SOURCE: Danaos Corporation

March 07, 2007 16:05 ET

Danaos Corporation Reports Fourth Quarter and Year End Results for Period Ended December 31, 2006

ATHENS, GREECE -- (MARKET WIRE) -- March 7, 2007 -- Danaos Corporation ("Danaos") (NYSE: DAC), a leading international owner of containerships, today reported unaudited results for the fourth quarter and the twelve month period ended December 31, 2006.

Highlights:

--  Reported net earnings of $30.6 million or $0.57(1) per share and
    $101.1 million or $2.16(1) per share respectively for the fourth quarter
    2006 and twelve months ended December 31, 2006
--  Operating Revenues of $69.2 million and $245.6 million respectively
    for the fourth quarter 2006 and twelve months ended December 31, 2006
--  EBITDA(2) of $46.6 million and $163.3 million respectively for the
    fourth quarter 2006 and twelve months ended December 31, 2006
--  During the fourth quarter of 2006 Danaos took delivery of three 4,814
    TEU container vessels, the Maersk Marathon, Maersk Messologi and Maersk
    Mytilini respectively, each of which were subsequently fixed under a 5-year
    charter to the A.P. Moller-Maersk Group, as well as a fourth containership,
    the 9,580 TEU newly built CSCL Le Havre chartered to China Shipping for 12
    years.
    
Danaos' CEO Dr. John Coustas commented: "The fourth quarter of 2006 was particularly important for Danaos since it marks the listing of our shares on the New York Stock Exchange. We thank our new shareholders for their continued support and shall continue to be in close touch with them and the broader investment community to keep them informed on the performance of our company and the new growth opportunities as they come along.

"In the fourth quarter of 2006 we acquired and took delivery of the three secondhand, 4,814 TEU vessels which we chartered to the A.P. Moller Maersk Group for five years each. We also added to our fleet the newly built 9,580 TEU CSCL Le Havre which is one out of 19 more scheduled new deliveries to follow in the next four years.

"During the fourth quarter of 2006 the market experienced relative weakness as some overcapacity fears coupled with the low profitability and in many cases the losses of the liner companies prompted concerns over the industry. However, despite this underlying weakness liner companies have regained pricing power during the fourth quarter in some of their routes on the back of strong growth and high trade volumes. Tonnage demand from the charter market has accelerated driving the charter rate indexes higher while the actual rise has been much more pronounced in the larger vessel sizes above 3,000 TEUs.

"During the first months of 2007 we increased our order-book by four 6,800 TEU vessels. Danaos' total orders now stand at 19 large size containerships of a total of 102,324 TEUs equivalent to 73% of our current fleet."

Three months ended December 31, 2006 compared to the three months ended December 31, 2005

During the quarter ended December 31, 2006, Danaos had an average of 27.9 containerships and 6.0 drybulk carriers in its fleet as opposed to 25.0 containerships and 7.0 drybulk carriers for the same period of 2005. We took delivery of the CSCL Le Havre, a 9,580 TEU vessel on November 20, 2006 and three 4,814 TEU vessels, Maersk Marathon, Maersk Messologi and Maersk Mytilini, on December 13, 18 and 22 of 2006 respectively.

Our net income was $30.6 million or $0.57(3) per share for the fourth quarter of 2006 compared to $0.52(3) per share or net income of $23.2 million for the fourth quarter of 2005, an increase in net income of 31.9%.

Operating Revenue

Operating revenue increased 22.2%, or $12.6 million, to $69.2 million in the quarter ended December 31, 2006, from $56.6 million in the quarter ended December 31, 2005. The increase was mainly a result of the addition to our fleet of six vessels, the MOL Confidence, a 4,651 TEU containership on March 23, 2006, the CSCL Pusan, a 9,580 TEU vessel on September 8, 2006, the CSCL Le Havre, a 9,580 TEU vessel on November 20, 2006 and three 4,814 TEU vessels, Maersk Marathon, Maersk Messologi and Maersk Mytilini, on December 13, 18 and 22 of 2006 respectively, which collectively contributed revenues of $7.6 million during the three months ended December 31, 2006. Our drybulk carriers generated an additional $0.4 million in revenues during the three months ended December 31, 2006 compared to the three months ended December 31, 2005 as a result of higher charter rates for the period.

