Danaos corporation reports third quarter and nine months results for the period ended september 30, 2021
Athens, greece--(business wire)--danaos corporation (“danaos”) (nyse: dac), one of the world’s largest independent owners of containerships, today reported unaudited results for the period ended september 30, 2021. highlights for the third quarter and nine months ended september 30, 2021: adjusted net income1 of $109.5 million, or $5.32 per share, for the three months ended september 30, 2021 compared to $47.3 million, or $1.91 per share, for the three months ended september 30, 2020, an increase of 131.5%. adjusted net income1 of $236.4 million, or $11.49 per share, for the nine months ended september 30, 2021 compared to $123.1 million, or $4.97 per share, for the nine months ended september 30, 2020, an increase of 92.0%. operating revenues of $195.9 million for the three months ended september 30, 2021 compared to $118.9 million for the three months ended september 30, 2020, an increase of 64.8%. operating revenues of $474.5 million for the nine months ended september 30, 2021 compared to $342.0 million for the nine months ended september 30, 2020, an increase of 38.7%. adjusted ebitda1 of $149.6 million for the three months ended september 30, 2021 compared to $83.3 million for the three months ended september 30, 2020, an increase of 79.6%. adjusted ebitda1 of $349.6 million for the nine months ended september 30, 2021 compared to $235.3 million for the nine months ended september 30, 2020, an increase of 48.6%. total contracted operating revenues were $2.1 billion as of september 30, 2021 with charters extending through 2028 and remaining average contracted charter duration of 3.3 years, weighted by aggregate contracted charter hire. charter coverage of 100% for the remainder of 2021 and 90% for 2022 in terms of contracted operating days. danaos has declared a dividend of $0.50 per share of common stock for the third quarter of 2021, which is payable on december 2, 2021 to stockholders of record as of november 19, 2021. three and nine months ended september 30, 2021 financial summary - unaudited (expressed in thousands of united states dollars, except per share amounts) three months ended three months ended nine months ended nine months ended september 30, september 30, september 30, september 30, 2021 2020 2021 2020 operating revenues $195,915 $118,932 $474,467 $341,952 net income $217,227 $42,786 $886,844 $110,371 adjusted net income1 $109,547 $47,303 $236,418 $123,078 earnings per share, diluted $10.55 $1.73 $43.11 $4.45 adjusted earnings per share, diluted1 $5.32 $1.91 $11.49 $4.97 diluted weighted average number of shares (in thousands) 20,598 24,789 20,571 24,789 adjusted ebitda1 $149,621 $83,331 $349,639 $235,322 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: "we are certain that everyone is aware of the well-documented disruptions to the global supply chain that continue unabated. this situation, despite its negative effect in world growth, had extremely positive effects in our market which continues from strength to strength. despite efforts by all participants to alleviate the disruptions to the global supply chain, there are no signs that conditions are improving. the main contributing factors are an increase in demand, lack of available vessels to satisfy such demand and low levels of productivity in the ports and other land-based infrastructure. additionally, as new vessel deliveries in 2022 are actually expected to be lower than in 2021, we do not expect any respite at least from the vessel supply front in the near term. in 2023, increased deliveries are forecasted, although there will be an offsetting effect from new environmental regulations that will likely tighten the effective supply of vessels due to the anticipated reductions in speed. overall, we do not expect a dramatic difference, provided demand remains healthy. during the third quarter, we consummated the acquisition of gemini and acquired six modern 5,500 teu vessels, all with existing cash resources. on the back of these moves we have achieved record ebitda and net income. we have also expanded our charter coverage and now have in excess of $2 billion of charter backlog. our share ownership in zim - although adjusted as per our usual practice - will also contribute around half a billion dollars to our earnings for 2021 which is outstanding. our liquidity in terms of cash and marketable securities is still close to half a billion and we are closely monitoring our options and strategy for next year to deliver even better results for the company and our shareholders. in the meantime, liner companies are announcing record results which is extremely positive for danaos as the strong credit quality of our customers continues to improve. the continued strong performance of danaos is ensured by existing charters with an average charter duration of 3.3 years and new charters that lock in current rates for several years. we expect strong market conditions to persist in the near term, which will support a strong re-chartering environment into next year and should ensure our stellar performance for the next 3 years." three months ended september 30, 2021 compared to