Seaspan Reports Financial Results for the Quarter Ended March 31, 2013

Seaspan Reports Financial Results for the Quarter Ended March 31, 2013 
First Quarter Revenue increase of 7.5% over Prior Year and Dividend
increase of 25% over Previous Quarter 
HONG KONG, CHINA -- (Marketwired) -- 04/29/13 -- Seaspan Corporation
("Seaspan") (NYSE:SSW) announced today its financial results for the
quarter ended March 31, 2013. Below is a summary of Seaspan's key
financial results:  
Summary of Key Financial Results (in thousands of USD):  


 
                                  Quarter Ended March                       
                                         31,                  Change        
                             ------------------------- ---------------------
                                     2013         2012          $        %  
                             ------------ ------------ ---------- ----------
Reported net earnings         $    55,606  $    51,258  $   4,348      8.5% 
Normalized net earnings(1)    $    28,350  $    33,228  $  (4,878)   (14.7%)
Earnings per share, basic     $      0.57  $      0.54  $    0.03      5.6% 
Earnings per share, diluted   $      0.53  $      0.51  $    0.02      3.9% 
Normalized earnings per                                                     
 share, converted(1) (Series                                                
 A preferred shares converted                                               
 at $15)                      $      0.21  $      0.30  $   (0.09)   (30.0%)
Cash available for                                                          
 distribution to common                                                     
 shareholders(2)              $    66,815  $    65,344  $   1,471      2.3% 
Adjusted EBITDA(3)            $   121,224  $   115,826  $   5,398      4.7% 
                                                                            
-----------------------------                                               
 (1)Normalized net earnings and normalized earnings per share are non-GAAP  
    measures that are adjusted for items such as interest expense, change in
    fair value of financial instruments, 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, 2013 and 2012- 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 and      
    amortization, interest expense, amortization of deferred charges, non-  
    cash share-based compensation, change in fair value of financial        
    instruments, 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 are not representative of its operating performance.   
    Please read "Reconciliation of Non-GAAP Financial Measures for the      
    Quarters Ended March 31, 2013 and 2012 - 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, depreciation and amortization, bareboat charter adjustment,     
    organizational development costs, change in fair value of financial     
    instruments 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, 2013 and
    2012 - 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 96.1% for the quarter ended March 31, 
    2013 or 99.9% if the impact of off-charter days are excluded.
    
--  Paid a quarterly dividend of $0.59375 per Series C preferred share and a
    pro-rated cash dividend of $0.25948 per Series D preferred share
    representing a total distribution of $9.1 million. The dividends were
    paid to all Series C and Series D preferred shareholders of record as of
    January 29, 2013 for the period from October 30, 2012 to January 29,
    2013 and for the period from December 13, 2012 to January 29, 2013,
    respectively.  
    
--  Paid a quarterly dividend for the 2012 fourth quarter of $0.25 per 
    Class A common share on February 27, 2013 to all shareholders of record
    as of February 18, 2013. 
    
--  In March 2013 Seaspan's board of directors approved a 25% increase in
    the quarterly common share dividend to $0.3125 per share, and on April
    26, 2013 the board of directors declared this dividend for the quarter
    ending March 31, 2013 payable on May 30, 2013 to shareholders of record
    on May 20, 2013. This $0.0625 per share increase to Seaspan's quarterly
    common share dividend represents the fourth increase since March 31,
    2010 for an aggregate increase of 213%. Seaspan expects common share
    dividends for the four quarters ending December 31, 2013 to total $1.25
    per share.  

