SOURCE: Danaos Corporation

Danaos Corporation

February 11, 2013 16:05 ET

Danaos Corporation Reports Fourth Quarter and Full Year Results for the Year Ended December 31, 2012

ATHENS, GREECE--(Marketwire - Feb 11, 2013) - Danaos Corporation ("Danaos") (NYSE: DAC), a leading international owner of containerships, today reported unaudited results for the quarter and full year ended December 31, 2012.

Highlights for the Fourth Quarter and Full Year Ended December 31, 2012:

  • Operating revenues of $151.8 million for the three months ended December 31, 2012 compared to $128.3 million for the three months ended December 31, 2011, an increase of 18.3%. Operating revenues of $589.0 million for the year ended December 31, 2012 compared to $468.1 million for the year ended December 31, 2011, an increase of 25.8%.
  • Adjusted EBITDA1 of $112.4 million for the three months ended December 31, 2012 compared to $88.8 million for the three months ended December 31, 2011, an increase of 26.6%. Adjusted EBITDA1 of $431.7 million for the year ended December 31, 2012 compared to $318.6 million for the year ended December 31, 2011, an increase of 35.5%.
  • Adjusted net income1 of $11.7 million, or $0.11 per share, for the three months ended December 31, 2012 compared to $16.1 million, or $0.15 per share, for the three months ended December 31, 2011. Adjusted net income1 of $60.5 million, or $0.55 per share, for the year ended December 31, 2012 compared to $61.2 million, or $0.56 per share, for the year ended December 31, 2011.
  • We recorded an impairment loss of $129.6 million for thirteen of our older vessels, which are currently either on lay-up or on short-term charters expiring in 2013.
  • We managed to improve our daily vessel operating cost by 7.3%, to $5,857 per day for the three months ended December 31, 2012 compared to $6,318 per day for the three months ended December 31, 2011.
  • The remaining average charter duration of our fleet was 9.7 years as of December 31, 2012 (weighted by aggregate contracted charter hire).
  • Total contracted operating revenues were $4.9 billion as of December 31, 2012, through 2028.
  • Charter coverage of 81% for the next 12 months in terms of contracted operating days and 97% in terms of operating revenues.
 
 
 
Three and Twelve Months Ended December 31, 2012
Financial Summary
(Expressed in thousands of United States dollars, except per share amounts):
 
    Three months ended
December 31,
    Three months ended
December 31,
  Twelve months ended
December 31,
    Twelve months ended
December 31,
    2012     2011   2012     2011
    (unaudited)
Operating revenues   $ 151,826     $ 128,344   $ 589,009     $ 468,101
Net (loss)/income   $ (116,478 )   $ 9,058   $ (105,204 )   $ 13,437
Adjusted net income1   $ 11,699     $ 16,129   $ 60,453     $ 61,164
(Losses)/earnings per share   $ (1.06 )   $ 0.08   $ (0.96 )   $ 0.12
Adjusted earnings per share1   $ 0.11     $ 0.15   $ 0.55     $ 0.56
Weighted average number of shares (in thousands)     109,622       109,142     109,613       109,045
Adjusted EBITDA1   $ 112,368     $ 88,810   $ 431,690     $ 318,607
                             

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 to adjusted EBITDA.

Danaos' CEO Dr. John Coustas commented:

Despite the challenging container market environment, in 2012 we managed to maintain the Company's profitability at the 2011 levels. Adjusted Net Income for 2012 came in at $60.5 million or 55 cents per share, compared to $61.2 million or 56 cents per share for 2011, effectively remaining stable, while Adjusted EBITDA increased by 35.5% to $431.7 million for 2012 compared to $318.6 million in 2011 as a result of our fleet expansion program that was concluded this year.

Demand & supply fundamentals for 2012 confirm that this has been a sluggish year, with supply outpacing demand by almost 3%. Although there are signs that this disparity may be somehow moderated in the coming quarters, we still expect supply to outpace demand in 2013.

Mainlane trade volumes in 2012 expanded by a mere 1% on average, while the Asia - Europe trade contracted by almost 3.5%, mainly due to the ongoing weakness in European consumer demand. At the same time, this is the route that has faced the biggest inflow of new tonnage with deliveries of the large post 10,000 TEU containerships. We expect this trend will continue in 2013 as vessels ordered during the early 2011 "mini-boom" are being delivered.

On the other hand, it was non-mainlane trade volumes that to a certain extent "saved the day" expanding by around 6.5% mainly on the back of strong intra-Asia and North-South trade growth. This growth facilitated cascading that helped ease the supply pressure in the mainlane trades but at the expense of the charter market as liner operators have been increasingly utilizing their own tonnage and are generally less inclined to renew expiring charters. It has to be noted that almost 85% of idle capacity, which currently stands at around 5% of the world fleet is now charter owned tonnage. This of course also reflects on us, as we currently have 7 vessels on cold lay-up.

In summary, the combined effect of the above is that the weakness of growth on the longer haul mainlanes has resulted in global TEU-mile growth increasing by just 4% in 2012, with supply increasing by almost 7% for the same period, while this imbalance has mostly affected asset values, time-charter earnings and employment potential of the mid-size vessels. In this context we are currently investigating to make selective acquisitions within 2013 to renew part of our older fleet.

The good news is that liner operators have so far managed the situation effectively with a variety of cost reduction initiatives as well as supply control strategies such as service rationalization, idling of tonnage, scrapping and extra slow steaming through which they have managed to maintain freight rates at decent levels. This is positive, as the financial health of the liner companies is important for containership lessors like us, since the majority of our tonnage is deployed under long-term time charters. 