the three months ended september 30, 2020 during the three months ended september 30, 2021, danaos had an average of 65.7 containerships compared to 58.0 containerships during the three months ended september 30, 2020. our fleet utilization for the three months ended september 30, 2021 was 97.7% compared to 98.7% for the three months ended september 30, 2020. our adjusted net income amounted to $109.5 million, or $5.32 per share, for the three months ended september 30, 2021 compared to $47.3 million, or $1.91 per share, for the three months ended september 30, 2020. we have adjusted our net income in the three months ended september 30, 2021 for a $64.1 million gain on our acquisition of the remaining interest in gemini shipholdings corporation (“gemini”), the change in fair value of our investment in zim integrated shipping services ltd. (“zim”) of $47.2 million and a non-cash fees amortization and accrued finance fees charge of $3.6 million. please refer to the adjusted net income reconciliation table, which appears later in this earnings release. the increase of $62.2 million in adjusted net income for the three months ended september 30, 2021 compared to the three months ended september 30, 2020 is attributable mainly to a $77.0 million increase in operating revenues and collection of a $12.3 million dividend from zim, which were partially offset by a $17.3 million increase in total operating expenses, a $8.3 million increase in net finance expenses, and a $1.5 million decrease in our equity investment in gemini following our acquisition and full consolidation by us since july 1, 2021. on a non-adjusted basis, our net income amounted to $217.2 million, or $10.55 earnings per diluted share, for the three months ended september 30, 2021 compared to net income of $42.8 million, or $1.73 earnings per diluted share, for the three months ended september 30, 2020. our net income for the three months ended september 30, 2021 includes a $64.1 million non-cash gain on our acquisition of gemini and a total gain on our investment in zim of $59.5 million. operating revenues operating revenues increased by 64.8%, or $77.0 million, to $195.9 million in the three months ended september 30, 2021 from $118.9 million in the three months ended september 30, 2020. operating revenues for the three months ended september 30, 2021 reflect: a $30.6 million increase in revenues in the three months ended september 30, 2021 compared to the three months ended september 30, 2020 mainly as a result of higher charter rates; a $15.6 million increase in revenues in the three months ended september 30, 2021 compared to the three months ended september 30, 2020 due to the incremental revenue generated by newly acquired vessels; a $21.5 million increase in revenue in the three months ended september 30, 2021 compared to the three months ended september 30, 2020 due to higher non-cash revenue recognition in accordance with us gaap; and a $9.3 million increase in revenues in the three months ended september 30, 2021 compared to the three months ended september 30, 2020 due to amortization of assumed time charters. vessel operating expenses vessel operating expenses increased by $7.0 million to $34.7 million in the three months ended september 30, 2021 from $27.7 million in the three months ended september 30, 2020, primarily as a result of the increase in the average number of vessels in our fleet and an increase in the average daily operating cost for vessels on time charter to $5,918 per vessel per day for the three months ended september 30, 2021 compared to $5,467 per vessel per day for the three months ended september 30, 2020. management believes that our daily operating cost remains among the most competitive in the industry. depreciation & amortization depreciation & amortization includes depreciation and amortization of deferred dry-docking and special survey costs. depreciation depreciation expense increased by 20.2%, or $5.2 million, to $31.0 million in the three months ended september 30, 2021 from $25.8 million in the three months ended september 30, 2020 mainly due to our recent acquisition of fifteen vessels and installation of scrubbers on nine of our vessels in the year ended december 31, 2020. amortization of deferred dry-docking and special survey costs amortization of deferred dry-docking and special survey costs decreased by $0.6 million to $2.6 million in the three months ended september 30, 2021 from $3.2 million in the three months ended september 30, 2020. general and administrative expenses general and administrative expenses increased by $1.3 million to $7.3 million in the three months ended september 30, 2021, from $6.0 million in the three months ended september 30, 2020. the increase was mainly attributable to increased management fees due to the increased size of our fleet and other corporate administrative expenses. other operating expenses other operating expenses include voyage expenses. voyage expenses voyage expenses increased by $4.5 million to $8.1 million in the three months ended september 30, 2021 from $3.6 million in the three months ended september 30, 2020 primarily as a result of the increase in commissions due to the increase in revenue per