Danaos corporation reports third quarter and nine months results for the period ended september 30, 2020
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, 2020. highlights for the third quarter and nine months ended september 30, 2020: adjusted net income1 of $47.3 million, or $1.91 per share, for the three months ended september 30, 2020 compared to $37.9 million, or $2.46 per share, for the three months ended september 30, 2019, an increase of 24.8%. adjusted net income1 of $123.1 million, or $4.97 per share, for the nine months ended september 30, 2020 compared to $110.7 million, or $7.23 per share, for the nine months ended september 30, 2019, an increase of 11.2%. operating revenues of $118.9 million for the three months ended september 30, 2020 compared to $111.8 million for the three months ended september 30, 2019, an increase of 6.4%. operating revenues of $341.9 million for the nine months ended september 30, 2020 compared to $337.0 million for the nine months ended september 30, 2019, an increase of 1.5%. adjusted ebitda1 of $83.3 million for the three months ended september 30, 2020 compared to $79.3 million for the three months ended september 30, 2019, an increase of 5.0%. adjusted ebitda1 of $235.3 million for the nine months ended september 30, 2020 compared to $232.4 million for the nine months ended september 30, 2019, an increase of 1.2%. total contracted operating revenues were $1.1 billion as of september 30, 2020, with charters extending through 2028 and remaining average contracted charter duration of 3.5 years, weighted by aggregate contracted charter hire. charter coverage of 87% for the next 12 months based on current operating revenues and 64% in terms of contracted operating days. on october 12, 2020, we announced the repurchase of 4,339,271 shares of our common stock for an aggregate purchase price of $31.1 million in privately negotiated transactions, including 2,517,013 shares from the royal bank of scotland and 1,822,258 shares from sphinx investment corp. these transactions resulted in the company's previously announced share repurchase program being terminated. three and nine months ended september 30, 2020 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, 2020 2019 2020 2019 operating revenues $ 118,932 $ 111,830 $ 341,952 $ 337,040 net income $ 42,786 $ 33,855 $ 110,371 $ 97,436 adjusted net income1 $ 47,303 $ 37,882 $ 123,078 $ 110,706 earnings per share, diluted $ 1.73 $ 2.20 $ 4.45 $ 6.36 adjusted earnings per share, diluted1 $ 1.91 $ 2.46 $ 4.97 $ 7.23 diluted weighted average number of shares (in thousands) 24,789 15,373 24,789 15,309 adjusted ebitda1 $ 83,331 $ 79,328 $ 235,322 $ 232,447 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 pleased to report improved performance in the company’s profitability during this quarter. container trade has staged a remarkable recovery since the end of may, when 11.4% of the vessels in the global fleet stood idle. time charter rates have increased across all vessel sizes, and the time charter market is at or close to multi-year highs for all vessel sizes. the ability of the liner companies to consistently manage capacity addressed the swift drop in volumes at the onset of the pandemic, which alleviated pressure on our customers' cash flows and stabilized freight rates. all our customers have reported strong profitability which significantly mitigates our counterparty risk. volumes have consistently improved, particularly in transpacific eastbound, intra-asia and north-south trade lanes, as volumes have recovered faster than expected. notably, the increase in rates has been most pronounced in smaller vessel types. danaos has the greatest amount of leverage to this segment of the market as our larger vessels are contracted on multi-year time charters. from that perspective, the short-term chartering market has been quite dynamic. although significant market uncertainty remains, particularly as many countries see increasing spread of covid-19 cases, global gdp has rebounded swiftly, and imf has recently revised its 2020 gdp estimates upwards. for 2021, the imf forecasts global gdp growth of 5.2%, which effectively equals growth of 0.6% compared to 2019, or pre-pandemic levels. the recovery has thus far been primarily concentrated in goods rather than services, which has benefited containerized trade. we continue to execute our strategy and we are well insulated from near-term volatility due to our high charter coverage of 87% in terms of operating revenues and 64% in terms of operating days over the next 12 months. this provides significant visibility into our cash flows during this period. we also have some leverage to the presently strong market through our smaller vessels. we are also cautiously optimistic about the medium-term market outlook. the orderbook is currently in single