-- Reported net earnings of $26.1 million or $0.59 per share and $70.5
million or $1.59 per share respectively for the third quarter 2006 and nine
months ended September 30, 2006
-- Operating Revenues of $61.8 million and $176.4 million respectively
for the third quarter 2006 and nine months ended September 30, 2006
-- EBITDA(1)of $42.8 million and $116.7 million respectively for the
third quarter 2006 and nine months ended September 30, 2006
-- On September 8, 2006 Danaos took delivery of its 27th container
vessel, the 9,580 TEU CSCL Pusan, which is under a 12-year charter to China
Shipping
-- On October 6, 2006, the shares of Danaos commenced trading on the New
York Stock Exchange under the ticker symbol "DAC"
-- In October 2006, Danaos repaid $200 million under its credit
facilities
Danaos' CEO Dr. John Coustas commented: "On October 6, 2006 we listed of
our shares on the New York Stock Exchange. Our initial public offering
marks a strategic milestone in the development of our company. The very
positive response of the investment community allowed us to successfully
price our initial public offering at $21.00 per share representing the mid
point of the filing range and raising approximately $215 million.
In the third quarter of 2006 we took delivery of the CSCL Pusan, a 9,580
TEU newbuilding vessel chartered to China Shipping for 12 years. As we
prepare to take delivery of its sister vessel later this month, which will
represent our 28th vessel in our containership fleet and one out of 15 more
new deliveries to follow in the next three years. We shall continue to be
in close touch with our shareholders 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 container market we had positive developments this quarter as we
have seen liner companies increasing box rates on the back of strong demand
and also all liner company executives planning increases in box rates for
next year, which currently points to continued healthy demand for
containerships. Demand for the medium and larger size vessels remains
healthy. Further, we do not have any vessels up for re-chartering during
the 4th quarter."
Three months ended September 30, 2006 compared to the three months ended
September 30, 2005
During the quarter ended September 30, 2006, Danaos had an average of 26.3
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. In
August 2006, Danaos entered into an agreement to sell its entire fleet of 6
drybulk vessels to an unaffiliated purchaser with deliveries scheduled upon
expiration of each charter into early 2007.
Our net income was $26.1 million or $0.59 per share of for the third
quarter 2006 compared to net income of $27.1 million for the third quarter
of 2005, a decrease of 3.4%.
Operating Revenue
Operating revenue increased 2.5%, or $1.5 million, to $61.8 million in the
quarter ended September 30, 2006, from $60.3 million in the quarter ended
September 30, 2005. The increase was the result of a $5.4 million increase
in revenues generated by escalations in contractual charter rates in
accordance with the terms of existing charters for certain of our
containerships as well as the additions to our fleet of two vessels, the
MOL Confidence, a 4,651 TEU containership, on March 23, 2006 and the CSCL
Pusan, a 9,580 TEU vessel on September 8, 2006. This was offset in part by
a $3.9 million decrease in revenues generated by our drybulk carriers,
reflecting lower rates in the short term charter market in which they
operated during the period, coupled with the reduced drybulk fleet size due
to the sale of Sofia, which was sold on May 12, 2006.
Vessel Operating Expenses
Vessel operating expenses increased 4.0%, or $0.5 million, to $15.1 million
in the quarter ended September 30, 2006, from $14.6 million in the quarter
ended September 30, 2005. This increase was due to an increase in
lubricant costs per vessel experienced by the overall industry, the
enhanced maintenance related to the drydockings in the third quarter of
2006 as well as the increase in the number of vessels in our fleet during
the quarter ended September 30, 2006.
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of
Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense increased 14.9%, or $1.0 million, to $7.8 million in
the quarter ended September 30, 2006, from $6.8 million for the quarter
ended September 30, 2005. The increase in depreciation expense was due to
the increase in the average number of vessels in our fleet during the
quarter ended September 30, 2006.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs expense
increased 20.4%, or $0.2 million, to $1.4 million in the quarter ended
September 30, 2006, from $1.2 million in quarter ended September 30, 2005.