vessel and the increase in the average number of vessels in our fleet. interest expense and interest income interest expense increased by 52.1%, or $6.2 million, to $18.1 million in the three months ended september 30, 2021 from $11.9 million in the three months ended september 30, 2020. the increase in interest expense is a combined result of: a $6.3 million reduction in the recognition through our income statement of accumulated accrued interest that had been accrued in 2018 in relation to two of our credit facilities that were refinanced on april 12, 2021. as a result of the refinancing, the recognition of such accumulated interest has decreased; a $0.7 million increase in interest expense due to an increase in our debt service cost by approximately 0.4%, which was partially offset by a decrease in our average indebtedness by $80.5 million between the two periods (average indebtedness of $1,438.0 million in the three months ended september 30, 2021, compared to average indebtedness of $1,518.5 million in the three months ended september 30, 2020); and a $0.8 million decrease in the amortization of deferred finance costs and debt discount related to our debt. net proceeds from the issuance of our $300 million senior notes in february 2021 together with the net proceeds from a new $815 million senior secured credit facility and a new $135 million leaseback arrangement, each of which was drawn down on april 12, 2021, were used to refinance a substantial majority of our then outstanding indebtedness. as of september 30, 2021, our outstanding debt, gross of deferred finance costs, was $1,165.5 million, which includes $300 million aggregate principal amount of our senior notes, and our leaseback obligation was $242.9 million. these balances compare to debt of $1,376.2 million and a leaseback obligation of $129.4 million as of september 30, 2020. interest income decreased by $1.5 million to $0.2 million in the three months ended september 30, 2021 compared to $1.7 million in the three months ended september 30, 2020 mainly as a result of collection of accrued interest on zim and hmm bonds, which were redeemed by the issuers thereof in the first half of 2021. gain on investments the gain on investments of $59.5 million in the three months ended september 30, 2021 consists of the change in fair value of our shareholding interest in zim of $47.2 million and net dividends received on zim ordinary shares of $12.3 million. zim completed its initial public offering and listing on the new york stock exchange of its ordinary shares on january 27, 2021. in june 2021, we sold 2,000,000 ordinary shares of zim resulting in net proceeds of $76.4 million. our remaining shareholding interest of 8,186,950 ordinary shares has been fair valued at $415.1 million as of september 30, 2021, based on the closing price of zim’s ordinary shares on the nyse on that date. subsequently, in october 2021, we sold 1,000,000 of these zim ordinary shares, resulting in net proceeds to us of $44.3 million. equity income on investments equity income on investments increased by $62.6 million to $64.1 million in the three months ended september 30, 2021 compared to $1.5 million in the three months ended september 30, 2020 mainly due to the non-cash gain of $64.1 million recognized upon our acquisition of the remaining 51% equity interest in gemini on july 1, 2021. other finance expenses other finance expenses, net decreased by $0.2 million to $0.1 million in the three months ended september 30, 2021 compared to $0.3 million in the three months ended september 30, 2020 due to the decreased finance costs on the refinanced debt. loss on derivatives amortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three months ended september 30, 2021 and september 30, 2020. other income, net other income, net was $0.3 million in the three months ended september 30, 2021 compared to $0.1 million in the three months ended september 30, 2020. adjusted ebitda adjusted ebitda increased by 79.6%, or $66.3 million, to $149.6 million in the three months ended september 30, 2021 from $83.3 million in the three months ended september 30, 2020. as outlined above, the increase is mainly attributable to a $67.7 million increase in operating revenues (net of $9.3 million amortization of assumed time charters) and a collection of $12.3 million dividend from zim, which were partially offset by a $12.2 million increase in total operating expenses and a $1.5 million decrease in equity investment in gemini following our acquisition and full consolidation since july 1, 2021. adjusted ebitda for the three months ended september 30, 2021 is adjusted for the gain on gemini’s acquisition of $64.1 million, the change in fair value of our investment in zim of $47.2 million and stock based compensation of $0.6 million. tables reconciling adjusted ebitda to net income can be found at the end of this earnings release. nine months ended september 30, 2021 compared to the nine months ended september 30, 2020 during the nine months ended september 30, 2021, danaos had an average of 61.9 containerships compared to 56.9 containerships during the nine months ended september 30, 2020. our fleet utilization for the nine months ended