Danaos Corporation Reports First Quarter Results for the Period Ended March 31, 2013

Danaos Corporation Reports First Quarter Results for the Period Ended March 31, 
2013 
ATHENS, GREECE -- (Marketwired) -- 04/29/13 --  Danaos Corporation
("Danaos") (NYSE: DAC), a leading international owner of
containerships, today reported unaudited results for the quarter
ended March 31, 2013. 
Highlights for the First Quarter Ended March 31, 2013: 


 
--  Operating revenues of $146.1 million for the three months ended March
    31, 2013 compared to $134.2 million for the three months ended March
    31, 2012, an increase of 8.9%.
--  Adjusted EBITDA(1)of $108.6 million for the three months ended March
    31, 2013 compared to $96.4 million for the three months ended March
    31, 2012, an increase of 12.7%.
--  Adjusted net income(1)of $13.9 million, or $0.13 per share, for the
    three months ended March 31, 2013 compared to $16.9 million, or $0.15
    per share, for the three months ended March 31, 2012.
--  We managed to maintain our daily vessel operating cost at low levels,
    of $5,912 per day for the three months ended March 31, 2013 compared
    to $5,945 per day for the three months ended March 31, 2012.
--  The remaining average charter duration of our fleet was 9.5 years as
    of March 31, 2013 (weighted by aggregate contracted charter hire).
--  Total contracted operating revenues were $4.8 billion as of March 31,
    2013, through 2028.
--  Charter coverage of 90% for the next 12 months in terms of contracted
    operating days and 98% in terms of operating revenues.

 
                                                                            
                                                                            
                      Three Months Ended March 31, 2013                     
                              Financial Summary                             
 (Expressed in thousands of United States dollars, except per share amounts)
                                                                            
                                                  Three months  Three months
                                                     ended         ended    
                                                   March 31,     March 31,  
                                                 ------------- -------------
   
                                                   2013          2012    
                                                 ------------- -------------
                                                         (unaudited)        
Operating revenues                               $     146,088 $     134,237
Net income                                       $      13,432 $       9,342
Adjusted net income(1)                           $      13,884 $      16,938
Earnings per share                               $        0.12 $        0.09
Adjusted earnings per share(1)                   $        0.13 $        0.15
Weighted average number of shares (in thousands)       109,653       109,605
Adjusted EBITDA(1)                               $     108,584 $      96,438

