SOURCE: Danaos Corporation

Danaos Corporation

March 17, 2011 16:05 ET

Danaos Corporation Reports Fourth Quarter and Full Year Results for the Year Ended December 31, 2010

ATHENS, GREECE--(Marketwire - March 17, 2011) - Danaos Corporation ("Danaos") (NYSE: DAC), a leading international owner of containerships, today reported unaudited results for the period ended December 31, 2010.

Highlights for the Fourth Quarter and Full Year Ended December 31, 2010:

--  We took delivery of one 3,400 TEU containership in October 2010, and
    two more newly built vessels with an aggregate carrying capacity of
    13,500 TEU during 2011.

--  Operating revenues of $100.5 million and $359.7 million for the three
    months and year ended December 31, 2010, respectively.

--  Adjusted net income(1) of $1.5 million or $0.01 per share and
    $27.9 million or $0.37 per share for the three months and year ended
    December 31, 2010, respectively.

--  Adjusted EBITDA(1) of $65.0 million and $243.8 million for the three
    months and year ended December 31, 2010, respectively.



              Three and Twelve Months Ended December 31, 2010
                             Financial Summary
             (Expressed in thousands of United States dollars,
                         except per share amounts):

                              Three       Three       Twelve      Twelve
                              months      months      months      months
                              ended       ended       ended       ended
                             December    December    December    December
                                31,         31,         31,         31,
                            ----------  ----------  ----------  -----------
                               2010        2009        2010        2009
                            ----------  ----------  ----------  -----------
                                              (unaudited)

Operating revenues          $  100,485  $   85,339  $  359,677  $   319,511

Net (loss)/income           $   (8,889) $  (16,182) $ (102,341) $    36,089

Adjusted net income(1)      $    1,548  $   14,759  $   27,857  $    65,586

(Losses)/Earnings per share $    (0.08) $    (0.30) $    (1.36) $      0.66

Adjusted earnings per
 share(1)                   $     0.01  $     0.27  $     0.37  $      1.20

Weighted average number of
 shares (thousands)            108,611      54,551      75,436       54,550

Adjusted EBITDA(1)          $   64,997  $   56,025  $  243,849  $   204,019

(1) Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income/(loss) to adjusted net income and net income/(loss) to adjusted EBITDA.

Danaos' CEO Dr. John Coustas commented:

We finished the fourth quarter of 2010 with a fleet of 50 containerships. Since then we have taken delivery of two more ships, which immediately commenced their long-term charters. We therefore operate today a fleet of 52 large size containerships with an average age (weighted by TEU) of 8.3 years and further expect to take delivery of 13 more vessels for which we have secured long-term charters at highly accretive rates.

More importantly, the vast majority of our fleet has been re-financed, we have secured financing for the remaining 13 vessels of our orderbook and we have extended maturity of our loans until end of 2018, with favourable terms and covenants. We have further received government approval for a loan financing three vessels being built in China.

This Agreement paves the way for the continued growth of Danaos and indicates the trust and support from all our banks to the Company and its management.

In the fourth quarter of 2010, we recorded revenues of $101 million, adjusted EBITDA of $65 million and $1.5 million adjusted net income, adjusted for certain non-cash charges, as well as costs related to the execution of our financing plan. The year ended with total revenues of $360 million, adjusted EBITDA of $244 million and adjusted net income of $27.9 million, again, adjusted for certain non-cash charges, other one-off items and costs related to the execution of our financing plan.

During 2010, the container industry showed strong recovery from 2009 with liner companies reporting strong profits and continued optimistic outlook. Demand increased by over 12% while the majority of the idle capacity in 2009 was reactivated to cope with rapidly increasing trading volumes. At the same time, and with oil prices remaining strong, the slow-steaming strategies followed by the liner industry will absorb several new ship deliveries and thereby help maintain the supply-demand balance.

The weakness experienced in the last quarter of 2010 quickly reversed in 2011 and today we are further up from the 2010 highs. As values move up driven by demand/supply disparities there seems to be a decreasing number of willing sellers, especially for quality tonnage and larger vessels. Adding to that, the global order-book has decreased to decade-long low levels while a number of recently placed orders for new buildings are just enough to support liner operations with older fleets, which had not participated in the ordering activity of the last five years.

On the demand side, the 2011 spring and summer seasons are expected to be strong as recovery in the US and the rest of the world continues. However, as the expectation for oil prices is to remain high, slow steaming should not be expected to be abandoned as the asset market becomes tighter and starts pushing charter rates higher. All this is supportive of expectations for a continued strong asset and charter market which should benefit the containerships and allow the industry to continue building healthier balance sheets.

Three months ended December 31, 2010 compared to the three months ended December 31, 2009

During the quarter ended December 31, 2010, Danaos had an average of 49.9 containerships compared to 42.0 containerships for the same period in 2009. During the fourth quarter of 2010, we took delivery of one vessel, the Hanjin Versailles on October 11, 2010. Our fleet utilization was 98.5% in the fourth quarter of 2010.

Our adjusted net income was $1.5 million, or $0.01 per share, for the three months ended December 31, 2010 compared to $14.8 million, or $0.27 per share, for the three months ended December 31, 2009, adjusted for non-cash gain in fair value of derivatives of $8.3 million recorded in 2010 compared to $30.9 million loss recorded in 2009, as well as an expense of $18.7 million for fees related to our Comprehensive Financing Plan. Adjusted net income for the fourth quarter of 2010 decreased by $13.3 million, compared to the three months ended December 31, 2009. This decrease is mainly attributed to increased realized loss on our interest rate swap contracts and interest expense on our credit facilities recorded in our Statement of Income during the three months ended December 31, 2010 compared to the same period of 2009, which was partially offset by increased Income from Operations. On a non-adjusted basis, our net loss was $8.9 million, or a loss of $0.08 per share, for the fourth quarter of 2010, compared to net loss of $16.2 million, or a loss of $0.30 per share, for the fourth quarter of 2009. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