september 30, 2021 was 98.5% compared to 95.8% for the nine months ended september 30, 2020. adjusted fleet utilization, excluding the effect of 188 days of incremental off-hire due to shipyard delays related to the covid-19 pandemic, was 97.0% in the nine months ended september 30, 2020. our adjusted net income amounted to $236.4 million, or $11.49 per share, for the nine months ended september 30, 2021 compared to $123.1 million, or $4.97 per share, for the nine months ended september 30, 2020. we have adjusted our net income in the nine months ended september 30, 2021 for the gain on our investment in zim of $491.4 million, gain on debt extinguishment of $111.6 million, a $64.1 million gain on our acquisition of gemini, a non-cash fees amortization and accrued finance fees charge of $12.6 million and stock-based compensation of $4.1 million. please refer to the adjusted net income reconciliation table, which appears later in this earnings release. the increase of $113.3 million in adjusted net income for the nine months ended september 30, 2021 compared to the nine months ended september 30, 2020 is attributable mainly to a $132.5 million increase in operating revenues, collection of a $12.3 million dividend from zim, and partial collection of a common benefit claim of $3.9 million from hanjin shipping, which were partially offset by a $32.5 million increase in total operating expenses, a $2.1 million increase in net finance expenses and a $0.8 million decrease in the operating performance of our equity investment in gemini following our acquisition and full consolidation by us since july 1, 2021. on a non-adjusted basis, our net income amounted to $886.8 million, or $43.11 earnings per diluted share, for the nine months ended september 30, 2021 compared to net income of $110.4 million, or $4.45 earnings per diluted share, for the nine months ended september 30, 2020. our net income for the nine months ended september 30, 2021 includes a total gain on our investment in zim of $503.7 million, a $64.1 million non-cash gain on the acquisition of gemini and a $111.6 million gain on debt extinguishment. operating revenues operating revenues increased by 38.7%, or $132.5 million, to $474.5 million in the nine months ended september 30, 2021 from $342.0 million in the nine months ended september 30, 2020. operating revenues for the nine months ended september 30, 2021 reflect: a $69.6 million increase in revenues in the nine months ended september 30, 2021 compared to the nine months ended september 30, 2020 mainly as a result of higher charter rates and improved fleet utilization; a $32.1 million increase in revenues in the nine months ended september 30, 2021 compared to the nine months ended september 30, 2020 due to the incremental revenue generated by newly acquired vessels; a $21.5 million increase in revenue in the nine months ended september 30, 2021 compared to the nine months ended september 30, 2020 due to higher non-cash revenue recognition in accordance with us gaap; and a $9.3 million increase in revenues in the nine months ended september 30, 2021 compared to the nine months ended september 30, 2020 due to amortization of assumed time charters. vessel operating expenses vessel operating expenses increased by $16.5 million to $98.7 million in the nine months ended september 30, 2021 from $82.2 million in the nine months ended september 30, 2020, primarily as a result of the increase in the average number of vessels in our fleet and an increase in the average daily operating cost for vessels on time charter to $6,034 per vessel per day for the nine months ended september 30, 2021 compared to $5,592 per vessel per day for the nine months ended september 30, 2020. the average daily operating cost increased mainly due to the covid-19 related increase in crew remuneration in the nine months ended september 30, 2021. management believes that our daily operating cost remains among the most competitive in the industry. depreciation & amortization depreciation & amortization includes depreciation and amortization of deferred dry-docking and special survey costs. depreciation depreciation expense increased by 9.7%, or $7.3 million, to $82.9 million in the nine months ended september 30, 2021 from $75.6 million in the nine months ended september 30, 2020 mainly due to our recent acquisition of fifteen vessels and installation of scrubbers on nine of our vessels in the year ended december 31, 2020. amortization of deferred dry-docking and special survey costs amortization of deferred dry-docking and special survey costs decreased by $0.8 million to $7.6 million in the nine months ended september 30, 2021 from $8.4 million in the nine months ended september 30, 2020. general and administrative expenses general and administrative expenses increased by $7.5 million to $25.4 million in the nine months ended september 30, 2021, from $17.9 million in the nine months ended september 30, 2020. the increase was mainly attributable to increased management fees due to the increased size of our fleet and increased stock-based compensation. other operating expenses other operating expenses include voyage expenses. voyage expenses voyage expenses increased by $6.3 million