 
(1) Adjusted net income, adjusted earnings per share and adjusted
EBITDA are non-GAAP measures. Refer to the reconciliation of net
income to adjusted net income and net income to adjusted EBITDA. 
Danaos' CEO Dr. John Coustas commented:  
The fundamentals of the containership market still remain weak as the
Far-East Europe trade volumes remain flat having difficulty
supporting the inflow of large containerships. This is also evidenced
by lower freight rates in these routes compared to one year ago,
while the liner companies are making yet another attempt to restore
rates at healthier levels with announced General Rate Increases in
May. The Pacific lanes show a much better picture which is the effect
of the recovery in the US economy. Non-mainlane trade growth remains
healthy and helps absorb capacity that is cascaded down from the
mainlane routes but this adds pressure to the charter market,
particularly on the mid-size containerships. As we enter into the
peak season we expect some improvement in the market fundamentals,
but all-in-all we do not anticipate spectacular changes.  
Despite this challenging container market environment, we are
reporting yet another solid quarter. Adjusted Net Income for this
quarter came in at $13.9 million or 13 cents per share, $3 million
lower than the first quarter of 2012 due to the weaker charter market
today when compared to 1 year ago. However, as our vessels on the
spot market are currently running at operating break-even levels, an
improving market going forward is a one way option to improving our
results. 
Adjusted EBITDA increased by 12.7% to $108.6 million in the current
quarter compared to $96.4 million in the first quarter of 2012 as a
result of our fleet expansion program that was concluded in 2012. 
Out of the 7 vessels we had on cold lay-up at the end of 2012, we
only had 2 vessels on lay-up at the end of the first quarter. During
this quarter, we re-activated one vessel, while we sold 4 of our
older vessels and we intend to use the sale proceeds to make
accretive acquisitions of younger containerships. 
With a strong 98% contract coverage and only 2% of our current
revenue stream at stake through re-chartering over the next 12
months, we are largely insulated from the effects of the weak charter
market while we expect our EBITDA and free cash flow generation to be
safeguarded. At the same time, we continue to be one of the most cost
competitive operators in the market with our daily operating expenses
being consistently below $6,000 per day. 
We will continue to manage our fleet efficiently, while in 2013 we
will focus on rapidly de-leveraging the company and creating value
for our shareholders. 
Three months ended March 31, 2013 compared to the three months ended
March 31, 2012  
During the three months ended March 31, 2013, Danaos had an average
of 63.1 containerships compared to 60.1 containerships for the three
months ended March 31, 2012. Our fleet utilization declined to 89.6%
in the three months ended March 31, 2013 compared to 94.5% in the
three months ended March 31, 2012, mainly due to the 546 days for
which 7 of our vessels were off-charter and laid-up in the three
months ended March 31, 2013 compared to 246 days for which 3 of our
vessels were off-charter and laid-up in the three months ended March
31, 2012. During the three months ended March 31, 2013, our fleet
utilization for the fleet under employment was 99.1% (which excludes
the vessels on lay up). During the first quarter of 2013, we sold
three vessels, the Henry, the Pride and the Independence for an
amount of $18.8 million, which represents the gross sale proceeds
less commissions. 
Our adjusted net income was $13.9 million, or $0.13 per share, for
the three months ended March 31, 2013 compared to $16.9 million, or
$0.15 per share, for the three months ended March 31, 2012. We have
adjusted our net income in the three months ended March 31, 2013
mainly for unrealized gains on derivatives of $4.4 million, as well
as a non-cash expense of $4.8 million for fees related to our
comprehensive financing plan (comprised of non-cash, amortizing and
accrued finance fees). Please refer to the Adjusted Net Income
reconciliation table, which appears later in this earnings release. 
The decrease of 17.8%, or $3.0 million, in adjusted net income for
the three months ended March 31, 2013 compared to the three months
ended March 31, 2012, w
as mainly the result of the softening of the
charter market during the last year that led to the cold lay-up of 7
vessels up to the end of 2012 and to the lower re-chartering of
certain vessels that currently run at operating break-even levels
while they had a positive contribution to operating income during the
first quarter of 2012. The above was partially offset by the new
vessel additions to our fleet (all under long-term charters) over the
course of the last year that were accretive both to operating income
and the bottom line. As of March 31, 2013, we only had 2 vessels on
cold lay-up as we have sold, or have agreed to sell, 4 vessels and
have re-activated 1 further vessel.  
On a non-adjusted basis our net income was $13.4 million, or $0.12
per share, for the three months ended March 31, 2013, compared to net
income of $9.3 million, or $0.09 per share, for the three months
ended March 31, 2012.  
On March 27, 2013, we entered into an agreement with the lenders
under the HSH Nordbank AG-Aegean Baltic Bank-Piraeus Bank credit
facility. The agreement provides us the option to sell, for cash, up
to 9 mortgaged vessels (the Henry, the Pride, the Independence, the
Honour, the Elbe, the Hope, the Lotus, the Kalamata and the Komodo),
with the sale proceeds less sale commissions from such vessels' sales
to be deposited in a restricted cash account for use in financing the
acquisition of new containership vessels no later than December 31,
2013. Any funds remaining in this restricted cash account after that
date will be applied towards prepayment of the respective credit
facility. During the first quarter of 2013, we concluded the sales of
the Henry, the Pride and the Independence; accordingly, an amount of
$18.8 million, representing the gross sale proceeds less commissions
from the sale of the Henry, the Pride and the Independence, was
recorded as non-current restricted cash on March 31, 2013. We have
also entered into an agreement on April 2, 2013 to sell the Honour. 
Operating Revenues
 Operating revenues increased 8.9%, or $11.9
million, to $146.1 million in the three months ended March 31, 2013,
from $134.2 million in the three months ended March 31, 2012. The
increase was primarily attributable to the addition of three vessels
to our fleet, as follows: 


 
                                                                       
Vessel Name                Vessel Size (TEU)    Date Delivered         
----------------------- ----------------------- -----------------------
Hyundai Smart                    13,100         May 3, 2012            
Hyundai Speed                    13,100         June 7, 2012           
Hyundai Ambition                 13,100         June 29, 2012          

 
These additions to our fleet contributed revenues of $16.3 million
during the three months ended March 31, 2013 (270 operating days in
total).  
Furthermore, operating revenues for the three months ended March 31,
2013 reflect: 


 
--  $9.4 million of incremental revenues in the three months ended March
    31, 2013 compared to the three months ended March 31, 2012, related to
    one 8,530 TEU containership (the CMA CGM Melisande, which was added to
    our fleet on February 28, 2012), and two 13,100 TEU containerships
    (the Hyundai Together and the Hyundai Tenacity, which were added to
    our fleet on February 16, 2012 and March 8, 2012, respectively).
    
    
--  $1.1 million decrease in revenues in the three months ended March 31,
    2013 compared to the three months ended March 31, 2012, related to one
    2,130 TEU containership, the Montreal, which was sold on April 27,
    2012.
    
