Danaos Corporation Reports Results for the Fourth Quarter and Year Ended December 31, 2018
ATHENS, Greece, Feb. 19, 2019 /PRNewswire/ -- Danaos Corporation ("Danaos") (NYSE: DAC), one of the world's largest independent owners of containerships, today reported unaudited results for the fourth quarter and the year ended December 31, 2018.
Highlights for the Fourth Quarter and Year Ended December 31, 2018:
-- On August 10, 2018, we consummated the agreement with certain of our
lenders to refinance approximately $2.2 billion of our debt maturing on
December 31, 2018, reducing our debt by approximately $551 million,
resetting financial and other covenants, modifying interest rates and
amortization profiles and extending debt maturities by approximately
five years to December 31, 2023. In connection with this refinancing, we
issued approximately 99.3 million shares of common stock to certain of
our lenders. See "Debt Refinancing".
-- Adjusted net income(1 )of $36.6 million, or $0.18 per share, for the
three months ended December 31, 2018 compared to $31.2 million, or $0.28
per share, for the three months ended December 31, 2017, an increase of
17.3%. Adjusted net income(1) of $131.2 million, or $0.88 per share, for
the year ended December 31, 2018 compared to $114.9 million, or $1.05
per share, for the year ended December 31, 2017, an increase of 14.2%.
-- Operating revenues of $115.6 million for the three months ended December
31, 2018 compared to $114.2 million for the three months ended December
31, 2017, an increase of 1.2%. Operating revenues of $458.7 million for
the year ended December 31, 2018 compared to $451.7 million for the year
ended December 31, 2017, an increase of 1.5%.
-- Adjusted EBITDA(1) of $80.2 million for the three months ended December
31, 2018 compared to $80.0 million for the three months ended December
31, 2017, an increase of 0.3%. Adjusted EBITDA(1) of $317.8 million for
the year ended December 31, 2018 compared to $310.4 million for the year
ended December 31, 2017, an increase of 2.4%.
-- Total contracted operating revenues were $1.6 billion as of December 31,
2018, with charters extending through 2028 and remaining average
contracted charter duration of 4.9 years, weighted by aggregate
contracted charter hire.
-- Charter coverage of 88% for the next 12 months based on current
operating revenues and 74% in terms of contracted operating days.
Three Months and Year Ended December 31, 2018
Financial Summary - Unaudited
(
Expressed in thousands of United States dollars, except per share amounts
)
Three months
Three months
Year ended
Year ended
ended ended
December 31,
December 31,
December 31,
December 31,
---
2018 2017 2018 2017
Operating revenues $115,631 $114,168 $458,732 $451,731
Net income/(loss) $(180,983) $22,806 $(32,936) $83,905
Adjusted net income(1) $36,605 $31,231 $131,186 $114,881
Earnings/(loss) per share, diluted $(0.87) $0.21 $(0.22) $0.76
Adjusted earnings per share, diluted(1) $0.18 $0.28 $0.88 $1.05
Basic and diluted weighted average 209,142 109,821 148,720 109,824
number of shares (in thousands)
Adjusted EBITDA(1) $80,171 $80,016 $317,848 $310,378
(1)Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation
of net income to adjusted net income and net income to adjusted EBITDA.
Danaos' CEO Dr. John Coustas commented:
"The 4th quarter of 2018 was the first full quarter following the completion of our recent debt refinancing which reduced indebtedness by $551 million, reset financial covenants and extended maturities through the end of 2023. As mentioned before, the refinancing has strengthened the Company's balance sheet and growth prospects by removing all balloon payments and maturities of existing debt over the next five years.
Adjusted net income for the 4th quarter of 2018 was $36.6 million, or 18 cents per share, $5.4 million or 17.3% higher when compared to the 4th quarter of 2017. This improvement was primarily the result of a $5.8 million decrease in net finance expenses, combined with a $1.4 million increase in operating revenues due to improved re-chartering rates, and partially offset by a $1.9 million increase in total operating costs. Adjusted EBITDA for the 4th quarter of 2018 was $80.2 million, $0.2 million higher than the 4th quarter of 2017.
