Seaspan Reports Financial Results for the Quarter Ended March

Seaspan Reports Financial Results for the Quarter Ended March 31,
2012 
Declares First Quarter Dividend of $0.25 Per Common Share,
Representing a 33% Increase Over Previous Quarter's Dividend 
HONG KONG, CHINA -- (Marketwire) -- 05/16/12 -- Seaspan Corporation
(NYSE:SSW) announced today its financial results for the quarter
ended March 31, 2012. Below is a summary of Seaspan's key financial
results:  
Summary of Key Financial Results (in thousands of USD):  


 
                               Quarter Ended March 31,         Change       
                             -----------------------------------------------
                                     2012         2011           $       %  
                             -----------------------------------------------
Reported net earnings           $  51,258    $  50,552   $     706     1.4% 
Normalized net earnings(1)      $  33,228    $  25,146   $   8,082    32.1% 
Earnings per share, basic       $    0.54    $    0.56   $   (0.02)   (3.6%)
Earnings per share, diluted     $    0.51    $    0.53   $   (0.02)   (3.8%)
Normalized earnings per                                                     
 share, converted(1) (Series                                                
 A preferred shares converted                                               
 at $15)                        $    0.30    $    0.24   $    0.06    25.0% 
Cash available for                                                          
 distribution to common                                                     
 shareholders(2)                $  65,344    $  50,897   $  14,447    28.4% 
Adjusted EBITDA(3)              $ 115,826    $  87,235   $  28,591    32.8% 
                                                                            
-----------------------------                                               

 
(1) Normalized net earnings and normalized earnings per share are
non-GAAP measures that are adjusted for items such as the change in
fair value of financial instruments, interest expense, interest
expense at the hedged rate, organizational development costs and
certain other items that Seaspan believes are not representative of
its operating performance. Normalized earnings per share, converted,
reflects normalized earnings per share on a pro-forma basis on the
assumption that Seaspan's outstanding Series A preferred shares are
converted at $15.00 per share. Please read "Reconciliation of
Non-GAAP Financial Measures for the Quarters Ended March 31, 2012 and
2011- Description of Non-GAAP Financial Measures - B. Normalized Net
Earnings and Normalized Earnings per Share" for a description of
normalized net earnings and normalized earnings per share, converted,
and for reconciliations of these measures to net earnings and
earnings per share, respectively. 
(2) Cash available for distribution to common shareholders is a
non-GAAP measure that represents net earnings adjusted for
depreciation, amortization of deferred charges, non-cash share-based
compensation, dry-dock adjustment, change in fair value of financial
instruments, interest expense, interest expense at the hedged rate,
cash dividends paid on preferred shares, loss on vessels, bareboat
charter adjustment, organizational development costs and certain
other items that Seaspan believes are not representative of its
operating performance. Please read "Reconciliation of Non-GAAP
Financial Measures for the Quarters Ended March 31, 2012 and 2011 -
Description of Non-GAAP Financial Measures - A. Cash Available for
Distribution to Common Shareholders" for a description of cash
available for distribution to common shareholders and a
reconciliation of cash available for distribution to net earnings. 
(3) Adjusted EBITDA is a non-GAAP measure that represents net
earnings before interest expense and other debt-related expenses,
interest income, income tax expense, depreciation and amortization
expense, change in fair value of financial instruments, loss on
vessels, bareboat charter adjustment, organizational development
costs and certain other non-cash charges and items that Seaspan
believes are not representative of its operating performance. Please
read "Reconciliation of Non-GAAP Financial Measures for the Quarters
Ended March 31, 2012 and 2011 - Description of Non-GAAP Financial
Measures - C. Adjusted EBITDA" for a description of Adjusted EBITDA
and a reconciliation of Adjusted EBITDA to net earnings. 
Summary of Key Highlights 


 
--  Achieved vessel utilization of 99.1% for the quarter ended March 31,
    2012. 
    
--  Accepted delivery of two newbuilding vessels during the quarter,
    bringing Seaspan's operating fleet to a total of 67 vessels at March 31,
    2012. The two delivered vessels are 13100 TEU vessels, the largest
    vessels in Seaspan's fleet and flagship vessels in COSCON's
    containership fleet. 
    
--  Paid a fourth quarter dividend of $0.59375 per Series C preferred share
    on January 30, 2012, representing a distribution of $8.3 million. The
    dividend was paid to all Series C shareholders of record as of January
    27, 2012 for the period from October 30, 2011 to January 29, 2012. 
    
--  Paid a fourth quarter dividend of $0.1875 per common share on February
    22, 2012, increasing cumulative dividends paid to $7.72 per common share
    since Seaspan's August 2005 initial public offering. 
    
--  Repurchased 11.3 million Class A common shares through a tender offer at
    a price of $15 per share for an aggregate cost of $169.5 million
    excluding, fees and expenses. 