    
--  $12.7 million decrease in revenues in the three months ended March 31,
    2013 compared to the three months ended March 31, 2012. This was
    mainly attributable to an increase in off-hire days of 290 days, to
    593 days in the three months ended March 31, 2013, from 303 days in
    the three months ended March 31, 2012, re-chartering of certain
    vessels during 2012 at lower charter rates compared to what these
    vessels were earning in the three months ended March 31, 2012, as well
    as reduced revenue of our fleet in the three months ended March 31,
    2013 compared to the three months ended March 31, 2012 due to the one
    additional operating day in February 2012 compared to February 2013.

  
Vessel Operating Expenses
 Vessel operating expenses decreased 2.7%, or
$0.8 million, to $29.3 million in the three months ended March 31,
2013, from $30.1 million in the three months ended March 31, 2012.
The reduction is mainly attributable to the reduced costs of 6.1
vessels on average which were laid up during the three months ended
March 31, 2013 compared to 2.7 vessels on average during the three
months ended March 31, 2012. The overall decrease in vessel operating
expenses was offset in part by the increased average number of
vessels in our fleet during the three months ended March 31, 2013
compared to the three months ended March 31, 2012. 
The average daily operating cost per vessel was reduced to $5,912 for
the three months ended March 31, 2013, from $5,945 for the three
months ended March 31, 2012 (excluding those vessels on lay-up). 
Depreciation & Amortization
 Depreciation & Amortization includes
Depreciation and Amortization of Deferred Dry-docking and Special
Survey Costs.  
Depreciation
 Depreciation expense increased 7.3%, or
$2.3 million, to $34.0 million in the three months ended March 31,
2013, from $31.7 million in the three months ended March 31, 2012.
The increase in depreciation expense was due to the increased average
number of vessels in our fleet during the three months ended March
31, 2013 compared to the three months ended March 31, 2012. 
Amortization of Deferred Dry-docking and Special Survey Costs 
Amortization of deferred dry-docking and special survey costs
increased 41.7%, or $0.5 million, to $1.7 million in the three months
ended March 31, 2013, from $1.2 million in the three months ended
March 31, 2012. The increase reflects increased dry-docking and
special survey costs incurred within the year and amortized during
the three months ended March 31, 2013 compared to the three months
ended March 31, 2012. 
General and Administrative Expenses
 General and administrative
expenses increased 2.1%, or $0.1 million, to $4.9 million in the
three months ended March 31, 2013, from $4.8 million in the three
months ended March 31, 2012. The increase was mainly the result of
increased fees paid to our Manager in the three months ended March
31, 2013 compared to the three months ended March 31, 2012, due to
the increase in the average number of vessels in our fleet. 
Other Operating Expenses
 Other Operating Expenses includes Voyage
Expenses 
Voyage Expenses
 Voyage expenses increased by $0.2 million, to $3.1
million in the three months ended March 31, 2013, from $2.9 million
in the three months ended March 31, 2012. The increase was mainly the
result of increased voyage expenses, due to the increase in the
average number of vessels in our fleet. 
Interest Expense and Interest Income 
 Interest expense increased by
24.5%, or $4.5 million, to $22.9 million in the three months ended
March 31, 2013, from $18.4 million in the three months ended M
arch
31, 2012. The change in interest expense was due to the increase in
our average debt by $263.7 million, to $3,388.8 million in the three
months ended March 31, 2013, from $3,125.1 million in the three
months ended March 31, 2012. Furthermore, the financing of our
newbuilding program resulted in $2.6 million of interest being
capitalized, rather than such interest being recognized as an
expense, for the three months ended March 31, 2012 compared to nil
interest being capitalized for the three months ended March 31, 2013,
following the completion of our newbuilding program in June 2012. 
Interest income was $0.5 million in the three months ended March 31,
2013 compared to $0.4 million in the three months ended March 31,
2012.  
Other finance costs, net
 Other finance costs, net, increased by $1.2
million, to $5.1 million in the three months ended March 31, 2013,
from $3.9 million in the three months ended March 31, 2012. This
increase was due to the $0.7 million increase in amortizing finance
fees (which were deferred and are amortized over the term of the
respective credit facilities), as well as increased accrued finance
fees of $0.5 million (which accrete in our Statement of Income over
the term of the respective facilities) in the three months ended
March 31, 2013 compared to the three months ended March 31, 2012. 
Other income/(expenses), net
 Other income/(expenses), net, was
negligible in the three months ended March 31, 2013 compared to an
expense of $0.2 million in the three months ended March 31, 2012. 
Unrealized gain/(loss) on derivatives
 Unrealized gain/(loss) on
interest rate swap hedges was a gain of $4.4 million in the three
months ended March 31, 2013 compared to a gain of $2.9 million in the
three months ended March 31, 2012. The unrealized gains were
attributable to mark to market valuation of our swaps and hedge
accounting ineffectiveness. Furthermore, we reclassified unrealized
losses from Accumulated Other Comprehensive Loss to our earnings due
to the discontinuation of hedge accounting since July 1, 2012.  
Realized (loss)/gain on derivatives
 Realized loss on interest rate
swap hedges, increased by $1.2 million, to $36.6 million in the three
months ended March 31, 2013, from $35.4 million in the three months
ended March 31, 2012. This increase is mainly attributable to $4.8
million of realized losses that had been deferred during the three
months ended March 31, 2012 (as discussed below) and were not
deferred in the three months ended March 31, 2013, partially offset
by the lower average notional amount of swaps during the three months
ended March 31, 2013 compared to the three months ended March 31,
2012, which resulted in lower realized losses on derivatives of $3.6
million during the three months ended March 31, 2013. 
With all our newbuildings having been delivered, no realized losses
on cash flow hedges were deferred during the three months ended March
31, 2013. During the three months ended March 31, 2012, realized
losses on cash flow hedges of $4.8 million were deferred in
"Accumulated Other Comprehensive Loss," rather than being recognized
as expenses, and are being reclassified into earnings over the
depreciable lives of these vessels that were under construction and
financed by loans with interest rates that were hedged by our
interest rate swap contracts. The table below provides an analysis of
the items discussed above, and which were recorded in the three
months ended March 31, 2013 and 2012: 


