Twelve months ended December 31, 2012 compared to the twelve months ended December 31, 2011
During the twelve months ended December 31, 2012, Danaos had an average of 62.6 containerships compared to 54.9 containerships for the same period in 2011. Our fleet utilization declined to 93.0% in the twelve months ended December 31, 2012 compared to 97.6% in the same period in 2011, mainly due to the 1,349 days for which certain of our vessels were off-charter and laid-up by us in the twelve months ended December 31, 2012 compared to 155 days in the twelve months ended December 31, 2011. During the twelve months ended December 31, 2012, our fleet utilization for the fleet under employment was 98.8% (which excludes the laid up vessels).
Our adjusted net income was $60.5 million, or $0.55 per share, for the twelve months ended December 31, 2012 compared to $61.2 million, or $0.56 per share, for the twelve months ended December 31, 2011. We have adjusted our net income in the twelve months ended December 31, 2012, for an impairment loss of $129.6 million, unrealized losses on derivatives of $0.7 million, realized losses on swaps of $19.0 million attributable to our over-hedging position, as well as a non-cash expense of $17.1 million for fees related to our comprehensive financing plan (comprised of non-cash, amortizing and accrued finance fees) and a gain on sale of vessel of $0.8 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
Adjusted net income decreased by 1.1%, or $0.7 million, in the twelve months ended December 31, 2012 compared to the twelve months ended December 31, 2011. Although the vessel additions to our fleet over the course of the last year was 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 that currently run at operating breakeven levels, while they had a positive contribution to earnings during 2011.
Furthermore, the decrease was attributable to an increase in realized losses on our interest rate swap contracts (after the adjustment for the over-hedging portion), as well as increased interest expense (mainly due to the higher average indebtedness and the reduced interest being capitalized in 2012 following the completion of our newbuilding program in June 2012) during the twelve months ended December 31, 2012 compared to the same period in 2011, which was partially off-set by increased Income from Operations.
On a non-adjusted basis our net loss was $105.2 million, or $0.96 per share, for the twelve months ended December 31, 2012, compared to net income of $13.4 million, or $0.12 per share, for the twelve months ended December 31, 2011, which is mainly attributable to the impairment loss we incurred in the 4th quarter of 2012 on certain of our older vessels.
On July 1, 2012, we elected to prospectively de-designate interest rate swaps for which we were applying hedge accounting treatment due to the compliance burden associated with this accounting policy. As a result, all changes in the fair value of our interest rate swaps will be recorded in earnings under "Unrealized (Losses)/Gains on Derivatives" from the de-designation date forward. In addition, unrealized losses in Accumulated Other Comprehensive Loss associated with the previously designated cash flow interest rate swaps will be reclassified to earnings as the respective interest payments are recognized in earnings.
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