With a strong 97% contract coverage and only 3% of our current revenue stream at stake through re-chartering over the next 12 months, we are largely insulated from the effects of the weak charter market while expect our EBITDA and free cash flow generation to be safeguarded.

At the same time, we continue to be one of the most cost competitive operators in the market. Our daily vessel operating expenses actually came down by 5.4% year-on-year to $5,907 per day for 2012 from $6,246 per day in 2011.

With a resilient business model both from an operating and financial standpoint, we will continue to manage our fleet efficiently, while in 2013 we will focus on rapidly de-leveraging the company and creating value for our shareholders.

Three months ended December 31, 2012 compared to the three months ended December 31, 2011

During the three months ended December 31, 2012, Danaos had an average of 64.0 containerships compared to 57.9 containerships for the same period in 2011. Our fleet utilization declined to 90.4% in the three months ended December 31, 2012 compared to 96.9% in the same period of 2011, mainly due to the 501 days for which seven of our vessels were off-charter and laid-up in the fourth quarter of 2012 compared to 138 days for which two of our vessels were off-charter and laid-up in the fourth quarter of 2011. During the three months ended December 31, 2012, our fleet utilization for the fleet under employment was 98.8% (which excludes the vessels on lay up).

Our adjusted net income was $11.7 million, or $0.11 per share, for the three months ended December 31, 2012 compared to $16.1 million, or $0.15 per share, for the three months ended December 31, 2011. We have adjusted our net income in the fourth quarter of 2012 for an impairment loss on certain of our older vessels of $129.6 million, unrealized gains on derivatives of $7.6 million, realized losses on swaps of $1.4 million attributable to our over-hedging position (as described below), as well as a non-cash expense of $4.8 million for fees related to our comprehensive financing plan (comprised of non-cash, amortizing and accrued finance fees). Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

The decrease of 27.3%, or $4.4 million, in adjusted net income for the three months ended December 31, 2012 compared to the three months ended December 31, 2011, was mainly attributable to the softening of the charter market during the last year. Although the vessel additions, with associated contracted long-term charters, to our fleet over the course of the last year were accretive to the bottom line, the soft charter market has resulted in the cold lay-up of 7 vessels until the end of 2012 (one of which we subsequently agreed to sell) and has also affected the re-chartering of certain vessels in 2012 that currently run at operating break even levels, while they had a positive contribution to operating income during the 4th quarter of 2011.

On a non-adjusted basis our net loss was $116.5 million, or $1.06 per share, for the fourth quarter of 2012, compared to net income of $9.1 million, or $0.08 per share, for the fourth quarter of 2011, which is mainly attributable to the impairment loss we incurred in the current quarter on certain of our older vessels.

As a result of our comprehensive financing plan, we were in an over-hedged position under our cash flow interest rate swaps, which was due to deferred progress payments to shipyards, cancellation of three newbuildings in 2011, the replacement of variable interest rate debt with fixed interest rate vendor financing and equity proceeds from our private placement in 2010, all of which reduced initially forecasted variable interest rate debt and resulted in notional cash flow interest rate swaps being above our variable interest rate debt eligible for hedging. The over-hedged position described above was eliminated during the fourth quarter of 2012.

As of December 31, 2012, we recorded an impairment loss of $129.6 million for thirteen of our older vessels. The indicators of potential impairment of these vessels included volatility in the spot market and decline in the vessels' market values, as well as the potential impact the current charter marketplace may have on the future operation of the older vessels in our fleet, which are either laid up, or on short-term charters.

Operating Revenue
Operating revenue increased 18.3%, or $23.5 million, to $151.8 million in the three months ended December 31, 2012, from $128.3 million in the three months ended December 31, 2011. The increase was primarily attributable to the addition of six vessels to our fleet, as follows:

         
Vessel Name   Vessel Size (TEU)   Date Delivered
HyundaiTogether   13,100   February 16, 2012
CMA CGM Melisande   8,530   February 28, 2012
Hyundai Tenacity   13,100   March 8, 2012
Hyundai Smart   13,100   May 3, 2012
Hyundai Speed   13,100   June 7, 2012
Hyundai Ambition   13,100   June 29, 2012
         

These additions to our fleet contributed revenues of $31.8 million during the three months ended December 31, 2012 (552 operating days in total).

Furthermore, operating revenues for the three months ended December 31, 2012, reflect:

  • $4.5 million of incremental revenues in the three months ended December 31, 2012 compared to the same period of 2011, related to two 8,530 TEU containerships (the CMA CGM Bianca and the CMA CGM Samson, which were added to our fleet on October 26, 2011 and December 15, 2011, respectively).

  • $1.2 million decrease in revenues in the three months ended December 31, 2012 compared to the same period of 2011, related to the sale of one 2,130 TEU containership, the Montreal, on April 27, 2012.

  • $11.6 million decrease in revenues in the three months ended December 31, 2012 compared to the same period of 2011. This was mainly attributable to an increase in off-hire days of 398 days, to 565 days in the three months ended December 31, 2012, from 167 days in the three months ended December 31, 2011 ($6.3 million reduction in revenue in relation to the vessels that were off-charter and laid up for 501 days during the fourth quarter of 2012 compared to 138 days during the fourth quarter of 2011), as well as re-chartering of certain vessels in 2012 at lower charter rates compared to what these vessels were earning during the 4th quarter of 2011.

