-- Net earnings from continuing operations of $28.0 million or $0.51 per
share and $93.2 million or $1.71 per share for the quarter and the nine
months ended September 30, 2008, respectively, compared to $25.5 million or
$0.47 per share and $78.4 million or $1.44 per share for the respective
periods of 2007.
-- Operating revenues from continuing operations of $76.4 million and
$220.2 million for the quarter and the nine months ended September 30,
2008, respectively, compared to $62.6 million and $187.5 million for the
respective periods of 2007.
-- EBITDA from continuing operations of $51.0 million and $156.9 million
for the quarter and the nine months ended September 30, 2008, respectively,
compared to $40.3 million and $122.8 million for the respective periods of
2007.
-- Paid dividends of $0.465 per share on August 20, 2008, for the second
quarter of 2008 and declared dividends of $0.465 per share for the third
quarter of 2008, payable on November 19, 2008, for all shareholders on
record as of November 5, 2008.
Danaos' CEO Dr. John Coustas commented:
Our nine month and 3rd quarter results were excellent. Our combined fleet
today stands at 70 large cellular containerships, all of which are
chartered for long periods at fixed rates. Out of these 70 vessels, we
expect 32 to be gradually delivered for operations until the third quarter
of 2011.
During the third quarter we were able to once more successfully continue
expanding our credit facilities and implementing our growth strategy by
adding new vessels to our fleet. We also managed to extend our chartering
arrangements while we further applied cost control strategies to boost the
quality of our operations and the overall performance of our business.
Since the beginning of the year we have managed to arrange $1.1 billion in
new credit facilities. Out of those $560 million were negotiated during the
first quarter, while since the beginning of the third quarter we have
arranged additional credit lines for an impressive $550 million. We believe
that this fact alone further underscores the strength of Danaos' credit and
the faith of our lenders in our business model and our hands-on management.
We will continue to arrange further credit facilities in line with our
financing program and strategy.
On the operations side we added two 4,250 TEU new-building containerships
in our fleet which immediately entered into 12 year charters with ZIM
Lines. In September we also extended the employment of the MAERSK Deva at
an increased charter rate for another two years until March 2011.
Last, but equally important, we will refer to our successful cost
management. Slow steaming and a rapidly falling average age of our fleet
combined with our efforts to further control costs related to crews and
maintenance have led to notable results. Our daily operating cost per
vessel for the first nine months in 2008 increased by just 2.8% compared to
that for the same period in 2007. At the same time our daily operating cost
was 2.9% lower this quarter compared to that of the second quarter.
We believe that our business model, which is based on long term fixed rate
chartering to some of the largest liner companies in the world, gives
protection to our top line against volatility and weakness in the charter
market. Furthermore, our continued and recently demonstrated ability to
raise debt during a period where credit has become very scarce, underlines
both our solid strategy and the continued confidence in Danaos by our
lending banks. We continue to have a strong balance sheet which together
with our strong cash flow allows us to closely monitor the sale & purchase
market and consider any opportunities for further growth as they may arise.
Finally, on October 24, 2008, our Board of Directors declared a dividend of
$0.465 per share for the third quarter, which will be paid on November 19,
2008. The dividend reflects the continuing growth of our operations, our
confidence in the stability of our business model and our dedication to
support shareholder value through enhanced distributable cash flows.
Three months ended September 30, 2008 compared to the three months ended
September 30, 2007
During the quarter ended September 30, 2008, Danaos had an average of 38.1
containerships as opposed to 31.1 containerships for the same period of
2007. During the third quarter we acquired two vessels the Zim Rio Grande
on July 4, 2008 and the Zim Sao Paolo on September 22, 2008. Our fleet
utilization was 98.8% in the third quarter of 2008.
Given the sale of our entire dry bulk fleet in the beginning of 2007,
management has determined that the dry bulk business constituted
discontinued operations. The management and discussion analysis solely
reflects results from continuing operations (containerships), unless
otherwise noted.
Our net income was $28.0 million or $0.51 per share for the third quarter
of 2008 compared to $25.5 million or $0.47 per share for the third quarter
of 2007, which represents an increase of 9.8% or $2.5 million.
Distributable cash flow, defined as net income before depreciation &
amortization, less payments for drydocking and special survey costs was
$40.5 million for the third quarter of 2008. Our declared dividend of $25.4
million for the third quarter of 2008 represents 62.7% of our distributable
cash flow.