This was attributed to the costs of dry-docking and special surveys
conducted for three of our vessels in the quarter ended September 30, 2006
as compared to one of our vessels in 2005.
General and Administrative Expenses
General and administrative expenses increased 25%, or $0.4 million, to $1.8
million in the quarter ended September 30, 2006 from $1.4 million in the
same quarter of 2005, reflecting $0.1 million of technical management fees
we paid for vessels in our fleet during the quarter ended September 30,
2006 and $0.3 million of directors and officers' remuneration expense which
was not applicable in the quarter ended September 30, 2005.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses
Voyage Expenses
Voyage expenses were $1.6 million in the quarter ended September 30, 2006,
representing a decrease of $0.2 million, or 2.5%, from $1.8 million in the
quarter ended September 30, 2005. Commissions charged in the quarter ended
September 30, 2006 amounted to $1.5 million, a decrease of $0.2 million, or
12.5%, compared to $1.7 million in the quarter ended September 30, 2005.
Interest Expense and Interest Income
Interest expense increased $1.5 million, or 23.8%, to $7.9 million in the
quarter ended September 30, 2006, from $6.4 million in the quarter ended
September 30, 2005. Interest income was $0.4 million for the quarter ended
September 30, 2006, a decrease of $1.5 million, from $1.9 million for the
quarter ended September 30, 2005. The increase in interest expense was
primarily due to the increase in our average indebtedness resulting from
our debt refinancing in 2005 coupled with higher interest rates. The
decrease in interest income was due to the decreased daily average bank
deposits on which we earned interest, offset in part by higher interest
rates for deposits.
EBITDA
EBITDA for the quarter ended September 30, 2006 increased $3.3 million, or
8.4%, to $42.8 million in the quarter ended September 30, 2006, from $39.5
million in the quarter ended September 30, 2005.
Nine months ended September 30, 2006 compared to the nine months ended
September 30, 2005
During the nine months ended September 30, 2006, we had an average of 25.6
containerships and 6.5 drybulk carriers in our fleet. During the nine
months ended September 30, 2005, we had an average of 25.0 containerships
and 7.0 drybulk carriers in our fleet. We took delivery of one 4,651 TEU
containership on March 23, 2006 and one 9,580 TEU on September 8, 2006 and
sold one drybulk carrier on May 12, 2006.
Operating Revenue
Operating revenue decreased 4.5%, or $8.3 million, to $176.4 million in the
nine months ended September 30, 2006, from $184.7 million in the nine
months ended September 30, 2005. The decrease was a result of a $17.2
million increase in revenues generated by escalations in contractual
charter rates in accordance with the terms of existing charters for certain
of our containerships as well as the additions of two vessels the MOL
Confidence, a 4,651 TEU containership, to our fleet on March 23, 2006 and
CSCL Pusan a 9,580 TEU vessel on September 8, 2006 which was offset by
$25.5 million decrease in revenue generated by our drybulk carriers, which
are deployed on short-term time charters, and the effect of the sale of
Sofia a drybulk carrier sold on May 12, 2006.
Vessel Operating Expenses
Vessel operating expenses increased 14.3%, or $5.5 million, to
$44.5 million in the nine months ended September 30, 2006, from
$39.0 million in the nine months ended September 30, 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 nine months ended September 30, 2006. This increase was
also partly due to the enhanced maintenance related to the increased number
of vessels which had drydockings in the first nine months of 2006 as
opposed to the same period in 2005, as well as the increase in the number
of vessels in our fleet during the quarter ended September 30, 2006
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of
Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense increased 8.3%, or $1.7 million, to $22.0 million in
the nine months ended September 30, 2006, from $20.3 million for the nine
months ended September 30, 2005. The increase in depreciation expense was
due to the increase in the average number of vessels in our fleet during
the six months ended September 30, 2006.
