PR Newswire | Aug 3, 2020 04:31PM EDT

Ended June 30, 2020

08/03 15:30 CDT

Danaos Corporation Reports Second Quarter and Half Year Results for the Period Ended June 30, 2020 ATHENS, Greece, Aug. 3, 2020

ATHENS, Greece, Aug. 3, 2020 /PRNewswire/ -- Danaos Corporation ("Danaos") (NYSE: DAC), one of the world's largest independent owners of containerships, today reported unaudited results for the period ended June 30, 2020.

Highlights for the Second Quarter and Half Year Ended June 30, 2020:

* Adjusted net income1 of $42.5 million, or $1.71 per share, for the three months ended June 30, 2020 compared to $34.3 million, or $2.24 per share, for the three months ended June 30, 2019, an increase of 23.9%. Adjusted net income1 of $75.8 million, or $3.06 per share, for the six months ended June 30, 2020 compared to $72.8 million, or $4.77 per share, for the six months ended June 30, 2019, an increase of 4.1%. * Operating revenues of $116.8 million for the three months ended June 30, 2020 compared to $112.3 million for the three months ended June 30, 2019, an increase of 4.0%. Operating revenues of $223.0 million for the six months ended June 30, 2020 compared to $225.2 million for the six months ended June 30, 2019, a decrease of 1.0%. * Adjusted EBITDA1 of $80.1 million for the three months ended June 30, 2020 compared to $75.6 million for the three months ended June 30, 2019, an increase of 6.0%. Adjusted EBITDA1 of $152.0 million for the six months ended June 30, 2020 compared to $153.1 million for the six months ended June 30, 2019, a decrease of 0.7%. * Total contracted operating revenues were $1.2 billion as of June 30, 2020, with charters extending through 2028 and remaining average contracted charter duration of 3.7 years, weighted by aggregate contracted charter hire. * Charter coverage of 85% for the next 12 months based on current operating revenues and 62% in terms of contracted operating days. * Common stock repurchase program of up to $10 million approved.

Three and Six Months Ended June 30, 2020Financial Summary - Unaudited(Expressed in thousands of United States dollars, except per share amounts)

Three Three Six Six months months months months ended ended ended ended

June 30, June 30, June 30, June 30,

2020 2019 2020 2019

Operating revenues $116,824 $112,319 $223,020 $225,210

Net income $38,496 $30,138 $67,585 $63,581

Adjusted net income^1 $42,494 $34,255 $75,775 $72,824

Earnings per share, diluted $1.55 $1.97 $2.73 $4.16

Adjusted earnings per share, diluted^1 $1.71 $2.24 $3.06 $4.77

Diluted weighted average number of 24,789 15,314 24,789 15,276shares (in thousands)

Adjusted EBITDA^1 $80,073 $75,581 $151,991 $153,119



Adjusted net income, adjusted earnings per share and adjusted EBITDA are 1non-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 adjusted earnings for both the second quarter of 2020 and the first six months of the year. The Company's adjusted net income of $42.5 million for the second quarter of 2020 increased by $8.2 million, or 23.9% when compared to adjusted net income of $34.3 million for the second quarter of 2019. Adjusted EBITDA also improved by $4.5 million, or 6%, to $80.1 million for the second quarter of 2020 compared to $75.6 million for the second quarter of 2019.Although economic activity has been subdued since the start of the coronavirus pandemic, we have seen increasing signs of confidence with liner companies in recent weeks as a number of previously blanked sailings have been reinstated, implying that demand is gradually improving. This has also translated into improving charter rates for vessels greater than 4,000 TEU in size. Recently reported financial results of the liner companies have also been encouraging since, as we had anticipated, prudent capacity management, reduced bunker prices and falling interest rates have more than compensated for the drop in volumes caused by the pandemic.