Additionally, in the context of prudently evaluating the assets on our balance sheet, we recorded an impairment loss of $210.7 million in relation to the market value of certain of our Panamax vessels.
The charter market for vessels larger than 5,000 TEU has recently shown encouraging signs of recovery, and the market for smaller vessels remains stable albeit at relatively low levels. Anticipated slow steaming and re-designing of liner networks ahead of the implementation of new restrictions on sulphur emissions in 2020 together with vessels exiting service to be fitted with scrubbers are all positive supply side developments that may lead to improved charter rates. There has also been a continued abstention of new ordering as the market is still waiting on the outcome of trade talks to determine the demand side effects. Overall, we believe that the combined effect of these factors will be positive for the market outlook in the medium term from the 2nd half of the year onwards.
Our total contracted revenues as of December 31, 2018 were $1.6 billion, and we maintain our high charter contract coverage of 88% in terms of operating revenues and 74% in terms of operating days over the next 12 months. This insulates us from the near-term soft charter market.
Danaos continues to be a leader in the container shipping industry on the back of a solid track record of operational excellence and technological innovation that allows us to continually deliver high quality service to our customers. At the same time, the recently concluded refinancing transaction further enhances our ability to pursue growth opportunities and deliver value to our shareholders."
Three months ended December 31, 2018 compared to the three months ended December 31, 2017
During the three months ended December 31, 2018 and December 31, 2017, Danaos had an average of 55 containerships. Our fleet utilization for the three months ended December 31, 2018 was 97.9% compared to 97.8% for the three months ended December 31, 2017.
Our adjusted net income amounted to $36.6 million, or $0.18 per share, for the three months ended December 31, 2018 compared to $31.2 million, or $0.28 per share, for the three months ended December 31, 2017. We have adjusted our net income in the three months ended December 31, 2018 mainly for an impairment loss in relation to 10 of our vessels of $210.7 million, accelerated amortization of accumulated other comprehensive loss of $1.4 million and a non-cash fees amortization and accrued finance fees charge of $5.6 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The increase of $5.4 million in adjusted net income for the three months ended December 31, 2018 compared to the three months ended December 31, 2017 is attributable mainly to a $5.8 million decrease in net finance expenses, a $1.4 million increase in operating revenues and a $0.1 million operating performance improvement on equity investments, which were partially offset by a $1.9 million increase in total operating expenses.
On a non-adjusted basis, our net loss amounted to $181.0 million, or $0.87 diluted loss per share, for the three months ended December 31, 2018 compared to net income of $22.8 million, or $0.21 per share, for the three months ended December 31, 2017.
Operating Revenues
Operating revenues increased by 1.2%, or $1.4 million, to $115.6 million in the three months ended December 31, 2018 from $114.2 million in the three months ended December 31, 2017.
Operating revenues for the three months ended December 31, 2018 reflect:
-- $1.2 million increase in revenues in the three months ended December 31,
2018 compared to the three months ended December 31, 2017 due to the
re-chartering of certain of our vessels at higher rates.
-- $0.2 million increase in revenues due to higher fleet utilization of our
vessels in the three months ended December 31, 2018 compared to the
three months ended December 31, 2017.
Vessel Operating Expenses
Vessel operating expenses decreased by 2.3%, or $0.6 million, to $25.6 million in the three months ended December 31, 2018 from $26.2 million in the three months ended December 31, 2017. The average daily operating cost per vessel for vessels on time charter was $5,446 per day for the three months ended December 31, 2018 compared to $5,583 per day for the three months ended December 31, 2017. Management believes that our daily operating cost ranks as one of the most competitive in the industry.
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by 3.6%, or $1.0 million, to $27.0 million in the three months ended December 31, 2018 from $28.0 million in the three months ended December 31, 2017.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $0.6 million, to $2.3 million in the three months ended December 31, 2018 from $1.7 million in the three months ended December 31, 2017. The increase was mainly due to the increased number of vessels dry-docked over the last year.
General and Administrative Expenses
General and administrative expenses increased by $2.1 million to $7.9 million in the three months ended December 31, 2018, from $5.8 million in the three months ended December 31, 2017. The increase was mainly due to increased remuneration costs and professional fees.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses remained stable at $3.0 million in the three months ended December 31, 2018 and 2017.