digits as a percentage of the world fleet for the first time in 20 years. combined with an anticipated reduction in speeds due to the various environmental initiatives, the supply side outlook is healthy. tighter supply will help to maintain momentum in the container market or help to bring about a swift recovery if conditions deteriorate. consistent with our growth strategy we have agreed to purchase two 9,000 teu vessels built in 2009 which are both contracted on two year charters with a major liner company. these vessels are expected to be delivered to us between december 2020 and january 2021 and will be funded with a combination of cash and new credit facilities. with these new deliveries our fleet will for the first time exceed the 400,000 teu mark. in the meantime, we are generating strong cash flows from our $1.1 billion charter backlog and have a healthy liquidity position. this enabled us to opportunistically repurchase 4,339,271 shares, or 17.5% of the company’s outstanding shares, for an aggregate price of $31.1 million in privately negotiated transactions practically tripling our $10 million original buyback program. given the holding nature of the prior owners of these shares, these repurchases increase our per share results and valuation metrics without impacting trading liquidity. in light of the continued uncertainty about the duration of the coronavirus pandemic and the ensuing economic recovery, we remain focused on maintaining a conservative financial profile and making thoughtful capital allocation decisions that align with our strategy and market expectations and deliver value to our shareholders." three months ended september 30, 2020 compared to the three months ended september 30, 2019 during the three months ended september 30, 2020, danaos had an average of 58.0 containerships compared to 55.0 containerships during the three months ended september 30, 2019. our fleet utilization was 98.7% in each of the three months ended september 30, 2020 and september 30, 2019. our adjusted net income amounted to $47.3 million, or $1.91 per share, for the three months ended september 30, 2020 compared to $37.9 million, or $2.46 per share, for the three months ended september 30, 2019. we have adjusted our net income in the three months ended september 30, 2020 for amortization of non-cash fees and accrued finance fees charge of $4.5 million. please refer to the adjusted net income reconciliation table, which appears later in this earnings release. the increase of $9.4 million in adjusted net income for the three months ended september 30, 2020 compared to the three months ended september 30, 2019 is attributable mainly to a $7.1 million increase in operating revenues, a $6.8 million decrease in net finance expenses and a $0.9 million increase in the operating performance of our equity investment in gemini shipholdings corporation (“gemini”), which were partially offset by a $5.4 million increase in total operating expenses. on a non-adjusted basis, our net income amounted to $42.8 million, or $1.73 earnings per diluted share, for the three months ended september 30, 2020 compared to net income of $33.9 million, or $2.20 earnings per diluted share, for the three months ended september 30, 2019. operating revenues operating revenues increased by 6.4%, or $7.1 million, to $118.9 million in the three months ended september 30, 2020 from $111.8 million in the three months ended september 30, 2019. operating revenues for the three months ended september 30, 2020 reflect: a $11.5 million increase in revenues in the three months ended september 30, 2020 compared to the three months ended september 30, 2019 as a result of contractual increases in charter rates of vessels under long-term charters; a $5.5 million increase in revenues in the three months ended september 30, 2020 compared to the three months ended september 30, 2019 due to the acquisition of new vessels; a $5.6 million decrease in revenues in the three months ended september 30, 2020 compared to the three months ended september 30, 2019 due to lower non-cash revenue recognition in accordance with us gaap; a $5.1 million decrease in revenues in the three months ended september 30, 2020 compared to the three months ended september 30, 2019 as a result of lower re-chartering rates for certain of our vessels. this decrease is partially due to a $3.9 million decrease in revenues due to the re-chartering of four vessels in our fleet that concluded long-term charters over the last twelve months and were re-deployed at the prevailing lower spot rates at the time these vessels were re-chartered; and a $0.8 million increase in revenues due to higher fleet utilization of our vessels in the three months ended september 30, 2020 compared to the three months ended september 30, 2019. vessel operating expenses vessel