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 accelerate the recovery in the container market.We continue to execute our strategy and we are well insulated from near-term volatility due to our high charter coverage of 85% in terms of operating revenues and 62% in terms of operating days over the next 12 months. This provides significant visibility into our cash flows during this period. We have now concluded all the scrubber installation investments and took delivery of two 8,500 TEU vessels during the second quarter. Finally, we have ample liquidity and a $1.2 billion charter backlog, which provides us with flexibility to both manage our business and react to growth opportunities that may present themselves. Given continued uncertainty about the duration of the coronavirus pandemic and the ensuing economic recovery, we are focused on maintaining a conservative financial profile and making thoughtful capital allocation decisions that align with our strategy and market expectations.We also remain committed to operational excellence and technological innovation, which allows us to continually deliver a high quality service to our customers. Our commitment has enabled us to maintain our leadership position in the container shipping industry throughout multiple market cycles and during the current challenging environment. We believe that our focus and strategy will ultimately enhance shareholder value far and above the steel value of our fleet."

Three months ended June 30, 2020 compared to the three months ended June 30, 2019

During the three months ended June 30, 2020, Danaos had an average of 57.1 containerships compared to 55.0 containerships during the three months ended June 30, 2019. Our fleet utilization for the three months ended June 30, 2020 was 97.1% compared to 99.4% for the three months ended June 30, 2019.

Our adjusted net income amounted to $42.5 million, or $1.71 per share, for the three months ended June 30, 2020 compared to $34.3 million, or $2.24 per share, for the three months ended June 30, 2019. We have adjusted our net income in the three months ended June 30, 2020 for amortization of non-cash fees and accrued finance fees charge of $4.0 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

The increase of $8.2 million in adjusted net income for the three months ended June 30, 2020 compared to the three months ended June 30, 2019 is attributable mainly to a $5.8 million decrease in net finance expenses, a $4.5 million increase in operating revenues and a $1.7 million increase in the operating performance of our equity investment in Gemini Shipholdings Corporation ("Gemini"), which were partially offset by a $3.8 million increase in total operating expenses.

On a non-adjusted basis, our net income amounted to $38.5 million, or $1.55 earnings per diluted share, for the three months ended June 30, 2020 compared to net income of $30.1 million, or $1.97 earnings per diluted share, for the three months ended June 30, 2019.

Operating RevenuesOperating revenues increased by 4.0%, or $4.5 million, to $116.8 million in the three months ended June 30, 2020 from $112.3 million in the three months ended June 30, 2019.

Operating revenues for the three months ended June 30, 2020 reflect:

* a $9.6 million increase in revenues in the three months ended June 30, 2020 compared to the three months ended June 30, 2019 as a result of contractual increases in charter rates of vessels under long-term charters; * a $3.6 million increase in revenues in the three months ended June 30, 2020 compared to the three months ended June 30, 2019 due to the acquisition of new vessels; * a $5.3 million decrease in revenues in the three months ended June 30, 2020 compared to the three months ended June 30, 2019 due to lower non-cash revenue recognition in accordance with US GAAP; * a $2.5 million decrease in revenues in the three months ended June 30, 2020 compared to the three months ended June 30, 2019 as a result of lower re-chartering rates for certain of our vessels. This decrease is due to a $4.1 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 in the three months ended June 30, 2020, partially offset by a $1.7 million improvement from the re-chartering of other vessels in the fleet; and * a $0.9 million decrease in revenues due to lower fleet utilization of our vessels in the three months ended June 30, 2020 compared to the three months ended June 30, 2019.

Vessel Operating ExpensesVessel operating expenses increased by $1.3 million to $28.6 million in the three months ended June 30, 2020 from $27.3 million in the three months ended June 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 $5,787 per vessel per day for vessels on time charter for the three months ended June 30, 2020 compared to $5,884 per vessel per day for the three months ended June 30, 2019. Management believes that our daily operating cost are among the most competitive in the industry.

Depreciation & AmortizationDepreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.

DepreciationDepreciation expense increased by 5.4%, or $1.3 million, to $25.3 million in the three months ended June 30, 2020 from $24.0 million in the three months ended June 30, 2019 mainly due to the installation of scrubbers on nine of our vessels and the acquisition of the vessels Niledutch Lion, Phoebeand SM Charleston in the six months ended June 30, 2020.

Amortization of Deferred Dry-docking and Special Survey CostsAmortization of deferred dry-docking and special survey costs increased by $0.8 million to $2.9 million in the three months ended June 30, 2020 from $2.1 million in the three months ended June 30, 2019.