 
Gerry Wang, Chief Executive Officer, Co-Chairman, and Co-Founder of
Seaspan, commented, "During the first quarter, Seaspan continued to
generate strong, stable operational and financial results for
shareholders. We also took delivery of two newbuildings during the
quarter, increasing our fleet to 67 vessels. Consistent with our
strategy, both vessels commenced operations under long-term time
charters with a leading liner company."  
Mr. Wang added, "Based on our favourable results, our board has
declared a $0.25 per share dividend on our Class A common stock for
the first quarter, representing a 33% increase. We remain committed
to drawing upon our strong and flexible capital structure to further
grow our high-quality fleet in a disciplined manner. In achieving
this important goal, we intend to continue to emphasize our SAVER
vessel design, which we believe provides customers with improved
efficiency and operational savings." 
First Quarter Developments 
Delivery of Vessels  
In March 2012, Seaspan accepted delivery of the COSCO Excellence and
COSCO Faith vessels. Both 13100 TEU vessels are on charter to COSCON
under 12-year, fixed-rate time charter contracts.  
Time Charter  
In March 2012, CSCL did not exercise its option to extend the time
charter for the CSCL Dalian. Seaspan plans to re-charter the vessel,
subject to market conditions, following its redelivery to Seaspan on
or about July 2012.  
UASC Madinah 
In March 2012, Seaspan was notified the time charter for the UASC
Madinah will not be extended and the vessel will be returned to
Seaspan in June 2012. This vessel is owned by one of Seaspan's
subsidiaries, and is being chartered to Seaspan. Seaspan's subsidiary
financed the vessel with a term loan from a leading U.S. bank, and
this term loan will mature in June upon the expiration of the UASC
time charter. Subject to certain conditions, the vessel will be sold
to the U.S. bank in June 2012 for the amount outstanding under the
term loan and will be leased back to Seaspan's subsidiary for
approximately nine years. 
Open Market Share Repurchase Plan  
In February 2012, Seaspan's Board of Directors authorized the
repurchase of up to $50.0 million of its Class A common shares. The
share repurchase authorization does not have an expiration date and
repurchase activity will depend on factors such as working capital
needs, repayment of debt, share price, and economic and market
conditions. Share repurchases may be effected from time to time
through open market purchases or in privately negotiated
transactions, and the repurchase program may be suspended, delayed or
discontinued at any time. Seaspan has entered into a Rule 10b5-1 plan
in connection with the share repurchase program. No shares were
repurchased during the quarter ended March 31, 2012. 
Acquisition of Seaspan Management Services Limited  
On January 27, 2012, Seaspan acquired all of the issued and
outstanding share capital of Seaspan Management Services Limited (the
"Manager"), and acquired and cancelled all of the issued and
outstanding shares of Seaspan's Class C common stock, which were
owned by a subsidiary of the Manager.   
The purchase price for the acquisition, excluding potential balance
sheet adjustments and any contingent consideration for managed fleet
growth payments, was $54.0 million, which Seaspan paid through the
issuance of approximately 4.2 million shares of its Class A common
stock, valued on a per share basis equal to $12.794, being the
volume-weighted average trading price for the 90 trading days
immediately preceding the closing date of the acquisition. For
accounting purposes, under U.S. GAAP, the purchase price is required
to be valued at the acquisition date. Therefore, the closing share
price on the day prior to acquisition of $15.85 per share was used to
value the Class A common shares at $66.9 million. 
The Manager provides technical, administrative and strategic services
to Seaspan. Prior to the acquisition, the Manager was owned by
affiliates of Seaspan's largest shareholder and certain of Seaspan's
directors. The acquisition increases Seaspan's control over access to
services that the Manager provides on a long-term basis, and reduces
certain conflicts between Seaspan and its directors who had interests
in the Manager. Seaspan previously paid fees to the Manager for
technical services on a fixed basis, which fees were adjusted every
three years. As a result of the acquisition, Seaspan's costs for
these services will vary more directly with the actual cost of
providing technical services for Seaspan's fleet. The conflicts
committee of Seaspan's board of directors, which committee is
composed of independent directors, with the assistance of financial
and legal advisors, reviewed and approved the acquisition of the
Manager. For additional information about Seaspan's acquisition of
the Manager, please see Seaspan's Form 6-K filed with the SEC on
January 30, 2012. 
Tender Offer  
On January 19, 2012, Seaspan repurchased 11.3 million shares of its
Class A common stock tendered in a tender offer at a price of $15.00
per share, for an aggregate cost of $169.5 million excluding fees and
expenses related to the tender offer.  
Subsequent Events  
Dividends  
On April 17, 2012, Seaspan declared a quarterly dividend of $0.59375
per Series C preferred share, representing a total distribution of
$8.3 million. This dividend was paid on April 30, 2012 to all
shareholders of record on April 27, 2012. 
On May 12, 2012, Seaspan's board of directors declared a quarterly
dividend of $0.25 per Class A common share. The dividend will be paid
on June 8, 2012 to all shareholders of record as of May 29, 2012.
This represents a 33.3% increase over the previous quarterly common
share dividend. With this dividend, Seaspan has increased its
quarterly common share dividend by 150% since March 31, 2010. Seaspan
expects common share dividends for the four quarters ending December
31, 2012 to total $1.00 per share. 
Delivery of vessels  
On April 18 and 27, 2012, Seaspan accepted delivery of the COSCO Hope
and the COSCO Fortune, respectively, bringing its operating fleet to
69 vessels. Both 13100 TEU vessels are on charter to COSCON under
12-year, fixed-rate time charter contracts.  
Time Charter  
On April 24, 2012, Seaspan fixed the CSCL Ningbo on a six-month time
charter with CSCL at a charter rate of $8,450 per day, with an
additional six-month extension option at a charter rate of $12,250
per day.  
Loan Facility Transaction  
On May 12, 2012, three of Seaspan's subsidiaries concluded
documentation for a $224 million loan facility with a leading Chinese
bank relating to the construction of its three 10000 TEU newbuilding
vessels. Seaspan expects the agreement to be executed by early June
2012. These vessels are scheduled to be delivered in 2014, when they
will commence operations under charters with Hanjin Shipping Co.,
Ltd. ("Hanjin") for a period of 10 years, plus an additional two
years at the option of Hanjin. Seaspan has conditionally guaranteed
certain financial obligations of its subsidiaries to the Chinese bank
under the loan facility. 
Results for the Quarter Ended March 31, 2012  
The following tables summarize vessel utilization and the impact of
off-hire time on Seaspan's revenues for the quarter ended March 31,
2012: 


