-- Net earnings of $16.4 million or $0.30 per share and $52.3 million or
$0.96 per share for the quarter and the nine months ended September 30,
2009, respectively.
-- Operating revenues of $79.8 million and $234.2 million for the quarter
and the nine months ended September 30, 2009, respectively.
-- EBITDA of $51.2 million and $146.9 million for the quarter and the
nine months ended September 30, 2009, respectively.
Danaos' CEO Dr. John Coustas commented:
We are happy to announce the third quarter results of 2009. Our net income
was $16.4 million, or $0.30 per share while at the same time we managed to
increase our fleet by adding one more newly built 6,500 TEU vessel, which
immediately commenced its 12 year charter as planned.
On the operating cost side, we have once more managed to prove very
effective. We reduced our average daily operating cost per vessel by 5.8%
compared to that in the third quarter of 2008.
On the broader market front, we are getting signals of a visible recovery
based on volumes traded, while some routes have reached capacity. However,
the liner companies are still operating in the red, which has negatively
affected the whole industry.
In this third quarter, we also engaged in a new round of negotiations with
our shipyards. These negotiations are still in progress and aim to actively
manage our cash flows from investing activities both for the rest of this
year and the years that follow in order to defer capital expenditure
requirements and ultimately allow for the arrangement of additional funding
in a market that has given signs of gradual, albeit slow, recovery.
Among our efforts on the financing front, we are also considering to raise
more capital in the form of additional equity and other forms of hybrid
funding. Our strategy in this area, deal size and its potential structure,
as well as the type of instruments we may utilize, are all closely linked
to restructuring of the payment schedules for those newbuilding orders,
which are still unfinanced.
Finally, last week we agreed with Zim the revisions to charterparties we
have in place for six of our vessels in operation, which reflect
significantly improved terms compared to the initial unilateral imposed
reductions in payments and the revisions keep the original charter terms in
place with deferred, interest bearing payment terms.
In closing, would like to once again stress our commitment as management
and controlling shareholders to doing everything necessary to achieve our
corporate goals and safeguard our investments and their returns in the near
and long term horizon in the most challenging time in our industry's
history.
Three months ended September 30, 2009 compared to the three months ended
September 30, 2008
During the quarter ended September 30, 2009, Danaos had an average of 41.0
containerships compared to 38.1 containerships for the same period of 2008.
During the third quarter of 2009, we took delivery of one new vessel, the
CMA CGM Moliere. Our fleet utilization was 99.0% in the third quarter of
2009.
Our net income was $16.4 million, or $0.30 per share for the three months
ended September 30, 2009 compared to $28.0 million, or $0.51 per share for
the three months ended September 30, 2008, which represents a decrease of
41.4%, or $11.6 million compared to the three months ended September 30,
2008. This decrease is mainly attributable to increased realized losses on
our interest rate swap contracts recorded in our Income Statement
(representing net interest expense on our interest rate swap hedges) during
the three months ended September 30, 2009 compared to the same period of
2008, as well as, increased interest expense on our credit facilities
resulting from the increased average indebtedness in 2009 and increased
margins over LIBOR on which our indebtedness is subject to, following our
agreements with our lenders to temporarily waive certain covenant breaches
as of December 31, 2008 and June 30, 2009, and up until October 1, 2010.
Furthermore, in September, Zim Integrated Shipping Services Ltd. reduced,
unilaterally, all of its long-term charterhire payments to ship-owners by
35% commencing September 1, 2009. As a result, we did not recognize $1.4
million of revenue in the third quarter of 2009. Last week, we agreed with
Zim the revisions to charterparties we have in place for six of our vessels
in operation, which reflect significantly improved terms compared to the
initial unilateral imposed reductions in payments and the revisions keep
the original charter terms in place with deferred, interest bearing payment
terms. Zim is not a charterer of any of our newbuilding containerships.
Operating Revenue
Operating revenue increased 4.5%, or $3.4 million, to $79.8 million in the
three months ended September 30, 2009, from $76.4 million in the three
months ended September 30, 2008. The increase was primarily attributable to
the addition of five vessels to our fleet, as follows:
Vessel Name Vessel Size (TEU) Date Delivered
------------------ ------------------
Zim Kingston 4,253 November 3, 2008
Zim Monaco 4,253 January 2, 2009
Zim Dalian 4,253 March 31, 2009
Zim Luanda 4,253 June 26, 2009
CMA CGM Moliere 6,500 September 28, 2009
These additions to our fleet contributed revenues of $7.4 million during
the three months ended September 30, 2009. These revenues were offset in
part by the sale of two 3,101 TEU containerships, the Asia Express and the
Sederberg, on October 26, 2008 and December 10, 2008, respectively, that
contributed revenues of $2.8 million for the three months ended September
30, 2008 compared to no revenues in the three months ended September 30,
2009. Moreover, two 2,200 TEU containerships, the Zim Rio Grande and the
Zim Sao Paolo, which were added to our fleet on July 4, 2008 and September
22, 2008 contributed incremental revenues of $1.6 million during the three
months ended September 30, 2009 compared to the same period of 2008.
