Danaos Corporation Reports Second Quarter and Half Year Results for the Period Ended June 30, 2011

ATHENS, GREECE--(Marketwire - Jul 25, 2011) - Danaos Corporation ("Danaos") (NYSE: DAC), a leading international owner of containerships, today reported unaudited results for the period ended June 30, 2011.

Highlights for the Second Quarter and Half Year Ended June 30, 2011:

• During the second quarter of 2011, we took delivery and deployed three newly built containerships with an aggregate carrying capacity of 23,600 TEU.
• Operating revenues of $114.8 million and $213.8 million for the three and six months ended June 30, 2011, respectively.
• Adjusted net income¹ of $16.1 million or $0.15 per share and $27.5 million or $0.25 per share for the three and six months ended June 30, 2011.
• Adjusted EBITDA¹ of $78.4 million and $143.6 million for the three and six months ended June 30, 2011.

Three and Six Months Ended June 30, 2011
Financial Summary
(Expressed in thousands of United States dollars, except per share amounts):
		Three months ended June 30,				Three months ended June 30,				Six months ended June 30,			Six months ended June 30,
		2011				2010				2011			2010
		(unaudited)				(unaudited)				(unaudited)			(unaudited)
Operating revenues		$	114,764			$	84,946			$	213,753		$	164,605
Net (loss)/income		$	(231	)		$	(14,665	)		$	5,212		$	(94,429	)
Adjusted net income		$	16,102			$	17,189			$	27,456		$	34,837
Earnings/(losses) per share		$	0.00			$	(0.27	)		$	0.05		$	(1.73	)
Adjusted earnings per share		$	0.15			$	0.32			$	0.25		$	0.64
Weighted average number of shares (in thousands)			108,975				54,556				108,794			54,552
Adjusted EBITDA1		$	78,448			$	59,425			$	143,626		$	115,473

Danaos' CEO Dr. John Coustas commented:

This quarter we continued with the delivery of our contracted fleet and have reached 56 vessels of 265,559 TEU capacity and quickly heading towards the completion of our newbuilding program. In terms of financial results, we see a steady increase quarter on quarter in our net income as the new ships come on stream despite the one off items, which still drag down our performance.

In this quarter, we recorded revenues of $114.8 million, adjusted EBITDA of $78.4 million and adjusted net income of $16.1 million, adjusted for non-cash charges and certain non-recurring items.

During the quarter, we saw continuing erosion of the box rates, which in the end affected also the charter rates and some weakening was experienced due to charterers subletting vessels and the suspension of a number of Transpacific and Fareast-Europe services.

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

On the newbuilding front, ordering of vessels mainly by the financially strong liner companies continued for larger vessels and this will weigh negatively on the pricing power, which they may achieve from 2013 onwards.

Overall, the longer term health of the market will be determined by the demand characteristics, which relate to the growth of the western and world economy.

Three months ended June 30, 2011 compared to the three months ended June 30, 2010

During the quarter ended June 30, 2011, Danaos had an average of 54.4 containerships compared to 43.4 containerships for the same period in 2010. During the second quarter of 2011, we took delivery of three vessels, the Hanjin Italy, on April 6, 2011, the Hanjin Constantza, on April 15, 2011 and the Hanjin Greece, on May 4, 2011. Our fleet utilization was reduced to 97.4% in the three months ended June 30, 2011 compared to 98.4% in the same period of 2010, due to an increase in the scheduled off-hire days in the second quarter of 2011.

Our adjusted net income was $16.1 million, or $0.15 per share, for the three months ended June 30, 2011 compared, to $17.2 million, or $0.32 per share, for the three months ended June 30, 2010, adjusted for a non-cash loss in fair value of derivatives of $3.3 million recorded in the three months ended June 30, 2011 and a $22.3 million loss recorded in the corresponding quarter of 2010, realized losses on swaps of $10.2 million attributable to our over-hedging position (as described below) recorded in the second quarter of 2011 compared to a $8.4 million loss in the same period of 2010, as well as an expense of $2.8 million for fees related to our Comprehensive Financing Plan ($2.6 million of non-cash, amortizing and accrued finance fees and $0.2 million of legal fees) recorded in 2011 compared to fees related to our Comprehensive Financing Plan of $0.9 million and non-cash amortization of finance fees of $0.3 million recorded in 2010.

The decrease of 6.4%, or $1.1 million, in the adjusted net income for the three months ended June 30, 2011 compared to the three months ended June 30, 2010 was mainly attributable to increased realized losses on our interest rate swap contracts recorded during the three months ended June 30, 2011 compared to the same period of 2010, as well as increased interest expense due to higher average indebtedness in the second quarter of 2011 compared to the same period of 2010, which was partially offset by a reduced margin over LIBOR applicable to borrowings following the effectiveness of the agreement with our lenders to restructure existing indebtedness in the first quarter of 2011 ("Bank Agreement"), which was reset to 1.85% for all our credit facilities under the Bank Agreement, further offset by increased Income from Operations.