Vessel Operating Expenses
Vessel operating expenses decreased 3.8%, or $1.2 million, to $30.5 million in the three months ended December 31, 2012, from $31.7 million in the three months ended December 31, 2011. The reduction is mainly attributable to the reduced costs of 5.3 vessels on average which were on lay-up during the fourth quarter of 2012 compared to 1.4 vessels on average during the fourth quarter of 2011. The overall decrease in vessel operating expenses was offset in part by the increased average number of vessels in our fleet during the three months ended December 31, 2012 compared to the same period of 2011.

The average daily operating cost per vessel was reduced to $5,857 for the three months ended December 31, 2012, from $6,318 for the three months ended December 31, 2011 (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 30.1%, or $8.9 million, to $38.5 million in the three months ended December 31, 2012, from $29.6 million in the three months ended December 31, 2011. The increase in depreciation expense was due to the increased average number of vessels in our fleet (with higher cost base) during the three months ended December 31, 2012 compared to the same period of 2011.

Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased 58.3%, or $0.7 million, to $1.9 million in the three months ended December 31, 2012, from $1.2 million in the three months ended December 31, 2011. The increase reflects increased dry-docking and special survey costs incurred within the year and amortized during the three months ended December 31, 2012 compared to the same period of 2011.

General and Administrative Expenses
General and administrative expenses decreased 25.7%, or $1.8 million, to $5.2 million in the three months ended December 31, 2012, from $7.0 million in the same period of 2011. The decrease was mainly the result of a non-cash stock based compensation expense of $2.1 million recorded in the fourth quarter of 2011 compared to $0.1 million in the fourth quarter of 2012. Furthermore, fees to our Manager increased by $0.4 million in the three months ended December 31, 2012 compared to the same period of 2011, due to the increase in the average number of vessels in our fleet.

Other Operating Expenses
Other Operating Expenses includes Voyage Expenses

Voyage Expenses
Voyage expenses increased by $0.6 million, to $3.5 million in the three months ended December 31, 2012, from $2.9 million in the three months ended December 31, 2011. The increase was mainly the result of increased commissions to our Manager, due to the increase in the average number of vessels in our fleet and the increase in the commission on gross charter hires to our Manager, to 1.0% from 0.75%, effective January 1, 2012.

Interest Expense and Interest Income
Interest expense increased by 45.6%, or $7.3 million, to $23.3 million in the three months ended December 31, 2012, from $16.0 million in the three months ended December 31, 2011. The change in interest expense was due to the increase in our average debt by $420.4 million, to $3,402.8 million in the three months ended December 31, 2012, from $2,982.4 million in the three months ended December 31, 2011. Furthermore, the financing of our newbuilding program resulted in $3.2 million of interest being capitalized, rather than such interest being recognized as an expense, for the three months ended December 31, 2011 compared to nil interest being capitalized for the three months ended December 31, 2012, following the completion of our newbuilding program in June 2012.

Interest income was $0.4 million in the three months ended December 31, 2012 compared to $0.3 million in the three months ended December 31, 2011.

Other finance costs, net
Other finance costs, net, increased by $1.4 million, to $5.1 million in the three months ended December 31, 2012, from $3.7 million in the three months ended December 31, 2011. This increase was mainly due to the $0.7 million increase in amortizing finance fees (which were deferred and are amortized over the term of the respective credit facilities), as well as increased accrued finance fees of $0.5 million (which accrete in our Statement of Income over the term of the respective facilities) in the three months ended December 31, 2012 compared to the three months ended December 31, 2011.

Other income/(expenses), net
Other income/(expenses), net, was negligible in the three months ended December 31, 2012 and 2011, respectively.

Unrealized gain/(loss) on derivatives
Unrealized gain/(loss) on interest rate swap hedges was a gain of $7.6 million in the three months ended December 31, 2012 compared to a gain of $7.1 million in the three months ended December 31, 2011. The unrealized gains were attributable to hedge accounting ineffectiveness, mark to market valuation of our swaps. Furthermore, we reclassified unrealized losses from Accumulated Other Comprehensive Loss to our earnings due to the discontinuation of hedge accounting since July 1, 2012.

Realized (loss)/gain on derivatives
Realized loss on interest rate swap hedges, increased by $3.8 million, to $38.7 million in the three months ended December 31, 2012, from $34.9 million in the three months ended December 31, 2011. This increase is mainly attributable to $6.4 million of realized losses that had been deferred during the 4th quarter of 2011 (as discussed below) and were not deferred in the current quarter, partially offset by the lower average notional amount of swaps during the three months ended December 31, 2012 compared to the same period in 2011 which resulted in lower realized losses on derivatives of $2.6 million during the 4th quarter of 2012.

Following the delivery of all our newbuildings, no realized losses on cash flow hedges were deferred during the three months ended December 31, 2012. During the three months ended December 31, 2011, realized losses on cash flow hedges of $6.4 million were deferred in "Accumulated Other Comprehensive Loss", rather than being recognized as expenses, and are being reclassified into earnings over the depreciable lives of these vessels that were under construction and financed by loans with interest rates that were hedged by our interest rate swap contracts. The table below provides an analysis of the items discussed above, and which were recorded in the three months ended December 31, 2012 and 2011:

             
    Three months ended
December 31,
    Three months ended
December 31,
 
    2012     2011  
    (in millions)  
Total realized losses of swaps   $ (38.7 )   $ (41.3 )
Realized losses of swaps deferred in OCL     --       6.4  
  Realized losses of swaps expensed in P&L     (38.7 )     (34.9 )
Realized losses attributable to overhedging     1.4       8.7  
  Adjusted realized losses attributable to hedged debt   $ (37.3 )   $ (26.2 )
                 