 
                                                                            
                                                 Three months  Three months 
                                                     ended         ended    
                                                   March 31,     March 31,  
                                                 ------------  ------------ 
                                                     2013          2012     
                                                 ------------  ------------ 
                                                        (in millions)       
Total realized losses of swaps                   $      (36.6) $      (40.2)
Realized losses of swaps deferred in OCL                   --           4.8 
                                                 ------------  ------------ 
  Realized losses of swaps expensed in P&L              (36.6)        (35.4)
Realized losses attributable to overhedging                --           6.9 
                                                 ------------  ------------ 
  Adjusted realized losses attributable to                                  
   hedged debt                                   $      (36.6) $      (28.5)
                                                 ============  ============ 

 
Adjusted EBITDA
 Adjusted EBITDA increased 12.7%, or $12.1 million, to
$108.6 million in the three months ended March 31, 2013, from $96.4
million in the three months ended March 31, 2012. Adjusted EBITDA for
the three months ended March 31, 2013, is adjusted for unrealized
gain on derivatives of $4.4 million and realized losses on
derivatives of $35.6 million. Tables reconciling Adjusted EBITDA to
Net Income can be found at the end of this earnings release.  
Recent news
 On April 2, 2013, we entered into an agreement to sell
the Honour, for a gross sale consideration of $9.1 million. The
Honour was built in 1989 and was laid up as of March 31, 2013. We
expect to deliver the vessel in May 2013. 
Conference Call and Webcast 
 On Tuesday, April 30th, at 9:00 A.M.
EDT, the Company's management will host a conference call to discuss
the results.  
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1 866 819 7111 (US Toll
Free Dial In), 0800 953 0329 (UK Toll Free Dial In) or +44 (0)1452
542 301 (Standard International Dial In). Please quote "Danaos" to
the operator.  
A telephonic replay of the conference call will be available until
May 5, 2013 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# 
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 61
containerships aggregating 353,836 TEUs ranks Danaos among the
largest containership charter owners in the world based on total TEU
capacity. Danaos is one of the largest US listed containership
companies based on fleet size. The Company's shares trade on the New
York Stock Exchange under the symbol "DAC." 
Forward-Looking Statements 
 Matters discussed in this release may
constitute forward-looking statements within the meaning of the
safeharbor provisions of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements reflect our current views with respect to
future events and financial performance and may include statements
concerning plans, objectives, goals, strategies, future events or
performance, and underlying assumptions and other statements, which
are other than statements of historical facts. The forward-looking
statements in this release are based upon various assumptions, many
of which are based, in turn, upon further assumptions, including
without limitation, management's examination of historical operating
trends, data contained in our records and other data available from
third parties. Although Danaos Corporation believes that these
assumptions were reasonable when made, because these assumptions are
inherently subject to significant un
certainties and contingencies
which are difficult or impossible to predict and are beyond our
control, Danaos Corporation cannot assure you that it will achieve or
accomplish these expectations, beliefs or projections. Important
factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements
include the strength of world economies and currencies, general
market conditions, including changes in charter hire rates and vessel
values, charter counterparty performance, changes in demand that may
affect attitudes of time charterers to scheduled and unscheduled
drydocking, changes in Danaos Corporation's operating expenses,
including bunker prices, dry-docking and insurance costs, ability to
obtain financing and comply with covenants in our financing
arrangements, actions taken by regulatory authorities, potential
liability from pending or future litigation, domestic and
international political conditions, potential disruption of shipping
routes due to accidents and political events or acts by terrorists.  
Risks and uncertainties are further described in reports filed by
Danaos Corporation with the U.S. Securities and Exchange Commission.  
Visit our website at www.danaos.com 
Appendix 
Fleet Utilization 
Danaos had 593 unscheduled off-hire days in the three months ended
March 31, 2013 (including 546 days related to the Marathonas, the
Duka, the Messologi and the Honour, which have been off-charter and
laid up, as well as the Independence, the Henry and the Pride (which
have been off-charter and laid up until the date they were sold
during the current quarter)). 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.  