We also had a further decrease in revenues of $2.8 million during the three
months ended September 30, 2009, mainly attributable to the re-chartering
of two of our vessels at reduced charter rates.
Vessel Operating Expenses
Vessel operating expenses increased 1.3%, or $0.3 million, to $23.1 million
in the three months ended September 30, 2009, from $22.8 million in the
three months ended September 30, 2008. The increase was due to the increase
in the average number of vessels in our fleet during the three months ended
September 30, 2009 compared to the same period of 2008.
This overall increase was offset in part by the lower average daily
operating cost per vessel of $6,122 for the three months ended September
30, 2009 compared to $6,502 for the three months ended September 30, 2008.
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of
Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense increased 19.2%, or $2.5 million, to $15.5 million in
the three months ended September 30, 2009, from $13.0 million in the three
months ended September 30, 2008. The increase in depreciation expense was
due to the increased average number of vessels in our fleet during the
three months ended September 30, 2009 compared to the same period of 2008.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased
10.0%, or $0.2 million, to $2.2 million in the three months ended September
30, 2009, from $2.0 million in the three months ended September 30, 2008.
The increase reflects higher drydocking costs incurred, which were subject
to amortization during the three months ended September 30, 2009 as
compared to the same period of 2008.
General and Administrative Expenses
General and administrative expenses increased 35.7%, or $1.0 million, to
$3.8 million in the three months ended September 30, 2009, from $2.8
million in the same period of 2008. The increase was mainly the result of
increased fees of $0.4 million paid to our Manager in the third quarter of
2009 compared to the same period of 2008, due to the increase in the
average number of our vessels in our fleet and an increase in the fees paid
to our Manager since January 1, 2009. Furthermore, various other general
and administrative expenses, were increased by $0.6 million in the third
quarter of 2009 compared to the same period of 2008.
Other Operating Expenses
Other Operating Expenses includes Voyage Expenses
Voyage Expenses
Voyage expenses decreased 11.1%, or $0.2 million, to $1.6 million in the
three months ended September 30, 2009, from $1.8 million in the three
months ended September 30, 2008.
Interest Expense and Interest Income
Interest expense increased by 10.7%, or $0.9 million, to $9.3 million in
the three months ended September 30, 2009, from $8.4 million in the three
months ended September 30, 2008. The change in interest expense was due to
the increase in our average debt by $421.4 million to $2,277.7 million in
the quarter ended September 30, 2009, from $1,856.3 million in the quarter
ended September 30, 2008, as well as the increased margins over LIBOR on
which our indebtedness is subject to, following our agreements with our
lenders to waive certain covenant breaches through October 1, 2010. The
financing of our extensive newbuilding program resulted in interest
capitalization, rather than such interest being recognized as an expense,
of $8.5 million for the three months ended September 30, 2009 compared to
$8.6 million of capitalized interest for the three months ended September
30, 2008. The weighted average interest rate margin over LIBOR payable
under our credit facilities has increased by approximately 1.5% per annum,
following our agreements with our lenders to waive certain covenant
breaches as of December 31, 2008 and June 30, 2009, and up until October 1,
2010.
Interest income decreased by $1.5 million, to $0.4 million in the three
months ended September 30, 2009, from $1.9 million in the three months
ended September 30, 2008. The decrease in interest income is attributable
to lower interest rates to which our cash balances were subject during the
three months ended September 30, 2009 compared to the three months ended
September 30, 2008, partially offset by higher average cash balances.
Other income/(expenses), net
Other income/(expenses), net, decreased by $0.7 million, to a gain of $0.1
million in the three months ended September 30, 2009, from a gain of $0.8
million in the same period of 2008. The decrease is mainly attributable to
a gain of $0.5 million related to the early termination of forward
contracts during the three months ended September 30, 2008.
Other finance costs, net
Other finance cost, net, decreased by $0.1 million, to $0.3 million in the
three months ended September 30, 2009, from $0.4 million in the same period
of 2008.