 
Gerry Wang, Chief Executive Officer, Co-Chairman, and Co-Founder of
Seaspan, commented, "During the first quarter, we generated stable
results which were in line with our expectations. We also entered
into two important transactions with MOL and Yang Ming Marine,
enabling Seaspan to further increase its contracted revenue stream
and cash flows as well as diversify and enhance the Company's
high-quality customer base. We intend to continue to draw upon our
financial strength and technical and operational leadership to pursue
attractive growth opportunities."  
Mr. Wang continued, "We declared a $0.3125 per common share dividend
for the first quarter of 2013, representing a 25% increase over the
fourth quarter 2012 dividend and a 213% increase since March 31,
2010." 
First Quarter Developments 
Time Charters   
During the quarter ended March 31, 2013, two 4250 TEU vessels were
re-delivered to Seaspan. Two vessels commenced short-term charters in
late March and one vessel commenced a short-term charter in
mid-April. 
Newbuilding Contracts  
In January 2013 Seaspan entered into contracts fo
r the construction
of five 14000 TEU newbuilding containerships with Hyundai Heavy
Industries Co., Ltd. The vessels are scheduled for delivery in 2015
and will be constructed using Seaspan's fuel efficient SAVER design.
Concurrently with executing the newbuilding contracts, Seaspan signed
long-term, fixed-rate time charters for the vessels with Yang Ming
Marine Transport Corporation ("Yang Ming Marine"). After the initial
10-year charter periods, Yang Ming Marine may extend the charter for
each vessel up to an additional two years. Pursuant to its right of
first refusal agreement with Greater China Intermodal Investments,
LLC ("GCI"), Seaspan retained three of the 14000 TEU newbuilding
containerships and GCI acquired the remaining two vessels.  
In January 2013 Seaspan entered into contracts for the construction
of four 10000 TEU newbuilding containerships with Jiangsu New Yangzi
Shipbuilding Co., Ltd. and Jiangsu Yangzi Xinfu Shipbuilding Co.,
Ltd. The vessels are scheduled for delivery in 2014 and will be
constructed using Seaspan's fuel efficient SAVER design. Concurrently
with entering into these newbuilding contracts, Seaspan signed
long-term, fixed-rate time charters for these vessels with Mitsui
O.S.K. Lines, Ltd. ("MOL"). In connection with this transaction,
Seaspan also agreed to purchase from MOL four existing 2003-built
4600 TEU vessels, which are scheduled for delivery in late 2013 and
early 2014, and has signed two-year short-term fixed-rate time
charters for these vessels with MOL. Pursuant to its right of first
refusal agreement with GCI, Seaspan retained two of the 10000 TEU
newbuilding containerships and two of the existing vessels and GCI
acquired the remaining two 10000 TEU newbuilding containerships and
two existing vessels.  
Seaspan intends to fund the construction of its five newbuilding
containerships and the acquisition of the two existing vessels
initially with existing cash and new debt financing. Seaspan is
considering various sources of debt financing to which it has access.
Seaspan will supervise the construction of all nine newbuilding
vessels and manage all 13 vessels included in these transactions. 
Loan Facility Transactions 
In January 2013, Seaspan entered into a LIBOR-based term loan
facility with an Asian bank for loan facilities in the amount of up
to $340.0 million to be used towards the refinancing of existing
vessels.  
Subsequent Events  
On April 12, 2013, Seaspan declared a cash dividend of $0.59375 per
share on its Series C preferred shares (NYSE:SSW PR C) for the period
from January 30, 2013 to April 29, 2013, and a cash dividend of
$0.496875 per share on its Series D preferred shares (NYSE:SSW PR D)
for the period from January 30, 2013 to April 29, 2013. The
dividends, representing a total distribution of $9.9 million, were
paid on April 30, 2013 to all Series C and Series D preferred
shareholders of record as of April 29, 2013. 
On April 25, 2013, Seaspan entered into a term loan facility with an
Asian bank in the amount of up to $174.0 million to be used to fund
the construction of two 14000 TEU newbuilding containerships to be
chartered to Yang Ming Marine.  
On April 26, 2013, Seaspan declared quarterly dividends of $0.3125
per Class A common share. The dividend is payable on May 30, 2013 to
all shareholders of record as of May 20, 2013. 
Results for the Quarter Ended March 31, 2013  
The following table summarizes vessel utilization for the quarter
ended March 31, 2013: 