 
                                                                            
                             First    Second     Third    Fourth     First  
Vessel Utilization          Quarter   Quarter   Quarter   Quarter   Quarter 
(No. of Days)                2012      2012      2012      2012      2013   
-------------------------- --------  --------  --------  --------  -------- 
Ownership Days                5,471     5,663     5,888     5,888     5,677 
Less Off-hire Days:                                                         
  Scheduled Off-hire Days       (49)      (45)      (58)      (57)       -- 
  Other Off-hire Days          (254)     (266)     (376)     (508)     (593)
                           --------  --------  --------  --------  -------- 
Operating Days                5,168     5,352     5,454     5,323     5,084 
                           ========  ========  ========  ========  ======== 
Vessel Utilization             94.5%     94.5%     92.6%     90.4%     89.6%
                                                                            
Operating Revenues (in                                                      
 '000s of US Dollars)      $134,237  $146,657  $156,289  $151,826  $146,088 
Average Gross Daily                                                         
 Charter Rate              $ 25,975  $ 27,402  $ 28,656  $ 28,523  $ 28,735 

 
Fleet List 
The following table describes in detail our fleet deployment profile
as of April 29, 2013. 


 
                                                                            
                           Vessel Size                                      
Vessel Name                   (TEU)     Year Built  Expiration of Charter(1)
------------------------- ------------ ------------ ------------------------
Containerships                                                              
-------------------------                                                   
                                                                            
Hyundai Ambition             13,100        2012     June 2024               
Hyundai Speed                13,100        2012     June 2024               
Hyundai Smart                13,100        2012     May 2024                
Hyundai Tenacity             13,100        2012     March 2024              
Hyundai Together             13,100        2012     February 2024           
Hanjin Italy                 10,100        2011     April 2023              
Hanjin Germany               10,100        2011     March 2023              
Hanjin Greece                10,100        2011     May 2023                
CSCL Le Havre                 9,580        2006     September 2018          
CSCL Pusan                    9,580        2006     July 2018               
CMA CGM Melisande             8,530        2012     November 2023           
CMA CGM Attila                8,530        2011     April 2023              
CMA CGM Tancredi              8,530        2011     May 2023                
CMA CGM Bianca                8,530        2011     July 2023               
CMA CGM Samson                8,530        2011     September 2023          
CSCL America                  8,468        2004     September 2016          
CSCL Europe                   8,468        2004     June 2016               
CMA CGM Moliere(2)            6,500        2009     August 2021             
CMA CGM Musset(2)             6,500        2010     February 2022           
CMA CGM Nerval(2)             6,500        2010     April 2022              
CMA CGM Rabelais(2)           6,500        2010     June 2022               
CMA CGM Racine(2)             6,500        2010     July 2022               
YM Mandate                    6,500        2010     January 2028            
YM Maturity                   6,500        2010     April 2028              
Marathonas                    4,814        1991     Laid-up                 
Messologi                     4,814        1991     March 2014              
Mytilini                      4,814        1991     February 2014           
Commodore(3)                  4,651        1992     February 2014           
Duka(4)                       4,651        1992     Laid-up                 
Federal(5)                    4,651        1994     March 2014              
SNL Colombo(6)                4,300        2004     March 2019              
YM Singapore                  4,300        2004     October 2019            
YM Seattle(7)                 4,253        2007     July 2019               
YM Vancouver                  4,253        2007     September 2019          
Derby D                       4,253        2004     February 2014           
Deva                          4,253        2004     December 2013           
ZIM Rio Grande                4,253        2008     May 2020                
ZIM Sao Paolo                 4,253        2008     August 2020             
ZIM Kingston                  4,253        2008     September 2020          
ZIM Monaco                    4,253        2009     November 2020           
ZIM Dalian                    4,253        2009     February 2021           
ZIM Luanda                    4,253        2009     May 2021                
Honour(8)                     3,908        1989     --                      
Hope                          3,908        1989     July 2013               
Hanjin Constantza             3,400        2011     February 2021           
Hanjin Algeciras              3,400        2011     November 2020           
Hanjin Buenos Aires           3,400        2010     March 2020              
Hanjin Santos                 3,400        2010     May 2020                
Hanjin Versailles             3,400        2010     August 2020             
Lotus                         3,098        1988     July 2013               
Elbe                          2,917        1991     May 2013                
Kalamata                      2,917        1991     August 2013             
Komodo                        2,917        1991     August 2013             
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                