Operating Revenue

Operating revenue increased 17.8%, or $15.2 million, to $100.5 million in the three months ended December 31, 2010, from $85.3 million in the three months ended December 31, 2009. The increase was primarily attributed to the addition of nine vessels to our fleet, as follows:


                            Vessel Size
Vessel Name                    (TEU)              Date Delivered
---------------------- ---------------------- ----------------------
CMA CGM Musset                 6,500               March 12, 2010
CMA CGM Nerval                 6,500               May 17, 2010
YM Mandate                     6,500               May 19, 2010
Hanjin Buenos Aires            3,400               May 27, 2010
CMA CGM Rabelais               6,500               July 2, 2010
Hanjin Santos                  3,400               July 6, 2010
CMA CGM Racine                 6,500               August 16, 2010
YM Maturity                    6,500               August 18, 2010
Hanjin Versailles              3,400               October 11, 2010

These additions to our fleet contributed revenues of $23.4 million during the three months ended December 31, 2010. These revenues were offset in part by the sale of one 1,704 TEU containership, the MSC Eagle, on January 22, 2010, which had contributed revenues of $1.0 million for the three months ended December 31, 2009.

We also had a further decrease in revenues of $7.2 million during the three months ended December 31, 2010, mainly attributed to re-chartering of certain vessels at reduced charter rates.

Vessel Operating Expenses

Vessel operating expenses increased 16.7%, or $3.9 million, to $27.2 million in the three months ended December 31, 2010, from $23.3 million in the three months ended December 31, 2009. The increase is mainly attributed to the increased average number of vessels under time charter in our fleet during the three months ended December 31, 2010 compared to the same period of 2009, as well as increased costs of certain vessels which were on charterers' directed lay-up for 92 days only during the fourth quarter of 2010 compared to 283 days in the same period of 2009.

Although the average number of vessels in our fleet increased during the three months ended December 31, 2010 compared to the same period of 2009, the average daily operating cost per vessel (under time charter) was reduced to $6,310 for the three months ended December 31, 2010, from $6,518 for the three months ended December 31, 2009 (excluding those vessels on lay-up).

Depreciation & Amortization

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

Depreciation

Depreciation expense increased 36.8%, or $6.0 million, to $22.3 million in the three months ended December 31, 2010, from $16.3 million in the three months ended December 31, 2009. The increase in depreciation expense was due to the increased average number of vessels in our fleet during the three months ended December 31, 2010 compared to the same period of 2009.

Amortization of Deferred Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs decreased 40.0%, or $0.8 million, to $1.2 million in the three months ended December 31, 2010, from $2.0 million in the three months ended December 31, 2009. The decrease reflects lower drydocking costs amortized during the three months ended December 31, 2010 compared to the same period of 2009.

General and Administrative Expenses

General and administrative expenses increased by $2.7 million, to $6.9 million in the three months ended December 31, 2010, from $4.2 million in the same period of 2009. The increase was mainly the result of a non-cash stock based compensation of the Manager's employees of $1.6 million and increased fees of $0.8 million to our Manager in the three months ended December 31, 2010 compared to the same period of 2009, due to the increase in the average number of vessels in our fleet and an increase in the per day fee payable to our Manager since January 1, 2010.

Other Operating Expenses

Other Operating Expenses includes Voyage Expenses.

Voyage Expenses

Voyage expenses increased by $1.2 million, to $3.1 million in the three months ended December 31, 2010, from $1.9 million in the three months ended December 31, 2009. The increase was mainly the result of increased various voyage expenses, such as port, commission and other expenses due to the increased number of vessels in our fleet.

Interest Expense and Interest Income

Interest expense increased by 18.3%, or $1.7 million, to $11.0 million in the three months ended December 31, 2010, from $9.3 million in the three months ended December 31, 2009. The change in interest expense was partially due to the increase in our average debt by $247.1 million, to $2,558.5 million in the quarter ended December 31, 2010, from $2,311.4 million in the quarter ended December 31, 2009. In addition, the delivery of newbuild vessels has resulted in a reduction in the amount of interest capitalized, rather than such interest being recognized as an expense, by $3.7 million, to $4.2 million in the three months ended December 31, 2010, from $7.9 million in the three months ended December 31, 2009.

Interest income decreased by $0.1 million, to $0.3 million in the three months ended December 31, 2010, from $0.4 million in the three months ended December 31, 2009. The decrease in interest income is mainly attributed to lower average cash balances during the three months ended December 31, 2010 compared to the three months ended December 31, 2009.

Other income/(expenses), net

Other income/(expenses), net, reduced by $18.3 million, to a loss of $17.7 million in the three months ended December 31, 2010, from income of $0.6 million in the three months ended December 31, 2009. This was mainly the result of legal and advisory fees of $18.0 million attributed to fees related to preparing and structuring the Comprehensive Financing Plan, which were recorded during the three months ended December 31, 2010.

Other finance costs, net

Other finance costs, net, increased by $0.4 million, to $1.2 million in the three months ended December 31, 2010, from $0.8 million in the three months ended December 31, 2009. The increase was mainly the result of fees related to the Comprehensive Financing Plan of the Company, which were recorded during the three months ended December 31, 2010.

Loss on fair value of derivatives

Loss on fair value of derivatives, decreased by $25.6 million, to a loss of $19.0 million in the three months ended December 31, 2010, from a loss of $44.6 million in the same period of 2009. The decrease is mainly attributed to non-cash changes in fair value of interest rate swaps of $8.3 million gain recorded in our Statement of Income in the three months ended December 31, 2010, due to hedge accounting ineffectiveness, compared to $30.9 million loss in the three months ended December 31, 2009, as well as realized loss on interest rate swap hedges of $27.3 million recorded in our Statement of Income during the three months ended December 31, 2010, which is mainly attributed to higher average notional amount of swaps and reduced LIBOR payable on our credit facilities against LIBOR fixed through such swaps, compared to $13.7 million loss in the three months ended December 31, 2009.