 
                                                First Quarter      
                                           ----------------------- 
                                                  2013        2012 
                                           ----------- ----------- 
        Vessel Utilization:                                        
        Ownership Days                           5,850       5,591 
        Less Off-hire Days:                                        
        Scheduled 5-Year Survey                      -         (44)
        Unscheduled Off-hire(1)                   (230)         (7)
                                           ----------- ----------- 
        Operating Days                           5,620       5,540 
                                           ----------- ----------- 
                                           ----------- ----------- 
        Vessel Utilization                        96.1%       99.1%
                                           ----------- ----------- 
                                           ----------- ----------- 
                                                                   
        -----------------------------------                        
        (1) Unscheduled off-hire includes days related to vessels  
         off-charter                                               

 
Seaspan had 69 vessels in operation throughout the first quarter of
2013. Revenue is determined primarily by the number of operating
days, and ship operating expense is determined primarily by the
number of ownership days.   
The following table summarizes Seaspan's consolidated financial
results for the quarters ended March 31, 2013 and 2012: 


 
                                Quarter Ended                               
                                  March 31,                  Increase       
                         --------------------------- -----------------------
                                  2013          2012        Days           %
                         ------------- ------------- ----------- -----------
Operating days                   5,620         5,540          80        1.4%
Ownership days                   5,850         5,591         259        4.6%
                                                                            
                                                                            
Financial Summary               Quarter Ended                               
(in millions of USD)              March 31,                 Change          
                          ------------------------- ------------------------
                                  2013         2012            $         %  
                          ------------ ------------ ------------ -----------
                                                                            
Revenue                     $    164.9   $    153.4   $     11.5       7.5% 
Ship operating expense            37.5         34.6          3.0       8.7% 
Depreciation and                                                            
 amortization expense             42.8         37.9          4.8      12.7% 
General and administrative                                                  
 expense                           7.8          5.9          1.9      33.2% 
Operating lease expense            1.1            -          1.1     100.0% 
Interest expense                  15.5         17.0         (1.5)     (8.8%)
Undrawn credit facility                                                     
 fees                              0.4          0.8         (0.4)    (50.7%)
Change in fair value of                                                     
 financial instruments             2.7          4.7         (2.0)    (43.0%)

 
Revenue  
Revenue increased by 7.5% for the quarter ended March 31, 2013 over
the same period for 2012. This is due primarily to the impact of a
full quarter's contribution of the larger newbuild vessels delivered
in 2012 that have higher time-charter rates. These increases were
partially offset by an increase in unscheduled off-hire which
includes 221 off-charter days for four of Seaspan's 4250 TEU vessels,
fewer days in 2013 due to leap year and lower rates for four vessels
which were on short-term charters during the quarter. The increase in
operating days and the financial impact thereof for the quarter ended
March 31, 2013 relative to the corresponding period in 2012, is
attributable to the following:  


 
                                                    Quarter Ended           
                                                    March 31, 2013          
                                           ---------------------------------
                                            Operating Days         $ impact 
                                                    impact    (in mil
lions) 
                                           --------------- -----------------
Full period contribution for 2012 vessel               320  $          17.9 
 deliveries                                                                 
Change in daily charterhire rate and re-                 -             (1.7)
 charters                                                                   
Fewer days due to leap year                            (61)            (1.7)
Scheduled off-hire                                      44              1.1 
Unscheduled off-hire                                  (223)            (4.3)
Other                                                    -              0.2 
                                           --------------- -----------------
Total                                                   80  $          11.5 
                                           --------------- -----------------
                                           --------------- -----------------