Operating Revenue
Operating revenue increased 22.0%, or $13.8 million, to $76.4 million in
the quarter ended September 30, 2008 from $62.6 million in the quarter
ended September 30, 2007. The increase was primarily attributed to the
addition to our fleet of nine vessels, as follows:
Vessel Name Vessel Size (TEU) Date Delivered ----------------- ------------------ ----------------------- Hyundai Future 2,200 October 2, 2007 YM Singapore 4,300 October 9, 2007 Hyundai Sprinter 2,200 October 15, 2007 YM Vancouver 4,253 November 27, 2007 Hyundai Progress 2,200 February 11, 2008 Hyundai Highway 2,200 March 18, 2008 Hyundai Bridge 2,200 March 20, 2008 Zim Rio Grande 4,253 July 4, 2008 Zim Sao Paolo 4,253 September 22, 2008These additions to our fleet contributed revenues of $14.3 million during the three months ended September 30, 2008. Moreover, a 4,253 TEU containership, the YM Seattle and three 2,200 TEU containerships, the Hyundai Vladivostok, the Hyundai Advance and the Hyundai Stride, which were added to our fleet on September 10, 2007, July 23, 2007, August 20, 2007 and September 5, 2007, respectively, contributed incremental revenues of $4.1 million during the three months ended September 30, 2008 compared to the three months ended September 30, 2007. In addition, the Company sold three vessels as follows:
Vessel Name Vessel Size (TEU) Date Sold ------------------ ------------------ -------------------- APL Belgium 5,506 January 15, 2008 Winterberg 3,101 January 25, 2008 Maersk Constantia 3,101 May 20, 2008These vessel sales reduced operating revenue by $4.3 million during the three months ended September 30, 2008. Moreover a 5,506 TEU containership, the APL Holland, which was sold on August 3, 2007, contributed $0.9 million less revenue during the three months ended September 30, 2008 compared to the three months ended September 30, 2007. We also had a further increase in revenues of $0.6 million attributed to higher charter rates achieved due to the re-chartering of certain vessels. Vessel Operating Expenses Our daily operating expenses per vessel increased 4.3% compared on a quarter on quarter basis. The increase was mainly due a general increase in costs experienced by the overall industry. At the same time, our daily operating expenses per vessel compared to those of the second quarter of 2008 decreased by 2.9%, which was mainly attributed to the decrease of the average age of our fleet as a result of the addition of two new building vessels during the third quarter of 2008, as well as lower lubricant expenses attributed to slow steaming and lower insurance cost. In absolute numbers, vessel operating expenses increased 47.1% or $7.3 million, to $22.8 million in the quarter ended September 30, 2008, from $15.5 million in the quarter ended September 30, 2007. The increase was mainly due to the increase in the average number of our vessels in our fleet during the quarter ended September 30, 2008 compared to the quarter ended September 30, 2007. Depreciation & Amortization Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs. Depreciation Depreciation expense increased 36.8%, or $3.5 million, to $13.0 million in the quarter ended September 30, 2008, from $9.5 million in the quarter ended September 30, 2007. The increase in depreciation expense was due to the increased average number of vessels in our fleet during the quarter ended September 30, 2008 compared to the same period of 2007. Amortization of Deferred Dry-docking and Special Survey Costs Amortization of deferred dry-docking and special survey costs increased 18.8%, or $0.3 million to $1.9 million in the quarter ended September 30, 2008, from $1.6 million in the quarter ended September 30, 2007. The increase reflects higher drydocking costs incurred, which were subject to amortization during the three months ended September 30, 2008 as compared to the same period of 2007. General and Administrative Expenses General and administrative expenses increased 12.0%, or $0.3 million, to $2.8 million in the quarter ended September 30, 2008, from $2.5 million in the same quarter of 2007. The increase was primarily a result of increased fees of $0.4 million paid to our Manager in the third quarter of 2008 compared to the same period of 2007, attributed to the increase in the average number of our vessels in our fleet. Other Operating Expenses Other Operating Expenses include Voyage Expenses Voyage Expenses Voyage expenses decreased 10.0% or $0.2 million, to $1.8 million in the quarter ended September 30, 2008, from $2.0 million for the quarter ended September 30, 2007. Interest Expense and Interest Income Interest expense increased 108.3%, or $5.2 million, to $10.0 million in the quarter ended September 30, 2008, from $4.8 million in the quarter ended September 30, 2007. The change