Amortization of Deferred Drydocking and Special Survey Costs
Amortization of deferred drydocking and special survey costs expense
increased 39.5%, or $1.1 million, to $3.9 million in the nine months ended
September 30, 2006, from $2.8 million in the nine months ended September
30, 2005. This was due to the costs of drydocking and special surveys
conducted for eight of our vessels in the nine months ended September 30,
2006 in comparison with in the nine months ended September 30, 2005
drydocking and special surveys conducted for three of our vessels.
General and Administrative Expenses
General and administrative expenses increased 50.7%, or $1.8 million, to
$5.3 million in the nine months ended September 30, 2006 from $3.5 million
in the nine months ended September 30, 2005, reflecting $0.8 million of
technical management fees we paid in respect of the vessels in our fleet
during the nine months ended September 30, 2006 pursuant to our new
management agreement, which was not in effect fully during the nine months
ended September 30, 2005, and $1.0 million of additional directors and
officers' remuneration expense which was not applicable in the nine months
ended September 30, 2005.
Gain/(loss) on sale of vessels
Gain/(loss) on sale of vessels of $15.0 million for the nine months ended
September 30, 2006 reflects the sale of the Sofia III to a third party
drybulk operator for $27.5 million, representing a gain on sale of $15.0
million.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses
Voyage Expenses
Voyage expenses were $4.9 million in the nine months ended September 30,
2006, representing a decrease of $0.3 million, or 5.3%, from $5.2 million
in the nine months ended September 30, 2005. Commissions charged in the
nine months ended September 30, 2006 amounted to $4.6 million, an increase
of $0.2 million, or 4.4%, compared to $4.4 million in the nine months ended
September 30, 2005.
Interest Expense and Interest Income
Interest expense increased $6.2 million, or 37.8%, to $22.8 million in the
nine months ended September 30, 2006, from $16.5 million in the nine months
ended September 30, 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 and the increase in average indebtedness resulting from our debt
refinancing in 2005, which impacted the full nine months ended September
30, 2006 while it only impacted part of the nine months ended September 30,
2005.
Interest income was $2.5 million for the nine months ended September 30,
2006, a decrease of $2.7 million, from $5.2 million for the nine months
ended September 30, 2005.
The decrease in interest income was due to the decreased daily average bank
deposits on which we earned interest, offset in part by higher interest
rates.
Other income/(expense)
Other expense, net of $(15.3) million for the nine months ended September
30, 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 HN 1561, 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 leasing legislation enacted in 2006.
loss on derivatives
Gain (loss) on derivatives decreased $9.1 million to $(6.6) million in the
nine months ended September 30, 2006, from $2.5 million in the nine months
ended September 30, 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 HN 1561. 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 for the nine months ended September 30, 2006 decreased
$17.3 million, or 13.0%, to $116.7 million in the quarter ended September
30, 2006, from $134.0 million in the quarter ended September 30, 2005.
Dividend Payment
We intend to pay quarterly dividends of $0.44 per share, or $1.76 per
share, per year. We expect to pay our first dividend in February 2007.
Recent News
On October 5, 2006, Danaos successfully priced its initial public offering
of 10,250,000 shares of common stock at $21.00 per share representing the
mid point of the filing range and raising approximately $198.2 million net
of underwriting discounts and commissions and the estimated offering
expenses. Merrill Lynch & Co. and Citigroup Corporate and Investment
Banking served as joint book-running managers of the offering. Dahlman Rose
& Company, Jefferies & Company, Fortis Securities LLC and Nomura
International served as co-managers.
On October 18, 2006, the company paid down debt of $100 million under its
credit facility with The Royal Bank of Scotland and on October 31, 2006,
the company paid down debt of $100 million under its credit facility with
Aegean Baltic Bank/HSH Nordbank in compliance to the disclosure in its
prospectus about the use of the proceeds from its initial public offering.