 
Vessel utilization was 96.1% for the quarter ended March 31, 2013,
compared to 99.1% for the comparable period in 2012. The decrease in
vessel utilization for the quarter ended March 31, 2013 was primarily
due to a 223-day increase in unscheduled off-hire which includes 221
off-charter days for four of Seaspan's 4250 TEU vessels. During the
quarter ended March 31, 2013, there were no scheduled dry-dockings,
compared to the quarter ended March 31, 2012, where Seaspan completed
four dry-dockings which resulted in 44 days of scheduled off-hire.  
Seaspan's cumulative vessel utilization since its initial public
offering in August 2005 through March 31, 2013 was 99.0%.  
Ship Operating Expense  
Ship operating expense for the quarter ended March 31, 2013 increased
by $3.0 million, or 8.7%, to $37.5 million compared to the
corresponding period in the prior year. The increase is due to 320
more ownership days related to the addition of four 13100 TEU vessels
during the first and second quarter of 2012. In addition, larger TEU
vessels are more expensive to operate. The increased cost of lubes,
insurance and other operating costs associated with these vessels
further contributed to higher ship operating expenses.  
Ship operating expense for the quarter ended March 31, 2012 included
fixed, daily, per vessel fees totalling $9.3 million, paid to Seaspan
Management Services Limited (the "Manager") for technical services
prior to Seaspan's acquisition of the Manager on January 26, 2012,
and $25.3 million of direct costs incurred during the
post-acquisition period from January 27 to March 31, 2012.   
Depreciation and Amortization Expense  
The increase in depreciation and amortization for the quarter ended
March 31, 2013 was due to the increase in the size of the fleet. Four
vessels delivered in 2012 and a full quarter of depreciation was
taken in the first quarter of 2013.  
General and Administrative Expense  
For the quarter ended March 31, 2013, general and administrative
expenses increased by $1.9 million to $7.8 million from $5.9 million
for the same period of 2012. The increase was due primarily to the
non-cash stock appreciation rights granted to the chief executive
officer in December 2012. In March 2013, additional stock
appreciation rights were granted to certain members of management.
Seaspan expects to incur non-cash compensation expenses of
approximately $9.2 million for the remainder of 2013 and $4.2 million
in 2014 relating to the stock appreciation rights granted to the
chief executive officer and management. 
Operating Lease Expense  
On June 27, 2012, Seaspan sold the Madinah to a U.S. bank and is
leasing the vessel back for approximately nine years. Prior to June
27, 2012, Seaspan owned the vessel and financed it with a term loan
of $53.0 million which was repaid using the proceeds from the sale to
the bank. During the quarter ended March 31, 2013, Seaspan incurred
operating lease expense of $1.1 million. In the comparable period of
2012, instead of operating lease expense, Seaspan incurred interest
expense of $0.6 million on the $53.0 million loan. 
Interest Expense  
As at March 31, 2013, the balance of Seaspan's long-term debt totaled
$3.1 billion and Seaspan's other long-term liabilities was $641.5
million. As at March 31, 2013, Seaspan's operating debt balance was
$2.9 billion. Interest expense is comprised primarily of interest
incurred on long-term debt and other long-term liabilities at the
variable rate calculated by reference to LIBOR plus the applicable
margin incurred on debt for operating vessels and a reclassification
of amounts from accumulated other comprehensive loss related to
previously designated hedging relationships. Interest incurred on
long-term debt and other long-term liabilities for Seapsan's vessels
under construction is capitalized to the cost of the respective
vessels under construction.  
The decrease in interest expense for the quarter ended March 31,
2013, was primarily due to a lower reclassification of accumulated
other comprehensive loss into earnings. The remaining decrease was
due to lower operating debt and other long-term liabilities as well
as a reduction in the average LIBOR. In 2012, the term loan of $53.0
million was repaid using the proceeds from the sale of the Madinah.
The average LIBOR charged on Seaspan's long-term debt for the quarter
ended March 31, 2013 was 0.2% compared to 0.5% for the comparable
period in 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.  
Undrawn Credit Facility Fee  
During the quarter ended March 31, 2013, the decrease in undrawn
credit facility fees compared to 2012 was due to a reduction in
average undrawn balances on Seaspan's credit facilities due to debt
draws for construction and final delivery of vessels. Seaspan pays
commitment fees of 0.2% and 0.4% on its credit facilities, which are
expensed as incurred.  
Change in Fair Value of Financial Instruments  
The change in fair value of financial instruments resulted in a loss
of $2.7 million for the quarter ended March 31, 2013, compared to a
loss of $4.7 million for the comparable period in 2012. The decrease
in change in fair value for the quarter was primarily due to the
effect of the passage of time and less discounting of expected future
settlements. The fair value of interest rate swap and swaption
agreements is subject to change based on the counterparty and
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 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. Because 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. 
About Seaspan  
Seaspan provides many of the world's major shipping lines with
creative outsourcing alternatives to vessel ownership by offering
long-term leases on large, modern containerships combined with
industry-leading ship management and a reputation for safety, quality
and innovation. Seaspan's managed fleet consists of 89 containerships
representing a total capacity of approximately 600,000 TEU, including
16 newbuilding containerships on order scheduled for delivery by the
end of 2015. Seaspan's current operating fleet of 69 vessels has an
average age of approximately six years and an average remaining lease
period of approximately six years.  
Seaspan's common shares, Series C Preferred Shares and Series D
Preferred Shares are listed on The New York Stock Exchange under the
symbols "SSW", "SSW PR C" and "SSW PR D", respectively. 
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, 2013 on April 30, 2013 at 5:00 a.m. PT / 8:00 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: 46179747. The recording will be available from
April 30, 2013 at 10:00 a.m. PT / 1:00 p.m. ET through 8:59 p.m. PT /
11:59 p.m. ET on May 14, 2013. The conference call will also be
broadcast live over the Internet and will include a s
lide
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, 2013                           
                        (IN THOUSANDS OF US DOLLARS)                        
                                                                            