in interest expense was due to the increase in our average debt by $1,107.5 million to $1,856.3 million in the quarter ended September 30, 2008 from $748.8 million in the quarter ended September 30, 2007, partially offset by the financing of our extensive new-building program which resulted in interest capitalization of $12.6 million for the quarter ended September 30, 2008 as opposed to $6.1 million of capitalized interest for the quarter ended September 30, 2007. Interest income increased by $0.8 million, to $1.9 million in the quarter ended September 30, 2008, from $1.1 million in the quarter ended September 30, 2007. The increase in interest income is mainly attributed to higher average cash deposits during the three months ended September 30, 2008 as opposed to the three months ended September 30, 2007, partially offset by lower interest rates. The increase in restricted cash is attributed to $282.0 million additional cash which we raised through our revolving credit facilities during the third quarter of 2008. These funds are now designated to finance certain of our new buildings and will be gradually utilized to fund progress payments of these new buildings up to their deliveries through the second quarter of 2010. EBITDA EBITDA from continuing operations increased by $10.7 million, or 26.6%, to $51.0 million in the quarter ended September 30, 2008, from $40.3 million in the quarter ended September 30, 2007. A table reconciling EBITDA to net income can be found at the end of this earnings release. Nine months ended September 30, 2008 compared to the nine months ended September 30, 2007 During the nine months ended September 30, 2008, Danaos had an average of 37.3 containerships as opposed to 31.0 containerships for the same period of 2007. During the nine months of 2008, we acquired five vessels, the Hyundai Progress on February 11, 2008, the Hyundai Highway on March 18, 2008, the Hyundai Bridge on March 20, 2008, the Zim Rio Grande on July 4, 2008 and the Zim Sao Paolo on September 22, 2008. In addition, we sold three vessels, the APL Belgium on January 15, 2008, the Winterberg on January 25, 2008 and the Maersk Constantia on May 20, 2008. Given the sale of our entire dry bulk fleet in the beginning of 2007, management has determined that the dry bulk business constituted discontinued operations. The management and discussion analysis solely reflects results from continuing operations (containerships), unless otherwise noted. Our net income was $93.2 million or $1.71 per share for the nine months ended September 30, 2008 compared to $78.4 million or $1.44 per share for the nine months ended September 30, 2007, an increase in net income of 18.9% or $14.8 million. Earnings per share, excluding the gain on sale of vessels of $14.9 million, were $1.44 for the nine months ended September 30, 2008. Distributable cash flow, defined as net income before depreciation & amortization, less payments for drydocking and special survey costs, was $126.9 million for the nine months ended September 30, 2008. We paid a dividend of $25.4 million for the first and the second quarter of 2008, respectively, and we declared a dividend of $25.4 million for the third quarter of 2008, which in aggregate represent 60.0% of our distributable cash flow for the nine months ended September 30, 2008. Operating Revenue Operating revenue increased 17.4%, or $32.7 million, to $220.2 million in the nine months ended September 30, 2008 from $187.5 million in the nine months ended September 30, 2007. The increase was primarily attributed to the addition to our fleet of nine vessels, as follows:
Vessel Name Vessel Size (TEU) Date Delivered ---------------- ------------------ -------------------- Hyundai Future 2,200 October 2, 2007 YM Singapore 4,300 October 9, 2007 Hyundai Sprinter 2,200 October 15, 2007 YM Vancouver 4,253 November 27, 2007 Hyundai Progress 2,200 February 11, 2008 Hyundai Highway 2,200 March 18, 2008 Hyundai Bridge 2,200 March 20, 2008 Zim Rio Grande 4,253 July 4, 2008 Zim Sao Paolo 4,253 September 22, 2008These additions to our fleet contributed revenues of $35.3 million during the nine months ended September 30, 2008. Moreover, two 4,253 TEU containerships, the YM Colombo and the YM Seattle and three 2,200 TEU containerships, the Hyundai Vladivostok, the Hyundai Advance and the Hyundai Stride, which were added to our fleet on March 12, 2007, on September 10, 2007, on July 23, 2007, on August 20, 2007 and on September 5, 2007, respectively, contributed incremental revenues of $19.4 million during the nine months ended September 30, 2008 compared to the nine months ended September 30, 2007. In addition since January 1, 2007, the Company sold six vessels as follows:
Vessel Name Vessel Size (TEU) Date Sold ---------------- ------------------ -------------------- APL England 5,506 March 7, 2007 APL Scotland 5,506 June 22, 2007 APL Holland 5,506 August 3, 2007 APL Belgium 5,506 January 15, 2008 Winterberg 3,101 January 25, 2008 Maersk Constantia 3,101 May 20, 2008These sales reduced operating revenue by $21.8 million during the nine months ended September 30, 2008 compared to the same period in the prior year. Vessel Operating Expenses Our daily operating expenses per vessel between the nine month periods of 2007 and 2008 increased by 2.8%. The increase was mainly due to higher crew wages partially offset by lower lubricant expenses attributed to slow steaming and lower insurance cost. In absolute numbers vessel operating expenses increased 39.7% or $18.5 million, to $65.1 million in the nine months ended September 30, 2008, from $46.6 million in the nine months ended September 30, 2007. The increase was mainly due to the increase in the average number of our vessels in our fleet during the nine months ended September 30, 2008 compared to the nine months ended September 30, 2007. Depreciation & Amortization Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs. Depreciation Depreciation expense increased 27.8%, or $8.1 million, to $37.2 million in the nine months ended September 30, 2008, from $29.1 million in the nine months ended September 30, 2007. The increase in depreciation expense was due to the increased average number of vessels in our fleet during the nine months ended September 30, 2008, compared to the same period of 2007. Amortization of Deferred Dry-docking and Special Survey Costs Amortization of deferred dry-docking and special survey costs increased 20.5%, or $0.9 million, to $5.3 million in the nine months ended September 30, 2008, from $4.4 million in the nine months ended September 30, 2007. The increase reflects higher dry-docking costs incurred, which were subject to amortization during the nine months ended September 30, 2008 as compared to the same period of 2007. General and Administrative Expenses General and administrative expenses increased 17.8%, or $1.3 million, to $8.6 million in the nine months ended September 30, 2008, from $7.3 million in the same period of 2007. The increase was mainly a result of increased fees of $1.0 million paid to our Manager in the nine months ended September 30, 2008 compared to the same period of 2007 attributed to the increase in the average number of our vessels in our fleet. Moreover, public company related and other administrative expenses were higher by $0.3 million in the nine months ended September 30, 2008 compared with the nine months ended September 30, 2007. Gain / (loss) on sale of vessels The gain on sale of vessels for the nine months ended September 30, 2008, reflects the sale of the APL Belgium, the Winterberg and the Maersk Constantia for $44.5 million, $11.2 million and $15.8 million, respectively, resulting in an aggregate net gain of $14.9 million. Other Operating Expenses Other Operating Expenses include Voyage Expenses Voyage Expenses Voyage expenses increased 9.3% or $0.5 million, to $5.9 million in the nine months ended September 30, 2008, from $5.4 million for the nine months ended September 30, 2007. The increase was mainly a result of increased bunker costs of $0.7 million, attributed to the repositioning of two of our vessels, during the second quarter of 2008. Our vessels are not otherwise subject to fuel costs, which are paid by our charterers. Interest Expense and Interest Income Interest expense increased 73.1%, or $10.6 million, to $25.1 million in the nine months ended September 30, 2008, from $14.5 million in the nine months ended September 30, 2007. The change in interest expense was due to the increase in our average debt by $909.3 million to $1,603.2 million in the nine months ended September 30, 2008 from $693.9 million in the nine months ended September 30, 2007, partially offset by the financing of our extensive new-building program which resulted in capitalized interest of $35.4 million for the nine months ended September 30, 2008 as opposed to $13.1 million of capitalized interest for the nine months ended September 30, 2007. Interest income increased 5.4%, or $0.2 million, to $3.9 million in the nine months ended September 30, 2008, from $3.7 million in the nine months ended September 30, 2007. The increase in interest income is mainly attributed to higher average restricted cash deposits, partially offset by lower interest rates, during the nine months ended September 30, 2008 as opposed to the nine months ended September 30, 2007. The increase in restricted cash is attributed to $282.0 million additional cash which we raised through our revolving credit facilities during the third quarter of 2008. These funds are now designated to finance certain of our new buildings