Impairment Loss
We have recognized an impairment loss of $210.7 million in relation to 10 of our vessels as of December 31, 2018 compared to nil in the comparable period.
Interest Expense and Interest Income
Interest expense decreased by 13.1%, or $2.9 million, to $19.3 million in the three months ended December 31, 2018 from $22.2 million in the three months ended December 31, 2017. The decrease in interest expense is attributable to a:
(i) $10.4 million decrease in interest expense on two of our credit facilities for which we have recognized an interest expense accrual, which has been classified on our balance sheet under "Accumulated accrued interest" and represents future interest expense for the relevant facilities that has been recognized in advance as a result of the application of Troubled Debt Restructuring ("TDR") accounting in connection with our debt refinancing.
(ii) $4.8 million increase in interest expense due to an increase in debt service cost of approximately 2.4%, partially offset by a $656.1 million decrease in our average debt, to $1,684.7 million in the three months ended December 31, 2018, compared to $2,340.8 million in the three months ended December 31, 2017.
(iii) $2.7 million increase in the amortization of deferred finance costs and debt discount related to our debt refinancing.
As of December 31, 2018, the debt outstanding, gross of deferred finance costs, was $1,666.2 million compared to $2,340.8 million as of December 31, 2017.
Interest income increased by $0.1 million to $1.5 million in the three months ended December 31, 2018 compared to $1.4 million in the three months ended December 31, 2017.
Other finance costs, net
Other finance costs, net decreased by $0.6 million to $0.4 million in the three months ended December 31, 2018 compared to $1.0 million in the three months ended December 31, 2017 mainly due to decreased exit fees expenses.
Equity income on investments
Equity income on investments amounted to $0.4 million in the three months ended December 31, 2018 compared to $0.3 million in the three months ended December 31, 2017 and relates to the improved operating performance of Gemini Shipholdings Corporation ("Gemini"), in which the Company has a 49% shareholding interest.
Loss on derivatives
Amortization of deferred realized losses on interest rate swaps increased by $1.4 million to $2.3 million in the three months ended December 31, 2018 compared to $0.9 million in the three months ended December 31, 2017 due to the accelerated amortization of accumulated other comprehensive loss.
Other income/(expenses), net
Other income/(expenses), net was $0.1 million in income in the three months ended December 31, 2018 compared to $4.3 million in expenses in the three months ended December 31, 2017 mainly due to the decrease in refinancing-related professional fees.
Adjusted EBITDA
Adjusted EBITDA increased by 0.3%, or $0.2 million to $80.2 million in the three months ended December 31, 2018 from $80.0 million in the three months ended December 31, 2017. As outlined above, the increase of $1.4 million in operating revenues and a $0.1 million operating performance improvement on our equity investments, were partially offset by a $1.3 million increase in total operating expenses. Adjusted EBITDA for the three months ended December 31, 2018 is adjusted mainly for impairment loss of $210.7 million, accelerated amortization of accumulated other comprehensive loss of $1.4 million and stock based compensation of $0.8 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.
Year ended December 31, 2018 compared to the year ended December 31, 2017
During the year ended December 31, 2018 and December 31, 2017, Danaos had an average of 55 containerships. Our fleet utilization for the year ended December 31, 2018 was 96.8% compared to 96.4% for the year ended December 31, 2017. The fleet utilization excluding the off charter days of the vessels that were previously chartered to Hanjin was 97.9% in the year ended December 31, 2017.
Our adjusted net income amounted to $131.2 million, or $0.88 per share, for the year ended December 31, 2018 compared to $114.9 million, or $1.05 per share, for the year ended December 31, 2017. We have adjusted our net income in the year ended December 31, 2018 for the impairment loss of $210.7 million, the gain on debt extinguishment of $116.4 million, refinancing related professional fees of $51.3 million, a non-cash fees amortization and accrued finance fees charge of $17.0 million and an accelerated amortization of accumulated other comprehensive loss of $1.4 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The increase of $16.3 million in adjusted net income for the year ended December 31, 2018 compared to the year ended December 31, 2017 is attributable to a $7.0 million increase in operating revenues, a $4.8 million decrease in net finance expenses, a $4.1 million decrease in total operating expenses and a $0.4 million increase in the operating performance of our equity investment in Gemini.