 
(1) Earliest date charters could expire. Some charters include options
to extend their terms.  
(2) The charters with respect to the CMA CGM Moliere, the CMA CGM
Musset, the CMA CGM Nerval, the CMA CGM Rabelais and the CMA CGM
Racine include an option for the charterer, CMA-CGM, to purchase the
vessels eight years after the commencement of the respective
charters, which will fall in September 2017, March 2018, May 2018,
July 2018 and August 2018, respectively, each for $78.0 million.  
(3) On February 6, 2013, the Hyundai Commodore was renamed to
Commodore at the request of the charterer of this vessel.  
(4) On October 25, 2012, the Hyundai Duke was renamed to Duka.  
(5) On April 6, 2013, the Hyundai Federal was renamed to Federal at
the request of the charterer of this vessel.  
(6) On March 18, 2012, the YM Colombo was renamed to SNL Colombo at
the request of the charterer of this vessel.  
(7) On April 9, 2012, the Taiwan Express was renamed to YM Seattle at
the request of the charterer of this vessel.  
(8) On April 2, 2013, we entered into an agreement to sell the
Honour. We expect to deliver the vessel to her buyers in May 2013.  


 
                                                                            
                                                                            
                             DANAOS CORPORATION                             
                 Condensed Statements of Income - Unaudited                 
(Expressed in thousands of United States dollars, except per share amounts) 
                                                                            
                                                 Three months  Three months 
                                                     ended         ended    
                                                   March 31,     March 31,  
                                                 ------------  ------------ 
                                                     2013          2012     
                                                 ------------  ------------ 
                                                                            
OPERATING REVENUES                               $    146,088  $    134,237 
                                                                            
OPERATING EXPENSES                                                          
  Vessel operating expenses                           (29,293)      (30,095)
  Depreciation & amortization                         (35,713)      (32,883)
  General & administrative                             (4,917)       (4,837)
  Loss on sale of vessels                                 (15)           -- 
  Other operating expenses                             (3,057)       (2,890)
                                                 ------------  ------------ 
Income From Operations                                 73,093        63,532 
                                                 ------------  ------------ 
                                                                            
OTHER EARNINGS (EXPENSES)                                                   
  Interest income                                         492           353 
  Interest expense                                    (22,864)      (18,390)
  Other finance cost                                   (5,077)       (3,857)
  Other income/(expenses), net                             (1)          196 
  Realized (loss)/gain on derivatives                 (36,615)      (35,443)
  Unrealized gain/(loss) on derivatives                 4,404         2,951 
                                                 ------------  ------------ 
Total Other Income (Expenses), net                    (59,661)      (54,190)
                                                 ------------  ------------ 
                                                                            
Net Income                                       $     13,432  $      9,342 
                                                 ============  ============ 
                                                                            
EARNINGS PER SHARE                                                          
Basic & diluted net income per share             $       0.12  $       0.09 
                                                 ============  ============ 
Basic & diluted weighted average number of                                  
 common shares (in thousands of shares)               109,653       109,605 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                             Non-GAAP Measures*                             
      Reconciliation of Net Income to Adjusted Net Income - Unaudited       
                                                                            
                                                 Three months  Three months 
                                                     ended         ended    
                                                   March 31,     March 31,  
                                                 ------------  ------------ 
                                                     2013          2012     
                                                 ------------  ------------ 
Net income                                       $     13,432  $      9,342 
  Unrealized (gain)/loss on derivatives                (4,404)       (2,951)
  Realized loss on over-hedging portion of                                  
   derivatives                                             --         6,886 
  Amortization of financing fees & finance fees                             
   accrued                                              4,841         3,661 
  Loss on sale of vessels                                  15            -- 
                                                 ------------  ------------ 
Adjusted Net Income                              $     13,884  $     16,938 
                                                 ============  ============ 
Adjusted Earnings Per Share                      $       0.13  $       0.15 
                                                 ============  ============ 
Weighted average number of shares                     109,653       109,605 

 
* The Company reports its financial results in accordance with U.S.
generally accepted accounting principles (GAAP). However, management
believes that certain non-GAAP financial measures used in managing
the business may provide users of this financial information
additional meaningful comparisons between current results and results
in prior operating periods. Management believes that these non-GAAP
financial measures can provide additional meaningful reflection of
underlying trends of the business because they provide a comparison
of historical information that excludes certain items that impact the
overall comparability. Management also uses these non-GAAP financial
measures in making financial, operating and planning decisions and in
evaluating the Company's performance. See the Table above for 
supplemental financial data and corresponding reconciliations to GAAP
financial measures for the three months ended March 31, 2013 and
2012. Non-GAAP financial measures should be viewed in addition to,
and not as an alternative for, the Company's reported results
prepared in accordance with GAAP.  