General and Administrative ExpensesGeneral and administrative expenses decreased by $0.5 million to $6.0 million in the three months ended June 30, 2020, from $6.5 million in the three months ended June 30, 2019. The decrease was mainly due to decreased non-cash recognition of share based compensation.

Other Operating ExpensesOther Operating Expenses include Voyage Expenses.

Voyage ExpensesVoyage expenses increased by $0.6 million to $3.3 million in the three months ended June 30, 2020 from $2.7 million in the three months ended June 30, 2019 primarily as a result of the increase in the average number of vessels in our fleet.

Interest Expense and Interest IncomeInterest expense decreased by 27.7%, or $5.2 million, to $13.6 million in the three months ended June 30, 2020 from $18.8 million in the three months ended June 30, 2019. The decrease in interest expense is attributable to:

* a $5.1 million decrease in interest expense due to a decrease in debt service cost of approximately 1.56% and a $95.8 million decrease in our average debt (including leaseback obligations), to $1,534.9 million in the three months ended June 30, 2020, compared to $1,630.7 million in the three months ended June 30, 2019; and * a $0.1 million decrease in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing.

As of June 30, 2020, our outstanding bank debt, gross of deferred finance costs, was $1,392.6 million and our leaseback obligation was $135.2 million compared to bank debt of $1,470.6 million and our leaseback obligation of $144.4 million as of June 30, 2019.

Interest income remained stable at $1.6 million in each of the three months ended June 30, 2020 and June 30, 2019.

Other finance costs, netOther finance costs, net decreased by $0.8 million to $1.0 million in the three months ended June 30, 2020 compared to $1.8 million in the three months ended June 30, 2019 mainly due to the decrease in finance costs related to the leaseback obligations, partially offset by lease termination fees in the three months ended June 30, 2020.

Equity income/(loss) on investmentsEquity income/(loss) on investments increased by $1.7 million to $1.7 million of income on investments in the three months ended June 30, 2020 compared to nil in the three months ended June 30, 2019 due to the improved operating performance of Gemini, in which the Company has a 49% shareholding interest.

Loss on derivativesAmortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three months ended June 30, 2020 and June 30, 2019.

Other income, netOther income, net was nil in the three months ended June 30, 2020 compared to $0.4 million in income in the three months ended June 30, 2019.

Adjusted EBITDAAdjusted EBITDA increased by 6.0%, or $4.5 million, to $80.1 million in the three months ended June 30, 2020 from $75.6 million in the three months ended June 30, 2019. As outlined above, the increase is mainly attributable to a $4.5 million increase in operating revenues, a $1.7 million increase in the operating performance of our equity investees and a $0.7 million decrease in other finance expenses, which were partially offset by a $2.4 million increase in operating expenses. Adjusted EBITDA for the three months ended June 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.

Six months ended June 30, 2020 compared to the six months ended June 30, 2019

During the six months ended June 30, 2020, Danaos had an average of 56.4 containerships compared to 55.0 containerships during the six months ended June 30, 2019. Our fleet utilization for the six months ended June 30, 2020 was 94.2% compared to 98.8% for the six months ended June 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 96.1% in the six months ended June 30, 2020.

Our adjusted net income amounted to $75.8 million, or $3.06 per share, for the six months ended June 30, 2020 compared to $72.8 million, or $4.77 per share, for the six months ended June 30, 2019. We have adjusted our net income in the six months ended June 30, 2020 for amortization of non-cash fees and accrued finance fees charge of $8.2 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

The increase of $3.0 million in adjusted net income for the six months ended June 30, 2020 compared to the six months ended June 30, 2019 is attributable mainly to a $6.3 million decrease in net finance expenses and a $3.3 million increase in the operating performance of our equity investment in Gemini, which were partially offset by a $4.4 million increase in total operating expenses and a $2.2 million decrease in operating revenues, of which $3.2 million relates to incremental off-hire due to shipyard delays related to the COVID-19 pandemic in the first quarter of 2020.

On a non-adjusted basis, our net income amounted to $67.6 million, or $2.73 earnings per diluted share, for the six months ended June 30, 2020 compared to net income of $63.6 million, or $4.16 earnings per diluted share, for the six months ended June 30, 2019.

