Seaspan Reports Third Quarter 2019 Results

Achieves highest quarterly utilization rate since 2011 of 99.6%,
Closes $500 million accordion, increasing Portfolio Financing Program to $1.5 billion and finishes the quarter with over $912 million of liquidity

HONG KONG, Nov. 7, 2019 /PRNewswire/ - Seaspan Corporation ("Seaspan") (NYSE: SSW) announced today its financial results for the three and nine months ended September 30, 2019.

Highlights for the Third Quarter and First Nine Months of 2019:

    --  Increased portfolio financing program by $500.0 million to $1.5 billion
    --  Agreed to acquire 9600 TEU vessel which Seaspan expects will enter into
        a three year time charter with Ocean Network Express ("ONE")
    --  Achieved vessel utilization of 99.6% for the third quarter, the highest
        quarterly utilization since 2011, and 98.8% for the first nine months
    --  Operating earnings of $116.1 million for the third quarter and $570.6
        million for the first nine months
    --  Earnings per diluted share of $0.11 for the third quarter and $1.44 for
        the first nine months; changes in fair value of financial instruments
        contributed a loss of $0.10 per diluted share for the third quarter and
        a loss of $0.17 per diluted share for the first nine months
    --  Cash flow from operations of $145.9 million for the third quarter and
        $645.2 million for the first nine months

Comments from Management

Bing Chen, President and Chief Executive Officer, commented, "Our focus on Operational Excellence in quality, reliability, and scalability, together with Customer Partnership, as the preferred solution provider of our customers, has resulted in our highest quarterly utilization rate since 2011, of 99.6% for our 112 vessels fleet. We continue to strengthen our customer centric approach, which this quarter generated an attractive vessel acquisition to facilitate the growth needs of one of our customers, in addition to a tailored charter solution for another. We see growing opportunities to broaden and deepen our customer partnerships as our sector stabilizes into a new normal marked by consolidation, and we expect our momentum to continue throughout the remainder of the year."

Ryan Courson, Chief Financial Officer, said, "During the quarter we continued to execute across our business delivering, ahead of plan, a total of $645 million year-to-date cash flows from operations. We remain focused on the balance sheet as well, advancing our capital plan with the increase of our portfolio financing program to $1.5 billion of total commitments. The increased capacity provides room and flexibility to finance new acquisitions, including our recently acquired 9600 TEU vessel, which is expected to be delivered in April. The execution on our capital plan has significantly improved capital availability and flexibility, positioning us to execute on our next phase of growth."

Significant Developments During the Quarter Ended September 30, 2019

Portfolio Financing Program Increased to $1.5 billion

On May 15, 2019, Seaspan entered into a credit agreement with a syndicate of lenders for a $1.0 billion secured credit facility as part of a portfolio financing program (the "Program"). The Program is secured by a portfolio of vessels (the "Collateral Pool") and bears interest at LIBOR plus 2.25% per annum. Seaspan may add, substitute and remove vessels from the Collateral Pool during the term, subject to a borrowing base, portfolio concentration limits, absence of defaults and compliance with financial covenants and certain negative covenants.

On September 18, 2019, Seaspan increased the committed amount under the Program by $500.0 million to a total of $1.5 billion. The additional commitments are subject to the same terms, conditions and Collateral Pool security requirements as the initial tranche.

Series D Preferred Shares

In September 2019, Seaspan redeemed 1,923,585 shares of 7.95% Series D preferred shares for $47.8 million.

Purchase of 9600 TEU Vessel

On September 9, 2019, Seaspan closed an agreement to purchase a 2010-built 9600 TEU containership. The vessel is expected to be delivered by the end of April 2020, at which point Seaspan expects the vessel will enter into a 36 month fixed rate time charter with ONE. Subsequent to delivery of the vessel, Seaspan's fleet will expand to 113 vessels.

Unencumbered Vessels

As of November 7, 2019, Seaspan had 31 unencumbered vessels.

Subsequent Events

Debt Prepayment

In October 2019, Seaspan refinanced secured term loan facilities, totalling $180.1 million, using proceeds from the Program. As of September 30, 2019, this balance was classified as current liabilities due to the issuance of voluntary irrevocable prepayment notices by Seaspan.