(Loss)/gain on fair value of derivatives
(Loss)/gain on fair value of derivatives, increased by $8.1 million, to an
expense of $8.2 million in the three months ended September 30, 2009, from
an expense of $0.1 million in the same period of 2008. The increase is
mainly attributable to realized losses on interest rate swap hedges of $8.5
million recorded in our Income Statement during the three months ended
September 30, 2009 compared to $1.6 million in the three months ended
September 30, 2008 (representing net interest expense on our interest rate
swap hedges following our hedging strategy). In addition, realized losses
on cash flow hedges of $10.3 million and $4.0 million in the three months
ended September 30, 2009 and 2008, respectively, were deferred in
"Accumulated Other Comprehensive Loss," rather than such realized losses
being recognized as an expense, and will be reclassified into earnings over
the depreciable life of these vessels under construction, which are
financed by loans for which their interest rate has been hedged by our
interest rate swap contracts.
EBITDA
EBITDA increased by $1.6 million, or 3.2%, to $51.2 million in the three
months ended September 30, 2009, from $49.6 million in the three months
ended September 30, 2008. A table reconciling EBITDA to net income can be
found at the end of this earnings release.
Nine months ended September 30, 2009 compared to the nine months ended
September 30, 2008
During the nine months ended September 30, 2009, Danaos had an average of
40.0 containerships as compared to 37.3 containerships for the same period
of 2008. During the first nine months of 2009, we took delivery of four
vessels, the Zim Monaco on January 2, 2009, the Zim Dalian on March 31,
2009, the Zim Luanda on June 26, 2009 and the CMA CGM Moliere on September
28, 2009.
Our net income on a comparable basis from continuing operations was $52.3
million or $0.96 per share for the nine months ended September 30, 2009
compared to $78.3 million or $1.44 per share for the respective period of
2008, excluding a gain on sale of vessels of $14.9 million recorded during
the nine months of 2008. This represents a decrease of 33.2%, or $26.0
million, which is mainly attributable to increased realized losses on our
interest rate swaps (representing net interest expense on our interest rate
swap hedges) in the nine months ended September 30, 2009 compared to the
same period of 2008, as well as, increased interest expense due to higher
average indebtedness in 2009 and increased margins over LIBOR on which our
indebtedness is subject to, following our agreements with our lenders to
waive certain covenant breaches as of December 31, 2008 and June 30, 2009.
Our net income on a reported basis from continuing operations was $52.3
million or $0.96 per share for the nine months ended September 30, 2009
compared to $93.2 million or $1.71 per share for the nine months ended
September 30, 2008.
Operating Revenue
Operating revenue increased 6.4%, or $14.0 million, to $234.2 million in
the nine months ended September 30, 2009, from $220.2 million in the nine
months ended September 30, 2008. The increase was primarily attributed to
the addition to our fleet of five vessels, as follows:
Vessel Name Vessel Size (TEU) Date Delivered
------------------ ------------------
Zim Kingston 4,253 November 3, 2008
Zim Monaco 4,253 January 2, 2009
Zim Dalian 4,253 March 31, 2009
Zim Luanda 4,253 June 26, 2009
CMA CGM Moliere 6,500 September 28, 2009
These additions to our fleet contributed revenues of $17.8 million during
the nine months ended September 30, 2009. Moreover, three 2,200 TEU
containerships, the Hyundai Progress, the Hyundai Highway and the Hyundai
Bridge, as well as, two 4,253 TEU containerships, the Zim Rio Grande and
the Zim Sao Paolo, which were added to our fleet on February 11, 2008,
March 18, 2008 and March 20, 2008, July 4, 2008 and September 22, 2008,
contributed incremental revenues of $13.0 million during the nine months
ended September 30, 2009 compared to the same period in 2008.
In addition, the Company sold five vessels as follows:
Vessel Name Vessel Size (TEU) Date Sold
----------------- -----------------
APL Belgium 5,506 January 15, 2008
Winterberg 3,101 January 25, 2008
Maersk Constantia 3,101 May 20, 2008
Asia Express 3,101 October 26, 2008
Sederberg 3,101 December 10, 2008
These sales contributed operating revenues of $10.4 million during the nine
months ended September 30, 2008 compared to no revenues in the nine months
ended September 30, 2009. The balance of $6.4 million is attributable to
revenue lost due to off-hire days, as well as,
re-chartering of two of our vessels at reduced charter rates.
Vessel Operating Expenses
Vessel operating expenses increased 6.0%, or $3.9 million, to $69.0 million
in the nine months ended September 30, 2009, from $65.1 million in the nine
months ended September 30, 2008. The increase was due to the increase in
the average number of our vessels in our fleet during the nine months ended
September 30, 2009 compared to the nine months ended September 30, 2008.
