Reconciliation of Net Income to Adjusted EBITDA (Expressed in thousands of United States dollars) Three months Three months Twelve Twelve ended ended months ended months ended December 31, December 31, December 31, December 31, ------------ ------------ ------------ ------------ 2012 2011 2012 2011 ------------ ------------ ------------ ------------Net (loss)/income $ (116,478) $ 9,058 $ (105,204) $ 13,437Depreciation 38,514 29,598 143,938 106,178Amortization of deferred drydocking & special survey costs 1,882 1,152 6,070 5,800Amortization of deferred finance costs and other finance fees accrued 4,778 3,535 17,076 11,292Amortization of deferred realized losses on interest rate swaps 1,013 529 3,524 1,575Interest income (462) (335) (1,642) (1,304)Interest expense 23,288 15,958 87,340 55,124Impairment loss 129,630 -- 129,630 --Gain on sale of vessels -- -- (830) --Comprehensive Financing Plan related fees -- -- -- 2,266Stock based compensation 100 2,112 139 2,182Realized loss on derivatives 37,696 34,879 150,910 130,341Unrealized (gain)/loss on derivatives (7,593) (7,676) 739 (10,537)Non-cash changes in fair value of warrants -- -- -- 2,253 ------------ ------------ ------------ ------------Adjusted EBITDA(1) $ 112,368 $ 88,810 $ 431,690 $ 318,607 ============ ============ ============ ============
(1) Adjusted EBITDA represents net income before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs and deferred finance costs, non-cash changes in fair value of warrants, unrealized (gain)/loss on derivatives, realized gain/(loss) on derivatives, stock based compensation, gain/(loss) on sale of vessel, impairment loss and other items in relation to the Company's comprehensive financing plan. 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 ability to service additional debt and make capital expenditures. In addition, we believe that Adjusted EBITDA is useful in evaluating our operating performance and liquidity position 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 and liquidity. 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 twelve months ended December 31, 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.
For further information please contact:
Company Contact:
Evangelos Chatzis
Chief Financial Officer
Danaos Corporation
Athens, Greece
Tel.: +30 210 419 6480
E-Mail: cfo@danaos.com
Iraklis Prokopakis
Senior Vice President and Chief Operating Officer
Danaos Corporation
Athens, Greece
Tel.: +30 210 419 6400
E-Mail: coo@danaos.com
Investor Relations and Financial Media
Nicolas Bornozis
President
Capital Link, Inc.
New York
Tel. 212-661-7566
E-Mail: danaos@capitallink.com