to $17.2 million in the nine months ended september 30, 2021 from $10.9 million in the nine months ended september 30, 2020 primarily as a result of the increase in commissions due to the increase in revenue per vessel and the increase in the average number of vessels in our fleet. interest expense and interest income interest expense increased by 22.7%, or $9.5 million, to $51.4 million in the nine months ended september 30, 2021 from $41.9 million in the nine months ended september 30, 2020. the increase in interest expense is a combined result of: a $6.9 million decrease in interest expense due to a decrease in our debt service cost by approximately 0.5%, while our average indebtedness also decreased by $27.2 million between the two periods (average indebtedness of $1,505.3 million in the nine months ended september 30, 2021, compared to average indebtedness of $1,532.5 million in the nine months ended september 30, 2020); a $16.3 million reduction in the recognition through our income statement of accumulated accrued interest that had been accrued in 2018 in relation to two of our credit facilities that were refinanced on april 12, 2021. as a result of the refinancing, the recognition of such accumulated interest has been decreased; and a $0.1 million increase in the amortization of deferred finance costs and debt discount related to our debt. net proceeds from the issuance of our $300 million senior notes in february 2021 together with the net proceeds from a new $815 million senior secured credit facility and a new $135 million leaseback arrangement, each of which was drawn down on april 12, 2021, were used to refinance a substantial majority of our then outstanding indebtedness. as of september 30, 2021, our outstanding debt, gross of deferred finance costs, was $1,165.5 million, which includes $300 million aggregate principal amount of our senior notes, and our leaseback obligation was $242.9 million. these balances compare to debt of $1,376.2 million and a leaseback obligation of $129.4 million as of september 30, 2020. interest income increased by $6.7 million to $11.7 million in the nine months ended september 30, 2021 compared to $5.0 million in the nine months ended september 30, 2020, mainly as a result of collection of accrued interest on zim and hmm bonds, which were redeemed by the issuers thereof during the 2021 period. gain on investments the gain on investments of $503.7 million in the nine months ended september 30, 2021 consists of the change in fair value of our shareholding interest in zim of $491.4 million and net dividends received on zim ordinary shares of $12.3 million. zim completed its initial public offering and listing on the new york stock exchange of its ordinary shares on january 27, 2021. in june 2021, we sold 2,000,000 ordinary shares of zim resulting in net proceeds of $76.4 million. for the nine months ended september 30, 2021, the unrealized gain related to the zim ordinary shares still held on september 30, 2021 amounted to $415.0 million. our remaining shareholding interest of 8,186,950 ordinary shares has been fair valued at $415.1 million as of september 30, 2021, based on the closing price of zim’s ordinary shares on the nyse on that date compared to the book value of these shares of $75 thousand as of december 31, 2020. subsequently, in october 2021, we sold 1,000,000 of these zim ordinary shares, resulting in net proceeds to us of $44.3 million. equity income on investments equity income on investments increased by $63.3 million to $68.0 million in the nine months ended september 30, 2021 compared to $4.7 million in the nine months ended september 30, 2020 mainly due to the non-cash gain of $64.1 million recognized on our acquisition of the remaining 51% equity interest in gemini on july 1, 2021. gain on debt extinguishment the gain on debt extinguishment of $111.6 million in the nine months ended september 30, 2021 related to our debt refinancing on april 12, 2021, as described above. other finance expenses other finance expenses, net decreased by $0.9 million to $1.1 million in the nine months ended september 30, 2021 compared to $2.0 million in the nine months ended september 30, 2020 due to the decreased finance costs on the refinanced debt. loss on derivatives amortization of deferred realized losses on interest rate swaps remained stable at $2.7 million in each of the nine months ended september 30, 2021 and september 30, 2020. other income, net other income, net was $4.5 million of income in the nine months ended september 30, 2021 compared to $0.4 million of income in the nine months ended september 30, 2020. the increase was mainly due to the collection from hanjin shipping of $3.9 million as a partial payment of common benefit claim and interest. adjusted ebitda adjusted ebitda increased by 48.6%, or $114.3 million, to $349.6 million in the nine months ended september 30, 2021 from $235.3 million in the nine months ended september 30, 2020. as outlined above, the increase is mainly attributable to a $123.2 million increase in operating revenues (net of $9.3 million amortization of assumed time charters), collection of a $12.3 million dividend from zim and partial collection of a common benefit