This overall increase was offset in part by the lower average daily
operating cost per vessel of $6,312 for the nine months ended September 30,
2009 compared to $6,503 for the nine months ended September 30, 2008.
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of
Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense increased 20.2%, or $7.5 million, to $44.7 million in
the nine months ended September 30, 2009, from $37.2 million in the nine
months ended September 30, 2008. The increase in depreciation expense was
due to the increased average number of vessels in our fleet during the nine
months ended September 30, 2009, compared to the same period of 2008.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased
17.0%, or $0.9 million, to $6.2 million in the nine months ended September
30, 2009, from $5.3 million in the nine months ended September 30, 2008.
The increase reflects higher drydocking costs incurred, which were subject
to amortization during the nine months ended September 30, 2009 compared to
the same period of 2008.
General and Administrative Expenses
General and administrative expenses increased 20.9%, or $1.8 million, to
$10.4 million in the nine months ended September 30, 2009, from $8.6
million in the same period of 2008. The increase was mainly a result of
increased fees paid to our Manager in the nine months ended September 30,
2009 compared to the same period of 2008 due to the increase in the average
number of our vessels in our fleet and an increase of the fees paid to our
manager since January 1, 2009.
Other Operating Expenses
Other Operating Expenses includes Voyage Expenses
Voyage Expenses
Voyage expenses decreased 8.5%, or $0.5 million, to $5.4 million in the
nine months ended September 30, 2009, from $5.9 million for the nine months
ended September 30, 2008.
Interest Expense and Interest Income
Interest expense increased 16.5%, or $3.8 million, to $26.9 million in the
nine months ended September 30, 2009, from $23.1 million in the nine months
ended September 30, 2008. The change in interest expense was due to the
increase in our average debt by $594.8 million to $2,198.0 million in the
nine months ended September 30, 2009 from $1,603.2 million in the nine
months ended September 30, 2008, as well as, the increased margins over
LIBOR on which our indebtedness is subject to, following our agreements
with our lenders to waive certain covenant breaches as of December 31, 2008
and June 30, 2009. The financing of our extensive new-building program
resulted in interest capitalization, rather than such interest being
recognized as an expense, of $25.2 million for the nine months ended
September 30, 2009 compared to $26.7 million of capitalized interest for
the nine months ended September 30, 2008.
Interest income decreased by $1.8 million, to $2.1 million in the nine
months ended September 30, 2009, from $3.9 million in the nine months ended
September 30, 2008. The decrease in interest income is mainly attributed to
lower interest rates on which our cash balances were subject to, partially
offset by higher average bank deposits during the nine months ended
September 30, 2009 compared to the nine months ended September 30, 2008.
Other income/(expenses), net
Other income/(expenses), net, decreased by $1.6 million, to an expense of
$0.9 million in the nine months ended September 30, 2009, from a gain of
$0.7 million in the same period of 2008. The decrease is mainly
attributable to foreign currency revaluations of $1.4 million recorded
during the nine months ended September 30, 2009.
Other finance costs, net
Other finance cost, net, decreased by $0.1 million, to $1.5 million in the
nine months ended September 30, 2009, from $1.6 million in the same period
of 2008.
(Loss)/gain on fair value of derivatives
(Loss)/gain on fair value of derivatives, decreased by $19.6 million, to an
expense of $19.0 million in the nine months ended September 30, 2009, from
a gain of $0.6 million in the same period of 2008. The increase is mainly
attributable to realized losses on interest rate swap hedges of $20.4
million recorded in our Income Statement during the nine months ended
September 30, 2009 compared to $2.0 million in the nine months ended
September 30, 2008 (representing net interest expense on our interest rate
swap hedges following our hedging strategy). In addition, realized losses
on cash flow hedges of $25.1 million and $8.7 million in the nine months
ended September 30, 2009 and 2008, respectively, were deferred in
"Accumulated Other Comprehensive Loss," rather than such realized losses
being recognized as an expense, and will be reclassified into earnings over
the depreciable life of these vessels under construction, which are
financed by loans for which their interest rate has been hedged by our
interest rate swap contracts.
EBITDA
EBITDA on a comparable basis from continuing operations increased by
$7.5 million, or 5.4%, to $146.9 million in the nine months ended September
30, 2009, from $139.4 million in the nine months ended September 30, 2008,
excluding a gain on sale of vessels of $14.9 million recorded during the
first nine months of 2008. EBITDA on a reported basis from continuing
operations decreased by $7.5 million, or 4.9%, to $146.9 million in the
nine months ended September 30, 2009, from $154.4 million in the nine
months ended September 30, 2008. A table reconciling EBITDA to net income
can be found at the end of this earnings release.