On a non-adjusted basis our net loss was $0.2 million, or $0.00 per share, for the second quarter of 2011, compared to net loss of $14.7 million, or $0.27 per share, for the second quarter of 2010. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

As a result of our Comprehensive Financing Plan, we are currently in an over-hedged position under our cash flow interest rate swaps, which is due to deferred progress payments to shipyards, cancellation of three newbuildings in 2010, the replacement of variable interest rate debt with a fixed interest rate seller's 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.

Operating Revenue
Operating revenue increased 35.2%, or $29.9 million, to $114.8 million in the three months ended June 30, 2011, from $84.9 million in the three months ended June 30, 2010. The increase was primarily attributable to the addition of ten vessels to our fleet, as follows:

Vessel Name		Vessel Size (TEU)		Date Delivered
CMA CGM Rabelais		6,500		July 2, 2010
Hanjin Santos		3,400		July 6, 2010
CMA CGM Racine		6,500		August 16, 2010
YM Maturity		6,500		August 18, 2010
Hanjin Versailles		3,400		October 11, 2010
Hanjin Algeciras		3,400		January 26, 2011
Hanjin Germany		10,100		March 10, 2011
Hanjin Italy		10,100		April 6, 2011
Hanjin Constantza		3,400		April 15, 2011
Hanjin Greece		10,100		May 4, 2011

These additions to our fleet contributed revenues of $29.1 million during the three months ended June 30, 2011. Moreover, two 6,500 TEU containerships, the CMA CGM Nerval and the YM Mandate, which were added to our fleet on May 17, 2010 and May 19, 2010, respectively, and one 3,400 TEU containership, the Hanjin Buenos Aires, which was added to our fleet on May 27, 2010, contributed incremental revenues of $4.2 million during the three months ended June 30, 2011 compared to the corresponding quarter of 2010.

In addition, $3.4 million reduction in revenues during the three months ended June 30, 2011 compared to the same period of 2010 was mainly attributable to re-chartering of certain vessels at reduced charter hire rates in the second half of 2010, which was partially offset by higher re-chartering of certain vessels at increased charter hire rates in the first half of 2011. Furthermore, scheduled off-hire revenues days were increased in the three months ended June 30, 2011 compared to the same period of 2010.

Vessel Operating Expenses
Vessel operating expenses increased 55.9%, or $10.5 million, to $29.3 million in the three months ended June 30, 2011, from $18.8 million in the three months ended June 30, 2010. The increase is mainly attributable to the increased average number of vessels in our fleet during the three months ended June 30, 2011 compared to the same period of 2010, as well as incremental costs with respect to certain vessels, which were on lay-up for 15 days in aggregate during the second quarter of 2011 compared to 477 days in the same period of 2010. The average daily operating cost per vessel increased to $6,166 for the three months ended June 30, 2011, from $5,477 for the three months ended June 30, 2010 (excluding those vessels on lay-up). The increase is mainly attributable to the increased lubricant expenses following the increase of the crude oil prices in the three months ended June 30, 2011 compared to the same period of 2010, as well as upward cost pressure on Euro denominated costs resulting from the weaker US Dollar and the repair and maintenance expenses related to the higher number of drydockings in the three months ended June 30, 2011 compared to the same period of 2010.

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

Depreciation
Depreciation expense increased 46.9%, or $8.3 million, to $26.0 million in the three months ended June 30, 2011, from $17.7 million in the three months ended June 30, 2010. The increase in depreciation expense was due to the increased average number of vessels in our fleet during the three months ended June 30, 2011 compared to the same period of 2010.

Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased 5.9%, or $0.1 million, to $1.8 million in the three months ended June 30, 2011, from $1.7 million in the three months ended June 30, 2010.

General and Administrative Expenses
General and administrative expenses decreased 17.5%, or $1.0 million, to $4.7 million in the three months ended June 30, 2011, from $5.7 million in the same period of 2010. The decrease was mainly the result of reduced legal and advisory fees of $1.6 million recorded in the three months ended June 30, 2011 compared to the same period of 2010, which partially was offset by increased fees of $0.6 million to our Manager in the second quarter of 2011 compared to the same period of 2010, due to the increase in the average number of our vessels in our fleet.

Other Operating Expenses
Other Operating Expenses includes Voyage Expenses

Voyage Expenses
Voyage expenses increased 23.5%, or $0.4 million, to $2.1 million in the three months ended June 30, 2011, from $1.7 million in the three months ended June 30, 2010. The increase was the result of increased voyage expenses, such as port, commission and other voyage expenses, due to the increased number of vessels in our fleet in the second quarter of 2011 compared to the same period of 2010.

Interest Expense and Interest Income
Interest expense increased by 32.7%, or $3.2 million, to $13.0 million in the three months ended June 30, 2011, from $9.8 million in the three months ended June 30, 2010. The change in interest expense was due to the increase in our average debt by $494.8 million, to $2,791.9 million in the quarter ended June 30, 2011, from $2,297.1 million in the quarter ended June 30, 2010, which was partially offset by the decrease in the margin over LIBOR payable on interest under our credit facilities in the three months ended June 30, 2011 compared to the three months ended June 30, 2010, in accordance with our Comprehensive Financing Plan, which sets the margin at 1.85% (in relation to our credit facilities under our Bank Agreement). Furthermore, the financing of our extensive newbuilding program resulted in interest capitalization, rather than such interest being recognized as an expense, of $3.8 million for the three months ended June 30, 2011 compared to $6.7 million of capitalized interest for the three months ended June 30, 2010.