Conference Call and Webcast
On Wednesday, November 8, 2006 at 11:00 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 U.S.). Please quote
"Danaos".
In case of any problem 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 November
16, 2006 by dialing 1866 247 4222 (from the US), 0800 953 1533 (from the
UK) or +44 1452 550 000 (from outside the US). Access Code: 1186615#
Audio webcast:
There will also be a live-and then archived webcast of the conference call
through the Danaos website (www.danaos.com). Participants to the live
webcast should register on the website approximately 10 minutes prior to
the start of the webcast.
About Danaos Corporation
Danaos Corporation is an international owner of containerships, chartering
its vessels to many of the world's largest liner companies. Its current
fleet of 27 containerships aggregating 116,115 TEUs ranks Danaos among the
largest containership charter owners in the world based on total TEU
capacity. Danaos is the largest U.S.-listed containership company based on
fleet size and market capitalization. Furthermore, the company has
contracted for 16 additional containerships aggregating 84,704 with
scheduled deliveries up to the end of 2009. The company's shares trade on
the New York Stock Exchange under the symbol "DAC".
Forward-Looking Statement
Matters discussed in this release may constitute forward-looking statements
within the meaning of the safeharbor provisions of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements reflect our current views with respect to
future events and financial performance and may include statements
concerning plans, objectives, goals, strategies, future events or
performance, and underlying assumptions and other statements, which are
other than statements of historical facts. The forward-looking statements
in this release are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without limitation,
management's examination of historical operating trends, data contained in
our records and other data available from third parties. Although Danaos
Corporation believes that these assumptions were reasonable when made,
because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to
predict and are beyond our control, Danaos Corporation cannot assure you
that it will achieve or accomplish these expectations, beliefs or
projections. Important factors that, in our view, could cause actual
results to differ materially from those discussed in the forward-looking
statements include the strength of world economies and currencies, general
market conditions, including changes in 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.
Visit our website at www.danaos.com
(1) EBITDA is a NON-GAAP financial measure. Please see below for the
reconciliation of EBITDA to Net Income.
Appendix
Fleet Utilization
Danaos had 49 off-hire days due to scheduled dry-docking & special survey
operations and 2 unscheduled off-hire days in the third quarter. The
following tables summarize vessel utilization and the impact of the
off-hire days relating to the last three quarters including this quarter.
First Second Third
Quarter Quarter Quarter
2006 2006 2006 YTD 2006
--------- --------- --------- ---------
No. of No. of No. of No. of
Vessel utilization Days Days Days Days
--------- --------- --------- ---------
Ownership days 2,889 2,953 2,967 8,809
Less Off-hire Days:
Scheduled Dry-docking (74) (49) (123)
Other Off-hire Days (2) (1) (2) (5)
Operating Days 2,813 2,953 2,915 8,681
--------- --------- --------- ---------
Vessel Utilization 97.4% 100.0% 98.2% 98.5%
First Second Third
Quarter Quarter Quarter
2006 2006 2006 YTD 2006
Revenue - Impact of Off-hire --------- --------- --------- ---------
(in '000s of US dollars) Revenue Revenue Revenue Revenue
--------- --------- --------- ---------
100% fleet utilization $ 56,416 $ 60,034 $ 62,940 $ 179,390
Less Off-hire:
Scheduled Dry-docking (1,821) (1,066) (2,886)
Other Off- hire Days (59) (35) (48) (143)
--------- --------- --------- ---------
Actual Revenue Earned $ 54,536 $ 59,999 $ 61,826 $ 176,361
Fleet List
The following table describes in detail our fleet deployment and current
employment profile as of November 3, 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 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 England 5,506 2001 6 years February 2007 APL-NOL
APL Holland 5,506 2001 6 years July 2007 APL-NOL
APL Scotland 5,506 2001 6 years June 2007 APL-NOL
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 February 2007 COSCO
YM Yantian 3,908 1989 8 years September 2011 Yang Ming
YM Milano 3,129 1988 3 years January 2007 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)
Dimitris C 43,814 1994 6 months January 2007 OBC London
Roberto C 45,210 1994 6 months March 2007 STX Panocean
Maria C 45,205 1994 6 months February 2007 KLC
MV Achilleas 69,180 1994 1 year April 2007 Baumarine (pool)
Alexandra I 69,090 1994 2 years January 2006 Baumarine (pool)
Fivos 69,659 1994 1 year January 2006 Cargill
(1) Earliest date charters could expire. Most charters include options to
extend their term.