Distribution

The Board of Directors declared a quarterly distribution in the amount of $0.125 per share for its Class A Common Shares, paid on October 30, 2019 to shareholders of record as at the close of business on October 21, 2019. Regular quarterly dividends on the Preferred Shares Series D, Series E, Series G, Series H and Series I were also declared.

Class A Common Shares Outstanding

As of November 7, 2019, there were 215.7 million Class A Common Shares outstanding.

Results for the Three and Nine Months Ended September 30, 2019 and 2018

Financial Results

The following table summarizes Seaspan's consolidated financial results for the three and nine months ended September 30, 2019 and 2018:



           
              Financial Summary                                     Three Months Ended                 Nine Months Ended
                                                                                    September 30,                        September 30,

           
              (in millions of US dollars, except earnings per share
    amount)



                                                                                             2019          2018                   2019 2018






           Revenue                                                                               $
     282.7            $
            295.0       $
       843.5 $
     801.4



           Ship operating expense                                                                    56.8                       55.4            170.4    163.7



           Depreciation and amortization expense                                                     63.9                       65.1            189.8    181.1



           General and administrative expense                                                         7.7                        8.1             23.3     24.5



           Operating lease expense                                                                   38.3                       33.0            116.3     96.6



           Income related to modification of time charters                                                                                    227.0



           Operating earnings                                                                       116.1                      133.4            570.6    335.6



           Interest expense and amortization of deferred



           financing fees                                                                            45.0                       56.0            151.5    149.4



           Net earnings                                                                              43.0                       80.0            368.2    215.7



           Net earnings to common shareholders                                                       25.0                       63.5            314.0    162.6



           Earnings per share, diluted                                                               0.11                       0.36             1.44     1.07



           Cash from operating activities                                                           145.9                      150.6            645.2    355.9

Ownership Days, Operating Days and Vessel Utilization

Ownership days are the number of days a vessel is owned and available for charter. Operating days are the number of days a vessel is available to the charterer for use.

The primary driver of ownership days are the increases or decreases in the number of vessels owned, while the drivers of operating days are ownership days and the number of days the vessels are off-hire.

Ownership days were unchanged for the three months ended September 30, 2019, and increased by 1,791 days for the nine months ended September 30, 2019, compared with the same periods in 2018. The increase for the nine months ended September 30, 2019 was primarily due to the full period contribution of the additional 16 vessels acquired through the acquisition of Greater China Intermodal Investments LLC ("GCI"), which contributed 1,152 days, with the remainder due to the 2018 vessel deliveries.Vessel utilization represents the number of operating days as a percentage of ownership days.

The following table summarizes Seaspan's vessel utilization for the nine months ended September 30, 2019 and 2018 and for each quarter for the 24 months ended September 30, 2019:


                                        2017        2018         2019            Nine Months
                                                                           Ended
                                                                                  September 30,



                                          Q4    Q1          Q2       Q3               Q4                   Q1        Q2         Q3        2018          2019




     
                Vessel Utilization:



     Ownership Days(1)                7,905  8,030        9,546     9,844                        9,844      9,630      9,737      9,844       27,420        29,211



     Less Off-hire Days:



     Scheduled Dry Docking                  (104)                  (8)                        (22)      (13)      (54)       (36)       (112)        (103)



     Unscheduled Off-hire(2)          (319) (149)       (137)    (146)                       (240)     (166)      (71)        (3)       (432)        (240)




     Operating Days(1)                7,586  7,777        9,409     9,690                        9,582      9,451      9,612      9,805       26,876        28,868




     
                Vessel Utilization   96.0   96.8         98.6      98.4                         97.3       98.1       98.7       99.6         98.0          98.8


                                           %     %           %        %                           %         %         %          %           %            %


     ____________________________



     (1)   
              Operating and ownership days include leased vessels and exclude vessels under bareboat charter.



     (2)   
              Unscheduled off-hire includes days related to vessels being off-charter.

Vessel utilization increased for the three and nine months ended September 30, 2019, compared with the same periods in 2018. The increase for the nine months ended September 30, 2019 was primarily due to a decrease in the number of unscheduled off-hire days and scheduled off-hire days for dry-docking.