and will be gradually utilized to fund progress payments of these new buildings up to their deliveries through the second quarter of 2010. EBITDA EBITDA from continuing operations increased by $34.1 million, or 27.8%, to $156.9 million in the nine months ended September 30, 2008, from $122.8 million in the nine months ended September 30, 2007. A table reconciling EBITDA to net income can be found at the end of this earnings release. Dividend Payment On July 25, 2008, the Board of Directors declared a dividend of $0.465 per common share for the second quarter of 2008 for all shareholders of record as of the close of business on August 6, 2008, paid on August 20, 2008. On October 24, 2008, the Board of Directors declared a dividend of $0.465 per common share for the third quarter of 2008 for all shareholders of record as of the close of business on November 5, 2008, payable on November 19, 2008. Recent News Since the beginning of the 3rd quarter of 2008 the Company has entered into two credit agreements for term loan facilities in the total amount of $550 million to finance part of its new-building program. The facilities have been fully underwritten by Fortis Bank, Lloyds TSB, National Bank of Greece, Deutsche Schiffsbank, Credit Suisse and Emporiki Bank, a subsidiary of Credit Agricole. Conference Call and Webcast On Monday, November 3, 2008 at 9:00 A.M. EST, the Company's management will host a conference call to discuss the results. Conference Call details: Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (US Toll Free Dial In), 0800 953 0329 (UK Toll Free Dial In) or +44 (0)1452 542 301 (Standard International Dial In). Please quote "Danaos" to the operator. A telephonic replay of the conference call will be available until November 10, 2008 by dialing 1 866 247 4222 (US Toll Free Dial In), 0800 953 1533 (UK Toll Free Dial In) or +44 (0)1452 550 000 (Standard International Dial In). Access Code: 1186615#. Audio webcast: There will also be a live and then archived webcast of the conference call through the Danaos website (www.danaos.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. About Danaos Corporation Danaos Corporation is an international owner of containerships, chartering its vessels to many of the world's largest liner companies. Our current fleet of 38 containerships aggregating 152,022 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Danaos is the largest US listed containership company based on fleet size. Furthermore, the company has a contracted fleet of 32 additional containerships aggregating 234,962 TEU with scheduled deliveries up to 2011. The company's shares trade on the New York Stock Exchange under the symbol "DAC." Forward-Looking Statement Matters discussed in this release may constitute forward-looking statements within the meaning of the safeharbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although Danaos Corporation believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, Danaos Corporation cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, shipyard performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in Danaos Corporation's operating expenses, including bunker prices, dry-docking and insurance costs, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. Risks and uncertainties are further described in reports filed by Danaos Corporation with the U.S. Securities and Exchange Commission. Visit our website at www.danaos.com Appendix Fleet Utilization Danaos had 42 off-hire days in total in the third quarter of 2008. The following table summarizes vessel utilization and the impact of the off-hire days on the company’s revenue relating to the last four quarters.
Fourth First Second Third
Quarter Quarter Quarter Quarter
2007 2008 2008 2008 Total
--------- --------- --------- --------- ---------
No. of No. of No. of No. of No. of
Vessel utilization Days Days Days Days Days
--------- --------- --------- --------- ---------
Ownership days 3,324 3,301 3,417 3,502 13,544
Less Off-hire Days:
Scheduled off-hire
Days (81) (159) (78) (40) (358)
Other off-hire Days (24) (1) -- (2) (27)
--------- --------- --------- --------- ---------
Operating Days 3,219 3,141 3,339 3,460 13,159
Vessel Utilization 96.8% 95.2% 97.7% 98.8% 97.2%
Revenue - Impact of
Off-hire (in '000s
of US dollars)
--------- --------- --------- --------- ---------
100% fleet
utilization $ 72,006 $ 70,689 $ 74,482 $ 77,303 $ 294,480
Less Off-hire Days:
Scheduled off-hire
Days (46) (796) (573) (807) (2,222)
Other off-hire Days (625) (16) -- (80) (721)
--------- --------- --------- --------- ---------
Actual Revenue
Earned $ 71,335 $ 69,877 $ 73,909 $ 76,416 $ 291,537
========= ========= ========= ========= =========
Fleet List
The following table describes in detail our fleet deployment profile as of
October 31, 2008.
