With a resilient business model both from an operating and financial standpoint, we will continue to manage our fleet efficiently, while in 2013 we will focus on rapidly de-leveraging the company and creating value for our shareholders.
Three months ended December 31, 2012 compared to the three months ended December 31, 2011
During the three months ended December 31, 2012, Danaos had an average of 64.0 containerships compared to 57.9 containerships for the same period in 2011. Our fleet utilization declined to 90.4% in the three months ended December 31, 2012 compared to 96.9% in the same period of 2011, mainly due to the 501 days for which seven of our vessels were off-charter and laid-up in the fourth quarter of 2012 compared to 138 days for which two of our vessels were off-charter and laid-up in the fourth quarter of 2011. During the three months ended December 31, 2012, our fleet utilization for the fleet under employment was 98.8% (which excludes the vessels on lay up).
Our adjusted net income was $11.7 million, or $0.11 per share, for the three months ended December 31, 2012 compared to $16.1 million, or $0.15 per share, for the three months ended December 31, 2011. We have adjusted our net income in the fourth quarter of 2012 for an impairment loss on certain of our older vessels of $129.6 million, unrealized gains on derivatives of $7.6 million, realized losses on swaps of $1.4 million attributable to our over-hedging position (as described below), as well as a non-cash expense of $4.8 million for fees related to our 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 decrease of 27.3%, or $4.4 million, in adjusted net income for the three months ended December 31, 2012 compared to the three months ended December 31, 2011, was mainly attributable to the softening of the charter market during the last year. Although the vessel additions, with associated contracted long-term charters, to our fleet over the course of the last year were accretive to the bottom line, the soft charter market has resulted in the cold lay-up of 7 vessels until the end of 2012 (one of which we subsequently agreed to sell) and has also affected the re-chartering of certain vessels in 2012 that currently run at operating break even levels, while they had a positive contribution to operating income during the 4th quarter of 2011.
On a non-adjusted basis our net loss was $116.5 million, or $1.06 per share, for the fourth quarter of 2012, compared to net income of $9.1 million, or $0.08 per share, for the fourth quarter of 2011, which is mainly attributable to the impairment loss we incurred in the current quarter on certain of our older vessels.
As a result of our comprehensive financing plan, we were in an over-hedged position under our cash flow interest rate swaps, which was due to deferred progress payments to shipyards, cancellation of three newbuildings in 2011, the replacement of variable interest rate debt with fixed interest rate vendor financing and equity proceeds from our private placement in 2010, all of which reduced initially forecasted variable interest rate debt and resulted in notional cash flow interest rate swaps being above our variable interest rate debt eligible for hedging. The over-hedged position described above was eliminated during the fourth quarter of 2012.
Most Popular Stories
- SEO Traffic Lab Celebrate Wins at Digital Marketing Event 'Internet World 2013' in London
- Social Media Initiatives Should Follow Customers' Lead
- Apple CEO: Offshore Units Not a 'Tax Gimmick'
- U.S. Senate Accuses Apple of Large-scale Tax Avoidance
- UTEP Water Recycling Project Wins Venture Titles
- Marketo Makes a Mint in IPO: Stock Shoots Up More than 50 Percent
- Bieber Booed at Billboard Awards
- Crude Oil Up, Gasoline Down
- Austin Startup Compare Metrics Raises $3.5 Million for Expansion
- Why So Many Top 'Car Guys' Are Actually Women