Vessel Operating Expenses

Vessel operating expenses increased 8.7%, or $1.3 million, to $16.2 million in the quarter ended December 31, 2006, from $14.9 million in the quarter ended December 31, 2005. This increase was due to the addition to our fleet of six vessels.

Depreciation & Amortization

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

Depreciation

Depreciation expense increased 33.9%, or $2.3 million, to $9.1 million in the quarter ended December 31, 2006, from $6.8 million for the quarter ended December 31, 2005. The increase in depreciation expense was due to the increase in the number of vessels in our fleet during the quarter ended December 31, 2006.

Amortization of Deferred Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs expense increased 33.3%, or $0.4 million, to $1.6 million in the quarter ended December 31, 2006, from $1.2 million in the quarter ended December 31, 2005. This was due to the costs of dry-docking and special surveys conducted for nine of our vessels during 2006.

General and Administrative Expenses

General and administrative expenses increased 43.8%, or $0.7 million, to $2.3 million in the quarter ended December 31, 2006 from $1.6 million in the same quarter of 2005, reflecting $0.3 million of technical management fees we paid for the six new vessels that entered our fleet during the quarter ended December 31, 2006 and $0.4 million of directors and officers' remuneration expense which was not applicable in the quarter ended December 31, 2005.

Other Operating Expenses

Other Operating Expenses include Voyage Expenses

Voyage Expenses

Voyage expenses were $2.3 million in the quarter ended December 31, 2006, the same as in the quarter ended December 31, 2005.

Interest Expense and Interest Income

Interest expense decreased $0.5 million, or 6.2%, to $6.4 million in the quarter ended December 31, 2006, from $6.9 million in the quarter ended December 31, 2005. Interest income was $1.1 million for the quarter ended December 31, 2006, the same as for the quarter ended December 31, 2005, due to decreased bank deposits on which interest was earned being offset by higher interest rates. The decrease in interest expense was primarily due to the financing of our extensive newbuilding program which resulted in capitalizing $2.8 million of interest for the quarter ended December 31, 2006 as opposed to $1.5 million capitalized interest for the quarter ended December 31, 2005.

EBITDA

EBITDA for the quarter ended December 31, 2006 increased $9.7 million, or 26.2%, to $46.6 million in the quarter ended December 31, 2006, from $36.9 million in the quarter ended December 31, 2005. A table with analytical EBITDA calculations reconciling EBITDA to net income can be found at the end of this document.

Twelve months ended December 31, 2006 compared to the twelve months ended December 31, 2005

During the twelve months ended December 31, 2006, we had an average of 26.3 containerships and 6.4 drybulk carriers in our fleet. During the twelve months ended December 31, 2005, we had an average of 25.0 containerships and 7.0 drybulk carriers in our fleet. We took delivery of the MOL Confidence, a 4,651 TEU containership, on March 23, 2006, the CSCL Pusan, a 9,580 TEU vessel on September 8, 2006, the CSCL Le Havre, a 9,580 TEU vessel on November 20, 2006 and three 4,814 TEU vessels, Maersk Marathon, Maersk Messologi and Maersk Mytilini acquired on December 13, 18 and 22 of 2006 respectively and sold one drybulk carrier on May 12, 2006.

Our net income was $101.1 million or $2.16(4) per share for 2006 compared to net income of $122.9 million or $2.77(4) per share for 2005. The decrease was primarily due to the decrease of revenues of our dry bulk carriers offset by the increased of income derived by the new additions to our fleet.