Revenue

Revenue decreased by 4.2% to $282.7 million and increased by 5.3% to $843.5 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The decrease in revenue for the three months ended September 30, 2019 was primarily due to the changes in the daily charter hire rates of seven time charters which were modified in the first quarter of 2019, offset by higher operating days. Seaspan recognized $227.0 million of income from modification, and these seven charters were subsequently rechartered to other customers at market rates. The increase in revenue for the nine months ended September 30, 2019 was primarily due to the contribution of additional operating days from the acquisition of vessels from the GCI transaction and 2018 vessel deliveries.

The increase in operating days and the related financial impact thereof for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018, is attributable to the following:


                                                                  
     
               Three Months Ended                     
          
              Nine Months Ended
                                                                        September 30                                       
              September 30



                                                                                Ownership                 Operating      
             
              $ Impact                        Ownership               Operating           
        
         $ Impact
                                                                       Days                                       Days                    (in millions                  Days                                  Days                       (in
                                                                      Impact                       Impact                                     of US                    Impact                  Impact                       millions
                                                                                                                             dollars)                                                                                                   of US
                                                                                                                                                                                                                            dollars)




              Full period contribution from 2018 vessel



              deliveries                                                                                                                 
              $                                    639                        639                         $
         17.3



              Addition of 16 vessels from acquisition of GCI                                                                                                                           1,152                      1,152                                42.9



              Changes in daily charter hire rates and recharters                                                                                                                                                                                      5.8



              Changes in daily charter hire rates on modified                                                                                                 (12.7)                                                                               (24.4)
    charters(1)



              Unscheduled Off-hire(2)                                                                             143                                             1.2                                                192                                 2.4



              Scheduled off-hire                                                                                 (28)                                          (0.8)                                                 9                               (0.7)



              Other                                                                                                                                                                                                                                 (1.2)




              
                Total                                                                                  115                                    $
     
      (12.3)                   1,791                      1,992                     $
     
           42.1


     _______________________________



     (1)              Seven time charters were modified in the first quarter of 2019 and
                         Seaspan recognized $227.0 million of income from modification; these
                         seven charters have been rechartered to other customers at market rates.



     (2)              Unscheduled off-hire includes days related to vessels being off-
                         charter.

Ship Operating Expense

Ship operating expense increased by 2.6% to $56.8 million and by 4.1% to $170.4 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The increase for the three months ended September 30, 2019 is primarily due to an increase in maintenance expenses. The increase for the nine months ended September 30, 2019 was primarily due to an increase in ownership days from the period contribution of the acquisition of vessels from the GCI transaction and 2018 vessel deliveries.

The following table summarizes Seaspan's operating cost per operating day for the nine months ended September 30, 2019 and 2018 and for each quarter for the 24 months ended September 30, 2019:


                                               2017                                2018                             2019                    Nine Months
                                                                                                                                 Ended
                                                                                                                                          September 30,



                                                 Q4               Q1         Q2         Q3               Q4              Q1            Q2                          Q3         2018      2019




              
                Operating Cost:



              Ownership Days(1)                            7,905            8,030                 9,546                   9,844                             9,844                9,630              9,737         9,844      27,420      29,211



              Vessel Operating Costs



              (in millions of US dollars)               $
      48.1         $
      49.5              $
      58.8         $
             55.4                          $
      55.6         $
          57.7           $
      55.9      $
      56.8       163.7       170.4




              
                Operating Cost per      $
     
        6,086    $
     
        6,170         $
     
        6,156    $
     
               5,624               $
           
        5,648    $
     
            5,993      $
     
        5,743 $
     
        5,770 $
     
      5,969 $
     
      5,833
    Ownership Day


     ________________________________



     (1)              Ownership days include leased vessels and exclude vessels under bareboat
                         charter.

Ship operating cost per ownership day increased by 2.6% to $5,770 and decreased by 2.3% to $5,833 for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased by 1.8% to $63.9 million and increased by 4.8% to $189.8 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The decrease for the three months ended was primarily due to asset write-offs in 2018. The increase for the nine months ended September 30, 2019 was primarily due to an increase in ownership days from the period contribution of the acquisition of vessels from the GCI transaction and 2018 vessel deliveries.

General and Administrative Expense

General and administrative expense decreased by 4.9% to $7.7 million and by 4.9% to $23.3 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The decrease for the three months ended was primarily due to a decrease in professional fees and share-based compensation expenses. For the nine months ended September 30, 2019, this decrease was primarily due to transition payments paid to the former CFO in 2018.