Fair value of financial instruments
As of December 31, 2008, the low prevailing interest rates led to
significant declines in the fair value of our interest rate swaps accounted
for such cash flow hedges. As of September 30, 2009, prevailing interest
rates increased from such historical low levels resulting in an unrealized
gain of $114.3 million, which was recorded in "Accumulated Other
Comprehensive Loss" and increased our "Total Shareholders' Equity."
Conference Call and Webcast
On Thursday, November 12, 2009 at 9:30 A.M. EST, the Company's management
will host a conference call to discuss the results. Participants should
dial into the call 10 minutes before the scheduled time using the following
numbers: 1 866 819 7111 (US Toll Free Dial In), 0800 953 0329 (UK Toll Free
Dial In) or +44 (0)1452 542 301 (Standard International Dial In). Please
quote "Danaos" to the operator.
A telephonic replay of the conference call will be available until November
19, 2009 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#. 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. Our current
fleet of 42 containerships aggregating 172,433 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. Furthermore, the company has a contracted fleet of 27
additional containerships aggregating 211,450 TEU with scheduled deliveries
up to the second quarter of 2012. The company's shares trade on the New
York Stock Exchange under the symbol "DAC."
Forward-Looking Statements
Matters discussed in this release may constitute forward-looking statements
within the meaning of the safeharbor provisions of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements reflect our current views with respect to
future events and financial performance and may include statements
concerning plans, objectives, goals, strategies, future events or
performance, and underlying assumptions and other statements, which are
other than statements of historical facts. The forward-looking statements
in this release are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without limitation,
management's examination of historical operating trends, data contained in
our records and other data available from third parties. Although Danaos
Corporation believes that these assumptions were reasonable when made,
because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to
predict and are beyond our control, Danaos Corporation cannot assure you
that it will achieve or accomplish these expectations, beliefs or
projections. Important factors that, in our view, could cause actual
results to differ materially from those discussed in the forward-looking
statements include the strength of world economies and currencies, general
market conditions, including changes in charter hire rates and vessel
values, charter counterparty performance, shipyard performance, changes in
demand that may affect attitudes of time charterers to scheduled and
unscheduled drydocking, changes in Danaos Corporation's operating expenses,
including bunker prices, dry-docking and insurance costs, ability to obtain
financing and comply with covenants in our financing arrangements, actions
taken by regulatory authorities, potential liability from pending or future
litigation, domestic and international political conditions, potential
disruption of shipping routes due to accidents and political events or acts
by terrorists.
Risks and uncertainties are further described in reports filed by Danaos
Corporation with the U.S. Securities and Exchange Commission.
Visit our website at www.danaos.com
Appendix Fleet Utilization Danaos had 37 off-hire days in total in the third quarter of 2009. 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 Fourth First Second Third
(No. of Days) Quarter Quarter Quarter Quarter
2008 2009 2009 2009 Total
-------- -------- -------- -------- --------
Ownership Days 3,560 3,510 3,645 3,775 14,490
Less Off-hire Days:
Scheduled Off-hire Days (29) (125) (27) (29) (210)
Other Off-hire Days (23) (4) (4) (8) (39)
-------- -------- -------- -------- --------
Operating Days 3,508 3,381 3,614 3,738 14,241
======== ======== ======== ======== ========
Vessel Utilization 98.5% 96.3% 99.1% 99.0% 98.3%
Revenue - Impact Fourth First Second Third
of Off-hire Quarter Quarter Quarter Quarter
(in '000s of US Dollars) 2008 2009 2009 2009 Total
-------- -------- -------- -------- --------
100% Fleet Utilization $ 79,866 $ 77,931 $ 79,229 $ 80,694 $317,720
Less Off-hire Days:
Scheduled Off-hire Days (563) (2,512) (6) (721) (3,802)
Other Off-hire Days (600) (167) (95) (181) (1,043)
-------- -------- -------- -------- --------
Actual Revenue Earned $ 78,703 $ 75,252 $ 79,128 $ 79,792 $312,875
======== ======== ======== ======== ========
Fleet List The following table describes in detail our fleet deployment profile as of November 11, 2009.