Operating Revenue

Operating revenue increased 1.7%, or $4.2 million, to $245.6 million in the twelve months ended December 31, 2006, from $241.4 million in the twelve months ended December 31, 2005. The increase was mainly a result of the additions of six vessels to our fleet the MOL Confidence, a 4,651 TEU containership, on March 23, 2006, the CSCL Pusan, a 9,580 TEU vessel on September 8, 2006, the CSCL Le Havre, a 9,580 TEU vessel on November 20, 2006 and three 4,814 TEU vessels, Maersk Marathon, Maersk Messologi and Maersk Mytilini acquired on December 13, 18 and 22 of 2006 respectively that collectively contributed revenues of $13.4 million in 2006, which was offset by $25.1 million decrease in revenue generated by our drybulk carriers, which are deployed on short-term time charters, due to lower charter rates, and the affect of the sale of Sofia III, a drybulk carrier, which was made on May 12, 2006.

Vessel Operating Expenses

Vessel operating expenses increased 12.6%, or $6.8 million, to $60.7 million in the twelve months ended December 31, 2006, from $53.9 million in the twelve months ended December 31, 2005. This increase was due to a general increase in running costs per vessel experienced by the industry, and the increase in the average number of vessels in our fleet during the twelve months ended December 31, 2006. This increase was also partly due to the enhanced maintenance related to the increased number of vessels which had drydockings in the first twelve months of 2006 as opposed to those in 2005.

Depreciation & Amortization

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

Depreciation

Depreciation expense increased 14.8%, or $4.0 million, to $31.1 million in the twelve months ended December 31, 2006, from $27.1 million for the twelve months ended December 31, 2005. The increase in depreciation expense was due to the increase in the number of vessels in our fleet during the twelve months ended December 31, 2006.

Amortization of Deferred Drydocking and Special Survey Costs

Amortization of deferred drydocking and special survey costs expense increased 38.5%, or $1.5 million, to $5.4 million in the twelve months ended December 31, 2006, from $3.9 million in the twelve months ended December 31, 2005. This was due to the costs of drydocking and special surveys conducted for nine of our vessels in the twelve months ended December 31, 2006.

General and Administrative Expenses

General and administrative expenses increased 49.0%, or $2.5 million, to $7.6 million in the twelve months ended December 31, 2006 from $5.1 million in the twelve months ended December 31, 2005, reflecting $1.4 million of additional directors and officers' remuneration expense which was not applicable in the twelve months ended December 31, 2005 and $1.1 million of technical management fees we paid in respect of the additional vessels that entered our fleet during the twelve months ended December 31, 2006, as well as our new management agreement, which was in effect during the second half of the year ended December 31, 2005.

Gain/(loss) on sale of vessels

Gain/(loss) on sale of vessels of $15.0 million for the twelve months ended December 31, 2006 reflects the sale of the Sofia III to a third party drybulk operator for $27.5 million.

Other Operating Expenses

Other Operating Expenses include Voyage Expenses

Voyage Expenses

Voyage expenses were $7.3 million in the twelve months ended December 31, 2006, representing a decrease of $0.2 million, or 3.2%, from $7.5 million in the twelve months ended December 31, 2005.

Interest Expense and Interest Income

Interest expense increased $5.8 million, or 24.9%, to $29.2 million in the twelve months ended December 31, 2006, from $23.4 million in the twelve months ended December 31, 2005.

The change in interest expense was primarily due to the increase in interest rates to which our indebtedness, on which we paid interest, was subject to, while there was no significant change in the average indebtedness for the full twelve months ended December 31, 2006 as compared to the twelve months ended December 31, 2005. The increase in interest expense was partially offset by the financing of our extensive newbuilding program which resulted in capitalizing $8.3 million of interest for the twelve months ended December 31, 2006 as opposed to $5.3 million capitalized interest for the twelve months ended December 31, 2005.