(2) As noted we have agreed to sell each of the dry bulk carriers to a
single purchaser upon expiration of the current charter for each
vessel. Under the leading "Expiration of Charter" we include the
expected month of delivery of each 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
acquisition, as of November 3, 2006.
Expiration
Vessel Expected Time of
Size Delivery Charter Charter
Vessel Name (TEU) Date(1) Term (1) Charterer
----------- -------- ---------- -------- ------ --------------
Newbuildings
HN 1561 9,580 Nov. 2006 12 years 2018 China Shipping
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
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 1561-January 31, 2007; HN 1639-September 30, 2007;
HN 1640-November 30, 2007; HN 1670-July 31, 2008; HN 1671-September 30,
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
Interim Statement of Operations
(Unaudited)
(Expressed in thousands of United States dollars, except per share amounts)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 2006 30, 2005 30, 2006 30, 2005
--------- --------- --------- ---------
Operating Revenues $ 61,826 $ 60,335 $ 176,361 $ 184,733
Operating Expenses:
Vessel operating expenses (15,132) (14,559) (44,538) (38,982)
Depreciation & amortization (9,179) (7,933) (25,884) (23,095)
General & administrative (1,762) (1,410) (5,264) (3,492)
Gain on sale of vessels - - 14,954 -
Other operating expenses (1,830) (1,874) (5,388) (5,412)
--------- --------- --------- ---------
Income from Operations 33,923 34,559 110,241 113,752
--------- --------- --------- ---------
Other earnings (expenses):
Interest income 449 1,902 2,536 5,221
Interest expense (7,957) (6,430) (22,798) (16,549)
Other finance income (cost),
net (98) (892) 2,395 (5,249)
Other income (expense) 95 (116) (15,251) (100)
Gain (loss) on derivatives (272) (1,960) (6,603) 2,541
--------- --------- --------- ---------
(7,783) (7,496) (39,721) (14,136)
--------- --------- --------- ---------
Net Income $ 26,140 $ 27,063 $ 70,520 $ 99,616
========= ========= ========= =========
Earnings per share, basic and
diluted $ 0.59 $ 0.61 $ 1.59 $ 2.25
========= ========= ========= =========
Basic and diluted weighted
average number of shares in
'000 44,308 44,308 44,308 44,308
DANAOS CORPORATION
Interim Balance Sheets
(Unaudited)
(Expressed in thousands of United States dollars)
September December 31,
30, 2006 2005
----------- ------------
Assets
Current Assets:
Cash and cash equivalents $ 32,750 $ 38,000
Restricted cash 18,765 724
Accounts receivable 1,783 14,107
Other current assets 15,452 11,181
----------- ------------
68,750 64,012
Non-Current Assets:
Vessels 800,628 654,222
Advances for vessel acquisitions and vessels
under construction 279,759 173,725
Deferred charges, net 12,117 7,758
Fair value of financial instruments - 1,422
Other assets - 44,619
----------- ------------
1,092,504 881,746
----------- ------------
Total Assets $ 1,161,254 $ 945,758
=========== ============
Liabilities and Stockholders' Equity
Current Liabilities:
Long term debt, current portion $ 161,194 $ 57,521
Accounts payable, accrued liabilities & other
current liabilities 39,558 12,963
----------- ------------
200,752 70,484
Long-Term Liabilities:
Long term debt 579,872 609,217
Fair value of financial instruments 7,952 3,332
Other liabilities 39,526 -
----------- ------------
