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Danaos Corporation Reports First Quarter Results for the Period Ended March 31, 2018

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Danaos Corporation Reports First Quarter Results for the Period Ended March 31, 2018

PR Newswire

ATHENS, Greece, June 26, 2018 /PRNewswire/ -- Danaos Corporation ("Danaos") (NYSE:DAC), one of the world's largest independent owners of containerships, today reported unaudited results for the quarter ended March 31, 2018.

Highlights for the First Quarter Ended March 31, 2018:

  • On June 19, 2018, we reached an agreement with certain of our lenders currently holding approximately $2.2 billion of debt maturing on December 31, 2018, that will significantly strengthen the Company's financial position through a debt reduction of approximately $551 million, the resetting of financial and other covenants, modified interest rates and amortization profiles and an extension of existing debt maturities by approximately five years to December 31, 2023. In connection with this refinancing, the consummation of which is subject to definitive documentation and certain closing conditions, we will issue approximately 99.3 million shares of common stock to certain of our lenders. See "Debt Refinancing".
  • Adjusted net income1 of $27.9 million, or $0.25 per share, for the three months ended March 31, 2018 compared to $24.5 million, or $0.22 per share, for the three months ended March 31, 2017, an increase of 13.9%.
  • Operating revenues of $111.9 million for the three months ended March 31, 2018 compared to $110.1 million for the three months ended March 31, 2017, an increase of 1.6%.
  • Adjusted EBITDA1 of $76.6 million for the three months ended March 31, 2018 compared to $72.5 million for the three months ended March 31, 2017, an increase of 5.7%.
  • Total contracted operating revenues were $1.7 billion as of March 31, 2018, with charters extending through 2028 and remaining average contracted charter duration of 5.4 years, weighted by aggregate contracted charter hire.
  • Charter coverage of 90% for the next 12 months based on current operating revenues and 81% in terms of contracted operating days.

 

 

Three Months Ended March 31, 2018

Financial Summary - Unaudited

(Expressed in thousands of United States dollars, except per share amounts)



Three months
ended


Three months
ended

March 31,

March 31,


2018


2017





Operating revenues

$111,854


$110,087

Net income

$14,992


$18,443

Adjusted net income1

$27,951


$24,522

Earnings per share

$0.14


$0.17

Adjusted earnings per share1

$0.25


$0.22

Weighted average number of shares (in thousands)

109,799


109,825

Adjusted EBITDA1

$76,638


$72,546



1Adjusted 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 extremely pleased to have reached an agreement with certain of our lenders currently holding $2.2 billion of debt maturing on December 31, 2018 that will significantly strengthen the Company's capital structure through a debt reduction of $551 million.

This comprehensive debt refinancing will also strengthen the Company's financial position through a resetting of financial and certain other covenants in credit facilities, a modification of interest rates and amortization profiles and an extension of existing debt maturities by approximately five years to December 31, 2023.  In connection with these debt write downs, we will issue just under 100 million shares of common stock to certain of our lenders. 

This is the culmination of a lengthy negotiation process we have undertaken with our lenders that will position Danaos for long-term success. I would like to thank all of our lenders for their support, as well as our financial and legal advisors for their assistance. The Danaos management team looks forward to the completion of this transaction which is expected to occur by July 31, 2018.

In the near term, we maintain high charter contract coverage of 90% for the next 12 months based on current operating revenues and 81% in terms of contracted operating days. The charter market has stabilized at current levels although trade tensions tend to make liner companies hesitant to commit for longer periods. The benefit, conversely, may be a reduction of speculative ordering or ordering by liner companies, a condition that would improve market conditions.

Danaos continues to be a leader in the container shipping industry as a result of our intense focus on continuously enhancing our operations and leveraging technical innovation to provide the highest quality service to our customers. Our industry has undergone significant changes during the past few years, and with the improved capital structure contemplated by our comprehensive re-financing agreement, we will be well positioned to take advantage of the growth opportunities in the container sector and create value for our shareholders." 