Interest income was $3.6 million for the twelve months ended December 31, 2006, a decrease of $2.7 million, from $6.3 million for the twelve months ended December 31, 2005. The decrease in interest income was due to the decreased monthly average bank deposits on which we earned interest, offset in part by higher interest rates.

Other income/(expense)

Other expense, net of $(16.6) million for the twelve months ended December 31, 2006 included a non recurring expense of approximately $(13) million related to the expected increase in the put option price we expect to pay under the leasing arrangements for the CSCL Europe, the CSCL America, the Maersk Derby, the Vancouver Express, the CSCL Pusan and the CSCL Le Havre, if the put option is exercised 6-1/2 years into the lease terms, as a result of a change in the United Kingdom tax legislation enacted in 2006.

Loss on derivatives

Gain (loss) on derivatives decreased $9.4 million to $(6.6) million in the twelve months ended December 31, 2006, from $2.8 million in the twelve months ended December 31, 2005. This decrease is a result of our interest rate swaps and the change in the fair value of foreign exchange forward transactions related to our leasing arrangements in respect to the CSCL Europe, the CSCL America, the Maersk Derby, the Vancouver Express, the CSCL Pusan and the CSCL Le Havre. Since the end of the second quarter of 2006, pursuant to the adoption of a formal hedge accounting policy we expect such fluctuations to be minimal in the future.

EBITDA

EBITDA decreased $7.7 million, or 4.5%, to $163.3 million in the twelve months ended December 31, 2006, from $171.0 million in the twelve months ended December 31, 2005. A table with analytical EBITDA calculations reconciling EBITDA to net income can be found at the end of this document.

Dividend Payment

On January 18, 2007 we declared a dividend of $0.44 per common share for the fourth quarter of 2006 for all shareholders on record as of January 29, 2007 which was paid on February 14, 2007. We currently intend to pay quarterly dividends of $0.44 per share, or $1.76 per share per year.

Recent News

During March 2007 Danaos Corporation entered into new shipbuilding contracts for 4 more large containership vessels, each of 6,800 TEUs, with scheduled delivery dates during 2010. The total contractual capital expenditure commitment for these orders is in the region of $400 million. Further, we have delivered the 5,506 TEU APL England to APL following the exercise of the call option APL had for this vessel. The sale consideration was $44.6 million. We have also delivered two more bulk carriers, the Roberto C and the Maria C to their new owners.

Conference Call and Webcast

On Thursday, March 8, 2007 at 11:30 A.M. EST, the Company's management will host a conference call to discuss the results.

Conference Call details:

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

In case of any problems with the above numbers, please dial 1 866 869 2352 (from the US). 800 694 1449 (from the UK) or +44 (0)1452 560 304 (from outside the US). Quote "Danaos"

A telephonic replay of the conference call will be available until March 14, 2007 by dialing 1 866 247 4222 (from the US), 0800 953 1533 (from the UK) or +44 (0)1452 550 000 (from outside of the US). Access Code: 1186615#

Slides and audio webcast:

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

About Danaos Corporation

Danaos Corporation is an international owner of containerships, chartering its vessels to many of the world's largest liner companies. Its current fleet of 30 containerships aggregating 134,631 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Danaos is the largest US listed containership company based on fleet size and market capitalization. Furthermore, the company has on order 19 additional containerships aggregating 102,324 TEU with scheduled deliveries up to 2010. The company's shares trade on the New York Stock Exchange under the symbol "DAC."

Forward-Looking Statement

Matters discussed in this release may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning 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 charterhire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in Danaos Corporation's operating expenses, including bunker prices, dry-docking and insurance costs, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

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

(1) Based on basic and diluted weighted average number of shares for the
    respective period.
(2) EBITDA is a NON-GAAP financial measure. Please see below for the
    reconciliation of EBITDA to Net Income.
(3) Based on basic and diluted weighted average number of shares for the
    respective period.
(4) Based on basic and diluted weighted average number of shares for the
    respective period.
Visit our website at www.danaos.com

Appendix

Fleet Utilization

Danaos had 22 off-hire days due to scheduled dry-docking & special survey operations and 2 unscheduled off-hire days in the fourth quarter. The following tables summarize vessel utilization and the impact of the off-hire days relating to the last four quarters.