Interest income increased by $0.1 million, to $0.3 million in the three months ended June 30, 2011, from $0.2 million in the three months ended June 30, 2010.

Other finance costs, net
Other finance costs, net, increased by $2.3 million, to $2.9 million in the three months ended June 30, 2011, from $0.6 million in the three months ended June 30, 2010. The increase is mainly attributable to increased amortization of finance fees of $1.9 million (which were deferred and will be amortized over the life of the respective credit facilities) and $0.4 million of finance fees accrued for the second quarter of 2011 related to our Comprehensive Financing Plan.

Other income/(expenses), net
Other income/(expenses), net, was an expense of $0.2 million in the three months ended June 30, 2011, from a gain of $0.1 million in the three months ended June 30, 2010. The increase of expense is mainly attributable to fees of $0.2 million directly related to our Comprehensive Financing Plan, which were recorded during the three months ended June 30, 2011.

Loss on fair value of derivatives
Loss on fair value of derivatives was reduced by $8.5 million, to a loss of $35.4 million in the three months ended June 30, 2011, from a loss of $43.9 million in the same period of 2010. The decrease is mainly attributable to a non-cash loss in fair value of interest rate swaps of $3.3 million recorded in the three months ended June 30, 2011, due to hedge accounting ineffectiveness, compared to $22.3 million loss in the three months ended June 30, 2010. There was also a realized loss on interest rate swap hedges of $32.1 million recorded during the three months ended June 30, 2011, which is mainly attributable to the higher average notional amount of swaps and the persisting low floating LIBOR rates, compared to a $21.6 million realized loss in the three months ended June 30, 2010.

In addition, realized losses on cash flow hedges of $8.0 million and $10.1 million in the three months ended June 30, 2011 and 2010, respectively, were deferred in "Accumulated Other Comprehensive Loss", rather than such realized losses being recognized as expenses, and will be reclassified into earnings over the depreciable lives of these vessels under construction, which are financed by loans for which their interest rates have been hedged by our interest rate swap contracts. The table below provides an analysis of the items discussed above, and were recorded in the three months ended June 30, 2011 and 2010:

			Three months ended June 30,							Three months ended June 30,
			2011							2010
			(in millions)
Loss on non-cash changes on fair value of swaps						$	(3.3	)					$	(22.3	)
	Total realized losses of swaps		(40.1	)						(31.7	)
	Realized losses of swaps deferred in OCI		8.0							10.1
Realized losses of swaps expensed in P&L							(32.1	)						(21.6	)
Loss on fair value of derivatives						$	(35.4	)					$	(43.9	)

Adjusted EBITDA
Adjusted EBITDA increased 32.0%, or $19.0 million, to $78.4 million in the three months ended June 30, 2011, from $59.4 million in the three months ended June 30, 2010. Adjusted EBITDA excludes a non-cash loss in fair value of derivatives of $3.3 million recorded in the three months ended June 30, 2011 and a $22.3 million loss recorded in the same period of 2010, realized losses on derivatives of $32.1 million recorded in 2011 compared to $21.6 million in 2010, as well as an expense of $2.8 million for fees related to our Comprehensive Financing Plan ($2.6 million of non-cash, amortizing and accrued finance fees and $0.2 million of other legal fees) recorded in 2011 compared to $1.2 million recorded in 2010 ($0.3 million of non-cash amortization of finance fees and $0.9 million of legal and advisory fees). Tables reconciling Adjusted EBITDA to Net (Loss)/Income can be found at the end of this earnings release.

Six months ended June 30, 2011 compared to the six months ended June 30, 2010

During the six months ended June 30, 2011, Danaos had an average of 52.7 containerships as compared to 42.4 containerships for the same period of 2010. Our fleet utilization was reduced to 97.1% in the six months ended June 30, 2011 compared to 99.0% in the same period of 2010, mainly due to the increased scheduled off-hire days.

Our adjusted net income was $27.5 million, or $0.25 per share, for the six months ended June 30, 2011 compared to $34.8 million, or $0.64 per share, for the six months ended June 30, 2010, adjusted for a non-cash gain in fair value of derivatives of $6.5 million recorded in the six months ended June 30, 2011 and a $44.8 million loss recorded in the same period of 2010, realized losses on swaps of $19.9 million attributable to our over-hedging position recorded in 2011 compared to a $12.4 million loss in 2010, as well as an expense of $8.8 million for fees related to our Comprehensive Financing Plan ($4.2 million of non-cash, amortizing and accrued finance fees, a non-cash loss in fair value of warrants of $2.3 million recorded in 2011 and $2.3 million of legal and advisory fees) recorded in 2011 compared to legal and advisory fees related to our Comprehensive Financing Plan of $1.9 million and non-cash amortization of finance fees of $0.7 million recorded in 2010, as well as an impairment loss of $71.5 million in relation to the cancellation of three 6,500 TEU newbuilding containerships and a gain on sale of vessels of $1.9 million recorded in the six months ended June 30, 2010.