 
                                                                            
                                                                            
                             DANAOS CORPORATION                             
                    Condensed Balance Sheets - Unaudited                    
             (Expressed in thousands of United States dollars)              
                                                                            
                                                     As of         As of    
                                                   March 31,   December 31, 
                                                 ------------  ------------ 
                                                     2013          2012     
                                                 ------------  ------------ 
ASSETS                                                                      
CURRENT ASSETS                                                              
  Cash and cash equivalents                      $     81,804  $     55,628 
  Restricted cash                                           9         2,821 
  Accounts receivable, net                             13,096         3,741 
  Other current assets                                 31,349        36,483 
                                                 ------------  ------------ 
                                                      126,258        98,673 
                                                 ------------  ------------ 
NON-CURRENT ASSETS                                                          
  Fixed assets, net                                 3,928,668     3,986,138 
  Restricted cash, net of current portion              19,240           430 
  Deferred charges, net                                82,686        88,821 
  Vessel held for sale                                  7,884            -- 
  Fair value of financial instruments                   2,553         2,908 
  Other non-current assets                             35,461        35,075 
                                                 ------------  ------------ 
                                                    4,076,492     4,113,372 
                                                 ------------  ------------ 
TOTAL ASSETS                                     $  4,202,750  $  4,212,045 
                                                 ============  ============ 
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
CURRENT LIABILITIES                                                         
  Long-term debt, current portion                $    139,464  $    125,076 
  Vendor Financing, current portion                    57,388        57,388 
  Accounts payable, accrued liabilities & other                             
   current liabilities                                 54,247        52,688 
  Fair value of financial instruments, current                              
   portion                                            126,705       130,100 
                                                 ------------  ------------ 
                                                      377,804       365,252 
                                                 ------------  ------------ 
LONG-TERM LIABILITIES                                                       
  Long-term debt, net of current portion            3,072,276     3,097,472 
  Vendor financing, net of current portion            110,994       121,754 
  Fair value of financial instruments, net of                               
   current portion                                    146,407       176,948 
  Other long-term liabilities                          11,225        10,315 
                                                 ------------  ------------ 
                                                    3,340,902     3,406,489 
                                                 ------------  ------------ 
                                                                            
STOCKHOLDERS' EQUITY                                                        
  Common stock                                          1,096         1,096 
  Additional paid-in capital                          546,023       546,023 
  Accumulated other comprehensive loss               (322,963)     (353,271)
  Retained earnings                                   259,888       246,456 
                                                 ------------  ------------ 
                                                      484,044       440,304 
                                                 ------------  ------------ 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $  4,202,750  $  4,212,045 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                             DANAOS CORPORATION                             
              Condensed Statements of Cash Flows - (Unaudited)              
             (Expressed in thousands of United States dollars)              
                                                                            
                                                 Three months  Three months 
                                                     ended         ended    
                                                   March 31,     March 31,  
                                                 ------------  ------------ 
                                                     2013          2012     
                                                 ------------  ------------ 
Operating Activities:                                                       
  Net income                                     $     13,432  $      9,342 
  Adjustments to reconcile net income to net                                
   cash provided by operating activities:                                   
  Depreciation                                         33,983        31,681 
  Amortization of deferred drydocking & special                             
   survey costs, finance cost and other finance                             
   fees accrued                                         6,571         4,863 
  Stock based compensation                                 --            23 
  Payments for drydocking/special survey                  245        (2,035)
  Amortization of deferred realized losses on                               
   cash flow interest rate swaps                          990           649 
  Realized loss on cash flow interest rate swaps                            
   deferred in Other Comprehensive Loss                    --        (2,951)
  Unrealized (gain)/loss on derivatives                (4,404)       (4,839)
  Loss on sale of vessels                                  15            -- 
  Accounts receivable                                  (9,355)       (1,844)
  Other assets, current and non-current                 4,748         7,554 
  Accounts payable and accrued liabilities              1,857         5,498 
  Other liabilities, current and non-current              591        17,878 
                                                 ------------  ------------ 
Net Cash provided by Operating Activities              48,673        65,819 
                                                 ------------  ------------ 
                                                                            
Investing Activities:                                                       
  Vessels under construction and vessels                                    
   additions                                             (981)     (183,874)
  Net proceeds from sale of vessel                     16,850            -- 
                                                 ------------  ------------ 
Net Cash provided by/(used in) Investing                                    
 Activities                                            15,869      (183,874)
                                                 ------------  ------------ 
                                                                            