Three months ended March 31, 2018 compared to the three months ended March 31, 2017

During the three months ended March 31, 2018 and March 31, 2017, Danaos had an average of 55 containerships. Our fleet utilization for the three months ended March 31, 2018 was 95.6% compared to 92.7% for the three months ended March 31, 2017. The fleet utilization excluding the off charter days of the vessels that were previously chartered to Hanjin Shipping ("Hanjin") was 98.1% in the three months ended March 31, 2017.

Our adjusted net income amounted to $27.9 million, or $0.25 per share, for the three months ended March 31, 2018 compared to $24.5 million, or $0.22 per share, for the three months ended March 31, 2017. We have adjusted our net income in the three months ended March 31, 2018 for refinancing related professional fees of $9.6 million and a non-cash amortization charge of $3.4 million for fees related to our 2011 comprehensive financing plan (comprised of non-cash, amortizing and accrued finance fees). Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

The increase of $3.4 million in adjusted net income for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 is attributable mainly to a $3.9 million decrease in total operating expenses and $1.8 million increase in operating revenues, which were partially offset by a $2.3 million increase in net finance expenses.

On a non-adjusted basis, our net income amounted to $15.0 million, or $0.14 per share, for the three months ended March 31, 2018 compared to net income of $18.4 million, or $0.17 per share, for the three months ended March 31, 2017.

Operating Revenues
Operating revenues increased by 1.6%, or $1.8 million, to $111.9 million in the three months ended March 31, 2018 from $110.1 million in the three months ended March 31, 2017.

Operating revenues for the three months ended March 31, 2018 reflect:

  • $3.2 million increase in revenues in the three months ended March 31, 2018 compared to the three months ended March 31, 2017 due to the re-chartering of certain of our vessels at higher rates.
  • $1.4 million decrease in revenues due to lower fleet utilization for vessels in our fleet, other than the three vessels previously chartered to Hanjin which did not earn any revenues in the three months ended March 31, 2017, compared to the three months ended March 31, 2018.

Vessel Operating Expenses
Vessel operating expenses decreased by 2.5%, or $0.7 million, to $26.8 million in the three months ended March 31, 2018 from $27.5 million in the three months ended March 31, 2017. The average daily operating cost per vessel for vessels on time charter was $5,849 per day for the three months ended March 31, 2018 compared to $5,756 per day for the three months ended March 31, 2017. Management believes that our daily operating cost ranks as one of 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 decreased by 6.2%, or $1.8 million, to $27.1 million in the three months ended March 31, 2018 from $28.9 million in the three months ended March 31, 2017.

Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $0.1 million, to $1.8 million in the three months ended March 31, 2018 from $1.7 million in the three months ended March 31, 2017.

General and Administrative Expenses
General and administrative expenses decreased by $0.9 million, to $5.2 million in the three months ended March 31, 2018, from $6.1 million in the three months ended March 31, 2017. The decrease was due to decreased professional fees.

Other Operating Expenses
Other Operating Expenses include Voyage Expenses.

Voyage Expenses
Voyage expenses decreased by $0.6 million, to $3.2 million in the three months ended March 31, 2018 from $3.8 million in the three months ended March 31, 2017. The decrease is mainly due to decreased bunkering expenses.

Interest Expense and Interest Income
Interest expense increased by 9.1%, or $1.9 million, to $22.8 million in the three months ended March 31, 2018 from $20.9 million in the three months ended March 31, 2017. The increase in interest expense was mainly due to the increase in average cost of debt due to the increase in US$ Libor by about 60 bps between the two periods, which was partially offset by a decrease in our average debt by $182.5 million, to $2,301.4 million in the three months ended March 31, 2018, from $2,483.9 million in the three months ended March 31, 2017 and a $0.4 million decrease in the amortization of deferred finance costs.

As of March 31, 2018, our debt outstanding gross of deferred finance costs was $2,299.9 million compared to $2,474.1 million as of March 31, 2017.

Interest income decreased by $0.1 million to $1.4 million in the three months ended March 31, 2018 compared to $1.5 million in the three months ended March 31, 2017.