Operating RevenuesOperating revenues decreased by 1.0%, or $2.2 million, to $223.0 million in the six months ended June 30, 2020 from $225.2 million in the six months ended June 30, 2019.

Operating revenues for the six months ended June 30, 2020 reflect:

* a $14.7 million increase in revenues in the six months ended June 30, 2020 compared to the six months ended June 30, 2019 as a result of contractual increases in charter rates of vessels under long-term charters; * a $4.5 million increase in revenues in the six months ended June 30, 2020 compared to the six months ended June 30, 2019 due to the acquisition of new vessels; * a $7.0 million decrease in revenues due to lower fleet utilization of our vessels in the six months ended June 30, 2020 compared to the six months ended June 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 $4.2 million decrease in revenues in the six months ended June 30, 2020 compared to the six months ended June 30, 2019 as a result of lower re-chartering rates for certain of our vessels. This decrease is due to a $8.6 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 in the six months ended June 30, 2020, partially offset by a $4.5 million improvement from the re-chartering of other vessels in the fleet; and * a $10.2 million decrease in revenues in the six months ended June 30, 2020 compared to the six months ended June 30, 2019 due to lower non-cash revenue recognition in accordance with US GAAP.

Vessel Operating ExpensesVessel operating expenses increased by $1.4 million to $54.6 million in the six months ended June 30, 2020 from $53.2 million in the six months ended June 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 $5,657 per vessel per day for vessels on time charter for the six months ended June 30, 2020 compared to $5,761 per vessel per day for the six months ended June 30, 2019. Management believes that our daily operating cost are among the most competitive in the industry.

Depreciation & AmortizationDepreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.

DepreciationDepreciation expense increased by 4.2%, or $2.0 million, to $49.8 million in the six months ended June 30, 2020 from $47.8 million in the six months ended June 30, 2019 mainly due to the installation of scrubbers on nine of our vessels and the acquisition of the vessels Niledutch Lion, Phoebeand SM Charleston in the six months ended June 30, 2020.

Amortization of Deferred Dry-docking and Special Survey CostsAmortization of deferred dry-docking and special survey costs increased by $1.0 million to $5.3 million in the six months ended June 30, 2020 from $4.3 million in the six months ended June 30, 2019.

General and Administrative ExpensesGeneral and administrative expenses decreased by $1.5 million to $11.9 million in the six months ended June 30, 2020, from $13.4 million in the six months ended June 30, 2019. The decrease was mainly due to decreased non-cash recognition of share based compensation.

Other Operating ExpensesOther Operating Expenses include Voyage Expenses.

Voyage ExpensesVoyage expenses increased by $1.3 million to $7.3 million in the six months ended June 30, 2020 from $6.0 million in the six months ended June 30, 2019 primarily as a result of the increase in the average number of vessels in our fleet.

Interest Expense and Interest IncomeInterest expense decreased by 18.5%, or $6.8 million, to $29.9 million in the six months ended June 30, 2020 from $36.7 million in the six months ended June 30, 2019. The decrease in interest expense is attributable to:

* a $5.8 million decrease in interest expense due to a decrease in debt service cost by approximately 0.8% and a $103.9 million decrease in our average debt (including leaseback obligations), to $1,539.5 million in the six months ended June 30, 2020, compared to $1,643.4 million in the six months ended June 30, 2019; and * a $1.0 million decrease in the amortization of deferred finance costs and debt discount related to our 2018 debt refinancing.

As of June 30, 2020, our outstanding bank debt, gross of deferred finance costs, was $1,392.6 million and our leaseback obligation was $135.2 million compared to bank debt of $1,470.6 million and our leaseback obligation of $144.4 million as of June 30, 2019.

Interest income increased by $0.1 million to $3.3 million in the six months ended June 30, 2020 compared to $3.2 million in the six months ended June 30, 2019.

Other finance costs, netOther finance costs, net decreased by $0.4 million to $1.7 million in the six months ended June 30, 2020 compared to $2.1 million in the six months ended June 30, 2019 mainly due to the decrease in finance costs related to the leaseback obligations, partially offset by lease termination fees in the six months ended June 30, 2020.