Adjusted EBITDA
Adjusted EBITDA increased 26.6%, or $23.6 million, to $112.4 million in the three months ended December 31, 2012, from $88.8 million in the three months ended December 31, 2011. Adjusted EBITDA for the fourth quarter of 2012, is adjusted for an impairment loss of $129.6 million, unrealized gain on derivatives of $7.6 million and realized losses on derivatives of $37.7 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Twelve months ended December 31, 2012 compared to the twelve months ended December 31, 2011

During the twelve months ended December 31, 2012, Danaos had an average of 62.6 containerships compared to 54.9 containerships for the same period in 2011. Our fleet utilization declined to 93.0% in the twelve months ended December 31, 2012 compared to 97.6% in the same period in 2011, mainly due to the 1,349 days for which certain of our vessels were off-charter and laid-up by us in the twelve months ended December 31, 2012 compared to 155 days in the twelve months ended December 31, 2011. During the twelve months ended December 31, 2012, our fleet utilization for the fleet under employment was 98.8% (which excludes the laid up vessels).

Our adjusted net income was $60.5 million, or $0.55 per share, for the twelve months ended December 31, 2012 compared to $61.2 million, or $0.56 per share, for the twelve months ended December 31, 2011. We have adjusted our net income in the twelve months ended December 31, 2012, for an impairment loss of $129.6 million, unrealized losses on derivatives of $0.7 million, realized losses on swaps of $19.0 million attributable to our over-hedging position, as well as a non-cash expense of $17.1 million for fees related to our comprehensive financing plan (comprised of non-cash, amortizing and accrued finance fees) and a gain on sale of vessel of $0.8 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

Adjusted net income decreased by 1.1%, or $0.7 million, in the twelve months ended December 31, 2012 compared to the twelve months ended December 31, 2011. Although the vessel additions to our fleet over the course of the last year was accretive to the bottom line, the soft charter market has resulted in the cold lay-up of 7 vessels until the end of 2012 (one of which we subsequently agreed to sell) and has also affected the re-chartering of certain vessels that currently run at operating breakeven levels, while they had a positive contribution to earnings during 2011.

Furthermore, the decrease was attributable to an increase in realized losses on our interest rate swap contracts (after the adjustment for the over-hedging portion), as well as increased interest expense (mainly due to the higher average indebtedness and the reduced interest being capitalized in 2012 following the completion of our newbuilding program in June 2012) during the twelve months ended December 31, 2012 compared to the same period in 2011, which was partially off-set by increased Income from Operations.

On a non-adjusted basis our net loss was $105.2 million, or $0.96 per share, for the twelve months ended December 31, 2012, compared to net income of $13.4 million, or $0.12 per share, for the twelve months ended December 31, 2011, which is mainly attributable to the impairment loss we incurred in the 4th quarter of 2012 on certain of our older vessels.

On July 1, 2012, we elected to prospectively de-designate interest rate swaps for which we were applying hedge accounting treatment due to the compliance burden associated with this accounting policy. As a result, all changes in the fair value of our interest rate swaps will be recorded in earnings under "Unrealized (Losses)/Gains on Derivatives" from the de-designation date forward. In addition, unrealized losses in Accumulated Other Comprehensive Loss associated with the previously designated cash flow interest rate swaps will be reclassified to earnings as the respective interest payments are recognized in earnings.

Discontinuation of hedge accounting increases the potential volatility in our reported earnings due to the recognition of non-cash fair value movements of our interest rate swaps directly to our earnings, however our adjusted earnings will not be affected.

Operating Revenue
Operating revenue increased 25.8%, or $120.9 million, to $589.0 million in the twelve months ended December 31, 2012, from $468.1 million in the twelve months ended December 31, 2011. The increase was primarily attributable to the addition of six vessels to our fleet, as follows:

         
Vessel Name   Vessel Size (TEU)   Date Delivered
Hyundai Together   13,100   February 16, 2012
CMA CGM Melisande   8,530   February 28, 2012
Hyundai Tenacity   13,100   March 8, 2012
Hyundai Smart   13,100   May 3, 2012
Hyundai Speed   13,100   June 7, 2012
Hyundai Ambition   13,100   June 29, 2012
         

These additions to our fleet contributed revenues of $88.8 million during the twelve months ended December 31, 2012 (1,564 operating days in total).

Furthermore, operating revenues for the twelve months ended December 31, 2012, reflect:

  • $64.0 million of incremental revenues in the twelve months ended December 31, 2012 compared to the same period of 2011, related to two 3,400 TEU containerships (the Hanjin Algeciras and the Hanjin Constantza, which were added to our fleet on January 26, 2011 and April 15, 2011, respectively), three 10,100 TEU containerships (the Hanjin Germany, the Hanjin Italy and the Hanjin Greece, which were added to our fleet on March 10, 2011, April 6, 2011 and May 4, 2011, respectively) and four 8,530 TEU containerships (the CMA CGM Attila, the CMA CGM Tancredi, the CMA CGM Bianca and the CMA CGM Samson, which were added to our fleet on July 8, 2011, August 22, 2011, October 26, 2011 and December 15, 2011, respectively).

  • $2.4 million decrease in revenues in the twelve months ended December 31, 2012 compared to the same period in 2011, related to the sale of one 2,130 TEU containership, the Montreal, on April 27, 2012.

  • $29.5 million decrease in revenues in the twelve months ended December 31, 2012 compared to the same period of 2011. This was mainly attributable to increased off-hire days by 1,136 days, to 1,613 days in the twelve months ended December 31, 2012, from 477 days in the twelve months ended December 31, 2011 ($18.5 million reduction in revenue in relation to certain vessels that were off-charter and laid up for 1,349 days during the twelve months ended December 31, 2012 compared to 155 days during the twelve months ended December 31, 2011).