On a non-adjusted basis, our net loss amounted to $32.9 million, or $0.22 loss per share, for the year ended December 31, 2018 compared to net income of $83.9 million, or $0.76 per share, for the year ended December 31, 2017.
Operating Revenues
Operating revenues increased by 1.5%, or $7.0 million, to $458.7 million in the year ended December 31, 2018 from $451.7 million in the year ended December 31, 2017.
Operating revenues for the year ended December 31, 2018 reflect:
-- $13.8 million increase in revenues in the year ended December 31, 2018
compared to the year ended December 31, 2017 due to the re-chartering of
certain of our vessels at higher rates.
-- $6.8 million decrease in revenues due to lower fleet utilization of our
vessels in the year ended December 31, 2018 compared to the year ended
December 31, 2017 (other than three vessels previously chartered to
Hanjin which were less utilized in the year ended December 31, 2017).
Vessel Operating Expenses
Vessel operating expenses decreased by 2.2%, or $2.4 million, to $104.6 million in the year ended December 31, 2018 from $107.0 million in the year ended December 31, 2017. The average daily operating cost per vessel for vessels on time charter was $5,619 per day for the year ended December 31, 2018 compared to $5,661 per day for the year ended December 31, 2017. Management believes that our daily operating cost ranks as one of the most competitive in the industry.
Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
Depreciation
Depreciation expense decreased by 6.4%, or $7.4 million, to $107.8 million in the year ended December 31, 2018 from $115.2 million in the year ended December 31, 2017.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $2.5 million, to $9.2 million in the year ended December 31, 2018 from $6.7 million in the year ended December 31, 2017. The increase was mainly due to the increased number of vessels dry-docked over the last year.
General and Administrative Expenses
General and administrative expenses increased by $3.6 million, to $26.3 million in the year ended December 31, 2018, from $22.7 million in the year ended December 31, 2017. The increase was mainly due to increased remuneration costs and professional fees.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses decreased by $0.4 million, to $12.2 million in the year ended December 31, 2018 from $12.6 million in the year ended December 31, 2017.
Impairment Loss
We have recognized an impairment loss of $210.7 million in relation to 10 of our vessels as of December 31, 2018 compared to nil in the year ended December 31, 2017.
Interest Expense and Interest Income
Interest expense decreased by 1.0%, or $0.9 million, to $85.7 million in the year ended December 31, 2018 from $86.6 million in the year ended December 31, 2017. The decrease in interest expense is attributable to a:
(i) $16.9 million decrease in interest expense on two of our credit facilities for which we have recognized an interest expense accrual, which has been classified on our balance sheet under "Accumulated accrued interest" and represents future interest expense for the relevant facilities that has been recognized in advance as a result of the application of TDR accounting in connection with our debt refinancing.
(ii) $12.2 million increase in interest expense due to an increase in debt service cost of approximately 1.1%, partially offset by a $358.1 million decrease in our average debt, to $2,051.0 million in the year ended December 31, 2018, compared to $2,409.1 million in the year ended December 31, 2017.
(iii) $3.8 million increase in the amortization of deferred finance costs and debt discount related to our debt refinancing.
As of December 31, 2018, the debt outstanding, gross of deferred finance costs, was $1,666.2 million compared to $2,340.8 million as of December 31, 2017.
Interest income increased by $0.2 million to $5.8 million in the year ended December 31, 2018 compared to $5.6 million in the year ended December 31, 2017.
Other finance costs, net
Other finance costs, net decreased by $1.1 million, to $3.0 million in the year ended December 31, 2018 from $4.1 million in the year ended December 31, 2017 mainly due to decreased exit fees expenses.
Equity income on investments
Equity income on investments amounted to $1.4 million in the year ended December 31, 2018 compared to $1.0 million in the year ended December 31, 2017 and relates to the improved operating performance of Gemini, in which the Company has a 49% shareholding interest.