Operating Lease Expense

Operating lease expense increased by 16.1% to $38.3 million and by 20.4% to $116.3 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The increase was primarily due to the amortization of deferred gains related to Seaspan's vessel sale-leaseback transactions, which are no longer recognized through operating leases. Upon adoption of Accounting Standards Update 2016-02 "Leases" on January 1, 2019, the remaining balance of these deferred gains were recognized through opening deficit as a cumulative adjustment.

Interest Expense and Amortization of Deferred Financing Fees

The following table summarizes Seaspan's borrowings:


                   (in
                    millions
                    of US
                    dollars)  September 30,



                                       2019                 2018



     Long-term
      debt,
      excluding
      deferred
      financing
      fees:


     Revolving
      credit
      facilities                                 $
       756.0           $
       812.3


     Term loan
      credit
      facilities                                    1,648.8              2,243.8


     Senior
      unsecured
      notes                                            80.0                417.9


     Fairfax
      Notes                                           500.0                250.0


     Debt
      discount
      and fair
      value
      adjustment                                    (155.8)              (88.1)


     Long-term
      obligations
      under
      other
      financing
      arrangements,
      excluding


     deferred
      financing
      fees                                            609.7                660.1



                  Total
                   borrowings               $
     
        3,438.7      $
     
        4,296.0

Interest expense and amortization of deferred financing fees decreased by $11.0 million to $45.0 million and increased by $2.1 million to $151.5 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The decrease for the three months ended September 30, 2019 was primarily due to the early prepayments of long-term debt. The increase for the nine months ended September 30, 2019 was primarily due to the issuance of the Fairfax Notes and debt assumed in connection with the acquisition of GCI.

Change in Fair Value of Financial Instruments

The change in fair value of financial instruments resulted in a loss of $22.1 million and $37.7 million for the three and nine months ended September 30, 2019, respectively. The losses for this period were primarily due to the impact of swap settlements and a decrease in the LIBOR forward curve.

Liquidity and Unencumbered Vessels

As of September 30, 2019, Seaspan had total liquidity of $912.9 million, consisting of $258.9 million of cash and cash equivalents and $654.0 million available under its revolving credit facilities and term loan credit facilities.



        
             
            As of September 30, 2019

                         ---

               TEU Class                            Vessel Count

       ---

     
         2500                                                4


     
         3500                                                2


     
         4250                                               18


     
         8500                                                2


     
         10000                                               2


     
         13100                                               1


     
         14000                                               2

       ---

                 Total                                        31

       ===

About Seaspan

Seaspan is the leading independent charter owner of containerships with industry leading ship management services. Seaspan charters its vessels primarily pursuant to long-term, fixed-rate, time charters from the world's largest container shipping liners. Seaspan's operating fleet consists of 112 containerships with a total capacity of more than 900,000 TEU, an average age of approximately seven years and an average remaining lease period of approximately four years, on a TEU weighted basis.

Seaspan has the following securities listed on The New York Stock Exchange:


                 Symbol              Description

    ---




       SSW             Class A Common Shares



       SSW PR D        Series D Preferred Shares



       SSW PR E        Series E Preferred Shares



       SSW PR G        Series G Preferred Shares



       SSW PR H        Series H Preferred Shares



       SSW PR I        Series I Preferred Shares



       SSWA            7.125% Senior Unsecured Notes
                         due 2027



       SSW25           5.500% Senior Notes due 2025



       SSW26           5.500% Senior Notes due 2026

Conference Call and Webcast

Seaspan will host a conference call and webcast presentation for investors, analysts, and interested parties to discuss its third quarter results on November 7, 2019 at 8:30 a.m. ET. Participants should call 1-877-246-9875 (US/Canada) or 1-707-287-9353 (International) and request the Seaspan call (conference ID: 8690787). The live webcast and slide presentation are available under "Events & Presentations" at www.seaspancorp.com.

A recording will be available at 1-855-859-2056 or 1-404-537-3406 (Conference passcode: 8690787).