The decrease of 21.0%, or $7.3 million, in adjusted net income for the six months ended June 30, 2011 compared to the six months ended June 30, 2010 was mainly attributable to increased realized losses on our interest rate swap contracts recorded in our Statement of Income during the six months ended June 30, 2011 compared to the same period of 2010, as well as increased interest expense due to higher average indebtedness in the first six months of 2011 compared to the same period of 2010, which was partially offset by a reduced margin over LIBOR applicable to borrowings following our Bank Agreement (which was reset to 1.85% for all our credit facilities under our Bank Agreement), further offset by increased Income from Operations.

On a non-adjusted basis, our net income was $5.2 million, or $0.05 per share, for the six months ended June 30, 2011, compared to net loss of $94.4 million, or $1.73 per share, for the six months ended June 30, 2010. Refer to the Adjusted Net Income reconciliation table in the last page of this earning release.

Operating Revenue
Operating revenue increased 29.9%, or $49.2 million, to $213.8 million in the six months ended June 30, 2011, from $164.6 million in the six months ended June 30, 2010. The increase was primarily attributable to the addition to our fleet of ten vessels, as follows:

Vessel Name		Vessel Size (TEU)		Date Delivered
CMA CGM Rabelais		6,500		July 2, 2010
Hanjin Santos		3,400		July 6, 2010
CMA CGM Racine		6,500		August 16, 2010
YM Maturity		6,500		August 18, 2010
Hanjin Versailles		3,400		October 11, 2010
Hanjin Algeciras		3,400		January 26, 2011
Hanjin Germany		10,100		March 10, 2011
Hanjin Italy		10,100		April 6, 2011
Hanjin Constantza		3,400		April 15, 2011
Hanjin Greece		10,100		May 4, 2011

These additions to our fleet contributed revenues of $44.9 million during the six months ended June 30, 2011. Moreover, three 6,500 TEU containerships, the CMA CGM Musset, the CMA CGM Nerval and the YM Mandate, which were added to our fleet on March 12, 2010, May 17, 2010 and May 19, 2010, respectively, and one 3,400 TEU containership, the Hanjin Buenos Aires, which was added to our fleet on May 27, 2010, contributed incremental revenues of $14.1 million during the six months ended June 30, 2011 compared to the same period of 2010. These revenues were offset in part by the sale of one 1,704 TEU containership, the MSC Eagle, on January 22, 2010, that contributed nil revenues in the six months ended June 30, 2011 compared to $0.1 million of revenues in the six months ended June 30, 2010.

In addition, $9.7 million reduction in revenues during the six months ended June 30, 2011 compared to the same period of 2010 was mainly attributable to re-chartering of certain vessels at reduced charter hire rates in the second half of 2010, which was partially offset by higher re-chartering of certain vessels at increased charter hire rates in the first half of 2011. Furthermore, scheduled off-hire revenues days were increased in the six months ended June 30, 2011 compared to the same period of 2010.

Vessel Operating Expenses
Vessel operating expenses increased 54.0%, or $19.6 million, to $55.9 million in the six months ended June 30, 2011, from $36.3 million in the six months ended June 30, 2010. The increase is mainly attributable to the increased average number of vessels in our fleet during the six months ended June 30, 2011 compared to the same period of 2010, as well as incremental costs of certain vessels, which were on lay-up for 105 days in aggregate during the six months ended June 30, 2011 compared to 1,091 days in the same period of 2010. The average daily operating cost per vessel increased to $6,164 for the six months ended June 30, 2011, from $5,549 for the six months ended June 30, 2010 (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 43.2%, or $14.6 million, to $48.4 million in the six months ended June 30, 2011, from $33.8 million in the six months ended June 30, 2010. The increase in depreciation expense was due to the increased average number of vessels in our fleet during the six months ended June 30, 2011, compared to the same period of 2010.

Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs decreased 5.7%, or $0.2 million, to $3.3 million in the six months ended June 30, 2011, from $3.5 million in the six months ended June 30, 2010. The decrease reflects reduced drydocking costs incurred and amortized during the six months ended June 30, 2011 compared to the same period of 2010.

General and Administrative Expenses
General and administrative expenses decreased 16.2%, or $1.8 million, to $9.3 million in the six months ended June 30, 2011, from $11.1 million in the same period of 2010. The decrease was mainly the result of reduced legal and advisory fees by $3.1 million recorded in 2010, which partially was offset by increased fees of $1.1 million to our Manager in the six months ended June 30, 2011 compared to the same period of 2010, due to the increase in the average number of our vessels in our fleet.

Other Operating Expenses
Other Operating Expenses includes Voyage Expenses.