 
                                                        First Quarter       
                                                  --------------------------
                                                          2012         2011 
                                                  --------------------------
Vessel Utilization:                                                         
Ownership Days                                           5,591        5,087 
Less Off-hire Days:                                                         
  Scheduled 5-Year Survey                                  (44)         (53)
  Unscheduled Off-hire                                      (7)          (2)
                                                  --------------------------
Operating Days                                           5,540        5,032 
                                                  --------------------------
                                                  --------------------------
Vessel Utilization                                        99.1%        98.9%
                                                  --------------------------
                                                  --------------------------
                                                                            
                                                       First Quarter        
                                                ----------------------------
                                                         2012          2011 
                                                ----------------------------
                                               
Revenue - Impact of Off-Hire (in thousands):                             
100% Utilization                                  $   153,349   $   121,983 
Less Off-hire:                                                              
  Scheduled 5-Year Survey                              (1,058)         (955)
  Unscheduled Off-hire(1)                                (202)          (33)
                                                ----------------------------
Actual Revenue Earned                             $   152,089   $   120,995 
                                                ============================
                                                                            
(1) Includes charterer deductions that are not related to off-hire.         

 
Seaspan accepted delivery of 10 vessels during the year ended
December 31, 2011. Seaspan began 2012 with 65 vessels in operation
and during the quarter ended March 31, 2012, accepted delivery of two
vessels, bringing its fleet to a total of 67 vessels in operation as
at March 31, 2012. Operating days are the primary driver of revenue,
while ownership days are the primary driver for ship operating costs. 
The following table summarizes Seaspan's consolidated financial
results for the quarters ended March 31, 2012 and 2011: 


 
Financial Summary (in millions):                                            
                                Quarter Ended March 31,        Change       
                                --------------------------------------------
                                       2012        2011           $       % 
                                --------------------------------------------
                                                                            
Revenue                           $   152.1   $   121.0   $    31.1    25.7%
Ship operating expense                 34.6        31.1         3.5    11.2%
Depreciation                           37.3        30.0         7.3    24.4%
General and administrative                                                  
 expenses                               5.9         2.7         3.2   117.1%
Interest expense                       17.0        10.1         6.8    67.3%
Change in fair value of                                                     
 financial instruments                                                      
 (gain)/loss                            4.7        (5.8)       10.5   180.6%
                                                                            
                      Quarter Ended March 31,            Increase           
                   ---------------------------------------------------------
                             2012          2011          Days             % 
                   ---------------------------------------------------------
Operating days              5,540         5,032           508          10.1%
Ownership days              5,591         5,087           504           9.9%

 
Revenue  
The increase in operating days and the dollar impact thereof, for the
quarter ended March 31, 2012 relative to the corresponding period in
2011, was due to the following:  


 
                                            Quarter Ended March 31, 2012    
                                         -----------------------------------
                                               Operating           $ impact 
                                             Days impact      (in millions) 
                                         -----------------------------------
2012 vessel deliveries                                40     $          2.3 
Full period contribution for 2011 vessel                                    
 deliveries                                          763               35.6 
Changes due to bareboat charters(1)                 (360)              (8.4)
Change in daily charterhire rate                       -                0.2 
Change in charterhire days                            61                1.7 
Scheduled off-hire                                     9               (0.1)
Unscheduled off-hire                                  (5)              (0.2)
                                         -----------------------------------
Total                                                508     $         31.1 
                                         ===================================
                                                                            
(1) Seaspan bareboat chartered to MSC four 4800 TEU vessels commencing in   
 the fourth quarter of 2011. These transactions were accounted for as       
 sales-type leases with the vessels being deemed disposed of and a gross    
 investment in lease recorded which is being amortized to income through    
 interest income from leasing. In the comparable period in the prior year,  
 the hire payments from the time chartering of these vessels to A.P.        
 Moller-Maersk A/S was included in revenue.                                 

 
Vessel utilization was 99.1% for the quarter ended March 31, 2012
compared to 98.9% for the comparable period in the prior year.  
The increase in vessel utilization for the quarter ended March 31,
2012 was primarily due to a decrease in scheduled off-hire. For the
quarter ended March 31, 2011, there were four scheduled dry-dockings
which resulted in 53 days of off-hire. During the quarter ended March
31, 2012, Seaspan commenced four dry-dockings which resulted in 44
days of scheduled off-hire. The decrease in scheduled off-hire was
partially offset by an increase in unscheduled off-hire. 
The dry-dockings Seaspan commenced during the quarter ended March 31,
2012 involved the following vessels: 


 
            Vessel                                    Commenced
            ---------------------------------------------------
            Rio de Janeiro Express                           Q1
            CSCL Zeebrugge                                   Q1
            COSCO Fuzhou                                     Q1
            COSCO Yingkou                                    Q1