Gain on debt extinguishment
The gain on debt extinguishment of $116.4 million in the year ended December 31, 2018 relates to our debt refinancing described below and consists of debt principal reduction net of refinancing related fees.
Loss on derivatives
Amortization of deferred realized losses on interest rate swaps increased by $1.4 million to $5.1 million in the year ended December 31, 2018 compared to $3.7 million in the year ended December 31, 2017 due to the accelerated amortization of accumulated other comprehensive loss.
Other income/(expenses), net
Other income/(expenses), net was $50.5 million in expenses in the year ended December 31, 2018 compared to $15.8 million in expenses in the year ended December 31, 2017 mainly due to a $37.0 million increase in refinancing-related professional fees, which were partially offset by a $2.4 million realized loss on sale of HMM securities in the year ended December 31, 2017 that did not recur in the 2018 period.
Adjusted EBITDA
Adjusted EBITDA increased by 2.4%, or $7.4 million, to $317.8 million in the year ended December 31, 2018 from $310.4 million in the year ended December 31, 2017. As outlined above, this increase is mainly attributable to a $7.0 million increase in operating revenues and a $0.4 million increase in operating performance on our equity investments in the year ended December 31, 2018 compared to the year ended December 31, 2017. Adjusted EBITDA for the year ended December 31, 2018 is adjusted for impairment loss of $210.7 million, a gain on debt extinguishment of $116.4 million, accelerated amortization of accumulated other comprehensive loss of $1.4 million, refinancing-related professional fees of $51.3 million and stock based compensation of $1.0 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.
Debt Refinancing
On August 10, 2018, we consummated the agreement reached with certain of our lenders on June 19, 2018 for the refinancing of approximately $2.2 billion of our debt maturing on December 31, 2018, reducing our debt by approximately $551 million. This agreement significantly strengthened our capital structure and financial position through this significant debt reduction, resetting financial and certain other covenants in our credit facilities, modifying interest rates and amortization profiles and extending debt maturities by approximately five years to December 31, 2023. In connection with this debt refinancing, we issued 99,342,271 new shares of Danaos common stock to certain of our lenders, which represented 47.5% of our outstanding common stock immediately after this issuance and diluted existing shareholders ratably. For additional information regarding the debt refinancing, see the Company's Reports on Form 6-K filed with the SEC on June 25, 2018 and August 14, 2018.
Conference Call and Webcast
On Wednesday, February 20, 2019 at 9:00 A.M. ET, 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: 1 844 802 2437 (US Toll Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075 441 375 (Standard International Dial In). Please indicate to the operator that you wish to join the Danaos Corporation earnings call.
A telephonic replay of the conference call will be available until February 27, 2019 by dialing 1 877 344 7529 (US Toll Free Dial In) or +44 (0) 2036 088 021 (Standard International Dial In) and using 10126336# as the access code.
Audio Webcast
There will also be a live and then archived webcast of the conference call, including a slide presentation providing additional company information, through the Danaos website (www.danaos.com). Participants of the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
About Danaos Corporation
Danaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 59 containerships aggregating 351,614 TEUs, including four vessels owned by Gemini Shipholdings Corporation, a joint venture, ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Our fleet is chartered to many of the world's largest liner companies on fixed-rate charters. Our long track record of success is predicated on our efficient and rigorous operational standards and environmental controls. Danaos Corporation'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, including statements about the expected benefits of the refinancing and other statements that are forward looking. 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. 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 effects of the refinancing transactions; Danaos' ability to achieve the expected benefits of the refinancing and comply with the terms of its new credit facilities and other agreements entered into in connection with the refinancing; the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, 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 74 unscheduled off-hire days in the three months ended December 31, 2018. The following table summarizes vessel utilization and the impact of the off-hire days on the Company's revenue.