Voyage Expenses
Voyage expenses increased 30.3%, or $1.0 million, to $4.3 million in the six months ended June 30, 2011, from $3.3 million for the six months ended June 30, 2010. The increase was the result of increased voyage expenses, such as port, commission and other voyage expenses due to the increased number of vessels in our fleet in the six months ended June 30, 2011 compared to the same period of 2010.

Interest Expense and Interest Income
Interest expense increased 34.1%, or $6.3 million, to $24.8 million in the six months ended June 30, 2011, from $18.5 million in the six months ended June 30, 2010. The change in interest expense was due to the increase in our average debt by $376.6 million, to $2,696.2 million in the six months ended June 30, 2011, from $2,319.6 million in the six months ended June 30, 2010, which was partially offset by the decrease in the margin over LIBOR payable on interest under our credit facilities in the six months ended June 30, 2011 compared to the six months ended June 30, 2010, in accordance with our Comprehensive Financing Plan, which sets the margin at 1.85% (in relation to our credit facilities under our Bank Agreement). Furthermore, the financing of our extensive newbuilding program resulted in interest capitalization, rather than such interest being recognized as an expense, of $9.7 million for the six months ended June 30, 2011 compared to $13.9 million of capitalized interest for the six months ended June 30, 2010.

Interest income increased by $0.1 million, to $0.6 million in the six months ended June 30, 2011, from $0.5 million in the six months ended June 30, 2010.

Other finance costs, net
Other finance costs, net, increased by $6.2 million, to $7.3 million in the six months ended June 30, 2011, from $1.1 million in the six months ended June 30, 2010. The increase is mainly attributable to increased amortization of finance fees of $2.9 million (which were deferred and are amortized over the life of the respective credit facilities), a non-cash loss in fair value of warrants of $2.3 million and $0.7 million of finance fees accrued for the first half of 2011 related to our Comprehensive Financing Plan.

Other income/(expenses), net
Other income/(expenses), net, was an expense of $2.1 million in the six months ended June 30, 2011, from a gain of $0.1 million in the six months ended June 30, 2010. The increase in expense is mainly attributable to fees of $2.3 million directly related to our Comprehensive Financing Plan, which were recorded during the six months ended June 30, 2011.

Loss on fair value of derivatives
Loss on fair value of derivatives, decreased by $28.7 million, to a loss of $53.7 million in the six months ended June 30, 2011, from a loss of $82.4 million in the same period of 2010. The decrease is mainly attributable to a non-cash gain in fair value of interest rate swaps of $6.5 million recorded in the six months ended June 30, 2011, due to hedge accounting ineffectiveness, compared to $44.8 million loss in the six months ended June 30, 2010. There was also a realized loss on interest rate swap hedges of $60.2 million recorded in the six months ended June 30, 2011, which is mainly attributable to the higher average notional amount of swaps and the persisting low floating LIBOR rates, compared to a $37.6 million realized loss in the six months ended June 30, 2010.

In addition, realized losses on cash flow hedges of $17.9 million and $21.8 million in the six months ended June 30, 2011 and 2010, respectively, were deferred in "Accumulated Other Comprehensive Loss", rather than such realized losses being recognized as expenses, and will be reclassified into earnings over the depreciable lives of these vessels under construction, which are financed by loans for which their interest rates have been hedged by our interest rate swap contracts. The table below provides an analysis of the items discussed above, and were recorded in the six months ended June 30, 2011 and 2010:

			Six months ended June 30,							Six months ended June 30,
			2011							2010
			(in millions)
Gain/(loss) on non-cash changes on fair value of swaps						$	6.5						$	(44.8	)
	Total realized losses of swaps		(78.1	)						(59.4	)
	Realized losses of swaps deferred in OCI		17.9							21.8
Realized losses of swaps expensed in P&L							(60.2	)						(37.6	)
Loss on fair value of derivatives						$	(53.7	)					$	(82.4	)

Adjusted EBITDA
Adjusted EBITDA increased by $28.1 million, or 24.3%, to $143.6 million in the six months ended June 30, 2011, from $115.5 million in the six months ended June 30, 2010. Adjusted EBITDA mainly excludes a non-cash gain in fair value of derivatives of $6.5 million recorded in 2011 and a $44.8 million loss recorded in 2010, realized losses on derivatives of $60.2 million recorded in 2011 compared to $37.6 million in 2010, as well as an expense of $8.8 million for fees related to our Comprehensive Financing Plan ($4.2 million of non-cash, amortizing and accrued finance fees, a non-cash loss in fair value of warrants of $2.3 million and $2.3 million of legal and advisory fees) recorded in the six months ended June 30, 2011 compared to $2.6 million recorded in the same period of 2010 ($0.7 million of non-cash amortization of finance fees and $1.9 million of fees related to our Comprehensive Financing Plan). Tables reconciling Adjusted EBITDA to Net (Loss) / Income can be found at the end of this earnings release.

Recent News
On July 8, 2011, the Company took delivery of the newbuilding 8,530 TEU vessel, the CMA CGM Attila. The vessel has been deployed on a 12-year time charter with one of the world's major liner companies.