operating expenses increased by $2.8 million to $27.7 million in the three months ended september 30, 2020 from $24.9 million in the three months ended september 30, 2019, primarily as a result of the increase in the average number of vessels in our fleet and an overall increase in the average daily operating cost to $5,467 per vessel per day for vessels on time charter for the three months ended september 30, 2020 compared to $5,298 per vessel per day for the three months ended september 30, 2019. management believes that our daily operating cost are 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 6.2%, or $1.5 million, to $25.8 million in the three months ended september 30, 2020 from $24.3 million in the three months ended september 30, 2019 mainly due to the installation of scrubbers on nine of our vessels and the acquisition of the vessels niledutch lion, phoebe and sm charleston in the nine months ended september 30, 2020. amortization of deferred dry-docking and special survey costs amortization of deferred dry-docking and special survey costs increased by $0.9 million to $3.2 million in the three months ended september 30, 2020 from $2.3 million in the three months ended september 30, 2019. general and administrative expenses general and administrative expenses decreased by $0.4 million to $6.0 million in the three months ended september 30, 2020, from $6.4 million in the three months ended september 30, 2019. the decrease was mainly due to decreased non-cash recognition of share-based compensation. other operating expenses other operating expenses include voyage expenses. voyage expenses voyage expenses increased by $0.8 million to $3.6 million in the three months ended september 30, 2020 from $2.8 million in the three months ended september 30, 2019 primarily as a result of the increase in the average number of vessels in our fleet. interest expense and interest income interest expense decreased by 34.6%, or $6.3 million, to $11.9 million in the three months ended september 30, 2020 from $18.2 million in the three months ended september 30, 2019. the decrease in interest expense is attributable to: a $6.8 million decrease in interest expense due to a decrease in debt service cost of approximately 2.3% and a $84.6 million decrease in our average debt (including leaseback obligations), to $1,518.5 million in the three months ended september 30, 2020, compared to $1,603.1 million in the three months ended september 30, 2019; and a $0.5 million increase in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing. as of september 30, 2020, our outstanding bank debt, gross of deferred finance costs, was $1,376.2 million and our leaseback obligation was $129.4 million compared to bank debt of $1,450.0 million and our leaseback obligation of $141.4 million as of september 30, 2019. interest income increased to $1.7 million in the three months ended september 30, 2020 compared to $1.6 million in the three months ended september 30, 2019. other finance costs, net other finance costs, net remained stable at $0.3 million in each of the three months ended september 30, 2020 and september 30, 2019. equity income on investments equity income on investments increased by $0.9 million to $1.5 million of income on investments in the three months ended september 30, 2020 compared to $0.6 million in the three months ended september 30, 2019 due to the improved operating performance of gemini, in which the company has a 49% shareholding interest. 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, 2020 and september 30, 2019. other income, net other income, net was $0.1 million in the three months ended september 30, 2020 compared to nil in the three months ended september 30, 2019. adjusted ebitda adjusted ebitda increased by 5.0%, or $4.0 million, to $83.3 million in the three months ended september 30, 2020 from $79.3 million in the three months ended september 30, 2019. as outlined above, the increase is mainly attributable to a $7.1 million increase in operating revenues and a $0.9 million increase in the operating performance of our equity investees, which were partially offset by a $4.0 million increase in operating expenses. adjusted ebitda for the three months ended september 30, 2020 is adjusted for stock based compensation of $0.3 million. tables reconciling adjusted ebitda to net income can be found at the end of this earnings release. nine months ended september 30, 2020 compared to the nine months ended september 30, 2019 during the nine months ended september 30, 2020, danaos had an average of 56.9 containerships compared to 55.0 containerships during the nine months ended september 30, 2019. our fleet utilization for the nine months ended september 30, 2020 was 95.8% compared to 98.8% for the nine months ended september 30, 2019. 