Financing Activities:                                                       
  Debt draw downs                                          --       117,320 
  Debt repayment                                      (22,368)      (11,607)
  Deferred costs                                           --          (100)
  Increase in restricted cash                         (15,998)        2,812 
                                                 ------------  ------------ 
Net Cash (used in)/provided by Financing                                    
 Activities                                           (38,366)      108,425 
                                                 ------------  ------------ 
Net Increase/(Decrease) in cash and cash                                    
 equivalents                                           26,176        (9,630)
Cash and cash equivalents, beginning of period         55,628        51,362 
                                                 ------------  ------------ 
Cash and cash equivalents, end of period         $     81,804  $     41,732 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
              Reconciliation of Net Income to Adjusted EBITDA               
             (Expressed in thousands of United States dollars)              
                                                                            
                                                 Three months  Three months 
                                                     ended         ended    
                                                   March 31,     March 31,  
                                                 ------------  ------------ 
                                                     2013          2012     
                                                 ------------  ------------ 
Net income                                       $     13,432  $      9,342 
Depreciation                                           33,983        31,681 
Amortization of deferred drydocking & special                               
 survey costs                                           1,730         1,202 
Amortization of deferred finance costs and other                            
 finance fees accrued                                   4,841         3,661 
Amortization of deferred realized losses on                                 
 interest rate swaps                                      990           649 
Interest income                                          (492)         (353)
Interest expense                                       22,864        18,390 
Loss on sale of vessels                                    15            -- 
Stock based compensation                                   --            23 
Realized loss on derivatives                           35,625        34,794 
Unrealized (gain)/loss on derivatives                  (4,404)       (2,951)
                                                 ------------  ------------ 
Adjusted EBITDA(1)                               $    108,584  $     96,438 
                                                 ============  ============ 

 
(1) Adjusted EBITDA represents net income before interest income and
expense, depreciation, amortization of deferred drydocking & special
survey costs and deferred finance costs, unrealized (gain)/loss on
derivatives, realized gain/(loss) on derivatives, stock based
compensation, gain/(loss) on sale of vessel and other items in
relation to the Company's comprehensive financing plan. However,
Adjusted EBITDA is not a recognized measurement under U.S. generally
accepted accounting principles, or "GAAP." We believe that the
presentation of Adjusted EBITDA is useful to investors because it is
frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in our industry. We
also believe that Adjusted EBITDA is useful in evaluating our ability
to service additional debt and make capital expenditures. In
addition, we believe that Adjusted EBITDA is useful in evaluating our
operating performance and liquidity position compared to that of
other companies in our industry because the calculation of Adjusted
EBITDA generally eliminates the effects of financings, income taxes
and the accounting effects of capital expenditures and acquisitions,
items which may vary for different companies for reasons unrelated to
overall operating performance and liquidity. In evaluating Adjusted
EBITDA, you should be aware that in the future we may incur expenses
that are the same as or similar to some of the adjustments in this
presentation. Our presentation of Adjusted EBITDA should not be
construed as an inference that our future results will be unaffected
by unusual or non-recurring items.  
Note: Items to consider for comparability include gains and charges.
Gains positively impacting net income are reflected as deductions to
net income. Charges negatively impacting net income are reflected as
increases to net income. 
The Company reports its financial results in accordance with U.S.
generally accepted accounting principles (GAAP). However, management
believes that certain non-GAAP financial measures used in managing
the business may provide users of these financial information
additional meaningful comparisons between current results and results
in prior operating periods. Management believes that these non-GAAP
financial measures can provide additional meaningful reflection of
underlying trends of the business because they provide a comparison
of historical information that excludes certain items that impact the
overall comparability. Management also uses these non-GAAP financial
measures in making financial, operating and planning decisions and in
evaluating the Company's performance. See the Tables above for
supplemental financial data and corresponding reconciliations to GAAP
financial measures for the three months ended March 31, 2013 and
2012. Non-GAAP financial measures should be viewed in addition to,
and not as an alternative for, the Company's reported results
prepared in accordance with GAAP. 
For further information please contact:  
Company Contact: 
Evangelos Chatzis 
Chief Financial Officer
Danaos Corporation
Athens, Greece
Tel.: +30 210 419 6480
E-Mail: cfo@danaos.com 
Iraklis Prokopakis
Senior Vice President and Chief Operating Officer
Danaos Corporation
Athens, Greece
Tel.: +30 210 419 6400
E-Mail: coo@danaos.com 
Investor Relations and Financial Media
Nicolas Bornozis
President
Capital Link, Inc.
New York
Tel. 212-661-7566
E-Mail: danaos@capitallink.com