claim of $3.9 million from hanjin shipping, which were partially offset by a $25.1 million increase in total operating expenses. adjusted ebitda for the nine months ended september 30, 2021 is adjusted for the change in fair value of our investment in zim of $491.4 million, gain on debt extinguishment of $111.6 million, a $64.1 million gain on the acquisition of gemini and stock based compensation of $6.1 million. tables reconciling adjusted ebitda to net income can be found at the end of this earnings release. dividend payment danaos has declared a dividend of $0.50 per share of common stock for the third quarter of 2021, which is payable on december 2, 2021 to stockholders of record as of november 19, 2021. recent developments in october 2021, we sold 1,000,000 ordinary shares of zim, resulting in net proceeds to us of $44.3 million. conference call and webcast on tuesday, november 9, 2021 at 9:00 a.m. et, 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: 1 844 802 2437 (us toll free dial in), 0800 279 9489 (uk toll free dial in) or +44 (0) 2075 441 375 (standard international dial in). please indicate to the operator that you wish to join the danaos corporation earnings call. a telephonic replay of the conference call will be available until november 16, 2021 by dialing 1 877 344 7529 (us toll free dial in) or 1-412-317-0088 (standard international dial in) and using 10161393# as the access code. audio webcast there will also be a live and then archived webcast of the conference call on the danaos website (www.danaos.com). participants of the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. slide presentation a slide presentation regarding the company and the containership industry will also be available on the danaos website (www.danaos.com). about danaos corporation danaos corporation is one of the largest independent owners of modern, large-size containerships. our current fleet of 71 containerships aggregating 436,589 teus ranks danaos among the largest containership charter owners in the world based on total teu capacity. our fleet is chartered to many of the world's largest liner companies on fixed-rate charters. our long track record of success is predicated on our efficient and rigorous operational standards and environmental controls. danaos corporation'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 safe harbor 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. although danaos corporation believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, danaos corporation cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the impact of the covid-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity, demand for seaborne transportation of containerized cargo, the ability and willingness of charterers to perform their obligations to us, charter rates for containerships, shipyards performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing; danaos’ ability to achieve the expected benefits of the 2021 debt refinancing and comply with the terms of its new credit facilities and other financing agreements; 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 dry-docking, 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 137 unscheduled off-hire days in the three months ended september 30, 2021. the following table summarizes vessel utilization and the impact of the off-hire days on the company’s revenue. vessel utilization (no. of days) first quarter second quarter third quarter 2021 2021 2021 total ownership days 5,400 5,460 6,043 16,903 less off-hire days: scheduled off-hire days (22) (33) - (55) other off-hire days (51) (15) (137) (203) operating days 5,327 5,412 5,906 16,645 vessel utilization 98.6% 99.1% 97.7% 98.5% operating revenues (in '000s of us dollars) $132,118 $146,434 $195,915 $474,467 average gross daily charter rate $24,802 $27,057 $33,172 $28,505 vessel utilization (no. of days) first quarter second quarter third quarter 2020 2020 2020 total ownership days 5,073 5,193 5,336 15,602 less off-hire days: scheduled off-hire days (336) (60) (10) (406) other off-hire days (104) (92) (60) (256) operating days 4,633 5,041 5,266 14,940 vessel utilization 91.3% 97.1% 98.7% 95.8% operating revenues (in '000s of us dollars) $106,196 $116,824 $118,932 $341,952 average gross daily charter rate $22,922 $23,175 $22,585 $22,888 fleet list the following table describes in detail our fleet deployment profile as of november 5, 2021: vessel name vessel size (teu) year built expiration of charter(1) hyundai ambition 13,100 2012 june 2024 hyundai speed 13,100 2012 june 2024 hyundai smart 13,100 2012 may 2024 hyundai respect 13,100 2012 march 2024 hyundai honour 13,100 2012 february 2024 express rome 10,100 2011 february 2022 express berlin 10,100 2011 april 2022 express athens 10,100 2011 february 2022 le havre 9,580 2006 april 2023 pusan c 9,580 2006 march 2023 bremen 9,012 2009 december 2022 c hamburg 9,012 2009 january 2023 niledutch lion 8,626 2008 may 2026 charleston 8,533 2005 february 2026 cma cgm melisande 8,530 2012 november 2024 cma cgm attila 8,530 2011 april 2024 cma cgm tancredi 8,530 2011 may 2024 cma cgm bianca 8,530 2011 july 2024 cma cgm samson 8,530 2011 september 2024 america 8,468 2004 february 2023 