In addition, realized losses on cash flow hedges of $8.7 million and $11.2 million in the three months ended December 31, 2010 and 2009, respectively, were deferred in "Accumulated Other Comprehensive Loss", rather than such realized losses being recognized as expenses, and will be reclassified into earnings over the depreciable lives of these vessels under construction, which are financed by loans for which their interest rates have been hedged by our interest rate swap contracts. The table below provides an analysis of the items discussed above, and were recorded in the three months ended December 31, 2010 and 2009:

                                                Three months  Three months
                                                    ended         ended
                                                December 31,  December 31,
                                                ------------  ------------
                                                    2010          2009
                                                ------------  ------------
                                                      (in millions)
Gain/(loss) of non-cash changes in fair value
 of swaps                                       $        8.3  $      (30.9)
  Total realized losses of swaps                       (36.0)        (24.9)
  Realized losses of swaps deferred in OCI               8.7          11.2
                                                ------------  ------------
Realized losses of swaps expensed in P&L               (27.3)        (13.7)
                                                ------------  ------------
Loss on fair value of derivatives               $      (19.0) $      (44.6)
                                                ============  ============

Adjusted EBITDA

Adjusted EBITDA increased by $9.0 million, or 16.1%, to $65.0 million in the three months ended December 31, 2010, from $56.0 million in the three months ended December 31, 2009, adjusted for non-cash gain in fair value of derivatives of $8.3 million in the three months ended December 31, 2010 compared to $30.9 million loss in the three months ended December 31, 2009, realized loss on derivatives of $27.3 million in the three months ended December 31, 2010 compared to a $13.7 million realized loss in the three months ended December 31, 2009, as well as non-cash stock based compensation of $1.6 million and an expense of $18.7 million of fees related to our Comprehensive Financing Plan recorded in the three months ended December 31, 2010. A table reconciling Adjusted EBITDA to Net Income/(Loss) can be found at the end of this earnings release.

Twelve months ended December 31, 2010 compared to the twelve months ended December 31, 2009

On August 6, 2010, we entered into a commitment letter with our lenders for the restructuring of our existing debt obligations, and approximately $426 million of new debt financing. The agreed terms, contemplate that, under our existing bank debt facilities, the amortization and maturities will be rescheduled, the interest rate margin will be reduced from current levels, and the financial covenants, events of default, and guarantee and security packages will be revised. In connection with this arrangement, we had also agreed to issue to our lenders warrants to purchase an aggregate of 15 million shares of our common stock for an initial exercise price of $6.00 per share (refer to "Recent News" section). We have also reached an agreement for $203.4 million credit facility with CEXIM for which we are in the process of finalizing, after having received approvals from all related government agencies. Furthermore, we issued and sold to several investors, including our largest stockholder, on August 12, 2010, 54,054,055 shares of our Common Stock for an aggregate purchase price of $200.0 million in cash. Following the transaction, the shares issued and outstanding as of December 31, 2010, were 108,610,921. On September 27, 2010, we entered into a $190 million financing facility with Hyundai Samho Heavy Industries ("Hyundai Samho") in respect of eight of our newbuilding containerships on order from Hyundai Samho, in the form of delayed payment schedule of a portion of the final installment for each such newbuilding.

During the twelve months ended December 31, 2010, Danaos had an average of 45.7 containerships compared to 40.5 containerships for the same period of 2009. During 2010, we took delivery of nine vessels, which are all on long-term charterers, the CMA CGM Musset on March 12, 2010, the CMA CGM Nerval on May 17, 2010, the YM Mandate on May 19, 2010, the Hanjin Buenos Aires on May 27, 2010, the CMA CGM Rabelais on July 2, 2010, the Hanjin Santos on July 6, 2010, the CMA CGM Racine on August 16, 2010, the YM Maturity on August 18, 2010 and the Hanjin Versailles on October 11, 2010 and we sold the MSC Eagle on January 22, 2010, a vessel over 30 years old. Our fleet utilization was 98.3% in the twelve months ended December 31, 2010.

Our adjusted net income was $27.9 million, or $0.37 per share, for the twelve months ended December 31, 2010 compared to $65.6 million, or $1.20 per share, for the twelve months ended December 31, 2009, adjusted for non-cash changes in fair value of derivatives of a $48.9 million loss recorded in the twelve months ended December 31, 2010 compared to a $29.5 million loss recorded in the twelve months ended December 31, 2009, as well as an impairment loss of $71.5 million in relation to the cancellation of three 6,500 TEU newbuilding containerships, a gain of $12.6 million in relation to an agreement entered into with the charterer of the three newbuildings cancelled in consideration for the termination of the respective charter parties, an expense of $24.3 million for fees related to our Comprehensive Financing Plan and a gain on sale of vessels of $1.9 million recorded in the twelve months ended December 31, 2010. Adjusted net income for the twelve months ended December 31, 2010 decreased by 57.5%, or $37.7 million, compared to the twelve months ended December 31, 2009. This decrease is mainly attributed to an increase in the realized loss on our interest rate swap contracts and interest expense on our credit facilities recorded in our Statement of Income during the twelve months ended December 31, 2010 compared to 2009, which was partially offset by increased Income from Operations. On a non-adjusted basis, our net loss was $102.3 million, or a loss of $1.36 per share, for the twelve months ended December 31, 2010, compared to net income of $36.1 million, or $0.66 per share, for the twelve months ended December 31, 2009. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

Operating Revenue

Operating revenue increased 12.6%, or $40.2 million, to $359.7 million in the twelve months ended December 31, 2010, from $319.5 million in the twelve months ended December 31, 2009. The increase was primarily attributed to the addition to our fleet of nine vessels, as follows:

                             Vessel Size
Vessel Name                     (TEU)             Date Delivered
---------------------- ---------------------- ----------------------
CMA CGM Musset                  6,500              March 12, 2010
CMA CGM Nerval                  6,500              May 17, 2010
YM Mandate                      6,500              May 19, 2010
Hanjin Buenos Aires             3,400              May 27, 2010
CMA CGM Rabelais                6,500              July 2, 2010
Hanjin Santos                   3,400              July 6, 2010
CMA CGM Racine                  6,500              August 16, 2010
YM Maturity                     6,500              August 18, 2010
Hanjin Versailles               3,400              October 11, 2010

These additions to our fleet contributed revenues of $48.9 million during the twelve months ended December 31, 2010. Moreover, two 4,253 TEU containerships, the Zim Dalian and the Zim Luanda, which were added to our fleet on March 31, 2009 and June 26, 2009, as well as a 6,500 TEU containership, the CMA CGM Moliere, which was added to our fleet on September 28, 2009, contributed incremental revenues of $15.5 million during the twelve months ended December 31, 2010 compared to 2009. These revenues were offset in part by the sale of one 1,704 TEU containership, the MSC Eagle, on January 22, 2010, that contributed revenues of $3.8 million for the twelve months ended December 31, 2009 compared to revenues of $0.1 million in the twelve months ended December 31, 2010.

We also had a further decrease in revenues of $20.5 million during the twelve months ended December 31, 2010, mainly attributed to re-chartering of vessels at reduced charter hire, as well as reduced charter hire, in relation to vessels laid up by our charterers, representing operating expenses not being incurred during the lay-up period.

Vessel Operating Expenses

Vessel operating expenses decreased 4.3%, or $4.0 million, to $88.3 million in the twelve months ended December 31, 2010, from $92.3 million in the twelve months ended December 31, 2009. The reduction is mainly attributed to reduced costs of certain vessels which were on charterers' directed lay-up for 1,311 days in aggregate during 2010 compared to 307 days in the same period of 2009. Although the average number of vessels in our fleet under time charter increased during the twelve months ended December 31, 2010 compared to the same period of 2009, the average daily operating cost per vessel (under time charter) was reduced to $5,884 for the twelve months ended December 31, 2010, from $6,373 for the twelve months ended December 31, 2009 (excluding those vessels on lay-up).

Depreciation & Amortization

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

Depreciation

Depreciation expense increased 26.4%, or $16.1 million, to $77.0 million in the twelve months ended December 31, 2010, from $60.9 million in the twelve months ended December 31, 2009. The increase in depreciation expense was due to the increased average number of vessels in our fleet during the twelve months ended December 31, 2010, compared to 2009.

Amortization of Deferred Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs decreased 10.8%, or $0.9 million, to $7.4 million in the twelve months ended December 31, 2010, from $8.3 million in the twelve months ended December 31, 2009. The decrease reflects reduced drydocking costs amortized during the twelve months ended December 31, 2010 compared to 2009.

Impairment Loss

On May 25, 2010, we signed an agreement, which forms part of the overall Comprehensive Financing Plan, with Hanjin Heavy Industries & Construction Co. Ltd. to cancel three 6,500 TEU newbuilding containerships, the HN N-216, the HN N-217 and the HN N-218, initially expected to be delivered in the first half of 2012, and recorded impairment loss of $71.5 million, which consisted of cash advances of $64.35 million paid to the shipyard and $7.16 million of interest capitalized and other predelivery capital expenditures paid in relation to the construction of the respective newbuildings.

General and Administrative Expenses

General and administrative expenses increased by $8.8 million, to $23.3 million in the twelve months ended December 31, 2010, from $14.5 million in the same period of 2009. The increase was mainly the result of legal and advisory fees of $2.5 million (attributed to fees related to preparing and structuring the Comprehensive Financing Plan), as well as non-cash stock based compensation of the Manager's 130 employees of $1.6 million recorded in 2010 and increased fees of $2.7 million to our Manager in the twelve months ended December 31, 2010 compared to 2009, due to the increase in the average number of our vessels in our fleet and an increase in the per day fee payable to our Manager since January 1, 2010.

Sale of Vessels

On January 22, 2010, we sold and delivered the MSC Eagle. The sale consideration was $4.6 million. We realized a net gain on this sale of $1.9 million. The MSC Eagle was over 30-years old and was generating revenue under its time charter, which expired in January 2010.

Other Operating Expenses

Other Operating Expenses includes Voyage Expenses.

Voyage Expenses

Voyage expenses increased 8.2%, or $0.6 million, to $7.9 million in the twelve months ended December 31, 2010, from $7.3 million for the twelve months ended December 31, 2009. The increase was mainly the result of increased various voyage expenses, such as port, commission and other expenses due to the increased number of vessels in our fleet.

Interest Expense and Interest Income

Interest expense increased 13.8%, or $5.0 million, to $41.2 million in the twelve months ended December 31, 2010, from $36.2 million in the twelve months ended December 31, 2009. The change in interest expense was partially due to the increase in our average debt by $179.8 million to $2,406.4 million in the twelve months ended December 31, 2010, from $2,226.6 million in the twelve months ended December 31, 2009, as well as increased margins over LIBOR following our agreements in connection with covenant waivers obtained during 2009, which was partially offset by the decrease of LIBOR payable under our credit facilities in the twelve months ended December 31, 2010 compared to the twelve months ended December 31, 2009. In addition, the delivery of newbuild vessels has resulted in reduction in the amount of interest capitalized, rather than such interest being recognized as an expense, by $9.2 million, to $23.9 million in the twelve months ended December 31, 2010, from $33.1 million in the twelve months ended December 31, 2009.

Interest income decreased by $1.4 million, to $1.0 million in the twelve months ended December 31, 2010, from $2.4 million in the twelve months ended December 31, 2009. The decrease in interest income is attributed to lower average cash balances, as well as reduced interest rates to which our cash balances were subject during the twelve months ended December 31, 2010 compared to the twelve months ended December 31, 2009.