 
Seaspan's cumulative vessel utilization since its initial public
offering in August 2005 is 99.3%.  
Ship Operating Expense  
Prior to the acquisition of the Manager, the ship operating expense
was comprised of fees paid to the Manager for technical services in
exchange for a fixed fee per day per vessel, which was adjusted every
three years. The fixed technical management fee was established based
on costs expected to be incurred by the Manager in providing the
technical services. As a result of the acquisition, Seaspan's ship
operating expense is made up of the direct operating costs of the
vessels. 
Ship operating expense for the quarter ended March 31, 2012 of $34.6
million included $9.3 million of technical management fees paid to
the Manager during the pre-acquisition period from January 1 to
January 26, 2012 and $25.3 million in direct costs incurred during
the post-acquisition period from January 27 to March 31, 2012.  
Ship operating expense increased to $34.6 million for the quarter
ended March 31, 2012, from $31.1 million for the same period in the
prior year. In 2011, the ship operating expenses represented the
amounts paid to the Manager for technical management fees. The
increase in ship operating expense was primarily due to an increase
in ownership days resulting from the two vessel deliveries in the
first quarter of 2012 and a full period of expenses for the 10 vessel
deliveries during 2011. In addition, lubricant costs, spares and
repairs and maintenance increased due to a worldwide rise in the cost
of lubricants, service and parts prices. Prior to the acquisition of
the Manager, the entire fixed technical service fee was classified as
ship operating expense. As a result of the acquisition of the
Manager, the portion of the Manager's general and administrative
expenses previously included in the fixed technical service fee,
because such expenses are not operating in nature, has been
reclassified as general and administrative expenses in 2012 and are
no longer included in ship operating expense. This decrease partially
offsets the increases described above.  
Depreciation  
The increase in depreciation expense for the quarter ended March 31,
2012 was due to the two vessel deliveries in 2012 and a full period
of ownership for the 10 deliveries in 2011, offset by the impact of
the disposition of four MSC bareboat charter vessels.  
General and Administrative Expenses  
The increase in general and administrative expenses for the quarter
ended March 31, 2012 compared to the corresponding period of the
prior year was primarily the result of the reclassification of
general and administrative expenses of the Manager from ship
operating expenses, as described above.  
Interest Expense  
Interest expense is comprised primarily of interest at the variable
rate plus the applicable margin incurred on debt for operating
vessels and a reclassification of amounts from accumulated other
comprehensive income related to previously designated hedging
relationships. The increase in interest expense for the quarter ended
March 31, 2012, was primarily due to a higher average operating debt
balance and higher average LIBOR compared to the comparable period in
the prior year. The average LIBOR for the quarter ended March 31,
2012 was 0.5% compared to 0.4% for the corresponding period of the
prior year. Although Seaspan has entered into fixed interest rate
swaps for much of its variable rate debt, the difference between the
variable interest rate and the swapped fixed rate on operating debt
is recorded in Seaspan's change in fair value of financial
instruments caption as required by financial reporting standards. The
interest incurred on long-term debt for Seaspan's vessels under
construction is capitalized to the respective vessels under
construction.  
Change in Fair Value of Financial Instruments  
The change in fair value of financial instruments resulted in a loss
of $4.7 million for the quarter ended March 31, 2012, compared to a
gain of $5.8 million for the comparable quarter last year. The
changes in change in fair value for the quarter ended March 31, 2012
were primarily due to decreases in the forward LIBOR curve. The fair
value of interest rate swap and swaption agreements is subject to
change based on Seaspan's company-specific credit risk included in
the discount factor and the interest rate implied by the current swap
curve, including its relative steepness. In determining the fair
value, these factors are based on the current information available
to Seaspan. These factors are expected to change through the life of
the instruments, causing the fair value to fluctuate significantly
due to the large notional amounts and long-term nature of Seaspan's
derivative instruments. As these factors may change, the fair value
of the instruments is an estimate and may deviate significantly from
the actual cash settlements realized over the term of the
instruments. Seaspan's valuation techniques have not changed and
remain consistent with those followed by other valuation
practitioners. 
Dividends Declared  
For the quarter ended March 31, 2012, Seaspan declared a quarterly
dividend of $0.25 per Class A common share, representing a total
distribution of $15.7 million. The dividend will be paid on June 8,
2012 to all shareholders of record as of May 29, 2012. Because
Seaspan adopted a dividend reinvestment plan, or DRIP, the actual
amount of cash dividend paid may be less than $15.7 million based on
shareholder participation in the DRIP.  
Since Seaspan's initial public offering in August 2005, it has
declared cumulative dividends of $7.97 per common share. Since
Seaspan adopted the DRIP in May 2008, a total of 3.3 million shares
have been issued, and $38.1 million of dividends have been
reinvested, through shareholder participation in the DRIP.  
About Seaspan  
Seaspan is a leading independent owner and manager of containerships,
which it charters primarily pursuant to long-term fixed-rate time
charters to major container liner companies. Seaspan's contracted
fleet of 72 containerships consists of 69 containerships in operation
and three containerships scheduled for delivery in 2014. Seaspan's
operating fleet of 69 vessels has an average age of approximately
five years and an average remaining charter period of approximately
seven years. All of the three vessels to be delivered to Seaspan are
already committed to fixed-rate time charters of 10 years in duration
from delivery. Seaspan's customer base consists of nine of the
world's largest liner companies, including China Shipping Container
Lines (Asia) Co., Ltd., Compania Sud Americana de Vapores S.A., COSCO
Container Lines Co., Ltd., Hanjin Shipping Co., Ltd., Hapag-Lloyd
USA, LLC, Kawasaki Kisen Kaisha Ltd., Mediterranean Shipping Company
S.A., Mitsui O.S.K. Lines, Ltd., and United Arab Shipping Company
(S.A.G.).  
Seaspan's common shares are listed on the New York Stock Exchange
under the symbol "SSW".  
Seaspan's Series C preferred shares are listed on the New York Stock
Exchange under the symbol "SSW PR C".  
Conference Call and Webcast  
Seaspan will host a conference call and webcast presentation for
investors and analysts to discuss its results for the quarter ended
March 31, 2012 on May 17, 2012 at 7:00 a.m. PT / 10:00 a.m. ET.
Participants should call 1-877-246-9875 (US/Canada) or 1-707-287-9353
(International) and request the Seaspan call. A telephonic replay
will be available for anyone unable to participate in the live call.
To access the replay, call 1-855-859-2056 or 1-404-537-3406 and enter
the replay passcode: 79662823. The recording will be available from
May 17, 2012 at 10:00 a.m. PT / 1:00 p.m. ET through 8:59 p.m. PT /
11:59 p.m. ET on May 31, 2012. The conference call will also be
broadcast live over the Internet and will include a slide
presentation. To access the live webcast and slide presentation, go
to www.seaspancorp.com and click on "News & Events" and then "Events
& Presentations" for the link. The webcast and slides will be
archived on the site for one year. 