Vessel Size Expiration of
Vessel Name (TEU) Year Built Charter(1)
------------------ -------------- -------------- --------------------
Containerships
CSCL Le Havre 9,580 2006 September 2018
CSCL Pusan 9,580 2006 July 2018
MSC Baltic 8,468 2004 September 2016
CSCL Europe 8,468 2004 June 2016
MSC Marathon(5) 4,814 1991 September 2011
Maersk Messologi 4,814 1991 September 2011
Maersk Mytilini 4,814 1991 September 2011
MOL Affinity(3) 4,651 1992 March 2011
Hyundai Duke 4,651 1992 February 2011
APL Confidence(4) 4,651 1994 September 2012
YM Colombo 4,300 2004 March 2019
YM Singapore 4,300 2004 October 2019
YM Seattle 4,253 2007 July 2019
YM Vancouver 4,253 2007 September 2019
Maersk Derby 4,253 2004 February 2009
Maersk Deva 4,253 2004 January 2011
ZIM Rio Grande 4,253 2008 May 2020
ZIM Sao Paolo 4,253 2008 August 2020
Al Rayyan 3,908 1989 January 2011
YM Yantian 3,908 1989 July 2011
YM Milano 3,129 1988 May 2011
Sederberg 3,101 1978 March 2009
CMA CGM Lotus 3,098 1988 July 2010
CMA CGM Vanille 3,045 1986 July 2010
CMA CGM Passiflore 3,039 1986 May 2010
CMA CGM Elbe 2,917 1991 June 2010
CMA CGM Kalamata 2,917 1991 June 2010
CMA CGM Komodo 2,917 1991 June 2010
Hyundai Advance 2,200 1997 June 2017
Hyundai Future 2,200 1997 August 2017
Hyundai Sprinter 2,200 1997 August 2017
Hyundai Stride 2,200 1997 July 2017
Hyundai Progress 2,200 1998 December 2017
Hyundai Bridge 2,200 1998 January 2018
Hyundai Highway 2,200 1998 January 2018
Hyundai Vladivostok 2,200 1997 May 2017
Montreal Senator (2) 2,130 1984 March 2010
MSC Eagle 1,704 1978 January 2010
(1) Earliest date charters could expire. Some charters include options to
extend their term.
(2) On April 8, 2008, the Pacific Bridge was renamed to Montreal Senator at
the request of the charterer of this vessel.
(3) On April 15, 2008, the Hyundai Commodore was renamed to MOL Affinity at
the request of the charterer of this vessel.
(4) On June 2, 2008, the MOL Confidence was renamed to APL Confidence at
the request of the charterer of this vessel.
(5) On August 22, 2008, the Maersk Marathon was renamed to MSC Marathon at
the request of the charterer of this vessel.
New Deliveries
The following table describes the expected additions to our fleet as a
result of our new building containership program.
Vessel Size Time Charter
Vessel Name (TEU) Expected Delivery Term
---------------- -------------- -------------------- --------------
HN 1672 4,253 November 2008 12 years
HN 1673 4,253 December 2008 12 years
HN 1698 4,253 March 2009 12 years
HN S4001(1) 6,500 April 2009 12 years
HN 1699 4,253 June 2009 12 years
HN S4002(1) 6,500 June 2009 12 years
HN S4003(1) 6,500 August 2009 12 years
HN S4004(1) 6,500 October 2009 12 years
HN N-214 6,500 November 2009 18 years
HN N-219 3,400 November 2009 10 years
HN S4005(1) 6,500 December 2009 12 years
HN N-220 3,400 January 2010 10 years
HN N-215 6,500 January 2010 18 years
HN N-221 3,400 February 2010 10 years
HN N-216 6,500 March 2010 15 years
HN N-222 3,400 April 2010 10 years
HN N-223 3,400 May 2010 10 years
HN N-217 6,500 May 2010 15 years
HN Z00001 8,530 May 2010 12 years
HN Z00002 8,530 May 2010 12 years
HN Z00003 8,530 July 2010 12 years
HN Z00004 8,530 July 2010 12 years
HN N-218 6,500 July 2010 15 years
HN H 1022A 8,530 September 2010 12 years
Hull No S-461 10,100 January 2011 12 years
Hull No S-456 12,600 January 2011 12 years
Hull No S-462 10,100 February 2011 12 years
Hull No S-463 10,100 March 2011 12 years
Hull No S-457 12,600 March 2011 12 years
Hull No S-458 12,600 May 2011 12 years
Hull No S-459 12,600 June 2011 12 years
Hull No S-460 12,600 August 2011 12 years
(1) Vessel subject to charterer's option to purchase vessel after first
eight years of time charter term for $78.0 million.