Other income/(expenses), net

Other income/(expenses), net, decreased by $4.8 million, to an expense of $5.1 million in the twelve months ended December 31, 2010, from an expense of $0.3 million in 2009. The reduction was mainly the result of legal and advisory fees of $18.0 million (attributed to fees related to preparing and structuring the Comprehensive Financing Plan), which were partially offset by income of $12.6 million in relation to an agreement entered into with the charterer of the three newbuildings cancelled on May 25, 2010 in consideration for the termination of the respective charter parties, recorded during the twelve months ended December 31, 2010.

Other finance costs, net

Other finance cost, net, increased by $3.8 million, to $6.1 million in the twelve months ended December 31, 2010, from $2.3 million in the twelve months ended December 31, 2009. The increase was the result of $3.8 million of fees related to the Comprehensive Financing Plan of the Company, which were recorded during the twelve months ended December 31, 2010.

Loss on fair value of derivatives

Loss on fair value of derivatives, increased by $73.6 million, to a loss of $137.2 million in the twelve months ended December 31, 2010, from a loss of $63.6 million in 2009. The increase is mainly attributable to non-cash changes in fair value of interest rate swaps of $44.7 million loss recorded in our Statement of Income in the twelve months ended December 31, 2010, due to hedge accounting ineffectiveness and changes in forecasted debt, compared to a $29.5 million loss in the twelve months ended December 31, 2009, as well as a non-cash loss of $4.2 million in relation to deferred realized loss on cash flow hedges for the HN N-216, the HN N-217 and the HN N-218 following their cancellation being reclassified from "Accumulated other comprehensive loss" in the consolidated balance sheet to condensed consolidated statement of income in the twelve months ended December 31, 2010. Furthermore, the increased loss on fair value of derivatives is attributable to realized loss on interest rate swap hedges of $88.3 million recorded in our Statement of Income during the twelve months ended December 31, 2010, due to higher average notional amount of swaps and reduced LIBOR payable on our credit facilities against LIBOR fixed through such swaps, compared to a $34.1 million loss in the twelve months ended December 31, 2009.

In addition, realized losses on cash flow hedges of $38.5 million and $36.3 million in the twelve months ended December 31, 2010 and 2009, respectively, were deferred in "Accumulated Other Comprehensive Loss", rather than such realized losses being recognized as expenses, and will be reclassified into earnings over the depreciable lives of these vessels under construction, which are financed by loans for which their interest rates have been hedged by our interest rate swap contracts. The table below provides an analysis of the items discussed above, and were recorded in the twelve months ended December 31, 2010 and 2009:

                                                   Twelve        Twelve
                                                months ended  months ended
                                                December 31,  December 31,
                                                ------------  ------------
                                                    2010          2009
                                                ------------  ------------
                                                      (in millions)
Gain/(loss) of non-cash changes in fair value
 of swaps                                       $      (44.7) $      (29.5)
  Total realized losses of swaps                      (126.8)        (70.4)
  Realized losses of swaps deferred in OCI              38.5          36.3
                                                ------------  ------------
Realized losses of swaps expensed in P&L               (88.3)        (34.1)
Impairment of deferred realized losses                  (4.2)           --
                                                ------------  ------------
Loss on fair value of derivatives               $     (137.2) $      (63.6)
                                                ============  ============

Adjusted EBITDA

Adjusted EBITDA increased by $39.8 million, or 19.5%, to $243.8 million in the twelve months ended December 31, 2010, from $204.0 million in the twelve months ended December 31, 2009, adjusted for a gain of $12.6 million in relation to an agreement entered into with the charterer of the three newbuildings cancelled in consideration for the termination of the respective charter parties, an expense of $24.3 million of fees related to our Comprehensive Financing Plan, a non-cash stock based compensation of $1.7 million, a gain on sale of vessel of $1.9 million, impairment loss of $71.5 million, non-cash changes in fair value of derivatives of $48.9 million loss recorded in the twelve months ended December 31, 2010 compared to $29.5 million loss recorded in the twelve months ended December 31, 2009 and realized loss on derivatives of $88.3 million recorded in the twelve months ended December 31, 2010 compared to $34.1 million recorded in the twelve months ended December 31, 2009. Table reconciling Adjusted EBITDA to Net Income/(Loss) can be found at the end of this earnings release.

Recent News

On January 26, 2011, the Company took delivery of the newbuilding 3,400 TEU vessel, the Hanjin Algeciras. The vessel has been deployed on a 10-year time charter with one of the world's major liner companies.

On March 10, 2011, the Company took delivery of the newbuilding 10,100 TEU vessel, the Hanjin Germany. The vessel has been deployed on a 12-year time charter with one of the world's major liner companies.

On March 17, 2011, we are issuing 11.2 million warrants to purchase our common stock to certain of the banks which are parties to our Comprehensive Financing Plan. The warrants which will expire in January 2019 have an initial exercise price of $6.00 per share. The warrants may only be exercised on a cashless basis, which reduces the dilutive effects to our common stock. We expect to issue later this year, an additional 3.8 million warrants, with the same terms to the remaining banks participating in our Comprehensive Financing Plan. As of March 17, 2011, a total of 108.6 million shares of the company's common stock were outstanding.

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 52 containerships aggregating 233,429 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Danaos is one of the largest US listed containership companies based on fleet size. Furthermore, the company has a contracted fleet of 13 additional containerships aggregating 129,250 TEU with scheduled deliveries up to the second quarter of 2012. The company's shares trade on the New York Stock Exchange under the symbol "DAC".

Forward-Looking Statements

Matters discussed in this release may constitute forward-looking statements within the meaning of the 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, charter counterparty performance, 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, 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 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 67 off-hire days in total in the fourth quarter of 2010. The following table summarizes vessel utilization and the impact of the off-hire days on the company's revenue relating to the last four quarters.