Vessel Operating Expenses
Vessel operating expenses increased 3.6%, or $4.3 million, to $123.4 million in the twelve months ended December 31, 2012, from $119.1 million in the twelve months ended December 31, 2011. The increase is mainly attributable to the increased average number of vessels in our fleet during the twelve months ended December 31, 2012 compared to the same period of 2011. This overall increase was offset in part by the lower average daily operating cost per vessel of $5,907 for the twelve months ended December 31, 2012 compared to $6,246 for the twelve months ended December 31, 2011 (excluding vessels on lay-up).

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

Depreciation
Depreciation expense increased 35.5%, or $37.7 million, to $143.9 million in the twelve months ended December 31, 2012, from $106.2 million in the twelve months ended December 31, 2011. The increase in depreciation expense was due to the increased average number of vessels in our fleet (with higher cost base) during the twelve months ended December 31, 2012 compared to the same period of 2011.

Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased 5.2%, or $0.3 million, to $6.1 million in the twelve months ended December 31, 2012, from $5.8 million in the twelve months ended December 31, 2011. The increase reflects increased dry-docking and special survey costs incurred and amortized during the twelve months ended December 31, 2012 compared to the same period of 2011.

General and Administrative Expenses
General and administrative expenses decreased 2.9%, or $0.6 million, to $20.4 million in the twelve months ended December 31, 2012, from $21.0 million in the same period of 2011. The decrease was mainly the result of a non-cash stock based compensation expense of $2.2 million recorded in the twelve months ended December 31, 2011 compared to $0.1 million in the same period of 2012. Furthermore, fees to our Manager increased by $1.9 million, due to the increase in the average number of vessels in our fleet.

Other Operating Expenses
Other Operating Expenses includes Voyage Expenses

Voyage Expenses
Voyage expenses increased by $2.7 million, to $13.5 million in the twelve months ended December 31, 2012, from $10.8 million in the twelve months ended December 31, 2011. The increase was the result of increased commissions to our Manager by $2.4 million, due to the increase in the average number of vessels in our fleet and the increase in the commission on gross charter hires to our Manager, to 1.0% from 0.75%, effective January 1, 2012, as well as increased other voyage expenses due to the increase in the average number of vessels in the twelve months ended December 31, 2012 compared to the same period of 2011.

Interest Expense and Interest Income
Interest expense increased by 58.4%, or $32.2 million, to $87.3 million in the twelve months ended December 31, 2012, from $55.1 million in the twelve months ended December 31, 2011. The change in interest expense was due to the increase in our average debt by $495.3 million, to $3,308.3 million in the twelve months ended December 31, 2012, from $2,813.0 million in the twelve months ended December 31, 2011, as well as the increased average LIBOR payable on interest under our credit facilities in the twelve months ended December 31, 2012 compared to the twelve months ended December 31, 2011. Furthermore, the financing of our newbuilding program resulted in $3.7 million of interest being capitalized, rather than such interest being recognized as an expense, for the twelve months ended December 31, 2012 compared to $16.1 million of capitalized interest for the twelve months ended December 31, 2011.

Interest income was $1.6 million in the twelve months ended December 31, 2012 compared to $1.3 million in the twelve months ended December 31, 2011.

Other finance costs, net
Other finance costs, net, increased by $3.5 million, to $18.1 million in the twelve months ended December 31, 2012, from $14.6 million in the twelve months ended December 31, 2011. This increase was due to a $4.6 million increase in amortization in relation to finance fees (which were deferred and are amortized over the term of the respective credit facilities) in the twelve months ended December 31, 2012 compared to the same period in 2011, as well as a $1.2 million increase in accrued finance fees (which accrete in our Statement of Income over the term of the respective facilities) in the twelve months ended December 31, 2012 compared to the same period in 2011, which was partially offset by an expense of $2.3 million recorded in the twelve months ended December 31, 2011, in relation to non-cash changes in fair value of warrants, which did not recur in the twelve months ended December 31, 2012.

Other income/(expenses), net
Other income/(expenses), net, was income of $0.8 million in the twelve months ended December 31, 2012, compared to an expense of $2.0 million in the twelve months ended December 31, 2011. This was mainly the result of legal and advisory fees of $2.3 million related to preparing and structuring the comprehensive financing plan, which were recorded during the twelve months ended December 31, 2011 and did not recur in the twelve months ended December 31, 2012.

Unrealized (loss)/gain on derivatives
Unrealized (loss)/gain on interest rate swap hedges was a loss of $0.7 million in the twelve months ended December 31, 2012, compared to a gain of $9.0 million in the twelve months ended December 31, 2011, which is attributable to hedge accounting ineffectiveness, mark to market valuation of our swaps and reclassification of unrealized losses from Accumulated Other Comprehensive Loss to our earnings (due to the discontinuation of hedge accounting from July 1, 2012).

As discussed above, on July 1, 2012, we elected to prospectively de-designate interest rate swaps for which we were applying hedge accounting treatment due to the compliance burden associated with this accounting policy.

Realized (loss)/gain on derivatives
Realized loss on interest rate swap hedges, increased by $24.1 million, to $154.4 million in the twelve months ended December 31, 2012, from $130.3 million in the twelve months ended December 31, 2011. The increase is attributable to the realized losses being deferred for the respective periods (as discussed below), which is partially offset by the higher floating LIBOR rates during the twelve months ended December 31, 2012 compared to the same period of 2011.