The Board of Directors of the Company has appointed Mr. Evangelos Chatzis to the position of Chief Financial Officer, effective July 22, 2011.

Conference Call and Webcast
On Tuesday, July 26, 2011 at 9:00 A.M. EDT, 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 August 2, 2011 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 56 containerships aggregating 265,559 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Danaos is one of the largest US listed containership companies based on fleet size. Furthermore, the company has a contracted fleet of 9 additional containerships aggregating 99,620 TEU with scheduled deliveries up to the second quarter of 2012. The company's shares trade on the New York Stock Exchange under the symbol "DAC".

Forward-Looking Statements
Matters discussed in this release may constitute forward-looking statements within the meaning of the 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 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 42 unscheduled off-hire days in total in the second quarter of 2011. 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)			Third Quarter 2010				Fourth Quarter 2010				First Quarter 2011				Second Quarter 2011				Total
Ownership Days				4,408				4,590				4,587				4,953				18,538
Less Off-hire Days:
	Scheduled Off-hire Days			(138	)			(41	)			(119	)			(86	)			(384	)
	Other Off-hire Days			--				(26	)			(31	)			(42	)			(99	)
Operating Days				4,270				4,523				4,437				4,825				18,055
Vessel Utilization				96.9	%			98.5	%			96.7	%			97.4	%			97.4	%
Revenue - Impact of Off-hire (in '000s of US Dollars)			Third Quarter 2010				Fourth Quarter 2010				First Quarter 2011				Second Quarter 2011				Total
100% Fleet Utilization			$	94,758			$	101,051			$	101,454			$	116,398			$	413,661
Less Off-hire Days:
	Scheduled Off-hire Days			(171	)			--				(1,518	)			(697	)			(2,386	)
	Other Off-hire Days			--				(566	)			(947	)			(937	)			(2,450	)
Actual Revenue Earned			$	94,587			$	100,485			$	98,989			$	114,764			$	408,825

Fleet List

The following table describes in detail our fleet deployment profile as of July 25, 2011.

Vessel Name		Vessel Size (TEU)		Year Built		Expiration of Charter(1)
Containerships
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 Attila		8,530		2011		April 2023
CSCL America (2)		8,468		2004		September 2016
CSCL Europe		8,468		2004		June 2016
CMA CGM Moliere (3)		6,500		2009		August 2021
CMA CGM Musset (3)		6,500		2010		February 2022
CMA CGM Nerval (3)		6,500		2010		April 2022
CMA CGM Rabelais (3)		6,500		2010		June 2022
YM Mandate		6,500		2010		January 2028
CMA CGM Racine (3)		6,500		2010		July 2022
YM Maturity		6,500		2010		April 2028
Marathonas (4)		4,814		1991		September 2011
Messologi (5)		4,814		1991		September 2012
Maersk Mytilini		4,814		1991		September 2011
Hyundai Commodore (6)		4,651		1992		March 2013
Hyundai Duke		4,651		1992		February 2013
Hyundai Federal (7)		4,651		1994		September 2012
YM Colombo		4,300		2004		March 2019
YM Singapore		4,300		2004		October 2019
Taiwan Express (8)		4,253		2007		July 2019
YM Vancouver		4,253		2007		September 2019
Derby D (9)		4,253		2004		February 2014
Deva (10)		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 (11)		3,908		1989		January 2012
Hope (12)		3,908		1989		June 2012
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
SCI Pride (13)		3,129		1988		July 2012
Lotus (14)		3,098		1988		July 2012
Independence (15)		3,045		1986		October 2011
Henry (16)		3,039		1986		July 2012
Elbe (17)		2,917		1991		April 2012
California Dragon (18)		2,917		1991		July 2011
Komodo (19)		2,917		1991		April 2012
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
Hanjin Montreal (20)		2,130		1984		March 2012

	1.	Earliest date charters could expire. Some charters include options to extend their terms.
	2.	On August 21, 2009, the MSC Baltic was renamed to CSCL America at the request of the charterer of this vessel.
	3.	Vessel subject to charterer's option to purchase vessel after first eight years of time charter term for $78.0 million.
	4.	On January 21, 2010, the MSC Marathon was renamed to Marathonas at the request of the charterer of this vessel.
	5.	On April 15, 2011, the Maersk Messologi was renamed to Messologi at the request of the charterer of this vessel.
	6.	On April 2, 2009, the MOL Affinity was renamed to Hyundai Commodore at the request of the charterer of this vessel.
	7.	On May 12, 2009, the APL Confidence was renamed to Hyundai Federal at the request of the charterer of this vessel.
	8.	On June 4, 2011, the YM Seattle was renamed to Taiwan Express at the request of the charterer of this vessel.
	9.	On May 28, 2011, the Bunga Raya Tiga was renamed to Derby D at the request of the charterer of this vessel.
	10.	On October 7, 2010, the Bunga Raya Tujuh was renamed to Deva at the request of the charterer of this vessel.
	11.	On January 31, 2011, the Al Rayan was renamed to Honour at the request of the charterer of this vessel.
	12.	On July 1, 2011, the YM Yantian was renamed to Hope at the request of the charterer of this vessel.
	13.	On August 18, 2010, the YM Milano was renamed to SCI Pride at the request of the charterer of this vessel.
	14.	On July 24, 2010, the CMA CGM Lotus was renamed to Lotus at the request of the charterer of this vessel.
	15.	On October 18, 2010, the CMA CGM Vanille was renamed to Independence at the request of the charterer of this vessel
	16.	On May 13, 2010, the CMA CGM Passiflore was renamed to Henry at the request of the charterer of this vessel.
	17.	On May 28, 2011, the Jiangsu Dragon was renamed to Elbe at the request of the charterer of this vessel.
	18.	On July 20, 2010, the CMA CGM Kalamata was renamed to California Dragon at the request of the charterer of this vessel.
	19.	On May 24, 2011, the Shenzhen Dragon was renamed to Komodo at the request of the charterer of this vessel.
	20.	On May 14, 2009, the Montreal Senator was renamed to Hanjin Montreal at the request of the charterer of this vessel.