Equity income/(loss) on investmentsEquity income/(loss) on investments increased by $3.3 million to $3.3 million of income on investments in the six months ended June 30, 2020 compared to nil in the six months ended June 30, 2019 due to the improved operating performance of Gemini, in which the Company has a 49% shareholding interest.

Loss on derivativesAmortization of deferred realized losses on interest rate swaps remained stable at $1.8 million in each of the six months ended June 30, 2020 and June 30, 2019.

Other income, netOther income, net was $0.3 million in income in the six months ended June 30, 2020 compared to $0.4 million in income in the six months ended June 30, 2019.

Adjusted EBITDAAdjusted EBITDA decreased by 0.7%, or $1.1 million, to $152.0 million in the six months ended June 30, 2020 from $153.1 million in the six months ended June 30, 2019. As outlined above, the decrease is mainly attributable to a $2.2 million decrease in operating revenues, of which $3.2 million relates to the impact of the COVID-19 pandemic described above and a $2.6 million increase in operating expenses, which were partially offset by a $3.3 million increase in the operating performance of our equity investees and a $0.4 million decrease in other finance expenses. Adjusted EBITDA for the six months ended June 30, 2020 is adjusted for stock based compensation of $0.6 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Common Stock Repurchase ProgramThe Company's Board of Directors has approved a share repurchase program and authorized the officers of the Company to repurchase, from time to time, up to $10 million of the Company's common stock. Shares may be purchased in open market or privately negotiated transactions, at times and prices that are considered to be appropriate by the Company, and the program may be suspended or discontinued at any time.

Recent DevelopmentsOn July 2, 2020, we drew down a loan of $13.3 million with SinoPac, which was used to partially finance the acquisition costs of the newly acquired vessel SM Charleston.

Conference Call and WebcastOn Tuesday, August 4, 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 August 11, 2020 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 10146830# as the access code.

Audio WebcastThere 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 PresentationA slide presentation regarding the Company and the containership industry will also be available on the Danaos website (www.danaos.com).

About Danaos CorporationDanaos 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 StatementsMatters 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

For further information please contact:

Company Contact:

Evangelos Chatzis Iraklis ProkopakisChief Financial Officer Senior Vice President and Chief Operating OfficerDanaos Corporation Danaos CorporationAthens, Greece Athens, GreeceTel.: +30 210 419 6480 Tel.: +30 210 419 6400E-Mail: cfo@danaos.com E-Mail: coo@danaos.com

Investor Relations and Financial Media

Rose & CompanyNew YorkTel. 212-359-2228

E-Mail: danaos@rosecoglobal.com

Appendix

Fleet Utilization

Danaos had 92 unscheduled off-hire days in the three months ended June 30, 2020. The following table summarizes vessel utilization and the impact of the off-hire days on the Company's revenue.

First SecondVessel Utilization (No. of Days) Quarter Quarter

2020 2020 Total

Ownership Days 5,073 5,193 10,266

Less Off-hire Days:

Scheduled Off-hire Days (336) (60) (396)

Other Off-hire Days (104) (92) (196)

Operating Days 4,633 5,041 9,674

Vessel Utilization 91.3% 97.1% 94.2%

Operating Revenues (in '000s of US Dollars) $106,196 $116,824 $223,020

Average Gross Daily Charter Rate $22,922 $23,175 $23,054

First SecondVessel Utilization (No. of Days) Quarter Quarter

2019 2019 Total

Ownership Days 4,950 5,005 9,955

Less Off-hire Days:

Scheduled Off-hire Days - (22) (22)

Other Off-hire Days (90) (10) (100)

Operating Days 4,860 4,973 9,833

Vessel Utilization 98.2% 99.4% 98.8%

Operating Revenues (in '000s of US Dollars) $112,891 $112,319 $225,210

Average Gross Daily Charter Rate $23,229 $22,586 $22,903

Fleet ListThe following table describes in detail our fleet deployment profile as of August 3, 2020:

VesselVessel Name Size Year Expiration of Charter^(1) Built (TEU)

Containerships

Hyundai Ambition (ex MSC 13,100 2012 June 2024Ambition)

Hyundai Speed (ex Maersk 13,100 2012 June 2024Exeter)