                       First     Second      Third      Fourth
                      Quarter    Quarter    Quarter    Quarter
                       2006       2006       2006       2006       2006
                     ---------  ---------  ---------  ---------  ---------
                       No. of     No. of     No. of     No. of     No. of
Vessel utilization     Days       Days       Days       Days       Days
                     ---------  ---------  ---------  ---------  ---------
Ownership days           2,889      2,953      2,967      3,123     11,932
Less Off-hire Days:
   Scheduled Dry-
    docking                (74)                  (49)       (22)      (145)
   Other Off-hire
    Days                    (2)        (1)        (2)        (2)        (7)
Operating Days           2,813      2,952      2,916      3,099     11,780
                     ---------  ---------  ---------  ---------  ---------
Vessel Utilization        97.4%     100.0%      98.2%      99.2%      98.7%

                       First     Second     Third      Fourth
                      Quarter    Quarter    Quarter    Quarter
                       2006       2006       2006       2006       2006
                     ---------  ---------  ---------  ---------  ---------
Revenue - Impact of
 Off-hire(in ‘000s
 of US dollars)       Revenue    Revenue    Revenue    Revenue    Revenue
                     ---------  ---------  ---------  ---------  ---------
100% fleet
 utilization         $  56,416  $  60,034  $  62,940  $  69,720  $ 249,110
Less Off-hire:
   Scheduled
    Dry-docking         (1,821)               (1,066)      (455)    (3,342)
   Other Off-hire
    Days                   (59)       (35)       (48)       (38)      (180)
                     ---------  ---------  ---------  ---------  ---------
Actual Revenue
 Earned              $  54,536  $  59,999  $  61,826  $  69,227  $ 245,588
Fleet List

The following table describes in detail our fleet deployment and current employment profile as of March 7, 2006.

                    Vessel
                    Size   Year   Charter   Expiration of
Vessel Name         (TEU)  Built  Term(1)     Charter(1)      Charterer
                    ------ ----- ---------- -------------- ----------------
Containerships
CSCL Pusan           9,580  2006   12 years September 2018   China Shipping
CSCL Le Havre        9,580  2006   12 years  November 2018   China Shipping
CSCL America         8,468  2004   12 years  November 2016   China Shipping
CSCL Europe          8,468  2004   12 years    August 2016   China Shipping
APL Belgium          5,506  2002    6 years   January 2008          APL-NOL
APL Holland          5,506  2001    6 years      July 2007          APL-NOL
APL Scotland         5,506  2001    6 years      June 2007          APL-NOL
Maersk Marathon      4,814  1991    5 years  December 2011        AP Moller
Maersk Messologi     4,814  1991    5 years  December 2011        AP Moller
Maersk Mytilini      4,814  1991    5 years  December 2011        AP Moller
Hyundai Commodore    4,651  1992    8 years       May 2011          Hyundai
Hyundai Duke         4,651  1992    8 years     April 2011          Hyundai
MOL Confidence       4,651  1994  6.5 years  November 2012          Hyundai
Maersk Derby         4,253  2004    5 years     April 2009           Maersk
Vancouver Express    4,253  2004    5 years     March 2009           Maersk
Norasia Hamburg      3,908  1989    5 years   January 2008            COSCO
YM Yantian           3,908  1989    8 years September 2011        Yang Ming
YM Milano            3,129  1988    3 years     July  2008        Yang Ming
Victory I            3,098  1988    3 years      July 2007          Norasia
Independence         3,045  1986    3 years      June 2007          Wan Hai
Henry                3,039  1986    3 years       May 2007          Wan Hai
CMA CGM Elbe         2,917  1991    5 years    August 2010          CMA-CGM
CMA CGM Kalamata     2,917  1991    5 years    August 2010          CMA-CGM
CMA CGM  Komodo      2,917  1991    5 years    August 2010          CMA-CGM
Pacific Bridge       2,130  1984    3 years     March 2008      Hapag-Lloyd
Eagle Express        1,704  1978  2.5 years   October 2007      Hapag-Lloyd
Bareboat
 Containerships
Maersk Constantia    3,101  1979  2.0 years     April 2008           Maersk
S.A.  Helderberg     3,101  1977  2.0 years  December 2007           Maersk
S.A.  Sederberg      3,101  1978  2.0 years   January 2008           Maersk
S.A.  Winterberg     3,101  1978  2.0 years     March 2008           Maersk
Drybulk Carriers(2)  (DWT)
MV Achilleas        69,180  1994     1 year     April 2007 Baumarine (pool)