                       First     Second      Third     Fourth
Vessel Utilization    Quarter    Quarter    Quarter    Quarter
 (No. of Days)         2010       2010       2010       2010       Total
                     ---------  ---------  ---------  ---------  ---------
Ownership Days           3,732      3,945      4,408      4,590     16,675
Less Off-hire Days:
  Scheduled Off-hire
   Days                    (12)        --       (138)       (41)      (191)
  Other Off-hire Days       (1)       (64)        --        (26)       (91)
                     ---------  ---------  ---------  ---------  ---------
Operating Days           3,719      3,881      4,270      4,523     16,393
                     =========  =========  =========  =========  =========
Vessel Utilization        99.7%      98.4%      96.9%      98.5%      98.3%


Revenue - Impact of    First      Second     Third     Fourth
 Off-hire (in '000s   Quarter     Quarter   Quarter    Quarter
 of US Dollars)        2010        2010      2010       2010       Total
                     ---------  ---------  ---------  ---------  ---------
100% Fleet
 Utilization         $  80,002  $  86,009  $  94,758  $ 101,051  $ 361,820
Less Off-hire Days:
  Scheduled Off-hire
   Days                   (328)        --       (171)        --       (499)
  Other Off-hire Days      (15)    (1,063)        --       (566)    (1,644)
                     ---------  ---------  ---------  ---------  ---------
Actual Revenue
 Earned              $  79,659  $  84,946  $  94,587  $ 100,485  $ 359,677
                     =========  =========  =========  =========  =========

Fleet List

The following table describes in detail our fleet deployment profile as of March 17, 2011.

                          Vessel Size                     Expiration of
Vessel Name                  (TEU)        Year Built       Charter(1)
----------------         -------------- -------------- --------------------
Containerships
----------------
Hanjin Germany              10,100          2011         December 2022
CSCL Le Havre               9,580           2006         September 2018
CSCL Pusan                  9,580           2006         July 2018
CSCL America(2)             8,468           2004         September 2016
CSCL Europe                 8,468           2004         June 2016
CMA CGM Moliere(3)          6,500           2009         August 2021
CMA CGM Musset(3)           6,500           2010         February 2022
CMA CGM Nerval(3)           6,500           2010         April 2022
CMA CGM Rabelais(3)         6,500           2010         June 2022
YM Mandate                  6,500           2010         January 2028
CMA CGM Racine(3)           6,500           2010         July 2022
YM Maturity                 6,500           2010         April 2028
Marathonas(4)               4,814           1991         September 2011
Maersk Messologi            4,814           1991         September 2011
Maersk Mytilini             4,814           1991         September 2011
Hyundai Commodore(5)        4,651           1992         March 2013
Hyundai Duke                4,651           1992         February 2013
Hyundai Federal(6)          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
Bunga Raya Tiga(7)          4,253           2004         February 2014
Deva(8)                     4,253           2004         December 2013
ZIM Rio Grande              4,253           2008         May 2020
ZIM Sao Paolo               4,253           2008         August 2020
ZIM Kingston                4,253           2008         September 2020
ZIM Monaco                  4,253           2009         November 2020
ZIM Dalian                  4,253           2009         February 2021
ZIM Luanda                  4,253           2009         May 2021
Al Rayyan(9)                3,908           1989         January 2012
YM Yantian                  3,908           1989         July 2011
Hanjin Buenos Aires         3,400           2010         March 2020
Hanjin Santos               3,400           2010         May 2020
Hanjin Versailles           3,400           2010         August 2020
Hanjin Algeciras            3,400           2011         November 2020
SCI Pride(10)               3,129           1988         July 2012
Lotus(11)                   3,098           1988         June 2011
Independence(12)            3,045           1986         October 2011
Henry(13)                   3,039           1986         July 2011
Jiangsu Dragon(14)          2,917           1991         June 2011
California Dragon(15)       2,917           1991         June 2011
Shenzhen Dragon(16)         2,917           1991         June 2011
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         February 2018
Hyundai Bridge              2,200           1998         January 2018
Hyundai Highway             2,200           1998         January 2018
Hyundai Vladivostok         2,200           1997         May 2017
Hanjin Montreal(17)         2,130           1984         June 2011

(1) Earliest date charters could expire. Some charters include options to extend their term.

(2) On August 21, 2009, the MSC Baltic was renamed to CSCL America at the request of the charterer of this vessel.

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

(4) On January 21, 2010, the MSC Marathon was renamed to Marathonas at the request of the charterer of this vessel.

(5) On April 2, 2009, the MOL Affinity was renamed to Hyundai Commodore at the request of the charterer of this vessel.

(6) On May 12, 2009, the APL Confidence was renamed to Hyundai Federal at the request of the charterer of this vessel.

(7) On April 29, 2009, the Derby was renamed to Bunga Raya Tiga at the request of the charterer of this vessel.

(8) On October 7, 2010, the Bunga Raya Tujuh was renamed to Deva at the request of the charterer of this vessel.

(9) On January 31, 2011, the Al Rayan was renamed to Honour at the request of the charterer of this vessel.

(10) On August 18, 2010, the YM Milano was renamed to SCI Pride at the request of the charterer of this vessel.

(11) On July 24, 2010, the CMA CGM Lotus was renamed to Lotus at the request of the charterer of this vessel.

(12) On October 18, 2010, the CMA CGM Vanille was renamed to Independence at the request of the charterer of this vessel

(13) On May 13, 2010, the CMA CGM Passiflore was renamed to Henry at the request of the charterer of this vessel.

(14) On July 7, 2010, the CMA CGM Elbe was renamed to Jiangsu Dragon at the request of the charterer of this vessel.

(15) On July 20, 2010, the CMA CGM Kalamata was renamed to California Dragon at the request of the charterer of this vessel.

(16) On June 26, 2010, the CMA CGM Komodo was renamed to Shenzhen Dragon at the request of the charterer of this vessel.

(17) On May 14, 2009, the Montreal Senator was renamed to Hanjin Montreal 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.