DANAOS CORPORATION
Statements of Income
(Expressed in thousands of United States dollars, except share and per
share amounts)
Three Three Nine Nine
months months months months
ended ended ended ended
September September September September
30, 30, 30, 30,
--------- --------- --------- ---------
2008 2007 2008 2007
--------- --------- --------- ---------
(unaudited)(unaudited)(unaudited)(unaudited)
OPERATING REVENUES $ 76,416 $ 62,643 $ 220,202 $ 187,510
OPERATING EXPENSES
Vessel operating expenses (22,771) (15,543) (65,135) (46,631)
Depreciation & amortization (14,992) (11,130) (42,484) (33,515)
General & administrative (2,781) (2,450) (8,614) (7,260)
Gain / (loss) on sale of
vessels - (51) 14,928 (286)
Other operating expenses (1,759) (2,030) (6,099) (5,393)
--------- --------- --------- ---------
Income From Operations 34,113 31,439 112,798 94,425
--------- --------- --------- ---------
OTHER EARNINGS (EXPENSES)
Interest income 1,921 1,118 3,861 3,677
Interest expense (10,004) (4,794) (25,083) (14,471)
Other finance cost, net (372) (689) (1,648) (1,586)
Other income / (expenses),
net 822 (1,568) 740 (4,527)
Gain / (loss) on derivatives 1,491 (12) 2,562 930
--------- --------- --------- ---------
Total Other Income (Expenses),
net (6,142) (5,945) (19,568) (15,977)
--------- --------- --------- ---------
Net income from continuing
operations $ 27,971 $ 25,494 $ 93,230 $ 78,448
--------- --------- --------- ---------
Net (loss) income from
discontinued operations (38) (3) (1,560) 92,174
--------- --------- --------- ---------
Net Income $ 27,933 $ 25,491 $ 91,670 $ 170,622
========= ========= ========= =========
EARNINGS PER SHARE (from
continuing operations)
Basic and diluted net income
per share $ 0.51 $ 0.47 $ 1.71 $ 1.44
========= ========= ========= =========
EARNINGS PER SHARE
Basic and diluted net income
per share $ 0.51 $ 0.47 $ 1.68 $ 3.13
========= ========= ========= =========
Basic and diluted weighted
average number of shares (in
thousands of shares) 54,558 54,558 54,558 54,558
========= ========= ========= =========
DANAOS CORPORATION
Balance Sheets
(Expressed in thousands of United States dollars)
As of As of
September 30, December 31,
------------- -------------
2008 2007
------------- -------------
(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 66,495 $ 63,495
Restricted cash 323,021 46,179
Accounts receivable, net 2,504 4,321
Other current assets 27,957 18,993
------------- -------------
419,977 132,988
NON-CURRENT ASSETS
Fixed assets, net 1,293,419 1,182,505
Advances for vessel acquisitions and
vessels under construction 1,011,943 745,534
Deferred charges, net 15,358 10,431
Other non-current assets 966 333
------------- -------------
2,321,686 1,938,803
------------- -------------
TOTAL ASSETS 2,741,663 2,071,791
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Long-term debt, current portion 32,219 25,619
Accounts payable, accrued liabilities &
other current liabilities 29,436 24,092
Fair value of financial instruments,
current portion - 1,402
------------- -------------
61,655 51,113
LONG-TERM LIABILITIES
Long-term debt, net of current portion 1,986,660 1,330,927
Fair value of financial instruments, net
of current portion 112,923 56,537
Other long-term liabilities 6,666 8,310
------------- -------------
2,106,249 1,395,774
STOCKHOLDERS' EQUITY
Common stock 546 546
Additional paid-in capital 288,577 288,530
Accumulated other comprehensive income (121,640) (54,886)
Retained earnings 406,276 390,714
------------- -------------
573,759 624,904
------------- -------------
Total liabilities and stockholders' equity $ 2,741,663 $ 2,071,791
============= =============
DANAOS CORPORATION
Statements of Cash Flows
(Expressed in thousands of United States dollars)
Three Three Nine Nine
months months months months
ended ended ended ended
September September September September
30, 30, 30, 30,
---------- ---------- ---------- ----------
2008 2007 2008 2007
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
Cash Flows provided by /
(used in):
Operating Activities:
Net income $ 27,933 $ 25,491 $ 91,670 $ 170,622
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation 13,043 9,530 37,168 29,548
Amortization of deferred
charges 2,018 1,640 5,452 4,664