Other finance costs, net
Other finance costs, net remained stable at $1.0 million in the three months ended March 31, 2018 and 2017.

Equity income/(loss) on investments
Equity income/(loss) on investments decreased by $0.2 million in the three months ended March 31, 2018 from equity income on investments of $0.2 million in the three months ended March 31, 2017 and relates to the 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 the three months ended March 31, 2018 and 2017.

Other income/(expenses), net
Other income/(expenses), net was $9.4 million in expenses in the three months ended March 31, 2018 mainly due to $9.6 million of refinancing-related professional fees compared to $2.4 million in expenses in the three months ended March 31, 2017 due to a $2.4 million realized loss on sale of HMM securities.

Adjusted EBITDA
Adjusted EBITDA increased by 5.7%, or $4.1 million, to $76.6 million in the three months ended March 31, 2018 from $72.5 million in the three months ended March 31, 2017. As outlined above, this increase is mainly attributable to a $2.2 million decrease in operating expenses and a $1.8 million increase in operating revenues. Adjusted EBITDA for the three months ended March 31, 2018 is adjusted for refinancing-related professional fees of $9.6 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Debt Refinancing
On June 19, 2018, we reached an agreement with certain of our lenders currently holding approximately $2.2 billion of debt maturing on December 31, 2018 that will significantly strengthen the Company's capital structure and result in a debt reduction of approximately $551 million. Pursuant to a comprehensive debt refinancing agreement ("RA") with certain of its lenders, as well as Danaos Investment Limited as Trustee of the 883 Trust ("DIL"), its largest stockholder, and its manager, Danaos Shipping Co. Ltd., the Company will strengthen its financial position through a significant debt reduction, resetting of financial and certain other covenants in credit facilities, modified interest rates and amortization profiles and an extension of existing debt maturities by approximately five years to December 31, 2023. In connection with this debt refinancing, the Company will issue 99,342,271 new shares of Danaos common stock to certain of the Company's lenders, which represents 47.5% of the Company's outstanding common stock after giving effect to such issuance and will dilute existing shareholders ratably. The closing of the transaction is expected to occur by July 31, 2018, and is subject to definitive documentation and certain closing conditions and commitments by the Company and DIL. For additional information regarding the debt refinancing agreement, see the Company's Report on Form 6-K filed with the SEC on June 25, 2018.

Conference Call and Webcast
On Wednesday, June 27, 2018 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 July 4, 2018 by dialing 1 877 344 7529 (US Toll Free Dial In) or +1 412 317 0088 (Standard International Dial In) and using 10117035# as the access code.

Audio Webcast
There will also be a live and then archived webcast of the conference call through 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.

About Danaos Corporation
Danaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 59 containerships aggregating 351,614 TEUs, including four 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, including statements about the RA and transactions contemplated thereby, the expected timing of completion of the transactions contemplated by the RA, the expected benefits of the transactions contemplated by the RA, growth opportunities in the container sector and other statements that are forward looking. 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 effects of proposed refinancing transactions contemplated by the RA; the risk that conditions to completion of the transactions contemplated by the RA may not be met; the risk that we may not complete the refinancing transactions within the expected timing; Danaos' ability to achieve long-term success and remain an industry leader following the refinancing transactions; the actions that Danaos may take in the event the RA is terminated; the occurrence of any event, change, or other circumstance that could give rise to the termination of the RA; the effects of actions taken by NYSE against the Company during the pendency of the 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 91 unscheduled off-hire days in the three months ended March 31, 2018. 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


First
Quarter

2018

2017

Ownership Days

4,950


4,950

Less Off-hire Days:




Scheduled Off-hire Days

(125)


(15)

Other Off-hire Days

(91)


(347)

Operating Days

4,734


4,588

Vessel Utilization

95.6%


92.7%





Operating Revenues (in '000s of US Dollars)

$111,854


$110,087

Average Gross Daily Charter Rate 

$23,628


$23,995

 

Fleet List
The following table describes in detail our fleet deployment profile as of June 26, 2018:

Vessel Name

Vessel Size

(TEU)


