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* 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, 2012 and 2011. 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 Balance Sheets (Expressed in thousands of United States dollars) As of As of September 30, December 31, ------------- ------------- 2012 2011 ------------- -------------ASSETS (Unaudited) (Unaudited)CURRENT ASSETS Cash and cash equivalents $ 37,575 $ 51,362 Restricted cash 8 2,909 Accounts receivable, net 9,761 4,176 Other current assets 27,417 34,844 ------------- ------------- 74,761 93,291 ------------- -------------NON-CURRENT ASSETS Fixed assets, net 4,154,236 3,241,951 Advances for vessels under construction -- 524,286 Restricted cash, net of current portion 430 -- Deferred charges, net 91,560 99,711 Fair value of financial instruments 3,329 3,964 Other non-current assets 32,500 24,901 ------------- ------------- 4,282,055 3,894,813 ------------- -------------TOTAL ASSETS $ 4,356,816 $ 3,988,104 ============= =============LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIES Long-term debt, current portion $ 96,023 $ 41,959 Vendor Financing, current portion 46,693 10,857 Accounts payable, accrued liabilities & other current liabilities 59,330 58,254 Fair value of financial instruments, current portion 111,129 120,623 ------------- ------------- 313,175 231,693 ------------- -------------LONG-TERM LIABILITIES Long-term debt, net of current portion 3,135,111 2,960,288 Vendor financing, net of current portion 139,688 54,288 Fair value of financial instruments, net of current portion 235,709 291,829 Other long-term liabilities 9,385 7,471 ------------- ------------- 3,519,893 3,313,876 ------------- -------------STOCKHOLDERS' EQUITY Common stock 1,096 1,096 Additional paid-in capital 545,923 545,884 Accumulated other comprehensive loss (386,205) (456,105) Retained earnings 362,934 351,660 ------------- ------------- 523,748 442,535 ------------- -------------TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,356,816 $ 3,988,104 ============= ============= DANAOS CORPORATION Condensed Statements of Cash Flows - (Unaudited) (Expressed in thousands of United States dollars) Three Three Nine Nine months months months months ended ended ended ended September September September September 30, 30, 30, 30, ---------- ---------- ---------- ---------- 2012 2011 2012 2011 ---------- ---------- ---------- ----------Operating Activities: Net (loss)/income $ (7,034) $ (833) $ 11,274 $ 4,379 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 38,517 28,139 105,424 76,580 Amortization of deferred drydocking & special survey costs, finance cost and other finance fees accrued 6,329 4,847 16,486 12,405 Stock based compensation 8 23 39 70 Payments for drydocking/special survey (2,182) 42 (6,340) (7,008) Non-cash change in fair value of warrants -- -- -- 2,253 Amortization of deferred realized losses on cash flow interest rate swaps 1,012 459 2,511 1,046 Realized loss on cash flow interest rate swaps deferred in Other Comprehensive Loss -- (6,976) (7,035) (24,907) Unrealized loss/(gain) on derivatives 12,888 4,205 8,332 (2,861) Gain on sale of vessels -- -- (830) -- Accounts receivable (4,322) (723) (5,585) (1,685) Other assets, current and non-current (35,492) (3,224) (38,169) (14,089) Accounts payable and accrued liabilities (7,037) (5,458) 2,285 (16,208) Other liabilities, current and non-current 185 4,025 40,643 1,163 ---------- ---------- ---------- ----------Net Cash provided by Operating Activities 2,872 24,526 129,035 31,138 ---------- ---------- ---------- ----------Investing Activities: Vessels under construction and vessels additions (101) (151,481) (375,378) (454,120) Net proceeds from sale of vessel -- -- 5,635 -- ---------- ---------- ---------- ----------Net Cash used in Investing Activities (101) (151,481) (369,743) (454,120) ---------- ---------- ---------- ----------Financing Activities: Debt draw downs -- 99,911 266,920 327,597 Debt repayment (15,226) (8,218) (42,370) (42,777) Deferred costs -- -- (100) (30,217) Decrease in restricted cash 2,812 2,812 2,471 2,811 ---------- ---------- ---------- ----------Net Cash provided by Financing Activities (12,414) 94,505 226,921 257,414 ---------- ---------- ---------- ----------Net Increase/(Decrease) in cash and cash equivalents (9,643) (32,450) (13,787) (165,568)Cash and cash equivalents, beginning of period 47,218 96,717 51,362 229,835 ---------- ---------- ---------- ----------Cash and cash equivalents, end of period $ 37,575 $ 64,267 $ 37,575 $ 64,267 ========== ========== ========== ========== Reconciliation of Net Income to Adjusted EBITDA (Expressed in thousands of United States dollars) Three Three Nine Nine months months months months ended ended ended ended September September September September 30, 30, 30, 30, ---------- ---------- ---------- ---------- 2012 2011 2012 2011 ---------- ---------- ---------- ----------Net (loss)/income $ (7,034) $ (833) $ 11,274 $ 4,379Depreciation 38,517 28,139 105,424 76,580Amortization of deferred drydocking & special survey costs 1,574 1,368 4,188 4,648Amortization of deferred finance costs and other finance fees accrued 4,755 3,479 12,298 7,757Amortization of deferred realized losses on interest rate swaps 1,012 459 2,511 1,046Interest income (426) (323) (1,180) (969)Interest expense 24,202 14,355 64,052 39,166Gain on sale of vessels -- -- (830) --Comprehensive Financing Plan related fees -- -- -- 2,266Stock based compensation 8 23 39 70Realized loss on derivatives 40,668 35,300 113,214 95,462Unrealized (gain)/loss on derivatives 12,888 4,205 8,332 (2,861)Non-cash changes in fair value of warrants -- -- -- 2,253 ---------- ---------- ---------- ----------Adjusted EBITDA(1) $ 116,164 $ 86,172 $ 319,322 $ 229,797 ========== ========== ========== ==========