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 $123.1 million, or $4.97 per share, for the nine months ended september 30, 2020 compared to $110.7 million, or $7.23 per share, for the nine months ended september 30, 2019. we have adjusted our net income in the nine months ended september 30, 2020 for amortization of non-cash fees and accrued finance fees charge of $12.7 million. please refer to the adjusted net income reconciliation table, which appears later in this earnings release. the increase of $12.4 million in adjusted net income for the nine months ended september 30, 2020 compared to the nine months ended september 30, 2019 is attributable mainly to a $13.1 million decrease in net finance expenses, a $4.9 million increase in operating revenues and a $4.2 million increase in the operating performance of our equity investment in gemini, which were partially offset by a $9.8 million increase in total operating expenses. on a non-adjusted basis, our net income amounted to $110.4 million, or $4.45 earnings per diluted share, for the nine months ended september 30, 2020 compared to net income of $97.4 million, or $6.36 earnings per diluted share, for the nine months ended september 30, 2019. operating revenues operating revenues increased by 1.5%, or $4.9 million, to $341.9 million in the nine months ended september 30, 2020 from $337.0 million in the nine months ended september 30, 2019. operating revenues for the nine months ended september 30, 2020 reflect: a $26.2 million increase in revenues in the nine months ended september 30, 2020 compared to the nine months ended september 30, 2019 as a result of contractual increases in charter rates of vessels under long-term charters; a $10.0 million increase in revenues in the nine months ended september 30, 2020 compared to the nine months ended september 30, 2019 due to the acquisition of new vessels; a $6.2 million decrease in revenues due to lower fleet utilization of our vessels in the nine months ended september 30, 2020 compared to the nine months ended september 30, 2019 mainly due to the scheduled installation of scrubbers and dry-dockings of our vessels, of which $3.2 million relates to incremental delays in the chinese shipyards where these activities were being performed due to the covid-19 pandemic; a $9.3 million decrease in revenues in the nine months ended september 30, 2020 compared to the nine months ended september 30, 2019 as a result of lower re-chartering rates for certain of our vessels. this decrease is due to a $12.5 million decrease in revenues due to the re-chartering of six vessels in our fleet that concluded long-term charters over the last twelve months and were re-deployed at the prevailing lower spot rates at the time these vessels were re-chartered, partially offset by a $3.2 million improvement from the re-chartering of other vessels in the fleet; and a $15.8 million decrease in revenues in the nine months ended september 30, 2020 compared to the nine months ended september 30, 2019 due to lower non-cash revenue recognition in accordance with us gaap. vessel operating expenses vessel operating expenses increased by $4.2 million to $82.2 million in the nine months ended september 30, 2020 from $78.0 million in the nine months ended september 30, 2019, primarily as a result of the increase in the average number of vessels in our fleet, partially offset by an overall decrease in the average daily operating cost to $5,592 per vessel per day for vessels on time charter for the nine months ended september 30, 2020 compared to $5,605 per vessel per day for the nine months ended september 30, 2019. management believes that our daily operating cost are 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 4.9%, or $3.5 million, to $75.6 million in the nine months ended september 30, 2020 from $72.1 million in the nine months ended september 30, 2019 mainly due to the installation of scrubbers on nine of our vessels and the acquisition of the vessels niledutch lion, phoebe and sm charleston in the nine months ended september 30, 2020. amortization of deferred dry-docking and special survey costs amortization of deferred dry-docking and special survey costs increased by $1.9 million to $8.4 million in the nine months ended september 30, 2020 from $6.5 million in the nine months ended september 30, 2019. general and administrative expenses general and administrative expenses decreased by $1.9 million to $17.9 million in the nine months ended september 30, 2020, from $19.8 million in the nine months ended september 30, 2019. the decrease was mainly due to decreased non-cash recognition of share-based compensation. other operating expenses other operating expenses include voyage expenses. voyage expenses voyage expenses increased by $2.1 million to $10.9 million in the nine months ended september 30, 2020 from $8.8 million in