Vessel Utilization (No. of Days) First Second Third Fourth
Quarter Quarter Quarter Quarter
---
2018 2018 2018 2018 Total
---
Ownership Days 4,950 5,005 5,060 5,060 20,075
Less Off-hire Days:
Scheduled Off-hire Days (125) (111) (22) (33) (291)
Other Off-hire Days (91) (84) (111) (74) (360)
Operating Days 4,734 4,810 4,927 4,953 19,424
Vessel Utilization 95.6% 96.1% 97.4% 97.9% 96.8%
Operating Revenues (in '000s of US Dollars) $111,854 $113,466 $117,781 $115,631 $458,732
Average Gross Daily Charter Rate $23,628 $23,590 $23,905 $23,346 $23,617
Vessel Utilization (No. of Days) First Second Third Fourth
Quarter Quarter Quarter Quarter
---
2017 2017 2017 2017 Total
---
Ownership Days 4,950 5,005 5,060 5,060 20,075
Less Off-hire Days:
Scheduled Off-hire Days (15) (6) (15) (10) (46)
Other Off-hire Days (347) (99) (139) (99) (684)
Operating Days 4,588 4,900 4,906 4,951 19,345
Vessel Utilization 92.7% 97.9% 97.0% 97.8% 96.4%
Operating Revenues (in '000s of US Dollars) $110,087 $113,888 $113,588 $114,168 $451,731
Average Gross Daily Charter Rate $23,995 $23,242 $23,153 $23,060 $23,351
Fleet List
The following table describes in detail our fleet deployment profile as of February 19, 2019:
Vessel Name Vessel Size Year
Expiration of Charter(1)
Built
(TEU)
---
Containerships
---
MSC Ambition 13,100 2012
June 2024
Maersk Exeter 13,100 2012
June 2024
Maersk Enping 13,100 2012
May 2024
Hyundai Respect 13,100 2012
March 2024
Hyundai Honour 13,100 2012
February 2024
Express Rome 10,100 2011
February 2022
Express Berlin 10,100 2011
April 2022
Express Athens 10,100 2011
February 2022
Le Havre (ex CSCL Le
Havre) 9,580 2006
November 2022
Pusan C (ex CSCL Pusan) 9,580 2006
November 2022
CMA CGM Melisande 8,530 2012
November 2023
CMA CGM Attila 8,530 2011
April 2023
CMA CGM Tancredi 8,530 2011
May 2023
CMA CGM Bianca 8,530 2011
July 2023
CMA CGM Samson 8,530 2011
September 2023
America (ex CSCL
America) 8,468 2004
November 2022
Europe 8,468 2004
November 2022
CMA CGM
Moliere 6,500 2009
August 2021
CMA CGM Musset 6,500 2010
August 2022
CMA CGM Nerval 6,500 2010
October 2022
CMA CGM Rabelais 6,500 2010
December 2022
CMA CGM Racine 6,500 2010
January 2023
YM Mandate 6,500 2010
January 2028
YM Maturity 6,500 2010
April 2028
Performance 6,402 2002
May 2019
Dimitra C (ex Priority) 6,402 2002
March 2019
YM Seattle 4,253 2007
July 2019
YM Vancouver 4,253 2007
September 2019
Derby D 4,253 2004
March 2019
ANL Tongala (ex Deva) 4,253 2004
March 2019
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
Dimitris C 3,430 2001
June 2019
Express Black Sea 3,400 2011
November 2019
Express Spain 3,400 2011
March 2019
Express Argentina 3,400 2010
May 2019
Express Brazil 3,400 2010
July 2019
Express France 3,400 2010
September 2019
Singapore 3,314 2004
October 2019
Colombo 3,314 2004
March 2019
MSC Zebra 2,602 2001
September 2020
Amalia C 2,452 1998
August 2019
Danae C 2,524 2001
January 2020
Advance 2,200 1997
July 2019
Future 2,200 1997
March 2019
Sprinter 2,200 1997
June 2019
Stride 2,200 1997
February 2019
Progress C (ex Hyundai
Progress) 2,200 1998
June 2019
Bridge 2,200 1998
August 2019
Highway 2,200 1998
May 2019
Vladivostok 2,200 1997
March 2019
Catherine C (ex NYK
Lodestar)(2) 6,422 2001
November 2022
Leo C (ex NYK Leo)(2) 6,422 2002
November 2022
Suez Canal(2) 5,610 2002
March 2019
Genoa?2) 5,544 2002
July 2019
(1) Earliest date charters could
expire. Some charters include
options to extend their terms.