Written off amount of
deferred charges -- 160 309 444
Stock based compensation 24 -- 47 --
Payments for drydocking /
special survey (2,509) (1,445) (8,765) (6,071)
Change in fair value of
debt and financial
instruments (5,483) 13 (12,585) (1,046)
(Gain) / Loss on sale of
vessels -- 51 (14,928) (88,349)
Accounts receivable (227) 414 1,817 897
Other assets, current and
non-current (2,039) (3,150) (2,669) (9,386)
Accounts payable and
accrued liabilities (2,577) (938) 4,668 (2,118)
Other liabilities,
current and non-current (338) (569) (968) 15,182
---------- ---------- ---------- ----------
Cash provided by Operating
Activities 29,845 31,197 101,216 114,387
---------- ---------- ---------- ----------
Investing Activities:
Vessel acquisitions
including advances (45) (99,372) (76,525) (155,107)
Vessels under
construction (151,318) (158,370) (397,188) (320,238)
Proceeds from sale of
vessels -- 44,481 69,103 275,768
---------- ---------- ---------- ----------
Cash (used in) / provided
by Investing Activities (151,363) (213,261) (404,610) (199,577)
---------- ---------- ---------- ----------
Financing Activities:
Debt draw downs 399,760 305,000 715,213 541,177
Debt repayment (9,217) (87,217) (53,026) (318,844)
Dividends paid (25,369) (24,005) (76,108) (72,016)
Deferred costs (1,265) -- (2,843) (870)
Increase in restricted
cash (277,559) 7,393 (276,842) (31,810)
---------- ---------- ---------- ----------
Cash provided by / (used
in) Financing Activities 86,350 201,171 306,394 117,637
---------- ---------- ---------- ----------
Net change in cash and cash
equivalents (35,168) 19,107 3,000 32,447
Cash and cash equivalents,
beginning of period 101,663 56,415 63,495 43,075
---------- ---------- ---------- ----------
Cash and cash equivalents,
end of period $ 66,495 $ 75,522 $ 66,495 $ 75,522
========== ========== ========== ==========
Reconciliation of Three months Three months Nine months Nine months
Net Income to ended ended ended ended
EBITDA September 30, September 30, September 30, September 30,
------------ ------------ ------------ ------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
(unaudited)
Net income $ 27,971 $ 25,494 $ 93,230 $ 78,448
Depreciation 13,043 9,530 37,168 29,077
Amortization of
deferred
charges 1,949 1,600 5,316 4,438
Interest income (1,921) (1,118) (3,861) (3,677)
Interest expense 10,004 4,794 25,083 14,471
------------ ------------ ------------ ------------
EBITDA (1) from
continuing
operations $ 51,046 $ 40,300 $ 156,936 $ 122,757
------------ ------------ ------------ ------------
EBITDA (1) from
discontinued
operations (38) (5) (1,560) 93,120
------------ ------------ ------------ ------------
EBITDA (1) $ 51,008 $ 40,295 $ 155,376 $ 215,877
============ ============ ============ ============
(1) EBITDA represents net income before interest, income tax expense,
depreciation and amortization. However, EBITDA is not a recognized
measurement under U.S. generally accepted accounting principles, or
"GAAP." We believe that the presentation of EBITDA is useful to
investors because it is frequently used by securities analysts,
investors and other interested parties in the evaluation of companies
in our industry. We also believe that EBITDA is useful in evaluating
our ability to service additional debt and make capital expenditures.
In addition, we believe that EBITDA is useful in evaluating our
operating performance and liquidity position compared to that of
other companies in our industry because the calculation of EBITDA
generally eliminates the effects of financings, income taxes and the
accounting effects of capital expenditures and acquisitions, items
which may vary for different companies for reasons unrelated to
overall operating performance and liquidity.
Contact Information: For further information please contact: Company Contact: Dimitri J. Andritsoyiannis Chief Financial Officer Danaos Corporation Athens, Greece Tel.: +30 210 419 6481 E-Mail: cfo@danaos.com Iraklis Prokopakis Chief Operating Officer Danaos Corporation Athens, Greece Tel.: +30 210 419 6400 E-Mail: coo@danaos.com Investor Relations and Financial Media Nicolas Bornozis President Capital Link, Inc. New York Tel. 212-661-7566 E-Mail: nbornozis@capitallink.com