(1) Earliest date charters could expire. Most charters include options to
    extend their term.
(2) We have agreed to sell this vessel upon expiration of its current
    charter. Under the leading "Expiration of Charter" we include the
    expected month of delivery of this vessel to its new owner.
New Deliveries

The following table describes the expected additions to our fleet as a result of our new building program as well as two expected second hand acquisitions, as of March 7, 2006.

                           Expected     Time     Expiration
                  Vessel   Delivery    Charter       of
Vessel Name     Size (TEU)  Date(1)     Term     Charter(1) Charterer
                ---------- ---------- ---------- ---------- ----------
Newbuildings
HN 1639              4,253 Sept. 2007   12 years       2019  Yang Ming
HN 1640              4,253  Nov. 2007   12 years       2019  Yang Ming
HN 1670              4,253  July 2008   12 years       2020        Zim
HN 1671              4,253 Sept. 2008   12 years       2020        Zim
HN 1672              4,253  Nov. 2008   12 years       2020        Zim
HN 1673              4,253  Dec. 2008   12 years       2020        Zim
HN 1698              4,253  Mar. 2009   12 years       2021        Zim
HN 1699              4,253  June 2009   12 years       2021        Zim
HN  S4001(2)         6,500 April 2009   12 years       2021    CMA-CGM
HN  S4002(2)         6,500  June 2009   12 years       2021    CMA-CGM
HN  S4003(2)         6,500  Aug. 2009   12 years       2021    CMA-CGM
HN S4004(2)          6,500  Oct. 2009   12 years       2021    CMA-CGM
HN S4005(2)          6,500  Dec. 2009   12 years       2021    CMA-CGM
HN Z 00001           6,800       2010          -          -          -
HN Z 00002           6,800       2010          -          -          -
HN Z 00003           6,800       2010          -          -          -
HN Z 00004           6,800       2010          -          -          -
Secondhand
E.R. Auckland        4,300  Mar. 2007   12 years       2019  Yang Ming
E.R. Wellington      4,300 Sept. 2007   12 years       2019  Yang Ming


(1) Although the expected delivery dates are as set forth in the table
    above, the contracted delivery dates for our contracted vessels are
    as follows: HN 1639—December 31, 2007; HN 1640—November 30, 2007; HN
    1670—July 31, 2008; HN 1671—October 31, 2008; HN 1672—November 30,
    2008; HN 1673—December 31, 2008; HN 1698—March 31, 2009; HN 1699—
    June 30, 2009; E.R. Auckland—March 2007; E.R. Wellington—September
    15, 2007 to October 15, 2007; HN S4001—April 30, 2009; HN S4002—
    June 30, 2009; HN S4003—August 31, 2009; HN S4004—October 31, 2009;
    HN S4005—December 31, 2009.
(2) Vessel subject to charterer's option to purchase vessel after first
    eight years of time charter term for $78.0 million.