 
                             SEASPAN CORPORATION                            
                    UNAUDITED CONSOLIDATED BALANCE SHEET                    
                             AS OF MARCH 31, 2012                           
                        (IN THOUSANDS OF US DOLLARS)                        
                                                                            
                                          March 31, 2012  December 31, 2011 
                                         -----------------------------------
Assets                                                                      
Current assets:                                                             
  Cash and cash equivalents                $     289,478     $      481,123 
  Short term investments                          10,578                  - 
  Accounts receivable                             16,945              6,837 
  Prepaid expenses                                26,608             17,398 
  Gross investment in lease                       14,600             14,640 
                                         -----------------------------------
                                                 358,209            519,998 
                                                                            
Vessels                                        4,601,268          4,289,331 
Vessels under construction                       231,537            407,918 
Deferred charges                                  45,386             45,917 
Gross investment in lease                         92,198             95,798 
Goodwill                                          66,662                  - 
Other assets                                      78,202             88,754 
                                         -----------------------------------
                                           $   5,473,462     $    5,447,716 
                                         -----------------------------------
                                         -----------------------------------
                                                                            
Liabilities and Shareholders' Equity                                        
Current liabilities:                                                        
  Accounts payable and accrued                                              
   liabilities                             $      55,164     $       47,400 
  Deferred revenue                                23,666             23,257 
  Current portion of long-term debt               78,039             81,482 
  Current portion of other long-term                                        
   liabilities                                    37,045             37,649 
                                         -----------------------------------
                                                 193,914            189,788 
                                                                            
Long-term deferred revenue                        11,298             12,503 
Long-term debt                                 2,958,137          2,914,247 
Other long-term liabilities                      643,035            583,263 
Fair value of financial instruments              539,010            564,490 
                                         -----------------------------------
                                               4,345,394          4,264,291 
                                                                            
Share capital                                        770                838 
Treasury shares                                   (1,444)                 - 
Additional paid-in capital                     1,773,435          1,860,979 
Deficit                                         (591,415)          (622,406)
Accumulated other comprehensive loss             (53,278)           (55,986)
                                         -----------------------------------
Total shareholders' equity                     1,128,068          1,183,425 
                                         -----------------------------------
                                                                            
                                           $   5,473,462     $    5,447,716 
                                         -----------------------------------
                                         -----------------------------------
                                                                            
                                                                            
                             SEASPAN CORPORATION                            
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT FOR THE QUARTERS
                        ENDED MARCH 31, 2012 AND 2011                       
      (IN THOUSANDS OF US DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)      
                                                                            
                                              Quarter ended   Quarter ended 
                                             March 31, 2012  March 31, 2011 
                                            --------------------------------
                                                                            
Revenue                                       $     152,089   $     120,995 
                                                                            
Operating expenses:                                                         
 Ship operating                                      34,550          31,066 
 Depreciation                                        37,281          29,958 
 General and administrative                           5,850           2,694 
                                            --------------------------------
                                                     77,681          63,718 
                                            --------------------------------
                                                                            
Operating earnings                                   74,408          57,277 
                                                                            
Other expenses (earnings):                                                  
 Interest expense                                    16,975          10,147 
 Interest income                                       (308)           (155)
 Interest income from leasing                        (1,343)              - 
 Undrawn credit facility fees                           805           1,261 
 Amortization of deferred charges                     2,211           1,274 
 Equity loss on investment                              134               - 
 Change in fair value of financial                                          
  instruments                                         4,676          (5,802)
                                            --------------------------------
                                                     23,150           6,725 
                                            --------------------------------
                                                                            
Net earnings                                  $      51,258   $      50,552 
                                                                            
Deficit, beginning of period                       (622,406)       (469,616)
Dividends on common shares                          (11,735)         (8,581)
Dividends on Series B preferred shares                    -            (591)
Dividends on Series C preferred shares               (8,313)              - 
Amortization of Series C issuance costs                (219)           (324)
                                            --------------------------------
Deficit, end of period                        $    (591,415)  $    (428,560)
                                            --------------------------------
                                            --------------------------------
                                                                            