                                                               
                                          March 31, 2013  December 31, 2012 
                                        ----------------  ----------------- 
Assets                                                                      
Current assets:                                                             
  Cash and cash equivalents              $       286,018    $       393,478 
  Short-term investments                          66,373             36,100 
  Accounts receivable                             33,880              9,573 
  Prepaid expenses                                24,479             20,902 
  Gross investment in lease                       17,597             15,977 
                                        ----------------  ----------------- 
                                                 428,347            476,030 
                                                                            
Vessels                                        4,744,607          4,785,968 
Vessels under construction                       154,842             77,305 
Deferred charges                                  53,390             43,816 
Gross investment in lease                         74,601             79,821 
Goodwill                                          75,321             75,321 
Other assets                                      71,050             71,561 
Fair value of financial instruments               43,137             41,031 
                                        ----------------  ----------------- 
                                         $     5,645,295    $     5,650,853 
                                        ----------------  ----------------- 
                                        ----------------  ----------------- 
                                                                            
Liabilities and Shareholders' Equity                                        
Current liabilities:                                                        
  Accounts payable and accrued
   liabilities                           $        48,301    $        49,997 
  Current portion of deferred revenue             11,828             25,111 
  Current portion of long-term debt               95,106             66,656 
  Current portion of other long-term                                        
   liabilities                                    38,906             38,542 
                                        ----------------  ----------------- 
                                                 194,141            180,306 
                                                                            
Deferred revenue                                   6,869              7,903 
Long-term debt                                 3,000,431          3,024,288 
Other long-term liabilities                      602,612            613,049 
Fair value of financial instruments              579,796            606,740 
                                        ----------------  ----------------- 
                                               4,383,849          4,432,286 
                                                                            
Share capital                                        809                804 
Treasury shares                                     (395)              (312)
Additional paid in capital                     1,869,840          1,859,068 
Deficit                                         (563,770)          (594,153)
Accumulated other comprehensive loss             (45,038)           (46,840)
                                        ----------------  ----------------- 
Total shareholders' equity                     1,261,446          1,218,567 
                                                                            
                                        ----------------  ----------------- 
                                         $     5,645,295    $     5,650,853 
                                        ----------------  ----------------- 
                                        ----------------  ----------------- 
                                                                            