europe 8,468 2004 march 2023 phoebe 8,463 2005 august 2026 cma cgm moliere 6,500 2009 april 2022 cma cgm musset 6,500 2010 october 2022 cma cgm nerval 6,500 2010 december 2022 cma cgm rabelais 6,500 2010 february 2023 cma cgm racine 6,500 2010 march 2023 ym mandate 6,500 2010 january 2028 ym maturity 6,500 2010 april 2028 zim savannah (ex performance) 6,402 2002 may 2024 dimitra c 6,402 2002 january 2023 seattle c 4,253 2007 october 2024 vancouver 4,253 2007 november 2024 derby d 4,253 2004 january 2027 tongala (ex anl tongala) 4,253 2004 january 2023 rio grande 4,253 2008 november 2024 zim sao paolo 4,253 2008 february 2023 zim kingston 4,253 2008 april 2023 zim monaco 4,253 2009 july 2022 dalian (ex zim dalian) 4,253 2009 november 2022 zim luanda 4,253 2009 august 2025 dimitris c 3,430 2001 november 2025 express black sea 3,400 2011 january 2025 express spain 3,400 2011 january 2025 express argentina 3,400 2010 may 2023 express brazil 3,400 2010 june 2025 express france 3,400 2010 september 2025 singapore 3,314 2004 may 2024 colombo 3,314 2004 january 2025 zebra 2,602 2001 november 2024 amalia c 2,452 1998 january 2023 artotina (ex danae c) 2,524 2001 february 2022 advance 2,200 1997 december 2024 future 2,200 1997 november 2024 sprinter 2,200 1997 november 2024 stride 2,200 1997 january 2025 progress c 2,200 1998 november 2024 bridge 2,200 1998 december 2024 highway 2,200 1998 august 2022 vladivostok 2,200 1997 march 2025 belita (2) 8,533 2006 july 2026 catherine c (2) 6,422 2001 january 2023 leo c (2) 6,422 2002 august 2022 suez canal(2) 5,610 2002 march 2023 genoa(2) 5,544 2002 november 2024 wide alpha (3) 5,466 2014 march 2024 wide bravo(3) 5,466 2014 march 2022 maersk euphrates (3) 5,466 2014 april 2024 wide hotell(3) 5,466 2015 may 2024 wide india (3) 5,466 2015 july 2022 wide juliet(3) 5,466 2015 june 2023 (1) earliest date charters could expire. some charters include options to extend their terms. (2) vessels previously owned by gemini shipholdings corporation, in which we held a 49% equity interest through the end of the second quarter of 2021. on july 1, 2021, we exercised our option to acquire the remaining 51% equity interests in gemini shipholdings corporation and now hold 100%. (3) we entered into an agreement on july 7, 2021, to purchase these vessels. we took delivery of: (i) ‘maersk euphrates’ on august 25, 2021, (ii) ‘wide india’ on september 20, 2021, (iii) ‘wide bravo’ on september 23, 2021, (iv) ‘wide juliet’ on september 27, 2021, (v) ‘wide alpha’ on september 28, 2021, and (vi) ‘wide hotel’ on october 6, 2021. danaos corporation condensed consolidated statements of income - unaudited (expressed in thousands of united states dollars, except per share amounts) three months ended three months ended nine months ended nine months ended september 30, september 30, september 30, september 30, 2021 2020 2021 2020 operating revenues $195,915 $118,932 $474,467 $341,952 operating expenses vessel operating expenses (34,674) (27,662) (98,692) (82,232) depreciation & amortization (33,584) (28,939) (90,536) (84,029) general & administrative (7,342) (6,048) (25,367) (17,901) other operating expenses (8,055) (3,552) (17,249) (10,887) income from operations 112,260 52,731 242,623 146,903 other income/(expenses) interest income 152 1,650 11,661 4,952 interest expense (18,093) (11,907) (51,408) (41,865) gain on investments 59,519 - 503,684 - equity income on investments 64,063 1,464 68,028 4,729 gain on debt extinguishment - - 111,616 - other finance expenses (99) (330) (1,133) (1,990) other income, net 338 91 4,482 361 realized loss on derivatives (913) (913) (2,709) (2,719) total other income/(expenses), net 104,967 (9,945) 644,221 (36,532) net income $217,227 $42,786 $886,844 $110,371 earnings per share basic earnings per share $10.67 $1.74 $43.61 $4.49 diluted earnings per share $10.55 $1.73 $43.11 $4.45 basic weighted average number of common shares (in thousands of shares) 20,354 24,573 20,334 24,573 diluted weighted average number of common shares (in thousands of shares) 20,598 24,789 20,571 24,789 non-gaap measures1 reconciliation of net income to adjusted net income – unaudited three months ended three months ended nine months ended nine months ended september 30, september 30, september 30, september 30, 2021 2020 2021 2020 net income $217,227 $42,786 $886,844 $110,371 gain on investments (47,239) - (491,404) - equity income on investments (64,063) - (64,063) - gain on debt extinguishment - - (111,616) - amortization of financing fees, debt discount & finance fees accrued 3,622 4,517 12,579 12,707 stock based compensation - - 4,078 - adjusted net income $109,547 $47,303 $236,418 $123,078 adjusted earnings per share, diluted $5.32 $1.91 $11.49 $4.97 diluted weighted average number of shares (in thousands) 20,598 24,789 20,571 24,789 1 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 and nine months ended september 30, 2021 and 2020. 