Hyundai Smart (ex Maersk 13,100 2012 May 2024Enping)

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 September 2020

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 September 2020

Dimitra C 6,402 2002 January 2023

YM Seattle 4,253 2007 September 2020

YM Vancouver 4,253 2007 August 2020

Derby D 4,253 2004 August 2020

ANL Tongala 4,253 2004 October 2020

Rio Grande (ex ZIM Rio Grande) 4,253 2008 October 2020

ZIM Sao Paolo 4,253 2008 November 2020

ZIM Kingston 4,253 2008 February 2021

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 September 2020

Express Black Sea 3,400 2011 November 2020

Express Spain 3,400 2011 October 2020

Express Argentina 3,400 2010 September 2020

Express Brazil 3,400 2010 September 2020

Express France 3,400 2010 October 2020

Singapore 3,314 2004 August 2020

Colombo 3,314 2004 August 2020

MSC Zebra 2,602 2001 September 2020

Amalia C 2,452 1998 October 2020

Danae C 2,524 2001 August 2020

Advance 2,200 1997 November 2020

Future 2,200 1997 September 2020

Sprinter 2,200 1997 September 2020

Stride 2,200 1997 November 2020

Progress C 2,200 1998 September 2020

Bridge 2,200 1998 September 2020

Highway 2,200 1998 August 2020

Vladivostok 2,200 1997 September 2020

Belita^ ?2) 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 October 2020

Genoa^?2) 5,544 2002 September 2020



(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 CORPORATIONCondensed Consolidated Statements of Income - Unaudited(Expressed in thousands of United States dollars, except per share amounts)

Three Three Six Six months months months months ended ended ended ended

June 30, June 30, June 30, June 30,

2020 2019 2020 2019

OPERATING REVENUES $116,824 $112,319 $223,020 $225,210

OPERATING EXPENSES

Vessel operating expenses (28,568) (27,306) (54,570) (53,177)

Depreciation & amortization (28,199) (26,102) (55,090) (52,059)

General & administrative (6,013) (6,492) (11,853) (13,361)

Other operating expenses (3,289) (2,732) (7,335) (6,002)

Income From Operations 50,755 49,687 94,172 100,611

OTHER INCOME/(EXPENSES)

Interest income 1,588 1,569 3,302 3,165

Interest expense (13,645) (18,844) (29,958) (36,687)

Other finance expenses (1,038) (1,770) (1,660) (2,094)

Equity income/(loss) on investments 1,720 32 3,265 (52)

Other income, net 19 367 270 434

Realized loss on derivatives (903) (903) (1,806) (1,796)

Total Other Expenses, net (12,259) (19,549) (26,587) (37,030)

Net Income $38,496 $30,138 $67,585 $63,581

EARNINGS PER SHARE

Basic earnings per share $1.57 $2.02 $2.75 $4.26

Diluted earnings per share $1.55 $1.97 $2.73 $4.16

Basic weighted average number of 24,573 14,939 24,573 14,939common shares (in thousands of shares)

Diluted weighted average number of 24,789 15,314 24,789 15,276common shares (in thousands of shares)

Non-GAAP Measures^1Reconciliation of Net Income to Adjusted Net Income - Unaudited

Three Three Six Six months months months months ended ended ended ended

June 30, June 30, June 30, June 30,

2020 2019 2020 2019

Net income $38,496 $30,138 $67,585 $63,581

Amortization of financing fees, debt 3,998 4,117 8,190 9,243discount & finance fees accrued

Adjusted Net Income $42,494 $34,255 $75,775 $72,824

Adjusted Earnings Per Share, diluted $1.71 $2.24 $3.06 $4.77

Diluted weighted average number of 24,789 15,314 24,789 15,276shares (in thousands)



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 1 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 six months ended June 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

June 30, December 31,

2020 2019

ASSETS

CURRENT ASSETS

Cash and cash equivalents $84,955 $139,170

Accounts receivable, net 12,552 7,145

Other current assets 47,231 44,071

144,738 190,386

NON-CURRENT ASSETS

Fixed assets, net 2,466,556 2,389,874

Deferred charges, net 19,584 11,455

Investments in affiliates 12,230 8,965

Other non-current assets 56,971 82,339

2,555,341 2,492,633

TOTAL ASSETS $2,700,079 $2,683,019

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Long-term debt, current portion $123,084 $119,673