(2) Vessels acquired by Gemini
Shipholdings Corporation, in
which Danaos holds a 49% equity
interest.
DANAOS CORPORATION
Condensed Consolidated Statements of Operations-Unaudited
(Expressed in thousands of United States dollars, except per share amounts)
Three months
Three months
Year ended
Year ended
ended ended
December 31,
December 31,
December 31, December 31,
---
2018 2017 2018 2017
OPERATING REVENUES $115,631 $114,168 $458,732 $451,731
OPERATING EXPENSES
Vessel operating expenses (25,552) (26,196) (104,604) (106,999)
Depreciation & amortization (29,354) (29,672) (116,994) (121,976)
Impairment loss (210,715) (210,715) -
General & administrative (7,944) (5,815) (26,334) (22,672)
Other operating expenses (2,977) (2,962) (12,207) (12,587)
Income/(Loss) From Operations (160,911) 49,523 (12,122) 187,497
---
OTHER INCOME/(EXPENSES)
Interest income 1,483 1,375 5,781 5,576
Interest expense (19,328) (22,227) (85,706) (86,556)
Other finance expenses (415) (997) (3,026) (4,126)
Equity income on investments 453 332 1,365 965
Gain on debt extinguishment 116,365 -
Other income/(expenses), net 109 (4,269) (50,456) (15,757)
Realized loss on derivatives (2,374) (931) (5,137) (3,694)
Total Other Income/(Expenses), net (20,072) (26,717) (20,814) (103,592)
---
Net Income/(Loss) $(180,983) $22,806 $(32,936) $83,905
===
EARNINGS PER SHARE
Basic and diluted earnings/(loss) per share $(0.87) $0.21 $(0.22) $0.76
===
Basic and diluted weighted average number of 209,142 109,821 148,720 109,824
common shares (in thousands of shares)
Non-GAAP Measures*
Reconciliation of Net Income/(Loss) to Adjusted Net Income - Unaudited
Three months
Three months
Year ended
Year ended
ended ended
December 31,
December 31,
December 31, December 31,
---
2018 2017 2018 2017
Net income/(loss) $(180,983) $22,806 $(32,936) $83,905
Gain on debt extinguishment - (116,365)
Amortization of financing fees, debt discount & 5,584 3,440 17,016 14,322
finance fees accrued
Impairment loss 210,715 210,715 -
Accelerated amortization of accumulated other comprehensive loss 1,443 1,443 -
Refinancing professional fees (154) 4,985 51,313 14,297
Loss on sale of securities - 2,357
---
Adjusted Net Income $36,605 $31,231 $131,186 $114,881
Adjusted Earnings Per Share, basic and diluted $0.18 $0.28 $0.88 $1.05
Basic and diluted weighted average number of shares (in thousands) 209,142 109,821 148,720 109,824
* 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 months and years ended December 31, 2018 and 2017. 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 Consolidated Balance Sheets - Unaudited
(Expressed in thousands of United States dollars)
As of
As of
December 31, December 31,
--- ---
2018 2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents $77,275 $66,895
Restricted cash 2,812
Accounts receivable, net 9,225 6,502
Other current assets 33,250 49,790
119,750 125,999
NON-CURRENT ASSETS
Fixed assets, net 2,480,329 2,795,971
Deferred charges, net 13,031 8,962
Investments in affiliates 7,363 5,998
Other non-current assets 59,369 49,466
2,560,092 2,860,397
TOTAL ASSETS $2,679,842 $2,986,396
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Long-term debt, current portion 113,777 $2,329,601
Accumulated accrued interest, current portion 35,782
Accounts payable, accrued liabilities & other current liabilities 73,142 50,238
222,701 2,379,839
LONG-TERM LIABILITIES
Long-term debt, net 1,508,108
Accumulated accrued interest, net of current portion 200,574
Other long-term liabilities 57,606 57,852
1,766,288 57,852
STOCKHOLDERS' EQUITY
Common stock 2,133 1,098
Additional paid-in capital 725,581 546,898
Accumulated other comprehensive loss (118,710) (114,076)
Retained earnings 81,849 114,785
690,853 548,705
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,679,842 $2,986,396
DANAOS CORPORATION
Condensed Consolidated Statements of Cash Flows - Unaudited
(Expressed in thousands of United States dollars)
Three months