                                DANAOS CORPORATION
                             Statement of Operations
                   (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, 2006     31, 2005     31, 2006     31, 2005
                        -----------  -----------  -----------  -----------
                        (unaudited)  (unaudited)  (unaudited)   (audited)

Operating Revenues      $    69,227  $    56,648  $   245,588  $   241,381

Operating Expenses:
Vessel operating
 expenses                   (16,204)     (14,901)     (60,742)     (53,883)
Depreciation &
 amortization               (10,652)      (7,941)     (36,536)     (31,036)
General &
 administrative              (2,310)      (1,566)      (7,574)      (5,058)
Gain on sale of vessels           -            -       14,954            -
Other operating
 expenses                    (2,315)      (2,313)      (7,703)      (7,725)
                        -----------  -----------  -----------  -----------
Income from Operations       37,746       29,927      147,987      143,679
                        -----------  -----------  -----------  -----------

Other earnings
 (expenses):
Interest income               1,069        1,124        3,605        6,345
Interest expense             (6,442)      (6,866)     (29,240)     (23,415)
Other finance income
 (cost), net                   (457)      (1,832)       1,938       (7,081)
Other income (expense)       (1,329)         591      (16,580)         491
Gain (loss) on
 derivatives                    (25)         290       (6,628)       2,831

                        -----------  -----------  -----------  -----------
                             (7,184)      (6,693)     (46,905)     (20,829)
                        -----------  -----------  -----------  -----------

Net Income              $    30,562  $    23,234  $   101,082  $   122,850
                        ===========  ===========  ===========  ===========

Earnings per share,
 basic and diluted      $      0.57  $      0.52  $      2.16  $      2.77
                        ===========  ===========  ===========  ===========

Basic and diluted
 weighted average
 number of shares in
 ‘000                        54,000       44,308       46,751       44,308




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

                                              December 31,   December 31,
                                                  2006           2005
                                              -------------- --------------
Assets                                         (unaudited)     (audited)
Current Assets:
Cash and cash equivalents                     $       43,075 $       38,000
Restricted cash                                        2,493            724
Accounts receivable                                    2,170         14,107
Other current assets                                  11,962         11,181
                                              -------------- --------------
                                                      59,700         64,012
Non-Current Assets:
Vessels                                            1,016,608        654,222
Advances for vessel acquisitions and vessels
 under construction                                  205,366        173,725
Deferred charges, net                                  9,399          7,758
Fair value of financial instruments                    5,832          1,422
Other assets                                             285         44,619
                                              -------------- --------------
                                                   1,237,490        881,746

                                              -------------- --------------
Total Assets                                  $    1,297,190 $      945,758
                                              ============== ==============

Liabilities and Stockholders’ Equity
Current Liabilities:
Long term debt, current portion               $       22,760 $       57,521
Accounts payable, accrued liabilities & other
 current liabilities                                  21,488         12,963
Fair value of financial instruments, current
 portion                                               1,466              -
                                              -------------- --------------
                                                      45,714         70,484
Long-Term Liabilities:
Long term debt                                       639,556        609,217
Fair value of financial instruments, net of
 current portion                                       5,775          3,332
Other liabilities                                     40,293              -
                                              -------------- --------------
                                                     685,624        612,549
Stockholders’ Equity
Common Stock                                             546            443
Additional paid-in capital                           288,530         90,529
Other comprehensive income                             3,941              -
Retained earnings                                    272,835        171,753
                                              -------------- --------------
                                                     565,852        262,725

                                              -------------- --------------
Total Liabilities and Stockholders’ Equity    $    1,297,190 $      945,758
                                              ============== ==============