Realized losses on cash flow hedges of $7.0 million and $31.3 million in the twelve months ended December 31, 2012 and 2011, 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 the vessels under construction which were financed by loans with interest rates that have been hedged by our interest rate swap contracts. The reduction of the deferred realized losses is attributable to the gradual delivery of all our vessels under construction through June 2012, when our newbuilding program was completed. The table below provides an analysis of the items discussed above, and which were recorded in the twelve months ended December 31, 2012 and 2011:

             
    Twelve months ended
December 31,
    Twelve months ended
December 31,
 
    2012     2011  
    (in millions)  
Total realized losses of swaps   $ (161.4 )   $ (161.6 )
Realized losses of swaps deferred in OCL     7.0       31.3  
  Realized losses of swaps expensed in P&L     (154.4 )     (130.3 )
Realized losses attributable to overhedging     19.0       38.9  
  Adjusted realized losses attributable to hedged debt   $ (135.4 )   $ (91.4 )
                 

Adjusted EBITDA
Adjusted EBITDA increased 35.5%, or $113.1 million, to $431.7 million in the twelve months ended December 31, 2012, from $318.6 million in the twelve months ended December 31, 2011. Adjusted EBITDA for the twelve months ended December 31, 2012, is adjusted for an impairment loss of $129.6 million, unrealized loss on derivatives of $0.7 million, realized losses on derivatives of $150.9 million and a gain on sale of vessel of $0.8 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Recent news
On January 17, 2013, we entered into an agreement to sell the Independence for a gross sale consideration of $7.0 million. We expect the vessel to be delivered to its buyers in the second half of February 2013. The Independence is 26 years old and has been on cold lay-up since November 13, 2011.

Conference Call and Webcast
On Tuesday, February 12, 2013, at 9:00 A.M. EST, the Company's management will host a conference call to discuss the results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 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" to the operator.

A telephonic replay of the conference call will be available until February 19, 2013 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#

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 64 containerships aggregating 363,049 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. 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 508 unscheduled off-hire days in the fourth quarter of 2012 (including 501 days related to the Marathonas, the Independence, the Henry, the Pride, the Duka, the Messologi and the Honour, which have been off-charter and laid up). 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.

                               
Vessel Utilization
(No. of Days)
  First Quarter 2012     Second Quarter 2012     Third Quarter 2012     Fourth Quarter
2012
    Total  
Ownership Days     5,471       5,663       5,888       5,888       22,910  
Less Off-hire Days:                                        
  Scheduled Off-hire Days     (49 )     (45 )     (58 )     (57 )     (209 )
  Other Off-hire Days     (254 )     (266 )     (376 )     (508 )     (1,404 )
Operating Days     5,168       5,352       5,454       5,323       21,297  
Vessel Utilization     94.5 %     94.5 %     92.6 %     90.4 %     93.0 %
                                         
Operating Revenues(in '000s of US Dollars)   $ 134,237     $ 146,657     $ 156,289     $ 151,826     $ 589,009  
Average Gross Daily Charter Rate   $ 25,975     $ 27,402     $ 28,656     $ 28,523     $ 27,657  
                                         

Fleet List

The following table describes in detail our fleet deployment profile as of February 11, 2013.

             
Vessel Name   Vessel Size
(TEU)
  Year Built   Expiration of Charter(1)
Containerships            
             
Hyundai Ambition   13,100   2012   June 2024
Hyundai Speed   13,100   2012   June 2024
Hyundai Smart   13,100   2012   May 2024
Hyundai Tenacity   13,100   2012   March 2024
Hyundai Together   13,100   2012   February 2024
Hanjin Italy   10,100   2011   April 2023
Hanjin Germany   10,100   2011   March 2023
Hanjin Greece   10,100   2011   May 2023
CSCL Le Havre   9,580   2006   September 2018
CSCL Pusan   9,580   2006   July 2018
CMA CGM Melisande   8,530   2012   November 2023
CMA CGM Attila   8,530   2011   April 2023
CMA CGM Tancredi   8,530   2011   May 2023
CMA CGM Bianca   8,530   2011   July 2023
CMA CGM Samson   8,530   2011   September 2023
CSCL America   8,468   2004   September 2016
CSCL Europe   8,468   2004   June 2016
CMA CGM Moliere(2)   6,500   2009   August 2021
CMA CGM Musset(2)   6,500   2010   February 2022
CMA CGM Nerval(2)   6,500   2010   April 2022
CMA CGM Rabelais(2)   6,500   2010   June 2022
YM Mandate   6,500   2010   January 2028
CMA CGM Racine(2)   6,500   2010   July 2022
YM Maturity   6,500   2010   April 2028
Marathonas   4,814   1991   Laid-up
Messologi   4,814   1991   Laid-up
Mytilini   4,814   1991   March 2013
Hyundai Commodore(3)   4,651   1992   February 2013
Duka(4)   4,651   1992   Laid-up
Hyundai Federal(5)   4,651   1994   April 2013
SNL Colombo(6)   4,300   2004   March 2019
YM Singapore   4,300   2004   October 2019
YM Seattle(7)   4,253   2007   July 2019
YM Vancouver   4,253   2007   September 2019
Derby D   4,253   2004   February 2014
Deva   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
Honour   3,908   1989   Laid-up
Hope   3,908   1989   July 2013
Hanjin Constantza   3,400   2011   February 2021
Hanjin Algeciras   3,400   2011   November 2020
Hanjin Buenos Aires   3,400   2010   March 2020
Hanjin Santos   3,400   2010   May 2020
Hanjin Versailles   3,400   2010   August 2020
Pride(8)   3,129   1988   Laid-up
Lotus   3,098   1988   July 2013
Independence(9)   3,045   1986   Laid-up
Henry   3,039   1986   Laid-up
Elbe   2,917   1991   May 2013
Kalamata   2,917   1991   August 2013
Komodo   2,917   1991   August 2013
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
             