the nine months ended september 30, 2019 primarily as a result of the increase in the average number of vessels in our fleet. interest expense and interest income interest expense decreased by 23.7%, or $13.0 million, to $41.9 million in the nine months ended september 30, 2020 from $54.9 million in the nine months ended september 30, 2019. the decrease in interest expense is attributable to: a $12.5 million decrease in interest expense due to a decrease in debt service cost by approximately 1.3% and a $97.3 million decrease in our average debt (including leaseback obligations), to $1,532.5 million in the nine months ended september 30, 2020, compared to $1,629.8 million in the nine months ended september 30, 2019; and a $0.5 million decrease in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing. as of september 30, 2020, our outstanding bank debt, gross of deferred finance costs, was $1,376.2 million and our leaseback obligation was $129.4 million compared to bank debt of $1,450.0 million and our leaseback obligation of $141.4 million as of september 30, 2019. interest income increased by $0.2 million to $5.0 million in the nine months ended september 30, 2020 compared to $4.8 million in the nine months ended september 30, 2019. other finance costs, net other finance costs, net decreased by $0.4 million to $2.0 million in the nine months ended september 30, 2020 compared to $2.4 million in the nine months ended september 30, 2019 mainly due to the decrease in finance costs related to the leaseback obligations, partially offset by lease termination fees in the nine months ended september 30, 2020. equity income on investments equity income on investments increased by $4.2 million to $4.7 million of income on investments in the nine months ended september 30, 2020 compared to $0.5 million in the nine months ended september 30, 2019 due to the improved operating performance of gemini, in which the company has a 49% shareholding interest. 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, 2020 and september 30, 2019. other income, net other income, net was $0.3 million in the nine months ended september 30, 2020 compared to $0.4 million in income in the nine months ended september 30, 2019. adjusted ebitda adjusted ebitda increased by 1.2%, or $2.9 million, to $235.3 million in the nine months ended september 30, 2020 from $232.4 million in the nine months ended september 30, 2019. as outlined above, the increase is mainly attributable to a $4.9 million increase in operating revenues, a $4.2 million increase in the operating performance of our equity investees and a $0.4 million decrease in other finance expenses, which were partially offset by a $6.6 million increase in operating expenses. adjusted ebitda for the nine months ended september 30, 2020 is adjusted for stock based compensation of $0.9 million. tables reconciling adjusted ebitda to net income can be found at the end of this earnings release. recent developments on october 12, 2020, we announced the repurchase of 4,339,271 shares of our common stock for an aggregate purchase price of $31.1 million in privately negotiated transactions, including 2,517,013 shares from the royal bank of scotland and 1,822,258 shares from sphinx investment corp. these transactions resulted in the company's previously announced share repurchase program being terminated. on october 16, 2020, we entered into agreements to acquire two 9,000 teu container vessels built in 2009 for a gross aggregate purchase price of $62.0 million. these vessels are expected to be delivered to us by the end of january 2021. conference call and webcast on friday, november 6, 2020 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 13, 2020 by dialing 1 877 344 7529 (us toll free dial in) or 1-412-317-0088 (standard international dial in) and using 10149664# 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 63 containerships aggregating 385,769 teus, including five vessels owned by gemini shipholdings corporation, a joint venture, 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; the effects of the 2018 refinancing transactions; danaos’ ability to achieve the expected benefits of the refinancing and comply with the terms of its new credit facilities and other agreements entered into in connection with the 2018 refinancing; 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 60 unscheduled off-hire days in the three months ended september 30, 2020. 