Accumulated accrued interest, current portion 30,415 34,137

Long-term leaseback obligations, current portion 23,822 16,342

Accounts payable, accrued liabilities & other current 61,611 52,928 liabilities

238,932 223,080

LONG-TERM LIABILITIES

Long-term debt, net 1,240,253 1,270,663

Accumulated accrued interest, net of current portion 139,553 156,583

Long-term leaseback obligations, net 107,353 121,872

Other long-term liabilities 24,176 29,131

1,511,335 1,578,249

STOCKHOLDERS' EQUITY

Common stock 248 248

Additional paid-in capital 785,870 785,274

Accumulated other comprehensive loss (116,993) (116,934)

Retained earnings 280,687 213,102

949,812 881,690

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,700,079 $2,683,019

DANAOS CORPORATION Condensed Consolidated Statements of Cash Flows - Unaudited (Expressed in thousands of United States dollars)

Three Three Six Six months months months months ended ended ended ended

June 30, June 30, June 30, June 30,

2020 2019 2020 2019

Operating Activities:

Net income $38,496 $30,138 $67,585 $63,581

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

Depreciation 25,258 24,039 49,839 47,805

Amortization of deferred drydocking & special survey costs, finance cost, debt discount and other finance 7,469 6,180 13,971 13,497 fees accrued

PIK interest 743 855 1,550 1,695

Payments for drydocking/special survey (8,530) (1,569) (13,380) (1,690)

Amortization of deferred realized losses on cash 903 903 1,806 1,796 flow interest rate swaps

Equity (income)/loss on investments (1,720) (32) (3,265) 52

Stock based compensation 298 1,035 596 1,865

Accounts receivable (4,631) (53) (5,407) 1,729

Other assets, current and non-current 1,200 (3,907) (689) (11,073)

Accounts payable and accrued liabilities 3,594 (1,102) 8,937 (184)

Other liabilities, current and long-term (1,639) (4,033) (4,675) (7,617)

Net Cash provided by Operating Activities 61,441 52,454 116,868 111,456

Investing Activities:

Vessel additions and advances (56,500) (8,971) (98,746) (10,638)

Investments - - (75) -

Net Cash used in Investing Activities (56,500) (8,971) (98,821) (10,638)

Financing Activities:

Proceeds from sale-leaseback of vessels 139,080 146,523 139,080 146,523

Proceeds from long-term debt 23,400 - 23,400 -

Payments of leaseback obligations (138,189) (2,086) (142,065) (2,086)

Debt repayment (32,539) (176,097) (65,176) (205,811)

Payments of accumulated accrued interest (7,173) (8,767) (15,502) (17,867)

Finance costs (1,584) (5,562) (11,999) (20,049)

Net Cash used in Financing Activities (17,005) (45,989) (72,262) (99,290)

Net Increase/(Decrease) in cash and cash equivalents (12,064) (2,506) (54,215) 1,528

Cash and cash equivalents, beginning of period 97,019 81,309 139,170 77,275

Cash and cash equivalents, end of period $84,955 $78,803 $84,955 $78,803

DANAOS CORPORATIONReconciliation of Net Income to Adjusted EBITDA - Unaudited(Expressed in thousands of United States dollars)

Three Three Six Six months months months months ended ended ended ended

June 30, June 30, June 30, June 30,

2020 2019 2020 2019

Net income $38,496 $30,138 $67,585 $63,581

Depreciation 25,258 24,039 49,839 47,805

Amortization of deferred drydocking & 2,941 2,063 5,251 4,254special survey costs

Amortization of deferred finance costs,debt discount and other finance fees 3,998 4,117 8,190 9,243accrued

Amortization of deferred realized losses 903 903 1,806 1,796on interest rate swaps

Interest income (1,588) (1,569) (3,302) (3,165)

Interest expense 9,767 14,855 22,026 27,740

Stock based compensation 298 1,035 596 1,865

Adjusted EBITDA^(1) $80,073 $75,581 $151,991 $153,119





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 1)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 six months ended June 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.

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SOURCE Danaos Corporation