Vessel Name Vessel Size Expiration of
(TEU) Year Built Charter(1)
-------------- ---------- --------------
Containerships
CSCL Le Havre 9,580 2006 September 2018
CSCL Pusan 9,580 2006 July 2018
CSCL America(2) 8,468 2004 September 2016
CSCL Europe 8,468 2004 June 2016
CMA CGM Moliere(3) 6,500 2009 August 2021
MSC Marathon (4) 4,814 1991 September 2011
Maersk Messologi 4,814 1991 September 2011
Maersk Mytilini 4,814 1991 September 2011
Hyundai Commodore (5) 4,651 1992 March 2011
Hyundai Duke 4,651 1992 February 2011
Hyundai Federal (6) 4,651 1994 September 2012
YM Colombo 4,300 2004 March 2019
YM Singapore 4,300 2004 October 2019
YM Seattle 4,253 2007 July 2019
YM Vancouver 4,253 2007 September 2019
Bunga Raya Tiga (7) 4,253 2004 March 2010
Bunga Raya Tujuh (8) 4,253 2004 February 2011
ZIM Rio Grande 4,253 2008 May 2020
ZIM Sao Paolo 4,253 2008 August 2020
ZIM Kingston 4,253 2008 September 2020
ZIM Monaco 4,253 2009 November 2020
ZIM Dalian 4,253 2009 February 2021
ZIM Luanda 4,253 2009 May 2021
Al Rayyan 3,908 1989 January 2011
YM Yantian 3,908 1989 July 2011
YM Milano 3,129 1988 May 2011
CMA CGM Lotus 3,098 1988 July 2010
CMA CGM Vanille 3,045 1986 July 2010
CMA CGM Passiflore 3,039 1986 May 2010
CMA CGM Elbe 2,917 1991 June 2010
CMA CGM Kalamata 2,917 1991 June 2010
CMA CGM Komodo 2,917 1991 June 2010
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 (9) 2,130 1984 May 2010
MSC Eagle 1,704 1978 January 2010
(1) Earliest date charters could expire. Some charters include options to
extend their term.
(2) On August 21, 2009, the MSC Baltic was renamed to CSCL America at the
request of the charterer of this vessel.
(3) Vessel subject to charterer's option to purchase vessel after first
eight years of time charter term for $78.0 million.
(4) On August 22, 2008, the Maersk Marathon was renamed to MSC Marathon at
the request of the charterer of this vessel.
(5) On April 2, 2009, the MOL Affinity was renamed to Hyundai Commodore at
the request of the charterer of this vessel.
(6) On May 12, 2009, the APL Confidence was renamed to Hyundai Federal at
the request of the charterer of this vessel.
(7) On April 29, 2009, the Derby was renamed to Bunga Raya Tiga at the
request of the charterer of this vessel.
(8) On October 12, 2009, the Maersk Deva was renamed to Bunga Raya Tujuh
at the request of the charterer of this vessel.
(9) 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 Expected Time Charter
(TEU) Delivery(2) Term
------------ ---------------- ------------
HNS4002(1) (2) 6,500 4th Quarter 2009 12 years
HNS4003(1) (2) 6,500 4th Quarter 2009 12 years
HN N-219(2) 3,400 4th Quarter 2009 10 years
HNS4004(1) (2) 6,500 1st Quarter 2010 12 years
HNS4005(1) (2) 6,500 1st Quarter 2010 12 years
HN N-214(2) 6,500 1st Quarter 2010 18 years
HN N-215(2) 6,500 1st Quarter 2010 18 years
HN N-220(2) 3,400 2nd Quarter 2010 10 years
HN N-216(2) 6,500 2nd Quarter 2010 15 years
HN N-217(2) 6,500 3rd Quarter 2010 15 years
HN N-221(2) 3,400 3rd Quarter 2010 10 years
HN N-218(2) 6,500 4th Quarter 2010 15 years
HN N-222(2) 3,400 4th Quarter 2010 10 years
HN N-223(2) 3,400 4th Quarter 2010 10 years
Hull No S-461(2) 10,100 1st Quarter 2011 12 years
Hull No S-462(2) 10,100 1st Quarter 2011 12 years
HN Z00001(2) 8,530 1st Quarter 2011 12 years
Hull No S-463(2) 10,100 2nd Quarter 2011 12 years
HN Z00002(2) 8,530 2nd Quarter 2011 12 years
HN Z00003(2) 8,530 2nd Quarter 2011 12 years
HN Z00004(2) 8,530 2nd Quarter 2011 12 years
HN H 1022A(2) 8,530 3rd Quarter 2011 12 years
Hull No S-456(2) 12,600 1st Quarter 2012 12 years
Hull No S-457(2) 12,600 1st Quarter 2012 12 years
Hull No S-458(2) 12,600 2nd Quarter 2012 12 years
Hull No S-459(2) 12,600 2nd Quarter 2012 12 years
Hull No S-460(2) 12,600 2nd Quarter 2012 12 years
(1) Vessel subject to charterer's option to purchase vessel after first
eight years of time charter term for $78.0 million.