New Deliveries

The following table describes the expected additions to our fleet as a result of our new building containership program.

Vessel Name		Vessel Size (TEU)		Expected Delivery(*)		Charter Term
HN Z00002		8,530		3rd Quarter 2011		12 years
HN Z00003		8,530		4th Quarter 2011		12 years
HN Z00004		8,530		4th Quarter 2011		12 years
HN H 1022A		8,530		1st Quarter 2012		12 years
Hull No S-456		13,100		1st Quarter 2012		12 years
Hull No S-457		13,100		1st Quarter 2012		12 years
Hull No S-458		13,100		2nd Quarter 2012		12 years
Hull No S-459		13,100		2nd Quarter 2012		12 years
Hull No S-460		13,100		2nd Quarter 2012		12 years

(*) Delivery date represents most recent update regarding respective event.

DANAOS CORPORATION
Condensed Statements of Income - Unaudited
(Expressed in thousands of United States dollars, except per share amounts)
			Three months ended June 30,				Three months ended June 30,				Six months ended June 30,				Six months ended June 30,
			2011				2010				2011				2010
OPERATING REVENUES			$	114,764			$	84,946			$	213,753			$	164,605
OPERATING EXPENSES
	Vessel operating expenses			(29,325	)			(18,759	)			(55,927	)			(36,305	)
	Depreciation & amortization			(27,756	)			(19,455	)			(51,722	)			(37,256	)
	General & administrative			(4,716	)			(5,727	)			(9,345	)			(11,099	)
	Gain on sale of vessels			--				--				--				1,916
	Impairment loss			--				--				--				(71,509	)
	Other operating expenses			(2,056	)			(1,721	)			(4,274	)			(3,307	)
Income From Operations				50,911				39,284				92,485				7,045
OTHER EARNINGS (EXPENSES)
	Interest income			293				223				646				472
	Interest expense			(12,963	)			(9,773	)			(24,811	)			(18,549	)
	Other finance cost, net			(2,899	)			(604	)			(7,326	)			(1,093	)
	Other income/(expenses), net			(179	)			87				(2,099	)			74
	Loss on fair value of derivatives			(35,394	)			(43,882	)			(53,683	)			(82,378	)
Total Other Income (Expenses), net				(51,142	)			(53,949	)			(87,273	)			(101,474	)
Net (Loss)/Income			$	(231	)		$	(14,665	)		$	5,212			$	(94,429	)
EARNINGS/(LOSS) PER SHARE
Basic & diluted net (loss)/income per share			$	0.00			$	(0.27	)		$	0.05			$	(1.73	)
Basic & diluted weighted average number of common shares (in thousands of shares)				108,975				54,556				108,794				54,552

Non-GAAP Measures*
Reconciliation of Net Income/(Loss) to Adjusted Net Income - Unaudited
		Three months ended June 30,				Three months ended June 30,				Six months ended June 30,				Six months ended June 30,
		2011				2010				2011				2010
Net (loss)/income		$	(231	)		$	(14,665	)		$	5,212			$	(94,429	)
Loss on fair value of derivatives			35,394				43,882				53,683				82,378
Realized loss on derivatives			(32,054	)			(21,600	)			(60,163	)			(37,647	)
Realized loss on over-hedging portion of derivatives			10,158				8,377				19,927				12,379
Comprehensive Financing Plan related fees			177				856				2,266				1,904
Amortization of financing fees & finance fees accrued			2,658				339				4,278				659
Loss on fair value of warrants			--				--				2,253				--
Impairment loss			--				--				--				71,509
Gain on sale of vessels			--				--				--				(1,916	)
Adjusted Net Income		$	16,102			$	17,189			$	27,456			$	34,837
Adjusted Earnings Per Share		$	0.15			$	0.32			$	0.25			$	0.64
Weighted average number of shares			108,975				54,556				108,794				54,552