Weighted average number of shares, basic                                    
 (thousands)                                         63,696          68,854 
Weighted average number of shares, diluted                                  
 (thousands)                                         83,566          85,285 
                                            --------------------------------
                                                                            
Earnings per share, basic                     $        0.54   $        0.56 
                                            --------------------------------
                                            --------------------------------
Earnings per share, diluted                   $        0.51   $        0.53 
                                            --------------------------------
                                            --------------------------------
                                                                            
                                                                            
                             SEASPAN CORPORATION                            
 UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND LOSS FOR THE 
                   QUARTERS ENDED MARCH 31, 2012 AND 2011                   
                         (IN THOUSANDS OF US DOLLARS)                       
                                                                            
                                              Quarter ended    Quarter ended
                                             March 31, 2012   March 31, 2011
                                           ---------------------------------
                                                                            
Net earnings                                 $       51,258   $       50,552
                                                                            
Other comprehensive income:                                                 
  Amounts reclassified to net earnings                                      
   during the period, relating to cashflow                                  
   hedging instruments                                2,708            3,376
                                           ---------------------------------
                                                                            
Comprehensive income                         $       53,966   $       53,928
                                           ---------------------------------
                                           ---------------------------------
                                                                            
                                                                            
                             SEASPAN CORPORATION                            
              UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS               
               FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011               
                         (IN THOUSANDS OF US DOLLARS)                       
                                                                            
                                            Quarter ended     Quarter ended 
                                           March 31, 2012    March 31, 2011 
                                         -----------------------------------
                                                                            
Cash provided by (used in):                                                 
                                                                            
Operating activities:                                                       
 Net earnings                              $       51,258    $       50,552 
 Items not involving cash:                                                  
  Depreciation                                     37,281            29,958 
  Share-based compensation                            586               387 
  Amortization of deferred charges                  2,211             1,274 
  Amounts reclassified from other                                           
   comprehensive loss                               2,542             3,285 
  Unrealized change in fair value of                                        
   financial instruments                          (25,783)          (35,552)
  Equity loss on investment                           134                 - 
Change in assets and liabilities                  (18,470)          (13,515)
                                         -----------------------------------
Cash from operating activities                     49,759            36,389 
                                         -----------------------------------
                                                                            
Financing activities:                                                       
 Preferred shares issued, net of share                                      
  issue costs                                           -           240,376 
 Draws on credit facilities                        45,490             1,910 
 Repayment on credit facilities                   (10,042)                - 
                                                                            
 Repayment on other long-term liabilities         (24,649)           (2,213)
 Tender Offer                                    (170,609)                - 
 Financing fees                                       (16)             (682)
 Dividends on common shares(4)                     (7,367)           (6,251)
 Dividends on preferred shares                     (8,313)             (320)
                                         -----------------------------------
Cash from (used in) financing activities         (175,506)          232,820 
                                         -----------------------------------
                                                                            
Investing activities:                                                       
 Expenditures for vessels                         (86,635)          (90,561)
 Cash acquired on acquisition of Seaspan                                    
  Management Services Ltd.                         23,910                 - 
 Short term investments                           (10,214)                - 
 Intangible assets                                  7,041              (589)
                                         -----------------------------------
Cash used in investing activities                 (65,898)          (91,150)
                                         -----------------------------------
                                                                            
Increase (decrease) in cash and cash                                        
 equivalents                                     (191,645)          178,059 
Cash and cash equivalents, beginning of                                     
 period                                           481,123            34,219 
                                         -----------------------------------
Cash and cash equivalents, end of period   $      289,478    $      212,278 
                                         -----------------------------------
                                         -----------------------------------
                                                                            
(4) During the quarter ended March 31, 2012, non-cash dividends of $4.4     
 million were paid through the dividend reinvestment plan. Shareholders have
 invested a total of $38.1 million in the dividend reinvestment plan since  
 its adoption in May 2008.                                                  
                                                                            
                                                                            
                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
               FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011               
                         (IN THOUSANDS OF US DOLLARS)                       

 
Description of Non-GAAP Financial Measures  
A. Cash Available for Distribution to Common Shareholders  
Cash available for distribution to common shareholders is defined as
net earnings adjusted for depreciation, interest expense,
amortization of deferred charges, non-cash share-based compensation,
change in fair value of financial instruments, loss on vessels,
bareboat charter adjustment, organizational development costs,
amounts paid for dry-docking, cash dividends paid on preferred
shares, interest expense at the hedged rate and certain other items
that Seaspan believes affect the comparability of its operating
results.  
Cash available for distribution to common shareholders is a non-GAAP
measure used to assist in evaluating Seaspan's ability to make
quarterly cash dividends before reserves for replacement capital
expenditures. Cash available for distribution to common shareholders
is not defined by United States generally accepted accounting
principles ("GAAP") and should not be considered as an alternative to
net earnings or any other indicator of Seaspan's performance required
to be reported by GAAP.  