627,350 612,549
Stockholders' Equity
Common Stock 443 443
Additional paid-in capital 90,529 90,529
Other comprehensive income (93) -
Retained earnings 242,273 171,753
----------- ------------
333,152 262,725
----------- ------------
Total Liabilities and Stockholders' Equity $ 1,161,254 $ 945,758
=========== ============
DANAOS CORPORATION
Interim Statement of Cash Flows
(Unaudited)
(Expressed in thousands of United States dollars)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 2006 30, 2005 30, 2006 30, 2005
---------- ---------- ---------- ----------
Cash provided by (used in):
Operating Activities:
Net earnings $ 26,140 $ 27,063 $ 70,520 $ 99,616
Items not involving cash:
Depreciation 7,809 6,795 22,023 20,327
Amortization of deferred
charges 1,370 1,138 3,861 2,768
Change in fair value of
financial instruments 46 2,164 6,042 (1,747)
Loss (gain) on sale of
vessels - - (14,954) -
Other comprehensive income (93) - (93) -
Other non-cash items (2,926) (1,432) (6,522) (4,388)
Change in non-cash working
capital:
Accounts receivable 43 658 (2,647) 4,053
Other current assets (2,107) 4,933 (4,271) 9,589
Accounts payable and
accrued liabilities 21,135 1,049 23,250 (1,878)
Other current
liabilities 1,315 2,987 28,455 1,118
---------- ---------- ---------- ----------
Cash from operating
activities 52,732 45,355 125,664 129,458
---------- ---------- ---------- ----------
Investing Activities:
Vessel acquisitions
including advances (63) - (40,647) (12,350)
Vessels under construction (127,299) (14,017) (166,182) (14,038)
Proceeds from sale of
vessels - - 26,798 -
---------- ---------- ---------- ----------
Cash used in investing
activities (127,362) (14,017) (180,031) (26,388)
---------- ---------- ---------- ----------
Financing Activities:
Debt draw downs 107,704 - 138,079 400,000
Debt repayment (12,767) (8,376) (69,223) (319,313)
Dividends on common shares - (158,160) - (244,593)
Deferred costs (420) - (1,698) (791)
Decrease (increase) in
restricted cash (18,753) 4,284 (18,041) 5,741
---------- ---------- ---------- ----------
Cash from financing
activities 75,764 (162,252) 49,117 (158,956)
---------- ---------- ---------- ----------
Net change in cash and cash
equivalents 1,134 (130,914) (5,250) (55,886)
Cash and cash equivalents,
at beginning 31,616 172,036 38,000 97,008
---------- ---------- ---------- ----------
Cash and cash equivalents,
end of period $ 32,750 $ 41,122 $ 32,750 $ 41,122
========== ========== ========== ==========
Cash paid for interest 7,319 5,676 22,401 17,044
Non-cash capitalized
interest on vessels under
construction 1,905 1,429 5,472 3,738
Non-cash lease liability
related to vessel
acquisition - - 14,416 -
DANAOS CORPORATION
Reconciliation of Non-GAAP Financial Measures
(Expressed in thousands of United States dollars)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 2006 30, 2005 30, 2006 30, 2005
--------- --------- --------- ---------
Net Income $ 26,140 $ 27,063 $ 70,520 $ 99,616
Depreciation 7,809 6,795 22,023 20,327
Amortization of deferred
charges 1,370 1,138 3,861 2,768
Interest income (449) (1,902) (2,536) (5,221)
Interest expense 7,957 6,430 22,798 16,549
--------- --------- --------- ---------
EBITDA(1) $ 42,827 $ 39,524 $ 116,666 $ 134,039
========= ========= ========= =========
(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