Three months
Year ended
Year ended
ended ended
December 31,
December 31,
December 31, December 31,
---
2018 2017 2018 2017
Operating Activities:
Net income/(loss) $(180,983) $22,806 $(32,936) $83,905
Adjustments to reconcile net income/(loss) to net cash provided
by operating activities:
Depreciation 27,005 27,961 107,757 115,228
Impairment loss 210,715 210,715 -
Amortization of deferred drydocking & special survey costs, 7,933 5,151 26,253 21,070
finance cost, debt discount and other finance fees accrued
Gain on debt extinguishment (116,365) -
PIK interest 1,019 1,433 -
Payments for drydocking/special survey (1,401) (1,103) (13,306) (7,511)
Amortization of deferred realized losses on cash flow interest 2,374 931 5,137 3,694
rate swaps
Equity income on investments (453) (332) (1,365) (965)
Stock based compensation 849 1,006 -
Loss on sale of securities 2,357
Accounts receivable (407) 541 (2,723) (2,544)
Other assets, current and non-current (6,226) (4,599) 2,286 (7,832)
Accounts payable and accrued liabilities (3,338) (1,667) (4,350) (23)
Other liabilities, current and long-term (3,897) (4,442) (18,856) (26,306)
Net Cash provided by Operating Activities 53,190 45,247 164,686 181,073
---
Investing Activities:
Vessel additions and advances (6,167) (782) (8,250) (4,478)
Net proceeds from sale of securities 6,236
Net Cash provided by/(used in) Investing Activities (6,167) (782) (8,250) 1,758
---
Financing Activities:
Proceeds from long-term debt 325,852 -
Debt repayment (33,883) (41,723) (440,990) (189,653)
Payments of accumulated accrued interest (7,960) (8,556) -
Finance costs (8,038) (35,005) -
Paid-in capital 10,000 -
Share issuance costs (169) -
Net Cash used in Financing Activities (49,881) (41,723) (148,868) (189,653)
---
Net Increase/(Decrease) in cash, cash equivalents and restricted (2,858) 2,742 7,568 (6,822)
cash
Cash, cash equivalents and restricted cash, beginning of period 80,133 66,965 69,707 76,529
---
Cash, cash equivalents and restricted cash, end of period $77,275 $69,707 $77,275 $69,707
===
DANAOS CORPORATION
Reconciliation of Net Income/(Loss) to Adjusted EBITDA - Unaudited
(Expressed in thousands of United States dollars)
Three months
Three months
Year ended
Year ended
ended ended
December 31,
December 31,
December 31,
December 31,
---
2018 2017 2018 2017
Net income/(loss) $(180,983) $22,806 $(32,936) $83,905
Depreciation 27,005 27,961 107,757 115,228
Amortization of deferred drydocking & special survey 2,349 1,711 9,237 6,748
costs
Amortization of deferred finance costs, debt discount 5,584 3,440 17,016 14,322
and other finance fees accrued
Amortization of deferred realized losses on interest rate swaps 931 931 3,694 3,694
Interest income (1,483) (1,375) (5,781) (5,576)
Interest expense 13,915 19,557 70,749 75,403
Impairment loss 210,715 210,715 -
Gain on debt extinguishment - (116,365)
Accelerated amortization of accumulated other comprehensive loss 1,443 1,443 -
Stock based compensation 849 1,006 -
Refinancing professional fees (154) 4,985 51,313 14,297
Loss on sale of securities - 2,357
Adjusted EBITDA(1) $80,171 $80,016 $317,848 $310,378
1) Adjusted EBITDA represents net income
before interest income and expense,
depreciation, amortization of
deferred drydocking & special survey
costs deferred finance costs and debt
discount, amortization of deferred
realized losses on interest rate
swaps, loss on sale of securities,
gain on debt extinguishment,
impairment loss, accelerated
amortization of accumulated other
comprehensive loss, stock based
compensation and refinancing
professional fees. 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 operating
performance 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. 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 months and
years ended December 31, 2018 and
2017. 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.
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SOURCE Danaos Corporation