 
                                            Quarter ended     Quarter ended 
                                           March 31, 2012    March 31, 2011 
                                         -----------------------------------
                                                                            
Net earnings                               $       51,258    $       50,552 
Add:                                                                        
 Depreciation                                      37,281            29,958 
 Interest expense                                  16,975            10,147 
 Amortization of deferred charges                   2,211             1,274 
 Share-based compensation                             586               387 
 Change in fair value of financial                                          
  instruments                                       4,676            (5,802)
 Bareboat charter adjustment, net (1)               2,297                 - 
 Organizational development costs(2)                  631                 - 
Less:                                                                       
 Amounts paid for dry-dock adjustment              (1,946)           (1,458)
 Series B preferred share dividends                                         
  paid(3)                                               -              (320)
 Series C preferred share dividends paid                                    
  and accumulated(3)                               (8,313)           (4,090)
                                         -----------------------------------
Net cash flows before interest payments           105,656            80,648 
Less:                                                                       
 Interest expense at the hedged rate(4)           (40,312)          (29,751)
                                         -----------------------------------
Cash available for distribution to common                                   
 shareholders                              $       65,344    $       50,897 
                                         -----------------------------------
                                         -----------------------------------
                                                                            
                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
               FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011               
       (IN THOUSANDS OF US DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)     

 
Description of Non-GAAP Financial Measures  
B. Normalized Net Earnings and Normalized Earnings per Share  
Normalized net earnings is defined as net earnings adjusted for items
such as interest expense, change in fair value of financial
instruments, loss on vessels, interest expense at the hedged rate,
organizational development costs and certain other items Seaspan
believes affect the comparability of operating results. Normalized
net earnings is a useful measure because it excludes those items that
Seaspan believes are not representative of its operating performance. 
Normalized net earnings is not defined by GAAP and should not be
considered as an alternative to net earnings or any other indicator
of Seaspan's performance required to be reported by GAAP.  
Normalized earnings per share, converted, is calculated as normalized
net earnings, less dividends on Series B (until their repurchase on
November 30, 2011) and Series C preferred shares, divided by the
"converted" number of shares outstanding for the period. The Series A
preferred shares automatically convert to Class A common shares at a
price of $15.00 per share at any time on or after January 31, 2014 if
the trailing 30-day average trading price of the common shares is
equal to or above $15.00. If the share price is less than $15.00,
Seaspan can choose to not convert the preferred shares and to
increase the annual increase in the liquidation preference to 15% per
annum from 12%. The "converted" number of shares includes: basic
weighted average number of shares, share-based compensation, and the
impact of the Series A preferred shares converted at $15.00 per
share. This method reflects Seaspan's ability to control the
conversion if the share price is less than $15.00 and the per share
impact of the preferred shares conversion at $15.00.  
Normalized earnings per share, basic, can be computed as normalized
net earnings attributable to common shareholders divided by the
weighted-average number of shares used to compute reported earnings
per share, basic.  
Normalized earnings per share, converted, diluted, and basic are not
defined by GAAP and should not be considered as an alternative to
earnings per share or any other indicator of Seaspan's performance
required to be reported by GAAP. 


 
                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
               FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011               
       (IN THOUSANDS OF US DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)     

 
Description of Non-GAAP Financial Measures  
B. Normalized Net Earnings and Normalized Earnings per Share
(continued) 


 
                                            Quarter ended     Quarter ended 
                                           March 31, 2012    March 31, 2011 
                                         -----------------------------------
                                                                            
Net earnings                               $       51,258    $       50,552 
Adjust:                                                                     
  Interest expense                                 16,975            10,147 
  Change in fair value of financial                                         
   instruments                                      4,676            (5,802)
  Organizational development costs (2)                631                 - 
  Interest at hedged rate(4)                      (40,312)          (29,751)
                                         -----------------------------------
Normalized net earnings                    $       33,228    $       25,146 
                                         -----------------------------------
Less: preferred share dividends                                             
                                                                            
  Series A                                          8,128             7,142 
  Series B                                              -               591 
  Series C (including amortization of                                       
   issuance costs)                                  8,534             4,414 
                                         -----------------------------------
                                                   16,662            12,147 
                                         -----------------------------------
Normalized net earnings attributable to                                     
 common shareholders                       $       16,566    $       12,999 
                                         -----------------------------------
                                         -----------------------------------
                                                                            
Weighted average number of shares used to                                   
 compute earnings per share:                                                
Reported and normalized, basic                     63,696            68,854 
  Share-based compensation                            198               101 
  Contingent consideration                            703                 - 
  Shares held in escrow                               586                 - 
  Series A preferred shares liquidation                                     
   preference converted at $15                     18,383            16,330 
                                         -----------------------------------
Normalized, converted                              83,566            85,285 
  Series A preferred shares 115% premium                                    
   (30-day trailing average)                            -                 - 
                                         -----------------------------------
Reported, diluted(5)                               83,566            85,285 
                                         -----------------------------------
Earnings per share:                                                         
  Reported, basic                          $         0.54    $         0.56 
                                         -----------------------------------
                                         -----------------------------------
  Reported, diluted                        $         0.51    $         0.53 
                                         -----------------------------------
                                         -----------------------------------
  Normalized, converted - preferred                                         
   shares converted at $15(6)              $         0.30    $         0.24 
                                         -----------------------------------
                                         -----------------------------------
                                                                            
                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
               FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011               
            (IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE AMOUNTS)          

 
Description of Non-GAAP Financial Measures  
C. Adjusted EBITDA  
Adjusted EBITDA is defined as net earnings before interest expense
and other debt-related expenses, income tax expense, interest income,
depreciation and amortization expense, change in fair value of
financial instruments, loss on vessels, bareboat charter adjustment,
organizational development costs and certain other items that Seaspan
believes are not representative of its operating performance.  
Adjusted EBITDA provides useful information to investors in assessing
Seaspan's results of operations. Seaspan believes that this measure
is useful in assessing performance and highlighting trends on an
overall basis. Seaspan also believes that this measure can be useful
in comparing its results with those of other companies. The GAAP
measure most directly comparable to Adjusted EBITDA is net earnings.
Adjusted EBITDA is not defined by GAAP and should not be considered
as an alternative to net earnings or any other indicator of Seaspan's
performance required to be reported by GAAP. 