                                                                              
          
                SEASPAN CORPORATION


                                                                        
           
            UNAUDITED CONSOLIDATED BALANCE SHEETS


                                                                      
         
           AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018


                                                                          
           
              (IN THOUSANDS OF US DOLLARS)




                                                                                                                                   September 30, 2019                  December 31, 2018

                                                                                                                                                                                     ---


     Assets



     Current assets:



     Cash and cash equivalents                                                                                                                         $
         258,901                            $
          357,327



     Short-term investments                                                                                                                                                              2,532



     Accounts receivable                                                                                                                                     11,790                                     13,001



     Prepaid expenses and other                                                                                                                              32,129                                     36,519



     Gross investment in lease                                                                                                                               44,469                                     44,348



     Fair value of financial instruments                                                                                                                                                   113



                                                                                                                                                             347,289                                    453,840





     Vessels                                                                                                                                              5,761,779                                  5,926,274



     Right-of-use assets                                                                                                                                    985,563



     Gross investment in lease                                                                                                                              784,340                                    817,631



     Goodwill                                                                                                                                                75,321                                     75,321



     Other assets                                                                                                                                           185,416                                    204,931



                                                                                                                                                      $
         8,139,708                          $
          7,477,997

                                                                                                                                                                                                             ===


     Liabilities, puttable preferred shares and shareholders' equity



     Current liabilities:



     Accounts payable and accrued liabilities                                                                                                                71,735                                     70,211



     Current portion of deferred revenue                                                                                                                     61,538                                     55,915



     Current portion of long-term debt                                                                                                                      361,882                                    722,641



     Current portion of operating lease liabilities                                                                                                         159,757



     Current portion of long-term obligations under other financing



     arrangements                                                                                                                                           144,328                                     48,384



     Current portion of other long-term liabilities                                                                                                           7,124                                     32,243



                                                                                                                                                             806,364                                    929,394





     Deferred revenue                                                                                                                                       351,889                                    376,884



     Long-term debt                                                                                                                                       2,437,433                                  2,764,900



     Operating lease liabilities                                                                                                                            810,764



     Long-term obligations under other financing arrangements                                                                                               458,770                                    591,372



     Other long-term liabilities                                                                                                                             12,968                                    180,157



     Fair value of financial instruments                                                                                                                     56,323                                    127,172



                                                                                                                                                           4,934,511                                  4,969,879





     Puttable preferred shares                                                                                                                                                          48,139





     Shareholders' equity:



     Share capital                                                                                                                                            2,491                                      2,102



     Treasury shares                                                                                                                                          (374)                                     (371)



     Additional paid in capital                                                                                                                           3,452,511                                  3,126,457



     Deficit                                                                                                                                              (227,632)                                 (645,638)



     Accumulated other comprehensive loss                                                                                                                  (21,799)                                  (22,571)



                                                                                                                                                           3,205,197                                  2,459,979



                                                                                                                                                      $
         8,139,708                          $
          7,477,997

                                                                                                                                                                                                             ===


                                                                   
              
                SEASPAN CORPORATION


                                                           
         
               UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                       
         
           FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018


                                                         
         
              (IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE AMOUNTS)




                                                                                           Three Months Ended                                      Nine Months Ended
                                                                                                   September 30,                                          September 30,

                                                                                                                                              ---

                                                                    2019                                           2018                               2019                      2018

                                                                                                                                                                              ---




     Revenue                                                                          $
              282,716                              $
            294,981                                $
             843,459             $
              801,419





     Operating expenses (income):



     Ship operating                                                                              56,789                                         55,360                                           170,419                         163,676



     Depreciation and amortization                                                               63,917                                         65,053                                           189,841                         181,085



     General and administrative                                                                   7,673                                          8,148                                            23,335                          24,494



     Operating leases                                                                            38,268                                         33,048                                           116,304                          96,571



     Income related to modification of time charters                                                                                                                   (227,000)



                                                                                                 166,647                                        161,609                                           272,899                         465,826






     Operating earnings                                                                         116,069                                        133,372                                           570,560                         335,593





     Other expenses (income):



     Interest expense and amortization of deferred



     financing fees                                                                              44,999                                         56,038                                           151,464                         149,387



     Interest expense related to amortization of debt



     discount                                                                                     4,439                                          2,193                                            12,910                           5,091



     Interest income                                                                            (1,958)                                       (1,128)                                          (8,239)                        (2,893)



     Refinancing expenses                                         2,921                                                                                                     6,136



     Acquisition related gain on contract settlement                                                                                                                                                       (2,430)