* 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 six months ended June 30, 2011 and 2010. 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 June 30,				As of December 31,
			2011				2010
ASSETS			(Unaudited)				(Unaudited)
CURRENT ASSETS
	Cash and cash equivalents		$	96,717			$	229,835
	Restricted cash, current portion			2,909				2,907
	Accounts receivable, net			5,074				4,112
	Other current assets			36,142				29,976
				140,842				266,830
NON-CURRENT ASSETS
	Fixed assets, net			2,811,030				2,273,483
	Advances for vessels under construction			676,850				904,421
	Deferred charges, net			108,115				24,692
	Fair value of financial instruments			4,149				4,465
	Other non-current assets			19,937				15,239
				3,620,081				3,222,300
TOTAL ASSETS				3,760,923				3,489,130
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Long-term debt, current portion			21,619				21,619
	Accounts payable, accrued liabilities & other current liabilities			69,652				95,131
	Fair value of financial instruments, current portion			136,602				129,747
				227,873				246,497
LONG-TERM LIABILITIES
	Long-term debt, net of current portion			2,736,812				2,543,907
	Vendor financing			65,145				--
	Fair value of financial instruments, net of current portion			286,150				302,161
	Other long-term liabilities			7,836				4,153
				3,095,943				2,850,221
STOCKHOLDERS' EQUITY
	Common stock			1,090				1,086
	Additional paid-in capital			543,755				489,672
	Treasury stock			--				(3	)
	Accumulated other comprehensive loss			(451,173	)			(436,566	)
	Retained earnings			343,435				338,223
				437,107				392,412
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	3,760,923			$	3,489,130

DANAOS CORPORATION
Condensed Statements of Cash Flows - (Unaudited)
(Expressed in thousands of United States dollars)
			Three months ended June 30,				Three months ended June 30,				Six months ended June 30,				Six months ended June 30,
			2011				2010				2011				2010
Operating Activities:
	Net (loss)/ income		$	(231	)		$	(14,665	)		$	5,212			$	(94,429	)
	Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation			26,005				17,744				48,441				33,805
	Impairment loss			--				--				--				71,509
	Amortization of deferred finance cost and other finance fees accrued			4,409				2,050				7,559				4,110
	Stock based compensation			24				8				47				35
	Payments for drydocking/special survey			(2,150	)			--				(7,052	)			(258	)
	Change in fair value of financial instruments			(4,681	)			12,208				(22,158	)			22,920
	Gain on sale of vessels			--				--				--				(1,916	)
	Accounts receivable			(1,574	)			224				(962	)			(590	)
	Other assets, current and non-current			(6,735	)			(1,910	)			(10,864	)			(4,075	)
	Accounts payable and accrued liabilities			8,528				5,481				(10,750	)			4,236
	Other liabilities, current and non-current			(1,453	)			(1,850	)			(2,860	)			(285	)
Net Cash provided by Operating Activities				22,142				19,290				6,613				35,062
Investing Activities:
	Vessel additions			(549	)			--				(363	)			--
	Vessels under construction			(180,768	)			(203,655	)			(302,276	)			(279,286	)
	Proceeds from sale of vessels			--				--				--				1,764
Net Cash used in Investing Activities				(181,317	)			(203,655	)			(302,639	)			(277,522	)
Financing Activities:
	Debt draw downs			129,448				167,529				227,686				225,389
	Debt repayment			(2,592	)			(176,800	)			(34,559	)			(196,692	)
	Treasury stock			--				--				--				(50	)
	Deferred costs			--				--				(30,217	)			--
	Decrease/(Increase) in restricted cash			(2,814	)			171,565				(2	)			174,377
Net Cash provided by Financing Activities				124,042				162,294				162,908				203,024
Net Decrease in cash and cash equivalents				(35,133	)			(22,071	)			(133,118	)			(39,436	)
Cash and cash equivalents, beginning of period				131,850				104,685				229,835				122,050
Cash and cash equivalents, end of period			$	96,717			$	82,614			$	96,717			$	82,614

Reconciliation of Net Income/(Loss) to Adjusted EBITDA
(Expressed in thousands of United States dollars)
		Three months ended June 30,				Three months ended June 30,				Six months ended June 30,				Six months ended June 30,
		2011				2010				2011				2010
Net (loss)/income		$	(231	)		$	(14,665	)		$	5,212			$	(94,429	)
Depreciation			26,005				17,744				48,441				33,805
Amortization of deferred drydocking & special survey costs			1,751				1,711				3,281				3,451
Amortization of deferred finance costs and other finance fees accrued			2,658				339				4,278				659
Interest income			(293	)			(223	)			(646	)			(472	)
Interest expense			12,963				9,773				24,811				18,549
Impairment loss			--				--				--				71,509
Gain on sale of vessels			--				--				--				(1,916	)
Comprehensive Financing Plan related fees			177				856				2,266				1,904
Stock based compensation			24				8				47				35
Realized loss on derivatives			32,054				21,600				60,163				37,647
Non-cash changes in fair value of derivatives			3,340				22,282				(6,480	)			44,731
Non-cash changes in fair value of warrants			--				--				2,253				--
Adjusted EBITDA(1)		$	78,448			$	59,425			$	143,626			$	115,473

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

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

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and six months ended June 30, 2011 and 2010. 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.