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 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 vessel utilization (no. of days) first quarter second quarter third quarter 2019 2019 2019 total ownership days 4,950 5,005 5,060 15,015 less off-hire days: scheduled off-hire days - (22 ) (41 ) (63 ) other off-hire days (90 ) (10 ) (24 ) (124 ) operating days 4,860 4,973 4,995 14,828 vessel utilization 98.2 % 99.4 % 98.7 % 98.8 % operating revenues (in '000s of us dollars) $ 112,891 $ 112,319 $ 111,830 $ 337,040 average gross daily charter rate $ 23,229 $ 22,586 $ 22,388 $ 22,730 fleet list the following table describes in detail our fleet deployment profile as of november 5, 2020: vessel name vessel size (teu) year built expiration of charter(1) containerships hyundai ambition (ex msc ambition) 13,100 2012 june 2024 hyundai speed (ex maersk exeter) 13,100 2012 june 2024 hyundai smart (ex maersk enping) 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 niledutch lion 8,626 2008 february 2022 sm charleston 8,533 2005 december 2021 cma cgm melisande 8,530 2012 may 2024 cma cgm attila 8,530 2011 october 2023 cma cgm tancredi 8,530 2011 november 2023 cma cgm bianca 8,530 2011 january 2024 cma cgm samson 8,530 2011 march 2024 america 8,468 2004 february 2023 europe 8,468 2004 march 2023 phoebe 8,463 2005 april 2022 cma cgm moliere 6,500 2009 february 2022 cma cgm musset 6,500 2010 august 2022 cma cgm nerval 6,500 2010 october 2022 cma cgm rabelais 6,500 2010 december 2022 cma cgm racine 6,500 2010 january 2023 ym mandate 6,500 2010 january 2028 ym maturity 6,500 2010 april 2028 performance 6,402 2002 december 2020 dimitra c 6,402 2002 january 2023 ym seattle 4,253 2007 december 2020 ym vancouver 4,253 2007 november 2020 derby d 4,253 2004 november 2020 anl tongala 4,253 2004 november 2020 rio grande (ex zim rio grande) 4,253 2008 november 2020 zim sao paolo 4,253 2008 december 2020 zim kingston 4,253 2008 february 2021 zim monaco 4,253 2009 february 2021 zim dalian 4,253 2009 february 2021 zim luanda 4,253 2009 may 2021 dimitris c 3,430 2001 december 2020 express black sea 3,400 2011 december 2020 express spain 3,400 2011 november 2020 express argentina 3,400 2010 november 2020 express brazil 3,400 2010 september 2021 express france 3,400 2010 october 2021 singapore 3,314 2004 october 2021 colombo 3,314 2004 november 2020 zebra (ex msc zebra) 2,602 2001 november 2020 amalia c 2,452 1998 may 2021 danae c 2,524 2001 november 2020 advance 2,200 1997 november 2020 future 2,200 1997 november 2020 sprinter 2,200 1997 november 2020 stride 2,200 1997 november 2020 progress c 2,200 1998 november 2020 bridge 2,200 1998 february 2021 highway 2,200 1998 march 2021 vladivostok 2,200 1997 november 2020 belita Ľ2) 8,533 2006 september 2021 catherine c (2) 6,422 2001 january 2023 leo c (2) 6,422 2002 august 2022 suez canal(2) 5,610 2002 december 2020 genoaĽ2) 5,544 2002 september 2021 (1) earliest date charters could expire. some charters include options to extend their terms. (2) vessels acquired by gemini shipholdings corporation, in which danaos holds a 49% equity interest. 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, 2020 2019 2020 2019 operating revenues $ 118,932 $ 111,830 $ 341,952 $ 337,040 operating expenses vessel operating expenses (27,662 ) (24,858 ) (82,232 ) (78,035 ) depreciation & amortization (28,939 ) (26,607 ) (84,029 ) (78,666 ) general & administrative (6,048 ) (6,422 ) (17,901 ) (19,783 ) other operating expenses (3,552 ) (2,792 ) (10,887 ) (8,794 ) income from operations 52,731 51,151 146,903 151,762 other income/(expenses) interest income 1,650 1,586 4,952 4,751 interest expense (11,907 ) (18,216 ) (41,865 ) (54,903 ) other finance expenses (330 ) (308 ) (1,990 ) (2,402 ) equity income on investments 1,464 560 4,729 508 other income/(loss), net 91 (5 ) 361 429 realized loss on derivatives (913 ) (913 ) (2,719 ) (2,709 ) total other expenses, net (9,945 ) (17,296 ) (36,532 ) (54,326 ) net income $ 42,786 $ 33,855 $ 110,371 $ 97,436 earnings per share basic earnings per share $ 1.74 $ 2.27 $ 4.49 $ 6.52 diluted earnings per share $ 1.73 $ 2.20 $ 4.45 $ 6.36 basic weighted average number of common shares (in thousands of shares) 24,573 14,939 24,573 14,939 diluted weighted average number of common shares (in thousands of shares) 24,789 15,373 24,789 15,309 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, 2020 2019 2020 2019 net income $ 42,786 $ 33,855 $ 110,371 $ 97,436 amortization of financing fees, debt discount & finance fees accrued 4,517 4,027 12,707 13,270 adjusted net income $ 47,303 $ 37,882 $ 123,078 $ 110,706 adjusted earnings per share, diluted $ 1.91 $ 2.46 $ 4.97 $ 7.23 diluted weighted average number of shares (in thousands) 24,789 15,373 24,789 15,309 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, 2020 and 2019. 