                                                                            
                             SEASPAN CORPORATION                            
         UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT        
                FOR THE QUARTERS ENDED MARCH 31, 2013 AND 2012              
      (IN THOUSANDS OF US DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)      
                                                                            
                                                 Quarter Ended March 31,    
                                              ----------------------------- 
                                                        2013           2012 
                                              -------------- -------------- 
                                                                            
Revenue                                        $     164,924  $     153,432 
                                                                            
Operating expenses:                                                         
  Ship operating                                      37,546         34,550 
  Depreciation and amortization                       42,753         37,931 
  General and administrative                           7,791          5,850 
  Operating lease                                      1,086              - 
                                              -------------- -------------- 
                                                      89,176         78,331 
                                              -------------- -------------- 
                                                                            
Operating earnings                                    75,748         75,101 
                                                                            
Other expenses (income):                                                    
  Interest expense                                    15,484         16,975 
  Interest income                                       (187)          (308)
  Undrawn credit facility fees                           397            805 
  Amortization of deferred charges                     2,110          1,561 
  Change in fair value of financial                                         
   instruments                                         2,666          4,676 
  Equity loss on investment                               34            134 
  Other income                                          (362)             - 
                                              -------------- -------------- 
                                                      20,142         23,843 
                                              -------------- -------------- 
                                                                            
Net earnings                                   $      55,606  $      51,258 
                                                                            
Deficit, beginning of period                        (594,153)      (622,406)
Dividends - common shares                            (15,794)       (11,735)
Dividends - preferred shares               
           (9,119)        (8,313)
Amortization of Series C issuance costs                 (310)          (219)
                                              -------------- -------------- 
Deficit, end of period                         $    (563,770) $    (591,415)
                                              -------------- -------------- 
                                              -------------- -------------- 
                                                                            
Weighted average number of shares, basic              63,767         63,696 
                                                                            
Weighted average number of shares, diluted            85,990         83,566 
                                                                            
Earnings per share, basic                      $        0.57  $        0.54 
                                              -------------- -------------- 
                                              -------------- -------------- 
Earnings per share, diluted                    $        0.53  $        0.51 
                                              -------------- -------------- 
                                              -------------- -------------- 
                                                                            
                                                                            
                             SEASPAN CORPORATION                            
          UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME         
                FOR THE QUARTERS ENDED MARCH 31, 2013 AND 2012              
                         (IN THOUSANDS OF US DOLLARS)                       
                                                                            
                                                  Quarter Ended March 31,   
                                              ------------------------------
                                                        2013            2012
                                              --------------  --------------
                                                                            
Net earnings                                   $      55,606   $      51,258
                                                                            
Other comprehensive income:                                                 
  Amounts reclassified to earnings during the                               
   period, relating to cash flow hedging                                    
   instruments                                         1,802           2,708
                                              --------------  --------------
                                                                            
Comprehensive income                           $      57,408   $      53,966
                                              --------------  --------------
                                              --------------  --------------
                                                                            
                                                                           
                             SEASPAN CORPORATION                           
               UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS             
               FOR THE QUARTERS ENDED MARCH 31, 2013 AND 2012              
                         (IN THOUSANDS OF US DOLLARS)                      
                                                                           
                                                 Quarter Ended March 31,   
                                               --------------------------- 
                                                        2013          2012 
                                               ------------- ------------- 
 Cash from (used in):                                                      
 Operating activities:                                                     
   Net earnings                                 $     55,606  $     51,258 
   Items not involving cash:                                               
     Depreciation and amortization                    42,753        37,931 
     Share-based compensation                          2,811           586 
     Amortization of deferred charges                  2,110         1,561 
     Amounts reclassified from other                                       
      comprehensive loss to interest expense           1,579         2,542 
     Unrealized change in fair value of                                    
      financial instruments                          (28,869)      (25,783)
     Equity loss on investment                            34           134 
 Changes in assets and liabilities                   (41,741)      (18,471)
                                               ------------- ------------- 
 Cash from operating activities                       34,283        49,758 
                                               ------------- ------------- 
                                                                           