 
                                            Quarter ended     Quarter ended 
                                           March 31, 2012    March 31, 2011 
                                         -----------------------------------
                                                                            
Net earnings                               $       51,258    $       50,552 
Add:                                                                        
 Interest expense                                  16,975            10,147 
 Interest income                                     (308)             (155)
 Undrawn credit facility fees                         805             1,261 
 Depreciation                                      37,281            29,958 
 Amortization of deferred charges                   2,211             1,274 
 Change in fair value of financial                                          
  instruments                                       4,676            (5,802)
 Bareboat charter adjustment, net(1)                2,297                 - 
 Organizational development costs(2)                  631                 - 
                                         -----------------------------------
Adjusted EBITDA                            $      115,826    $       87,235 
                                         -----------------------------------
                                         -----------------------------------
                                                                            
(1)  In the second half of 2011, Seaspan entered into agreements to bareboat
     charter to MSC four 4800 TEU vessels for a five year term, beginning   
     from vessel delivery dates that occurred in 2011. Upon delivery of the 
     vessels to MSC, the transactions were accounted for as sales-type      
     leases. The vessels were disposed of and a gross investment in leases  
     was recorded, which is being amortized to income through interest      
     income from leasing. The bareboat charter adjustment is included to    
     reverse the GAAP accounting treatment and reflect the transaction as if
     the vessels had not been disposed of. Therefore, the bareboat charter  
     fees are added back and the interest income from leasing is deducted   
     resulting in a net bareboat charter adjustment.                        
(2)  Organizational development costs include professional fees and         
     integration costs related to the acquisition of the Manager.           
(3)  Dividends related to the Series B and Series C preferred shares have   
     been deducted as they reduce cash available for distribution to common 
     shareholders. All outstanding Series B preferred shares were redeemed  
     on November 30, 2011.                                                  
(4)  Interest expense at the hedged rate is calculated as the interest      
     incurred on operating debt at the fixed rate on the related interest   
     rate swaps plus the applicable margin on the related credit facilities 
     and variable rate leases, on an accrual basis. Interest expense on     
     fixed rate leases is calculated on the effective interest rate.        
(5)  If the effect of Series A preferred shares is anti-dilutive, their     
     effect is excluded from the computation of reported diluted earnings   
     per share.                                                             
(6)  Normalized earnings per share, converted, for the quarter ended March  
     31, 2012 is comparable to the comparable quarter in the prior year.    
     Excluding share count changes, a decrease of $0.04 per share due to the
     impact of the Series B and C preferred shares for the three months     
     ended March 31, 2012 was offset by an increase of $0.10 per share due  
     to a rise in normalized net earnings. In addition, due to a decrease in
     converted share count (85,285 to 83,566), there is an increase of $0.01
     per share.                                                             

 
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 
This release contains certain forward-looking statements (as such
term is defined in Section 21E of the Securities Exchange Act of
1934, as amended), which reflect management's current views with
respect to certain future events and performance, including, in
particular, statements regarding: future operating results; expansion
of Seaspan's business; future dividends; the effects of the
acquisition of the Manager on Seaspan and its operations and results,
including, among other things, on ship operating expenses and general
and administrative expenses; the closing of the financing for the
three newbuilding vessels; repurchases of Seaspan common shares under
its share repurchase program; vessel deliveries; vessel financing
arrangements; and Seaspan's capital requirements. Although these
statements are based upon assumptions Seaspan believes to be
reasonable, they are subject to risks and uncertainties. These risks
and uncertainties include, but are not limited to: the availability
to Seaspan of containership acquisition opportunities; the
availability and cost to Seaspan of financing to pursue growth
opportunities; integration of the Manager acquisition and the number
of additional vessels managed by the Manager in the future;
satisfaction of closing conditions for the newbuilding vessel
financing; chartering rates; conditions in the containership market;
increased operating expenses; the number of off-hire days;
dry-docking requirements; Seaspan's ability to borrow funds under its
credit facilities and to obtain additional financing in the future;
Seaspan's future cash flows and its ability to make dividend and
other payments; the time that it may take to construct new ships;
Seaspan's continued ability to enter into primarily long-term,
fixed-rate time charters with customers; changes in governmental
rules and regulations or actions taken by regulatory authorities; the
financial condition of shipyards, charterers, lenders, refund
guarantors and other counterparties and their ability to perform
their obligations under their agreements with Seaspan; the potential
for early termination of long-term contracts and Seaspan's potential
inability to renew or replace long-term contracts; conditions in the
public equity markets and the price of Seaspan's common shares; and
other factors detailed from time to time in Seaspan's periodic
reports and filings with the Securities and Exchange Commission,
including Seaspan's Report on Form 20-F for the year ended December
31, 2011. 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.
Contacts:
Seaspan Corporation - Investor Relations Inquiries
Mr. Sai W. Chu
Chief Financial Officer
604-638-2575
www.seaspancorp.com 
The IGB Group - Media Inquiries
Mr. Leon Berman
212-477-8438
 
 
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