     Change in fair value of financial instruments                                               22,068                                        (4,526)                                           37,661                        (29,775)



     Equity income on investment                                                                                                                                                                           (1,216)



     Other expenses                                                                                 637                                            822                                             2,386                           1,728



                                                                                                  73,106                                         53,399                                           202,318                         119,892






     
                Net earnings                                            $
              
                42,963                           $
     
              79,973                            $
     
               368,242         $
     
                215,701





     Dividends - preferred shares                                                              (17,917)                                      (16,498)                                         (54,254)                       (53,066)




     Net earnings attributable to common shares                                        $
              25,046                               $
            63,475                                $
             313,988             $
              162,635

                                                                                                                                                                                                                                     ===




     Weighted average number of shares, basic                                                   216,142                                        170,232                                           213,938                         147,292



     Effect of dilutive securities:



     Share-based compensation                                                                       697                                            543                                               460                             381



     Fairfax warrants                                                                             5,696                                          3,255                                             3,841                           3,860




     Weighted average number of shares, diluted                                                 222,535                                        174,030                                           218,239                         151,533






     Earnings per share, basic                                                           $
              0.12                                 $
            0.37                                   $
             1.47                $
              1.10

                                                                                                                                                                                                                                     ===


     Earnings per share, diluted                                                         $
              0.11                                 $
            0.36                                   $
             1.44                $
              1.07

                                                                                                                                                                                                                                     ===


                                                                       
              
                SEASPAN CORPORATION


                                                               
       
            UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


                                                             
       
           FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018


                                                                     
            
                (IN THOUSANDS OF US DOLLARS)




                                                                                                         Three Months Ended                         Nine Months Ended
                                                                                                                September 30,                              September 30,

                                                                                                                                                ---

                                                                                  2019                                         2018                      2019              2018

                                                                                                                                                                         ---




     Net earnings                                                                                    $
              42,963                     $
           79,973                        $
     368,242     $
     215,701





     Other comprehensive income:



     Amounts reclassified to net earnings during the period



     relating to cash flow hedging instruments                                                                    254                                 271                               772            847






     
                Comprehensive income                                                  $
              
                43,217                 $
     
             80,244                    $
     
       369,014 $
     
       216,548

                                                                                                                                                                                                       ===


                                                                                                               
              
                SEASPAN CORPORATION


                                                                                                 
              
                UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                         
              
                FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018


                                                                                                           
              
                (IN THOUSANDS OF US DOLLARS)




                                                                                                                                                                   Three Months Ended                                        Nine Months Ended
                                                                                                                                                                              September 30,                                                   September 30,

                                                                                                                                                                                                                      ---

                                                                                                                                                 2019                               2018                                2019                      2018

                                                                                                                                                                                                                                                ---


     Cash from (used in):



     Operating activities:



     Net earnings                                                                                                                                       $
              42,963                              $
              79,973                             $
              368,242             $
            215,701



     Items not involving cash:



     Depreciation and amortization                                                                                                                                63,917                                          65,053                                         189,841                       181,085



     Amortization of right-of-use assets                                                                                                      28,036                                                                                         83,443



     Share-based compensation                                                                                                                                        693                                             355                                           2,655                         1,905



     Amortization of deferred financing fees, debt discount



     and fair value of long-term debt                                                                                                                              7,743                                           5,726                                          22,629                        14,283



     Amounts reclassified from other comprehensive income



     to interest expense                                                                                                                                              70                                              80                                             219                           254



     Unrealized change in fair value of financial instruments                                                                                                      (406)                                       (13,925)                                       (13,724)                     (62,834)



     Acquisition related gain on contract settlement                                                                                                                                                                                                                         (2,430)



     Equity income on investment                                                                                                                                                                                                                                             (1,216)



     Deferred gain on sale-leasebacks                                                                                                                                                       (5,527)                                                                         (16,636)



     Amortization of acquired revenue contracts                                                                                                                    3,977                                           1,902                                           9,796                         5,461



     Refinancing expenses                                                                                                                      2,921                                                                                          6,136



     Other                                                                                                                                                         (576)                                          (355)                                        (1,313)                      (1,044)



     Changes in assets and liabilities                                                                                                                           (3,425)                                         17,307                                        (22,763)                       21,414




     Cash from operating activities                                                                                                                              145,913                                         150,589                                         645,161                       355,943