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 consolidated balance sheets - unaudited (expressed in thousands of united states dollars) as of as of september 30, december 31, 2021 2020 assets current assets cash, cash equivalents and restricted cash $93,557 $65,663 accounts receivable, net 7,025 7,556 other current assets 473,350 45,229 573,932 118,448 non-current assets fixed assets, net 2,918,889 2,479,937 deferred charges, net 11,327 17,339 investments in affiliates - 15,273 other non-current assets 74,457 83,383 3,004,673 2,595,932 total assets $3,578,605 $2,714,380 liabilities and stockholders' equity current liabilities long-term debt, current portion $96,300 $155,662 accumulated accrued interest, current portion 5,661 18,036 long-term leaseback obligations, current portion 85,502 24,515 accounts payable, accrued liabilities & other current liabilities 204,300 41,472 391,763 239,685 long-term liabilities long-term debt, net 1,038,770 1,187,345 accumulated accrued interest, net of current portion 26,111 136,433 long-term leaseback obligations, net 152,661 95,585 other long-term liabilities 46,600 19,755 1,264,142 1,439,118 stockholders’ equity common stock 206 204 additional paid-in capital 761,450 755,390 accumulated other comprehensive loss (71,852) (86,669) retained earnings 1,232,896 366,652 1,922,700 1,035,577 total liabilities and stockholders' equity $3,578,605 $2,714,380 danaos corporation condensed consolidated statements of cash flows - unaudited (expressed in thousands of united states dollars) three months ended three months ended nine months ended nine months ended september 30, september 30, september 30, september 30, 2021 2020 2021 2020 operating activities: net income $217,227 $42,786 $886,844 $110,371 adjustments to reconcile net income to net cash provided by operating activities: depreciation 31,011 25,765 82,909 75,604 amortization of deferred drydocking & special survey costs, finance cost, debt discount and other finance fees accrued 6,195 7,691 20,206 21,662 amortization of assumed time charters (9,318) - (9,318) - pik interest - 686 726 2,236 gain on investments (47,239) - (491,404) - equity income on investments (64,063) (1,464) (68,028) (4,729) gain on debt extinguishment - - (111,616) - payments for drydocking/special survey (460) (17) (1,615) (13,397) amortization of deferred realized losses on cash flow interest rate swaps 913 913 2,709 2,719 stock based compensation 576 301 6,055 897 accounts receivable 435 1,706 879 (3,701) other assets, current and non-current (22,739) 3,031 (21,093) 2,342 accounts payable and accrued liabilities (6,055) (8,323) 4,291 614 other liabilities, current and long-term (3,086) (3,911) (5,405) (8,586) net cash provided by operating activities 103,397 69,164 296,140 186,032 investing activities: vessel additions and advances (262,267) (7,403) (264,078) (106,149) investments 14,388 - 160,265 (75) net cash used in investing activities (247,879) (7,403) (103,813) (106,224) financing activities: proceeds from sale-leaseback of vessels - - 135,000 139,080 proceeds from long-term debt - 13,300 1,105,311 36,700 payments of leaseback obligations (16,202) (5,877) (37,377) (147,942) debt repayment (24,400) (34,573) (1,319,425) (99,749) dividends paid (10,295) - (20,593) - payments of accumulated accrued interest (1,532) (5,284) (8,890) (20,786) finance costs (3,950) (7,914) (18,459) (19,913) net cash used in financing activities (56,379) (40,348) (164,433) (112,610) net increase/(decrease) in cash, cash equivalents and restricted cash (200,861) 21,413 27,894 (32,802) cash, cash equivalents and restricted cash, beginning of period 294,418 84,955 65,663 139,170 cash, cash equivalents and restricted cash, end of period $93,557 $106,368 $93,557 $106,368 danaos corporation reconciliation of net income to adjusted ebitda - unaudited (expressed in thousands of united states dollars) three months ended three months ended nine months ended nine months ended september 30, september 30, september 30, september 30, 2021 2020 2021 2020 net income $217,227 $42,786 $886,844 $110,371 depreciation 31,011 25,765 82,909 75,604 amortization of deferred drydocking & special survey costs 2,573 3,174 7,627 8,425 amortization of assumed time charters (9,318) - (9,318) - amortization of deferred finance costs, debt discount and other finance fees accrued 3,622 4,517 12,579 12,707 amortization of deferred realized losses on interest rate swaps 913 913 2,709 2,719 interest income (152) (1,650) (11,661) (4,952) interest expense 14,471 7,525 38,978 29,551 gain on investments (47,239) - (491,404) - equity income on investments (64,063) - (64,063) - gain on debt extinguishment - - (111,616) - stock based compensation 576 301 6,055 897 adjusted ebitda(1) $149,621 $83,331 $349,639 $235,322 1) adjusted ebitda represents net income before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs, amortization of assumed time charters, amortization of deferred finance costs, debt discount and other finance fees accrued, amortization of deferred realized losses on interest rate swaps, gain on investments, equity income on investments, gain on debt extinguishment and stock based compensation. 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 operating performance 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. 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. 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 and nine months ended september 30, 2021 and 2020. 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.