                   Vessel Size         Expected
Vessel Name           (TEU)          Delivery(*)       Charter Term
---------------  ----------------  ----------------  ----------------

HN N-223              3,400        2nd Quarter 2011     10 years
HN Z00001             8,530        2nd Quarter 2011     12 years
Hull No S-462        10,100        2nd Quarter 2011     12 years
HN Z00002             8,530        3rd Quarter 2011     12 years
HN Z00003             8,530        3rd Quarter 2011     12 years
HN Z00004             8,530        3rd Quarter 2011     12 years
Hull No S-463        10,100        2nd Quarter 2011     12 years
HN H 1022A            8,530        4th Quarter 2011     12 years
Hull No S-456        12,600        1st Quarter 2012     12 years
Hull No S-457        12,600        1st Quarter 2012     12 years
Hull No S-458        12,600        2nd Quarter 2012     12 years
Hull No S-459        12,600        2nd Quarter 2012     12 years
Hull No S-460        12,600        2nd Quarter 2012     12 years


(*) Delivery date represents most recent update regarding respective event,
    which in certain cases may change significantly as a result of further
    negotiations with shipyards.




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

                              Three       Three       Twelve      Twelve
                              months      months      months      months
                              ended       ended       ended       ended
                             December    December    December    December
                                31,         31,         31,         31,
                            ----------  ----------  ----------  ----------
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------
                                             (Unaudited)
OPERATING REVENUES          $  100,485  $   85,339  $  359,677  $  319,511

OPERATING EXPENSES
  Vessel operating expenses    (27,222)    (23,341)    (88,271)    (92,327)
  Depreciation & amortization  (23,485)    (18,284)    (84,471)    (69,201)
  General & administrative      (6,862)     (4,186)    (23,255)    (14,541)
  Gain on sale of vessels           --          --       1,916          --
  Impairment loss                   --          --     (71,509)         --
  Other operating expenses      (3,099)     (1,933)     (7,928)     (7,346)
                            ----------  ----------  ----------  ----------
Income From Operations          39,817      37,595      86,159     136,096
                            ----------  ----------  ----------  ----------

OTHER EARNINGS (EXPENSES)
  Interest income                  272         355         964       2,428
  Interest expense             (10,996)     (9,345)    (41,158)    (36,208)
  Other finance cost, net       (1,234)       (755)     (6,055)     (2,290)
  Other income/(expenses),
   net                         (17,723)        600      (5,070)       (336)
  Loss on fair value of
   derivatives                 (19,025)    (44,632)   (137,181)    (63,601)
                            ----------  ----------  ----------  ----------
Total Other Income
 (Expenses), net               (48,706)    (53,777)   (188,500)   (100,007)
                            ----------  ----------  ----------  ----------

Net (Loss)/Income           $   (8,889) $  (16,182) $ (102,341) $   36,089
                            ==========  ==========  ==========  ==========

(Losses)/Earnings per Share
Basic and diluted net
 (loss)/income per share    $    (0.08) $    (0.30) $    (1.36) $     0.66
                            ==========  ==========  ==========  ==========
Basic and diluted weighted
 average number of common
 shares (in thousands of
 shares)                       108,611      54,551      75,436      54,550
                            ==========  ==========  ==========  ==========





                            Non-GAAP Measures*
  Reconciliation of Net Income/(Loss) to Adjusted Net Income - Unaudited

                              Three       Three       Twelve      Twelve
                              months      months      months      months
                              ended       ended       ended       ended
                             December    December    December    December
                                31,         31,         31,         31,
                            ----------  ----------  ----------  ----------
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------
Net (Loss)/Income           $   (8,889) $  (16,182) $ (102,341) $   36,089
Loss in fair value of
 derivatives                    19,025      44,632     137,181      63,601
Realized loss on derivatives   (27,277)    (13,691)    (88,302)    (34,104)
Impairment loss                     --          --      71,509          --
Gain on contract
 termination                        --          --     (12,600)         --
Comprehensive Financing
 Plan related fees              18,689          --      24,326          --
Gain on sale of vessels             --          --      (1,916)         --
                            ----------  ----------  ----------  ----------
Adjusted Net Income         $    1,548  $   14,759  $   27,857  $   65,586
                            ==========  ==========  ==========  ==========
Adjusted Earnings Per Share $     0.01  $     0.27  $     0.37  $     1.20
                            ==========  ==========  ==========  ==========
Weighted average number of
 shares                        108,611      54,551      75,436      54,550

* The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and twelve months ended December 31, 2010 and 2009. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP.

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



                                                   As of         As of
                                                December 31,  December 31,
                                                ------------  ------------
                                                    2010          2009
                                                ------------  ------------
                                                 (Unaudited)   (Unaudited)
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                     $    229,835  $    122,050
  Restricted cash, current portion                     2,907       154,078
  Accounts receivable, net                             4,112         3,732
  Other current assets                                29,976        20,644
                                                ------------  ------------
                                                     266,830       300,504
                                                ------------  ------------
NON-CURRENT ASSETS
  Fixed assets, net                                2,273,483     1,573,759
  Advances for vessels under construction            904,421     1,194,088
  Restricted cash, net of current portion                 --        44,393
  Deferred charges, net                               24,692        20,583
  Fair value of financial instruments                  4,465         3,762
  Other non-current assets                            15,239         5,622
                                                ------------  ------------
                                                   3,222,300     2,842,207
                                                ------------  ------------
TOTAL ASSETS                                       3,489,130     3,142,711
                                                ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Long-term debt, current portion                     21,619     2,331,678
  Accounts payable, accrued liabilities & other
   current liabilities                                95,131        86,264
  Fair value of financial instruments, current
   portion                                           129,747       100,065
                                                ------------  ------------
                                                     246,497     2,518,007
                                                ------------  ------------
LONG-TERM LIABILITIES
  Long term-debt, net of current portion           2,543,907            --
  Fair value of financial instruments, net of
   current portion                                   302,162       213,493
  Other long-term liabilities                          4,152         5,620
                                                ------------  ------------
                                                   2,850,221       219,113
                                                ------------  ------------