 Financing activities:                                                     
   Draws on credit facilities                          9,000        45,490 
   Repayment of credit facilities                    (21,007)      (10,042)
   Repayment of other long-term liabilities          (10,073)      (24,649)
   Shares repurchased, including related                                   
    expenses                                               -      (170,609)
   Financing fees                                    (11,877)          (16)
   Dividends on common shares                         (9,172)       (7,367)
   Dividends on preferred shares                      (9,119)       (8,313)
                                               ------------- ------------- 
 Cash used in financing activities                   (52,248)     (175,506)
                                               ------------- --
----------- 
                                                                           
 Investing activities:                                                     
   Expenditures for vessels                          (59,229)      (86,635)
   Short-term investments                            (30,273)      (10,214)
   Cash acquired on acquisition of Manager                 -        23,911 
   Intangible assets                                   1,118         7,041 
   Investment in affiliate                            (1,111)            - 
                                               ------------- ------------- 
 Cash used in investing activities                   (89,495)      (65,897)
                                               ------------- ------------- 
                                                                           
 Decrease in cash and cash equivalents              (107,460)     (191,645)
 Cash and cash equivalents, beginning of period      393,478       481,123 
                                               ------------- ------------- 
 Cash and cash equivalents, end of period       $    286,018  $    289,478 
                                               ------------- ------------- 
                                               ------------- ------------- 
                                                                           
                                                                            
                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
               FOR THE QUARTERS ENDED MARCH 31, 2013 AND 2012               
                         (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 and amortization, interest
expe
nse, amortization of deferred charges, non-cash share-based
compensation, change in fair value of financial instruments, 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 are not representative of its operating performance.  
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 March 31,    
                                              ----------------------------- 
                                                        2013           2012 
                                              -------------- -------------- 
                                                                            
Net earnings                                   $      55,606  $      51,258 
Add:                                                                        
  Depreciation and amortization                       42,753         37,931 
  Interest expense                                    15,484         16,975 
  Amortization of deferred charges                     2,110          1,561 
  Share-based compensation                             2,811            586 
  Change in fair value of financial                                         
   instruments                                         2,666          4,676 
  Bareboat charter adjustment, net (1)                 2,395          2,297 
  Organizational development costs (2)                     -            631 
Less:                                                                       
  Amounts paid for dry-dock adjustment                (2,485)        (1,946)
  Series C preferred share dividends paid and                               
   accumulated(3)                                     (8,313)        (8,313)
  Series D preferred share dividends paid and                               
   accumulated(3)                                       (806)             - 
                                              -------------- -------------- 
Net cash flows before interest payments              112,221        105,656 
Less:                                                                       
Interest expense at the hedged rate(4)               (45,406)       (40,312)
                                              -------------- -------------- 
Cash available for distribution to common                                   
 shareholders                                  $      66,815  $      65,344 
                                              -------------- -------------- 
                                              -------------- -------------- 
                                                                            
                                                                            
                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
               FOR THE QUARTERS ENDED MARCH 31, 2013 and 2012               
      (IN THOUSANDS OF US DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)      

 
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, 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 C and Series D 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, contingent consideration, shares held in
escrow 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. 


 
                                                 Quarter Ended March 31,    
                                              ------------------------
----- 
                                                        2013           2012 
                                              -------------- -------------- 
                                                                            