Year
Built


Expiration of Charter(1)

Containerships












MSC Ambition

13,100


2012


June 2024

Maersk Exeter

13,100


2012


June 2024

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


January 2019

Express Berlin

10,100


2011


September 2019

Express Athens

10,100


2011


January 2019

CSCL Le Havre

9,580


2006


September 2018

CSCL Pusan

9,580


2006


July 2018

CMA CGM Melisande

8,530


2012


November 2023

CMA CGM Attila

8,530


2011


April 2023

CMA CGM Tancredi

8,530


2011


May 2023

CMA CGM Bianca

8,530


2011


July 2023

CMA CGM Samson

8,530


2011


September 2023

CSCL America

8,468


2004


June 2019

Europe

8,468


2004


January 2019

CMA CGM Moliere

6,500


2009


August 2021

CMA CGM Musset

6,500


2010


February 2022

CMA CGM Nerval

6,500


2010


April 2022

CMA CGM Rabelais

6,500


2010


June 2022

CMA CGM Racine

6,500


2010


July 2022

YM Mandate

6,500


2010


January 2028

YM Maturity

6,500


2010


April 2028

Performance

6,402


2002


May 2019

Priority

6,402


2002


August 2018

YM Seattle

4,253


2007


July 2019

YM Vancouver

4,253


2007


September 2019

Derby D

4,253


2004


March 2019

ANL Tongala (ex Deva)

4,253


2004


March 2019

ZIM Rio Grande

4,253


2008


May 2020

ZIM Sao Paolo

4,253


2008


August 2020

ZIM Kingston

4,253


2008


September 2020

ZIM Monaco

4,253


2009


November 2020

ZIM Dalian

4,253


2009


February 2021

ZIM Luanda

4,253


2009


May 2021

Dimitris C

3,430


2001


June 2019

Express Black Sea

3,400


2011


November 2018

Express Spain

3,400


2011


November 2018

Express Argentina

3,400


2010


May 2019

Express Brazil

3,400


2010


September 2018

Express France

3,400


2010


October 2018

Singapore

3,314


2004


October 2019

Colombo

3,314


2004


March 2019

MSC Zebra

2,602


2001


October 2018

Amalia C

2,452


1998


August 2019

Danae C

2,524


2001


January 2020

Advance

2,200


1997


December 2018

Future

2,200


1997


July 2018

Sprinter

2,200


1997


October 2018

Stride

2,200


1997


July 2018

Progress C (ex Hyundai Progress)

2,200


1998


October 2018

Bridge

2,200


1998


July 2018

Highway

2,200


1998


November 2018

Vladivostok

2,200


1997


July 2018







Lodestar (ex NYK Lodestar)(2)

6,422


2001


July 2018

NYK Leo(2)

6,422


2002


February 2019

Suez Canal(2)

5,610


2002


November 2018

Genoaľ2)

5,544


2002


July 2018









(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

March 31,

March 31,



2018


2017






OPERATING REVENUES

$111,854


$110,087






OPERATING EXPENSES





Vessel operating expenses

(26,849)


(27,455)


Depreciation & amortization

(28,903)


(30,592)


General & administrative

(5,182)


(6,129)


Other operating expenses

(3,161)


(3,839)

Income From Operations

47,759


42,072






OTHER INCOME/(EXPENSES)





Interest income

1,375


1,471


Interest expense

(22,849)


(20,900)


Other finance expenses

(971)


(1,047)


Equity income on investments

(26)


206


Other income/(expenses), net

(9,385)


(2,448)


Realized loss on derivatives

(911)


(911)

Total Other Expenses, net

(32,767)


(23,629)






Net Income

$14,992


$18,443






EARNINGS PER SHARE




Basic & diluted earnings per share

$0.14


$0.17

Basic & diluted weighted average number of common shares
(in thousands of shares)

109,799


109,825

 

 