(1) Earliest date charters could expire. Some charters include options to extend their terms.
(2) Vessel subject to charterer's option to purchase vessel after first eight years of time charter term for $78.0 million.
(3) On April 20, 2012, the APL Commodore was renamed to Hyundai Commodore at the request of the charterer of this vessel.
(4) On October 25, 2012, the Hyundai Duke was renamed to Duka.
(5) On January 31, 2012, the APL Federal was renamed to Hyundai Federal at the request of the charterer of this vessel.
(6) On March 18, 2012, the YM Colombo was renamed to SNL Colombo at the request of the charterer of this vessel.
(7) On April 9, 2012, the Taiwan Express was renamed to YM Seattle at the request of the charterer of this vessel.
(8) On July 21, 2012, the SCI Pride was renamed to Pride.
(9) On January 17, 2013, we entered into an agreement to sell the Independence.

   
   
   
DANAOS CORPORATION  
Condensed Statements of Income - Unaudited  
(Expressed in thousands of United States dollars, except per share amounts)  
   
    Three months ended
December 31,
    Three months ended
December 31,
  Twelve months ended December 31,     Twelve months ended December 31,  
    2012     2011   2012     2011  
                               
OPERATING REVENUES   $ 151,826     $ 128,344   $ 589,009     $ 468,101  
                               
OPERATING EXPENSES                              
  Vessel operating expenses     (30,525 )     (31,679 )   (123,356 )     (119,127 )
  Depreciation & amortization     (40,396 )     (30,750 )   (150,008 )     (111,978 )
  Impairment loss     (129,630 )     --     (129,630 )     --  
  General & administrative     (5,202 )     (6,982 )   (20,379 )     (21,028 )
  Gain on sale of vessels     --       --     830       --  
  Other operating expenses     (3,543 )     (2,850 )   (13,503 )     (10,765 )
Income From Operations     (57,470 )     56,083     152,963       205,203  
                               
OTHER EARNINGS (EXPENSES)                              
  Interest income     462       335     1,642       1,304  
  Interest expense     (23,288 )     (15,958 )   (87,340 )     (55,124 )
  Other finance cost, net     (5,114 )     (3,665 )   (18,107 )     (14,581 )
  Other income/(expenses), net     48       (5 )   811       (1,986 )
  Realized (loss)/gain on derivatives     (38,709 )     (34,879 )   (154,434 )     (130,341 )
  Unrealized gain/(loss) on derivatives     7,593       7,147     (739 )     8,962  
Total Other Income (Expenses), net     (59,008 )     (47,025 )   (258,167 )     (191,766 )
                               
Net (Loss)/Income   $ (116,478 )   $ 9,058   $ (105,204 )   $ 13,437  
                               
(LOSS)/EARNINGS PER SHARE                              
Basic & diluted net (loss)/ income per share   $ (1.06 )   $ 0.08   $ (0.96 )   $ 0.12  
Basic & diluted weighted average number of common shares (in thousands of shares)     109,622       109,142     109,613       109,045  
   
   
   
Non-GAAP Measures*  
Reconciliation of Net Income to Adjusted Net Income - Unaudited  
   
    Three months ended
December 31,
    Three months ended
December 31,
  Twelve months ended December 31,     Twelve months ended December 31,  
    2012     2011   2012     2011  
Net (loss)/income   $ (116,478 )   $ 9,058   $ (105,204 )   $ 13,437  
Unrealized (gain)/loss on derivatives     (7,593 )     (7,147 )   739       (8,962 )
Realized loss on over-hedging portion of derivatives     1,362       8,663     19,042       38,858  
Comprehensive Financing Plan related fees     --       --     --       2,266  
Amortization of financing fees & finance fees accrued     4,778       3,535     17,076       11,292  
Impairment loss     129,630       --     129,630       --  
Loss on fair value of warrants     --       --     --       2,253  
Stock based compensation     --       2,020     --       2,020  
Gain on sale of vessels     --       --     (830 )     --  
Adjusted Net Income   $ 11,699     $ 16,129   $ 60,453     $ 61,164  
Adjusted Earnings Per Share   $ 0.11     $ 0.15   $ 0.55     $ 0.56  
Weighted average number of shares     109,622       109,142     109,613       109,045  
                               

* The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and twelve months ended December 31, 2012 and 2011. 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
December 31,
    As of
December 31,
 
    2012     2011  
ASSETS   (Unaudited)     (Unaudited)  
             
CURRENT ASSETS                
  Cash and cash equivalents   $ 55,628     $ 51,362  
  Restricted cash     2,821       2,909  
  Accounts receivable, net     3,741       4,176  
  Other current assets     36,483       34,844  
      98,673       93,291  
NON-CURRENT ASSETS                
  Fixed assets, net     3,986,138       3,241,951  
  Advances for vessels under construction     --       524,286  
  Restricted cash, net of current portion     430       --  
  Deferred charges, net     88,821       99,711  
  Fair value of financial instruments     2,908       3,964  
  Other non-current assets     35,075       24,901  
      4,113,372       3,894,813  
TOTAL ASSETS   $ 4,212,045     $ 3,988,104  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
CURRENT LIABILITIES                
  Long-term debt, current portion   $ 125,076     $ 41,959  
  Vendor Financing, current portion     57,388       10,857  
  Accounts payable, accrued liabilities & other current liabilities     52,688       58,254  
  Fair value of financial instruments, current portion     130,100       120,623  
      365,252       231,693  
LONG-TERM LIABILITIES                
  Long-term debt, net of current portion     3,097,472       2,960,288  
  Vendor financing, net of current portion     121,754       54,288  
  Fair value of financial instruments, net of current portion     176,948       291,829  
  Other long-term liabilities     10,315       7,471  
      3,406,489       3,313,876  
                 