Net earnings                                   $      55,606  $      51,258 
Adjust:                                                                     
  Interest expense                                    15,484         16,975 
  Change in fair value of financial                                         
   instruments                                         2,666          4,676 
  Organizational development costs (2)                     -            631 
  Interest expense at the hedged rate(4)             (45,406)       (40,312)
                                              -------------- -------------- 
Normalized net earnings                        $      28,350  $      33,228 
                                              -------------- -------------- 
Less: preferred share dividends                                             
  Series A                                             9,050          8,128 
  Series C (including amortization of issuance                              
   costs)                                              8,620          8,534 
  Series D                                             1,543              - 
                                              -------------- -------------- 
                                                      19,213         16,662 
                                              -------------- -------------- 
Normalized net earnings attributable to common                              
 shareholders                                  $       9,137  $      16,566 
                                              -------------- -------------- 
                                              -------------- -------------- 
Weighted average number of shares used to                                   
 compute ear
nings per share                                                 
Reported and normalized, basic                        63,767         63,696 
  Share-based compensation                               364            198 
  Contingent consideration                               977            703 
  Shares held in escrow                                  189            586 
  Series A preferred shares liquidation                                     
   preference converted at $15                        20,693         18,383 
                                              -------------- -------------- 
Reported, diluted(5)                                  85,990         83,566 
  Series A preferred shares 115% premium (30-                               
   day trailing average)                                   -              - 
                                              -------------- -------------- 
Normalized, converted                                 85,990         83,566 
                                              -------------- -------------- 
Earnings per share:                                                         
  Reported, basic                              $        0.57  $        0.54 
                                              -------------- -------------- 
                                              -------------- -------------- 
  Reported, diluted                            $        0.53  $        0.51 
                                              -------------- -------------- 
                                              -------------- -------------- 
  Normalized, converted - preferred shares                                  
   converted at $15(6)                         $        0.21  $        0.30 
                                              -------------- -------------- 
                                              -------------- -------------- 
                                                                            
                                                                            
                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
               FOR THE QUARTERS ENDED MARCH 31, 2013 AND 2012               
            (IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE AMOUNTS)          

 
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, bareboat charter adjustment,
organizational development costs, change in fair value of financial
instruments 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 March 31,    
                                              ----------------------------- 
                                                        2013           2012 
                                              -------------- -------------- 
                                                                            
Net earnings                                   $      55,606  $      51,258 
Add:                                                                        
  Interest expense                                    15,484         16,975 
  Interest income                                       (187)          (308)
  Undrawn credit facility fees                           397            805 
  Depreciation and amortization                       42,753         37,931 
  Amortization of deferred charges                     2,110          1,561 
  Bareboat charter adjustment, net (1)                 2,395          2,297 
  Organizational development costs (2)                     -            631 
  Change in fair value of financial                                         
   instruments                                         2,666          4,676 
                                              -------------- -------------- 
Adjusted EBITDA                                $     121,224  $     115,826 
                                              -------------- -------------- 
                                              -------------- -------------- 
                                                                            
(1) In the second half of 2011, Seaspan entered into agreements to bareboat 
    charter four 4800 TEU vessels to MSC 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 lease was
    recorded, which is being amortized to income through revenue. 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, which is recorded in revenue, 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 C and Series D preferred shares have    
    been deducted as they reduce cash available for distribution to common  
    shareholders.                                                           
                                                                            
(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, decreased for the quarter     
    ended March 31, 2013 as detailed in the table below:                    
                                                                            
                                                              Quarter Ended 
                                                             March 31, 2013 
                                                             -------------- 
                                                                            
Normalized earnings per share, converted-preferred shares                   
 converted at $15, March 31, 2012                             $        0.30 
                                                                            
Excluding share count changes:                                              
  Decr
ease in normalized earnings                                     (0.06)
  Decrease from impact of preferred shares                            (0.02)
                                                                            
Share count changes:                                                        
  Increase in converted share count (from 83,566 shares to                  
   85,990 shares)                                                     (0.01)
                                                             -------------- 
                                                                            
Normalized earnings per share, converted-preferred shares                   
 converted at $15, March 31, 2013                             $        0.21 
                                                             -------------- 
                                                             -------------- 

 
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 time charters; future dividends; the
effects of the acquisition of the Manager on Seaspan's ship operating
expenses and general and administrative expenses; the effects of
grants of stock appreciation rights on Seaspan's general and
administrative expenses; 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; the number of additional vessels managed by the
Manager in the future; the timing of recognition of compensation
expenses related to stock appreciation rights; 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 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, 2012. 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