(2) Delivery date represents most recent update regarding respective event,
which in certain cases may change significantly as a result of further
negotiations with shipyards.
DANAOS CORPORATION
Statements of Income
(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, 30, 30, 30,
--------- --------- --------- ---------
2009 2008 2009 2008
--------- --------- --------- ---------
OPERATING REVENUES $ 79,792 $ 76,416 $ 234,172 $ 220,202
OPERATING EXPENSES
Vessel operating expenses (23,109) (22,771) (68,986) (65,135)
Depreciation & amortization (17,691) (14,992) (50,917) (42,484)
General & administrative (3,767) (2,781) (10,355) (8,614)
Gain on sale of vessels -- -- -- 14,928
Other operating expenses (1,562) (1,759) (5,413) (6,099)
--------- --------- --------- ---------
Income From Operations 33,663 34,113 98,501 112,798
--------- --------- --------- ---------
OTHER EARNINGS (EXPENSES)
Interest income 368 1,921 2,073 3,861
Interest expense (9,299) (8,408) (26,863) (23,106)
Other finance cost, net (318) (372) (1,535) (1,648)
Other income / (expenses),
net 123 822 (936) 740
(Loss)/gain on fair value of
derivatives (8,165) (105) (18,969) 585
--------- --------- --------- ---------
Total Other Income (Expenses),
net (17,291) (6,142) (46,230) (19,568)
--------- --------- --------- ---------
Net income from continuing
operations $ 16,372 $ 27,971 $ 52,271 $ 93,230
--------- --------- --------- ---------
Net loss from discontinued
operations -- (38) -- (1,560)
--------- --------- --------- ---------
Net Income $ 16,372 $ 27,933 $ 52,271 $ 91,670
========= ========= ========= =========
EARNINGS PER SHARE (from
continuing operations)
Basic and diluted net income
per share $ 0.30 $ 0.51 $ 0.96 $ 1.71
========= ========= ========= =========
EARNINGS PER SHARE
Basic and diluted net income
per share $ 0.30 $ 0.51 $ 0.96 $ 1.68
========= ========= ========= =========
Basic and diluted weighted
average number of common
shares (in thousands of
shares) 54,551 54,558 54,549 54,558
========= ========= ========= =========
DANAOS CORPORATION
Balance Sheets
(Expressed in thousands of United States dollars)
As of As of
September 30, December 31,
------------ ------------
2009 2008
------------ ------------
ASSETS (Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 125,373 $ 120,720
Restricted cash, current portion 144,877 104,401
Accounts receivable, net 2,695 1,119
Other current assets 19,323 23,954
------------ ------------
292,268 250,194
NON-CURRENT ASSETS
Fixed assets, net 1,589,999 1,339,645
Advances for vessels under construction 1,101,759 1,067,825
Restricted cash, net of current portion 67,041 147,141
Deferred charges, net 22,711 16,098
Fair value of financial instruments 4,542 6,691
Other non-current assets 1,090 870
------------ ------------
2,787,142 2,578,270
------------ ------------
TOTAL ASSETS 3,079,410 2,828,464
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Long-term debt, current portion 65,846 42,219
Accounts payable, accrued liabilities &
other current liabilities 46,647 31,779
Fair value of financial instruments, current
portion 85,319 48,217
------------ ------------
197,812 122,215
LONG-TERM LIABILITIES
Long-term debt, net of current portion 2,251,716 2,065,459
Fair value of financial instruments, net of
current portion 263,245 414,668
Other long-term liabilities 5,990 7,088
------------ ------------
2,520,951 2,487,215
STOCKHOLDERS' EQUITY
Common stock 546 546
Additional paid-in capital 288,605 288,615
Treasury stock (39) (88)
Accumulated other comprehensive loss (385,211) (474,514)
Retained earnings 456,746 404,475
------------ ------------
360,647 219,034
------------ ------------
Total liabilities and stockholders' equity $ 3,079,410 $ 2,828,464
============ ============
DANAOS CORPORATION
Statements 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, 30, 30, 30,
--------- --------- --------- ---------
2009 2008 2009 2008
--------- --------- --------- ---------
Operating Activities:
Net income $ 16,372 $ 27,933 $ 52,271 $ 91,670
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 15,522 13,043 44,654 37,168
Amortization of deferred
charges 2,460 2,018 6,859 5,452
Written off amount of
deferred charges -- -- 412 309
Stock based compensation 7 24 39 47
Payments for drydocking /
special survey (1,322) (2,509) (7,075) (8,765)
Change in fair value of