Non-GAAP Measures*

Reconciliation of Net Income to Adjusted Net Income – Unaudited



Three months
ended


Three months
ended

March 31,

March 31,


2018


2017

Net income

$14,992


$18,443

Amortization of financing fees & finance fees accrued

3,351


3,722

Refinancing professional fees

9,608


-

Loss on sale of securities

-


2,357

Adjusted Net Income

$27,951


$24,522

Adjusted Earnings Per Share

$0.25


$0.22

Weighted average number of shares (in thousands)

109,799


109,825


* The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended March 31, 2018 and 2017. 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

March 31,

December 31,




2018


2017

ASSETS





CURRENT ASSETS






Cash and cash equivalents


$62,979


$66,895


Restricted cash


-


2,812


Accounts receivable, net


6,741


6,502


Other current assets


53,086


49,790




122,806


125,999

NON-CURRENT ASSETS






Fixed assets, net


2,769,627


2,795,971


Deferred charges, net


13,512


8,962


Investments in affiliates


5,972


5,998


Other non-current assets


54,334


49,466




2,843,445


2,860,397

TOTAL ASSETS


$2,966,251


$2,986,396







LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES






Long-term debt, current portion


$2,291,351


$2,329,601


Accounts payable, accrued liabilities & other current liabilities


54,740


50,238




2,346,091


2,379,839

LONG-TERM LIABILITIES






Other long-term liabilities


54,100


57,852




54,100


57,852







STOCKHOLDERS' EQUITY






Common stock


1,098


1,098


Additional paid-in capital


546,898


546,898


Accumulated other comprehensive loss


(111,713)


(114,076)


Retained earnings


129,777


114,785




566,060


548,705

Total liabilities and stockholders' equity


$2,966,251


$2,986,396

 

 

DANAOS CORPORATION

Condensed Consolidted Statements of Cash Flows - Unaudited

(Expressed in thousands of United States dollars)




Three months
ended


Three months
ended

March 31,

March 31,



2018


2017

Operating Activities:





Net income

$14,992


$18,443


Adjustments to reconcile net income to net cash provided by
operating activities:





Depreciation

27,060


28,851


Amortization of deferred drydocking & special survey costs,
finance cost and other finance fees accrued

5,194


5,463


Payments for drydocking/special survey

(6,393)


(4,094)


Amortization of deferred realized losses on cash flow interest rate
swaps

911


911


Equity income on investments

26


(206)


Loss on sale of securities

-


2,357


Accounts receivable

(239)


(1,330)


Other assets, current and non-current

(6,712)


210


Accounts payable and accrued liabilities

6,636


2,042


Other liabilities, current and long-term

(5,886)


(8,314)

Net Cash provided by Operating Activities

35,589


44,333






Investing Activities:





Vessel additions

(716)


(1,527)

Net Cash used in Investing Activities

(716)


(1,527)






Financing Activities:





Debt repayment

(41,601)


(53,958)

Net Cash used in Financing Activities

(41,601)


(53,958)

Net Decrease in cash, cash equivalents and restricted cash

(6,728)


(11,152)

Cash, cash equivalents and restricted cash, beginning of period

69,707


76,529

Cash, cash equivalents and restricted cash, end of period

$62,979


$65,377

 

 

DANAOS CORPORATION

Reconciliation of Net Income to Adjusted EBITDA - Unaudited

(Expressed in thousands of United States dollars)



Three months
ended


Three months
ended

March 31,

March 31,


2018


2017

Net income

$14,992


$18,443

Depreciation

27,060


28,851

Amortization of deferred drydocking & special survey
costs

1,843


1,741

Amortization of deferred finance costs and other
finance fees accrued

3,351


3,722

Amortization of deferred realized losses on interest rate
swaps

911


911

Interest income

(1,375)


(1,471)

Interest expense

20,248


17,992

Refinancing professional fees

9,608


-

Loss on sale of securities

-


2,357

Adjusted EBITDA(1)

$76,638


$72,546

  

1)

Adjusted EBITDA represents net income before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs and deferred finance costs, amortization of deferred realized losses on interest rate swaps, loss on sale of securities and refinancing professional fees. 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 months ended March 31, 2018 and 2017. 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.

 

 

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SOURCE Danaos Corporation

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