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, 2020 2019 assets current assets cash and cash equivalents $ 106,368 $ 139,170 accounts receivable, net 10,846 7,145 other current assets 45,406 44,071 162,620 190,386 non-current assets fixed assets, net 2,441,815 2,389,874 deferred charges, net 16,427 11,455 investments in affiliates 13,694 8,965 other non-current assets 61,465 82,339 2,533,401 2,492,633 total assets $ 2,696,021 $ 2,683,019 liabilities and stockholders' equity current liabilities long-term debt, current portion $ 126,326 $ 119,673 accumulated accrued interest, current portion 29,679 34,137 long-term leaseback obligations, current portion 24,166 16,342 accounts payable, accrued liabilities & other current liabilities 37,302 52,928 217,473 223,080 long-term liabilities long-term debt, net 1,222,971 1,270,663 accumulated accrued interest, net of current portion 132,319 156,583 long-term leaseback obligations, net 101,522 121,872 other long-term liabilities 22,024 29,131 1,478,836 1,578,249 stockholders’ equity common stock 248 248 additional paid-in capital 786,171 785,274 accumulated other comprehensive loss (110,180 ) (116,934 ) retained earnings 323,473 213,102 999,712 881,690 total liabilities and stockholders' equity $ 2,696,021 $ 2,683,019 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, 2020 2019 2020 2019 operating activities: net income $ 42,786 $ 33,855 $ 110,371 $ 97,436 adjustments to reconcile net income to net cash provided by operating activities: depreciation 25,765 24,336 75,604 72,141 amortization of deferred drydocking & special survey costs, finance cost, debt discount and other finance fees accrued 7,691 6,298 21,662 19,795 pik interest 686 850 2,236 2,545 payments for drydocking/special survey (17 ) (3,524 ) (13,397 ) (5,214 ) amortization of deferred realized losses on cash flow interest rate swaps 913 913 2,719 2,709 equity income on investments (1,464 ) (560 ) (4,729 ) (508 ) stock based compensation 301 1,195 897 3,060 accounts receivable 1,706 (141 ) (3,701 ) 1,588 other assets, current and non-current 3,031 (2,923 ) 2,342 (13,996 ) accounts payable and accrued liabilities (8,323 ) (379 ) 614 (563 ) other liabilities, current and long-term (3,911 ) (3,731 ) (8,586 ) (11,348 ) net cash provided by operating activities 69,164 56,189 186,032 167,645 investing activities: vessel additions and advances (7,403 ) (4,124 ) (106,149 ) (14,762 ) investments - - (75 ) - net cash used in investing activities (7,403 ) (4,124 ) (106,224 ) (14,762 ) financing activities: proceeds from sale-leaseback of vessels - - 139,080 146,523 proceeds from long-term debt 13,300 - 36,700 - payments of leaseback obligations (5,877 ) (3,063 ) (147,942 ) (5,149 ) debt repayment (34,573 ) (25,578 ) (99,749 ) (231,389 ) payments of accumulated accrued interest (5,284 ) (8,979 ) (20,786 ) (26,846 ) finance costs (7,914 ) (10,425 ) (19,913 ) (30,474 ) net cash used in financing activities (40,348 ) (48,045 ) (112,610 ) (147,335 ) net increase/(decrease) in cash and cash equivalents 21,413 4,020 (32,802 ) 5,548 cash and cash equivalents, beginning of period 84,955 78,803 139,170 77,275 cash and cash equivalents, end of period $ 106,368 $ 82,823 $ 106,368 $ 82,823 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, 2020 2019 2020 2019 net income $ 42,786 $ 33,855 $ 110,371 $ 97,436 depreciation 25,765 24,336 75,604 72,141 amortization of deferred drydocking & special survey costs 3,174 2,271 8,425 6,525 amortization of deferred finance costs, debt discount and other finance fees accrued 4,517 4,027 12,707 13,270 amortization of deferred realized losses on interest rate swaps 913 913 2,719 2,709 interest income (1,650 ) (1,586 ) (4,952 ) (4,751 ) interest expense 7,525 14,317 29,551 42,057 stock based compensation 301 1,195 897 3,060 adjusted ebitda(1) $ 83,331 $ 79,328 $ 235,322 $ 232,447 1) adjusted ebitda represents net income before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs, amortization of deferred finance costs, debt discount and other finance fees accrued, amortization of deferred realized losses on interest rate swaps 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. note: items to consider for comparability include gains and charges. gains positively impacting net income are reflected as deductions to net income. charges negatively impacting net income are reflected as increases to net income. the company reports its financial results in accordance with u.s. generally accepted accounting principles (gaap). however, management believes that certain non-gaap financial measures used in managing the business may provide users of these financial information additional meaningful comparisons between current results and results in prior operating periods. management believes that these non-gaap financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. management also uses these non-gaap financial measures in making financial, operating and planning decisions and in evaluating the company's performance. see the tables above for supplemental financial data and corresponding reconciliations to gaap financial measures for the three and nine months ended september 30, 2020 and 2019. 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.