STOCKHOLDERS' EQUITY
  Common stock                                         1,086           546
  Additional paid-in capital                         489,672       288,613
  Treasury stock                                          (3)          (39)
  Accumulated other comprehensive loss              (436,566)     (324,093)
  Retained earnings                                  338,223       440,564
                                                ------------  ------------
                                                     392,412       405,591
                                                ------------  ------------
Total liabilities and stockholders' equity      $  3,489,130  $  3,142,711
                                                ============  ============





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

                              Three       Three       Twelve      Twelve
                              months      months      months      months
                              ended       ended       ended       ended
                             December    December    December    December
                                31,         31,         31,         31,
                            ----------  ----------  ----------  ----------
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------
Operating Activities:
  Net (loss)/income         $   (8,889) $  (16,182) $ (102,341) $   36,089
  Adjustments to reconcile
   net income to net cash
   provided by operating
   activities:
  Depreciation                  22,251      16,252      77,045      60,906
  Impairment loss                   --          --      71,509          --
  Amortization of deferred
   charges                       1,572       2,325       8,766       9,184
  Written off amount of
   deferred charges                 --          --       1,084         412
  Stock based compensation       1,625           8       1,685          47
  Payments for drydocking/
   special survey                 (571)       (184)     (3,122)     (7,259)
  Change in fair value of
   financial instruments       (16,923)     19,700      10,375      (6,801)
  Gain on sale of vessels           --          --      (1,916)         --
  Accounts receivable              107      (1,037)       (380)     (2,613)
  Other assets, current and
   non-current                  (8,991)     (5,853)    (18,949)     (1,442)
  Accounts payable and
   accrued liabilities          23,506       1,829      32,449       6,933
  Other liabilities,
   current and non-current         264        (541)      2,587      (2,290)
                            ----------  ----------  ----------  ----------
Net Cash provided by
 Operating Activities           13,951      16,317      78,792      93,166
                            ----------  ----------  ----------  ----------

Investing Activities:
  Vessel acquisitions
   including advances               --         (12)         --        (299)
  Vessels under construction  (119,706)    (56,681)   (589,512)   (374,921)
  Proceeds from sale of
   vessels                          --       2,311       1,764       2,311
                            ----------  ----------  ----------  ----------
Net Cash used in Investing
 Activities                   (119,706)    (54,382)   (587,748)   (372,909)
                            ----------  ----------  ----------  ----------

Financing Activities:
  Debt draw downs               41,580      28,200     437,399     267,043
  Debt repayment                (3,842)     (6,892)   (208,751)    (32,219)
  Issuance of common stock          --          --     200,000          --
  Treasury stock purchased          --          --         (50)         --
  Deferred costs                (1,596)        (13)     (7,421)     (6,822)
  Decrease in restricted cash   10,808      13,447     195,564      53,071
                            ----------  ----------  ----------  ----------
Net Cash provided by
 Financing Activities           46,950      34,742     616,741     281,073
                            ----------  ----------  ----------  ----------
Net (decrease)/increase in
 cash and cash equivalents     (58,805)     (3,323)    107,785       1,330
Cash and cash equivalents,
 beginning of period           288,640     125,373     122,050     120,720
                            ----------  ----------  ----------  ----------
Cash and cash equivalents,
 end of period              $  229,835  $  122,050  $  229,835  $  122,050
                            ==========  ==========  ==========  ==========




            Reconciliation of Net Income/(Loss) to Adjusted EBITDA
              (Expressed in thousands of United States dollars)

                              Three       Three       Twelve      Twelve
                              months      months      months      months
                              ended       ended       ended       ended
                             December    December    December    December
                                31,         31,         31,         31,
                            ----------  ----------  ----------  ----------
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------
                                             (Unaudited)
Net (loss)/income           $   (8,889) $  (16,182) $ (102,341)     36,089
Depreciation                    22,251      16,252      77,045      60,906
Amortization of deferred
 drydocking & special
 survey costs                    1,234       2,032       7,426       8,295
Amortization of deferred
 finance costs and write-offs      338         293       1,340       1,301
Interest income                   (272)       (355)       (964)     (2,428)
Interest expense                10,996       9,345      41,158      36,208
Impairment loss                     --          --      71,509          --
Gain on sale of vessels             --          --      (1,916)         --
Gain on contract
 termination(2)                     --          --     (12,600)         --
Comprehensive Financing
 Plan related fees(3)           18,689          --      24,326          --
Stock based compensation(4)      1,625           8       1,685          47
Realized loss on derivatives    27,277      13,691      88,302      34,104
Non-cash changes in fair
 value of derivatives           (8,252)     30,941      48,879      29,497
                            ----------  ----------  ----------  ----------
Adjusted EBITDA(5)          $   64,997  $   56,025  $  243,849  $  204,019
                            ==========  ==========  ==========  ==========

(2) Gain on contract termination relates to consideration of $12.6 million received by the charterer of the three newbuildings cancelled on May 25, 2010 in relation to the termination of the respective charter parties.

(3) Fees related to our Comprehensive Financing Plan, of which $0.7 million and $3.8 million for the three and twelve months ended December 31, 2010, respectively, relate to financing fees and were recorded in "Other finance costs". Furthermore, $18.0 million and $20.5 million for the three and twelve months ended December 31, 2010, respectively, relate to legal and other advisory fees recorded in "Other income/(expense)" and "General and administrative expenses."

(4) Stock based compensation expense was recorded in "General and administrative expenses."

(5) Adjusted EBITDA represents net income/(loss) before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs and deferred finance costs, impairment loss, gain/(loss) on sale of vessels, non-cash changes in fair value of derivatives, realized gain/(loss) on derivatives, gain on contract termination, stock based compensation and other items in relation to the Company's Comprehensive Financing Plan. However, Adjusted EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or "GAAP." We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted EBITDA is useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that Adjusted EBITDA is useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Note: Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to net income. Charges negatively impacting net income are reflected as increases to net income.

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and twelve months ended December 31, 2010 and 2009. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP.

Contact Information

  • For further information please contact:


    Company Contact:

    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: danaos@capitallink.com