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


                           Three        Three       Twelve       Twelve
                          Months       Months       Months       Months
                           Ended        Ended        Ended        Ended
                          December     December     December     December
                          31, 2006     31, 2005     31, 2006     31, 2005
                        -----------  -----------  -----------  -----------
Cash provided by        (unaudited)  (unaudited)  (unaudited)   (audited)
 (used in):
Operating Activities:
Net earnings            $    30,562  $    23,234  $   101,082  $   122,850
Adjustments to
 reconcile Net Earnings
 to Cash from Operating
 Activities:
Depreciation                  9,088        6,787       31,111       27,114
Amortization of
 deferred charges             1,699        1,255        5,560        4,023
Written off amount of
 deferred charges               278          (68)         781            -
Change in fair value of
 financial instruments         (216)        (192)       5,733       (1,939)
Payments for
 drydocking/special
 survey                      (1,012)         (49)      (8,037)      (4,505)
Loss (gain) on sale of
 vessels                          -            -      (14,954)           -
Accounts receivable            (387)         623       (3,034)       4,676
Other assets short and
 long-term                    3,205        3,728       (1,066)      13,317
Accounts payable and
 accrued liabilities          1,275         (810)       5,775       (2,688)
Other liabilities short
 and long-term                  172       (1,731)      28,627         (613)
                        -----------  -----------  -----------  -----------
Cash from operating
 activities                  44,664       32,777      151,578      162,235
                        -----------  -----------  -----------  -----------

Investing Activities:
Vessel acquisitions
 including advances        (131,102)           -     (171,749)     (12,350)
Vessels under
 construction               (18,966)     (14,150)    (185,148)     (28,188)
Proceeds from sale of
 vessels                          -            -       26,798            -
                        -----------  -----------  -----------  -----------
Cash used in investing
 activities                (150,068)     (14,150)    (330,099)     (40,538)
                        -----------  -----------  -----------  -----------

Financing Activities:
Debt draw downs             296,892            -      434,971      400,000
Debt repayment             (378,542)     (20,624)    (447,765)    (339,937)
Contributions               201,259                   201,259
Dividends on common
 shares                           -            -            -     (244,593)
Deferred costs               (1,402)        (980)      (3,100)      (1,771)
Decrease (increase) in
 restricted cash             (2,478)        (145)      (1,769)       5,596
                        -----------  -----------  -----------  -----------
Cash from financing
 activities                 115,729      (21,749)     183,596     (180,705)
                        -----------  -----------  -----------  -----------
Net change in cash and
 cash equivalents            10,325       (3,122)       5,075      (59,008)
Cash and cash
 equivalents, at
 beginning                   32,750       41,122       38,000       97,008
                        -----------  -----------  -----------  -----------
Cash and cash
 equivalents, end of
 period                 $    43,075  $    38,000  $    43,075  $    38,000
                        ===========  ===========  ===========  ===========

Cash paid for interest        3,951        7,239       26,352       24,283
Non-cash capitalized
 interest on vessels
 under construction             607        1,537        6,079        5,275
Non-cash lease
 liability rel/d to
 vessel acq.                      -            -       14,416            -




                           DANAOS CORPORATION
                 Reconciliation  of Non-GAAP Financial Measures
                (Expressed in thousands of United States dollars)


                           Three        Three       Twelve       Twelve
                          Months       Months       Months       Months
                           Ended        Ended        Ended        Ended
                          December     December     December     December
                          31, 2006     31, 2005     31, 2006     31, 2005
                        -----------  -----------  -----------  -----------
Net Income              $    30,562  $    23,234  $   101,082  $   122,850
Depreciation                  9,088        6,787       31,111       27,114
Amortization of
 deferred charges             1,564        1,154        5,425        3,922
Interest income              (1,069)      (1,124)      (3,605)      (6,345)
Interest expense              6,442        6,866       29,240       23,415
                        -----------  -----------  -----------  -----------
EBITDA(1)               $    46,587  $    36,917  $   163,253  $   170,956
                        ===========  ===========  ===========  ===========


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

Contact Information

  • For further information please contact:

    Company Contact:

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

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

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