     Financing activities:



     Preferred shares issued, net of issuance costs                                                                                                                                         144,416                                                                           144,416



     Repayment of credit facilities                                                                                                                            (367,040)                                      (225,916)                                    (1,276,755)                    (360,660)



     Draws on credit facilities                                                                                                              115,900                                                                                        734,893                            325,600



     Fairfax notes and warrants issued                                                                                                                                                                                                     250,000                            250,000



     Draws on long-term obligations under other financing



     arrangements                                                                                                                                                                                                                                                             46,964



     Repayments on long-term obligations under other



     financing arrangements                                                                                                                                     (12,787)                                       (12,365)                                       (38,004)                     (35,672)



     Senior unsecured notes repurchased, including related



     expenses                                                                                                                                                                                                                              (8,998)



     Redemption of preferred shares                                                                                                                             (47,782)                                      (143,430)                                       (47,782)                    (143,430)



     Repayments on senior unsecured notes                                                                                                                                                                                                (311,398)



     Proceeds from exercise of warrants                                                                                                                                                     250,000                                         250,000                            250,000



     Financing fees                                                                                                                                              (7,890)                                        (2,753)                                       (23,619)                     (15,868)



     Dividends on common shares                                                                                                                                 (26,656)                                        (9,549)                                       (75,115)                     (28,358)



     Dividends on preferred shares                                                                                                                              (18,247)                                       (14,720)                                       (53,685)                     (49,680)




     Cash from (used in) financing activities                                                                                                                  (364,502)                                       (14,317)                                      (600,463)                      383,312






     Investing activities:



     Expenditures for vessels                                                                                                                                    (3,532)                                        (5,613)                                        (9,810)                    (306,626)



     Short-term investments                                                                                                                                          106                                           (105)                                          2,532                       (2,401)



     Prepayment on vessel purchase                                                                                                           (6,620)                                                                                       (6,620)



     Other assets                                                                                                                                                (1,100)                                          (201)                                        (6,806)                        2,510



     Loans to affiliate                                                                                                                                                                                                                                                        (427)



     Payments on settlement of interest swap agreements                                                                                                        (104,825)                                        (8,390)                                      (122,054)                     (30,992)



     Acquisition of GCI                                                                                                                                                                                                                                                    (333,581)



     Cash acquired from GCI acquisition                                                                                                                                                                                                                                       70,121




     Cash used in investing activities                                                                                                                         (115,971)                                       (14,309)                                      (142,758)                    (601,396)






     Increase (decrease) in cash, cash equivalents and restricted cash                                                                                         (334,560)                                        121,963                                        (98,060)                      137,859



     Cash, cash equivalents and restricted cash, beginning of period                                                                                             607,896                                         283,132                                         371,396                       267,236




     Cash, cash equivalents and restricted cash, end of period                                                                                         $
              273,336                             $
              405,095                             $
              273,336             $
            405,095

                                                                                                                                                                                                                                                                                                   ===






     The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the amounts shown in the consolidated statements of cash flows:




                                                                                                                                                                     September 30,



                                                                                                                                                 2019                               2018




     Cash and cash equivalents                                                                                                                         $
              258,901                             $
              391,030



     Restricted cash included in other assets                                                                                                 14,435                                          14,065




     Total cash, cash equivalents and restricted cash shown in the



     consolidated statements of cash flows                                                                                                             $
              273,336                             $
              405,095

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act) concerning Seaspan's operations, cash flows, and financial position, including, without limitation, the likelihood of its success in developing and expanding its business. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "will," "may," "potential," "should" and similar expressions are forward?looking statements. These forward-looking statements represent Seaspan's estimates and assumptions only as of the date of this release and are not intended to give any assurance as to future results. As a result, you are cautioned not to rely on any forward-looking statements. Forward-looking statements appear in a number of places in this release. Although these statements are based upon assumptions Seaspan believes to be reasonable based upon available information, they are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to:

    --  future growth prospects and ability to expand Seaspan's business;
    --  Seaspan's expectations as to impairments of its vessels, including the
        timing and amount of currently anticipated impairments;
    --  the future valuation of Seaspan's vessels and goodwill;
    --  potential acquisitions, vessel financing arrangements and other
        investments, and Seaspan's expected risks and benefits from such
        transactions as well as the likelihood of consummating any such
        transaction;
    --  future time charters and vessel deliveries, including future long-term
        charters for certain existing vessels;
    --  estimated future capital expenditures needed to preserve the operating
        capacity of Seaspan's fleet including, its capital base, and comply with
        regulatory standards, its expectations regarding future dry-docking and
        operating expenses, including ship operating expense and general and
        administrative expenses;
    --  Seaspan's expectations about the availability of vessels to purchase,
        the time it may take to construct new vessels, the delivery dates of new
        vessels, the commencement of service of new vessels under long-term time
        charter contracts and the useful lives of its vessels;
    --  availability of crew, number of off-hire days and dry-docking
        requirements;
    --  general market conditions and shipping market trends, including charter
        rates, increased technological innovation in competing vessels and other
        factors affecting supply and demand;
    --  Seaspan's financial condition and liquidity, including its ability to
        borrow and repay funds under its credit facilities, to refinance its
        existing facilities and to obtain additional financing in the future to
        fund capital expenditures, acquisitions and other general corporate
        activities;
    --  Seaspan's continued ability to meet its current liabilities as they
        become due;
    --  Seaspan's continued ability to maintain, enter into or renew primarily
        long-term, fixed-rate time charters with its existing customers or new
        customers;
    --  the potential for early termination of long-term contracts and Seaspan's
        potential inability to enter into, renew or replace long-term contracts;
    --  the introduction of new accounting rules for leasing and exposure to
        currency exchange rates and interest rate fluctuations;
    --  conditions inherent in the operation of ocean-going vessels, including
        acts of piracy;
    --  acts of terrorism or government requisition of Seaspan's containerships
        during periods of war or emergency;
    --  adequacy of Seaspan's insurance to cover losses that result from the
        inherent operational risks of the shipping industry;
    --  lack of diversity in Seaspan's operations and in the type of vessels in
        its fleet;
    --  conditions in the public equity market and the price of Seaspan's
        shares;
    --  Seaspan's ability to leverage to its advantage its relationships and
        reputation in the containership industry;
    --  changes in governmental rules and regulations or actions taken by
        regulatory authorities, and the effect of governmental regulations on
        Seaspan's business;
    --  the financial condition of Seaspan's customers, lenders, and other
        counterparties and their ability to perform their obligations under
        their agreements with us;
    --  Seaspan's continued ability to meet specified restrictive covenants and
        other conditions in its financing and lease arrangements, its notes and
        its preferred shares;
    --  any economic downturn in the global financial markets and export trade
        and increase in trade protectionism and potential negative effects of
        any recurrence of such disruptions on Seaspan's customers' ability to
        charter Seaspan's vessels and pay for Seaspan's services;
    --  the value of Seaspan's vessels and other factors or events that trigger
        impairment assessments or results;
    --  taxation of Seaspan's earnings and of distributions to its shareholders;
    --  Seaspan's exemption from tax on U.S. source international transportation
        income and exemption from tax on China-sourced international
        transportation service income;
    --  the ability to bring claims in China and Marshall Islands, where the
        legal systems are not well-developed;
    --  potential liability from future litigation; and
    --  other factors detailed from time to time in Seaspan's periodic reports.

Forward-looking statements in this release are estimates and assumptions reflecting the judgment of senior management and involve known and unknown risks and uncertainties. These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond Seaspan's control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Accordingly, these forward-looking statements should be considered in light of various important factors listed above and including, but not limited to, those set forth in "Item 3. Key Information--D. Risk Factors" in Seaspan's Annual Report for the year ended December 31, 2018 on Form 20-F filed on March 26, 2019 and in the "Risk Factors" in Reports on Form 6-K that are filed with the Securities and Exchange Commission from time to time relating to its quarterly financial results.

Seaspan does not intend to revise any forward-looking statements in order to reflect any change in Seaspan's expectations or events or circumstances that may subsequently arise. Seaspan expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in Seaspan's views or expectations, or otherwise. You should carefully review and consider the various disclosures included in Seaspan's Annual Report and in Seaspan's other filings made with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect Seaspan's business, prospects and results of operations.

Investor Inquiries:
Mr. Matt Borys
Seaspan Corporation
Tel. +1-778-328-5340
Email: mborys@seaspanltd.ca

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SOURCE Seaspan Corporation