STOCKHOLDERS' EQUITY                
  Common stock     1,096       1,096  
  Additional paid-in capital     546,023       545,884  
  Accumulated other comprehensive loss     (353,271 )     (456,105 )
  Retained earnings     246,456       351,660  
      440,304       442,535  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 4,212,045     $ 3,988,104  
   
   
   
DANAOS CORPORATION  
Condensed Statements of Cash Flows - (Unaudited)  
(Expressed in thousands of United States dollars)  
   
    Three months ended
December 31,
    Three months ended
December 31,
  Twelve months ended December 31,     Twelve months ended December 31,  
    2012     2011   2012     2011  
Operating Activities:                              
  Net (loss)/income   $ (116,478 )   $ 9,058   $ (105,204 )   $ 13,437  
  Adjustments to reconcile net income to net cash provided by operating activities:                              
  Depreciation     38,514       29,598     143,938       106,178  
  Impairment loss     129,630       --     129,630       --  
  Amortization of deferred drydocking & special survey costs, finance cost and other finance fees accrued     6,660       4,687     23,146       17,092  
  Stock based compensation     100       2,112     139       2,182  
  Payments for drydocking/special survey     (2,968 )     (210 )   (9,308 )     (7,218 )
  Non-cash change in fair value of warrants     --       --     --       2,253  
  Amortization of deferred realized losses on cash flow interest rate swaps     1,013       529     3,524       1,575  
  Realized loss on cash flow interest rate swaps deferred in Other Comprehensive Loss     --       (6,413 )   (7,035 )     (31,320 )
  Unrealized loss/(gain) on derivatives     (7,593 )     (7,676 )   739       (10,537 )
  Gain on sale of vessels     --       --     (830 )     --  
  Accounts receivable     6,020       1,621     435       (64 )
  Other assets, current and non-current     (11,641 )     (441 )   (11,813 )     (14,530 )
  Accounts payable and accrued liabilities     (4,665 )     751     (2,380 )     (15,457 )
  Other liabilities, current and non-current     (1,069 )     (5,262 )   1,577       (4,099 )
Net Cash provided by Operating Activities     37,523       28,354     166,558       59,492  
                               
Investing Activities:                              
  Vessels under construction and vessels additions     (46 )     (190,473 )   (375,424 )     (644,593 )
  Net proceeds from sale of vessel     --       --     5,635       --  
Net Cash used in Investing Activities     (46 )     (190,473 )   (369,789 )     (644,593 )
                               
Financing Activities:                              
  Debt draw downs     --       154,689     266,920       482,286  
  Debt repayment     (16,611 )     (2,592 )   (58,981 )     (45,369 )
  Deferred costs     --       (70 )   (100 )     (30,287 )
  Increase in restricted cash     (2,813 )     (2,813 )   (342 )     (2 )
Net Cash (used in)/provided by Financing Activities     (19,424 )     149,214     207,497       406,628  
Net Increase/(Decrease) in cash and cash equivalents     18,053       (12,905 )   4,266       (178,473 )
Cash and cash equivalents, beginning of period     37,575       64,267     51,362       229,835  
Cash and cash equivalents, end of period   $ 55,628     $ 51,362   $ 55,628     $ 51,362  
   
   
   
Reconciliation of Net Income to Adjusted EBITDA  
(Expressed in thousands of United States dollars)  
   
    Three months ended
December 31,
    Three months ended
December 31,
  Twelve months ended December 31,     Twelve months ended December 31,  
    2012     2011   2012     2011  
Net (loss)/income   $ (116,478 )   $ 9,058   $ (105,204 )   $ 13,437  
Depreciation     38,514       29,598     143,938       106,178  
Amortization of deferred drydocking & special survey costs     1,882       1,152     6,070       5,800  
Amortization of deferred finance costs and other finance fees accrued     4,778       3,535     17,076       11,292  
Amortization of deferred realized losses on interest rate swaps     1,013       529     3,524       1,575  
Interest income     (462 )     (335 )   (1,642 )     (1,304 )
Interest expense     23,288       15,958     87,340       55,124  
Impairment loss     129,630       --     129,630       --  
Gain on sale of vessels     --       --     (830 )     --  
Comprehensive Financing Plan related fees     --       --     --       2,266  
Stock based compensation     100       2,112     139       2,182  
Realized loss on derivatives     37,696       34,879     150,910       130,341  
Unrealized (gain)/loss on derivatives     (7,593 )     (7,676 )   739       (10,537 )
Non-cash changes in fair value of warrants     --       --     --       2,253  
Adjusted EBITDA(1)   $ 112,368     $ 88,810   $ 431,690     $ 318,607  
                               

(1) Adjusted EBITDA represents net income before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs and deferred finance costs, non-cash changes in fair value of warrants, unrealized (gain)/loss on derivatives, realized gain/(loss) on derivatives, stock based compensation, gain/(loss) on sale of vessel, impairment loss 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, 2012 and 2011. 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:
    Evangelos Chatzis
    Chief Financial Officer
    Danaos Corporation
    Athens, Greece
    Tel.: +30 210 419 6480
    E-Mail: cfo@danaos.com

    Iraklis Prokopakis
    Senior Vice President and 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