,906
   Depreciation                                        11,759        9,751
   Amortization of deferred charges                     1,610        1,420
   Interest income                                     (1,086)      (1,264)
   Interest expense                                     8,172        5,476
                                                  -----------  -----------
EBITDA (unaudited) (1)  from continuing
 operations                                       $    51,972  $    39,289
                                                  -----------  -----------
EBITDA (unaudited) (1)  from discontinued
 operations                                       $         5  $    77,336
                                                  -----------  -----------
EBITDA (unaudited) (1)                            $    51,977  $   116,625
                                                  ===========  ===========

(1) EBITDA represents net income before interest, income tax expense,
    depreciation and amortization.  However, EBITDA is not a recognized
    measurement under U.S. generally accepted accounting principles, or
    "GAAP."  We believe that the presentation of EBITDA is useful to
    investors because it is frequently used by securities analysts,
    investors and other interested parties in the evaluation of companies
    in our industry.  We also believe that EBITDA is useful in evaluating
    our ability to service additional debt and make capital expenditures.
    In addition, we believe that EBITDA is useful in evaluating our
    operating performance and liquidity position compared to that of other
    companies in our industry because the calculation of EBITDA generally
    eliminates the effects of financings, income taxes and the accounting
    effects of capital expenditures and acquisitions, items which may vary
    for different companies for reasons unrelated to overall operating
    performance and liquidity.

Contact Information

  • For further information please contact:

    Company Contacts:

    Dimitri J. Andritsoyiannis
    Chief Financial Officer
    Danaos Corporation
    Athens, Greece
    Tel.: +30 210 419 6481
    E-Mail: cfo@danaos.com

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

    Investor Relations and Financial Media:
    Nicolas Bornozis
    President
    Capital Link, Inc.
    New York
    Tel. 212-661-7566
    E-Mail: nbornozis@capitallink.com