financial instruments (10,653) (5,483) (26,501) (12,585)
Gain on sale of vessels -- -- -- (14,928)
Accounts receivable (1,241) (227) (1,576) 1,817
Other assets, current and
non-current (29) (2,039) 4,411 (2,669)
Accounts payable and accrued
liabilities (2,472) (2,577) 5,104 4,668
Other liabilities, current
and non-current (1,421) (338) (1,749) (968)
--------- --------- --------- ---------
Net Cash provided by Operating
Activities 17,223 29,845 76,849 101,216
--------- --------- --------- ---------
Investing Activities:
Vessel acquisitions and
additions including advances (50) (45) (287) (76,525)
Vessels under construction (111,470) (151,318) (318,240) (397,188)
Proceeds from sale of vessels -- -- -- 69,103
--------- --------- --------- ---------
Net Cash used in Investing
Activities (111,520) (151,363) (318,527) (404,610)
--------- --------- --------- ---------
Financing Activities:
Debt draw downs 57,600 399,760 238,843 715,213
Debt repayment (9,217) (9,217) (25,327) (53,026)
Dividends paid -- (25,369) -- (76,108)
Deferred costs (3,138) (1,265) (6,809) (2,843)
Decrease/(increase) in
restricted cash 17,704 (277,559) 39,624 (276,842)
--------- --------- --------- ---------
Net Cash provided by Financing
Activities 62,949 86,350 246,331 306,394
--------- --------- --------- ---------
Net (Decrease)/Increase in cash
and cash equivalents (31,348) (35,168) 4,653 3,000
Cash and cash equivalents,
beginning of period 156,721 101,663 120,720 63,495
--------- --------- --------- ---------
Cash and cash equivalents, end
of period $ 125,373 $ 66,495 $ 125,373 $ 66,495
========= ========= ========= =========
Reconciliation of Net Income to EBITDA - 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, 30, 30, 30,
--------- --------- --------- ---------
2009 2008 2009 2008
--------- --------- --------- ---------
Net income $ 16,372 $ 27,971 $ 52,271 $ 93,230
Depreciation 15,522 13,043 44,654 37,168
Amortization of deferred
drydocking & special survey
costs 2,169 1,949 6,263 5,316
Interest income (368) (1,921) (2,073) (3,861)
Interest expense 9,299 8,408 26,863 23,106
Fair value of derivatives 8,165 105 18,969 (585)
--------- --------- --------- ---------
EBITDA(1) from continuing
operations $ 51,159 $ 49,555 $ 146,947 $ 154,374
EBITDA(1) from discontinued
operations -- (38) -- (1,560)
--------- --------- --------- ---------
EBITDA(1) $ 51,159 $ 49,517 $ 146,947 $ 152,814
========= ========= ========= =========
(1) EBITDA represents net income before interest income and expense,
depreciation, amortization and fair value of derivatives. 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.
Net Income and EBITDA on a comparable basis - (Continuing operations)
Unaudited
Three Three Nine Nine
months months months months
ended ended ended ended
September September September September
30, 30, 30, 30,
---------- ---------- --------- ---------
2009 2008 2009 2008
---------- ---------- --------- ---------
Net Income $ 16,372 $ 27,971 $ 52,271 $ 93,230
Gain on sale of vessels -- -- -- (14,928)
---------- ---------- ---------- ---------
Net Income on a comparable
basis $ 16,372 $ 27,971 $ 52,271 $ 78,302
========== ========== ========== =========
Earnings Per Share on a
comparable basis $ 0.30 $ 0.51 $ 0.96 $ 1.44
========== ========== ========== =========
EBITDA (1) $ 51,159 $ 49,555 $ 146,947 $ 154,374
Gain on sale of vessels -- -- -- (14,928)
---------- ---------- ---------- ---------
EBITDA on a comparable basis $ 51,159 $ 49,555 $ 146,947 $ 139,446
========== ========== ========== =========
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
Tables above for supplemental financial data and corresponding
reconciliations to GAAP financial measures for the three and the nine
months ended September 30, 2009 and 2008. Non-GAAP financial measures
should be viewed in addition to, and not as an alternative for, the
Company's reported results prepared in accordance with GAAP.
Contact Information: For further information please contact: Company Contact: Dimitri J. Andritsoyiannis Chief Financial Officer Danaos Corporation Athens, Greece Tel.: +30 210 419 6481 E-Mail: cfo@danaos.com Iraklis Prokopakis Chief Operating Officer Danaos Corporation Athens, Greece Tel.: +30 210 419 6400 E-Mail: coo@danaos.com Investor Relations and Financial Media Nicolas Bornozis President Capital Link, Inc. New York Tel. 212-661-7566 E-Mail: danaos@capitallink.com