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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 months ended March 31, 2013 and 2012. 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 - Unaudited (Expressed in thousands of United States dollars) As of As of March 31, December 31, ------------ ------------ 2013 2012 ------------ ------------ASSETSCURRENT ASSETS Cash and cash equivalents $ 81,804 $ 55,628 Restricted cash 9 2,821 Accounts receivable, net 13,096 3,741 Other current assets 31,349 36,483 ------------ ------------ 126,258 98,673 ------------ ------------NON-CURRENT ASSETS Fixed assets, net 3,928,668 3,986,138 Restricted cash, net of current portion 19,240 430 Deferred charges, net 82,686 88,821 Vessel held for sale 7,884 -- Fair value of financial instruments 2,553 2,908 Other non-current assets 35,461 35,075 ------------ ------------ 4,076,492 4,113,372 ------------ ------------TOTAL ASSETS $ 4,202,750 $ 4,212,045 ============ ============LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIES Long-term debt, current portion $ 139,464 $ 125,076 Vendor Financing, current portion 57,388 57,388 Accounts payable, accrued liabilities & other current liabilities 54,247 52,688 Fair value of financial instruments, current portion 126,705 130,100 ------------ ------------ 377,804 365,252 ------------ ------------LONG-TERM LIABILITIES Long-term debt, net of current portion 3,072,276 3,097,472 Vendor financing, net of current portion 110,994 121,754 Fair value of financial instruments, net of current portion 146,407 176,948 Other long-term liabilities 11,225 10,315 ------------ ------------ 3,340,902 3,406,489 ------------ ------------STOCKHOLDERS' EQUITY Common stock 1,096 1,096 Additional paid-in capital 546,023 546,023 Accumulated other comprehensive loss (322,963) (353,271) Retained earnings 259,888 246,456 ------------ ------------ 484,044 440,304 ------------ ------------TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,202,750 $ 4,212,045 ============ ============ DANAOS CORPORATION Condensed Statements of Cash Flows - (Unaudited) (Expressed in thousands of United States dollars) Three months Three months ended ended March 31, March 31, ------------ ------------ 2013 2012 ------------ ------------Operating Activities: Net income $ 13,432 $ 9,342 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 33,983 31,681 Amortization of deferred drydocking & special survey costs, finance cost and other finance fees accrued 6,571 4,863 Stock based compensation -- 23 Payments for drydocking/special survey 245 (2,035) Amortization of deferred realized losses on cash flow interest rate swaps 990 649 Realized loss on cash flow interest rate swaps deferred in Other Comprehensive Loss -- (2,951) Unrealized (gain)/loss on derivatives (4,404) (4,839) Loss on sale of vessels 15 -- Accounts receivable (9,355) (1,844) Other assets, current and non-current 4,748 7,554 Accounts payable and accrued liabilities 1,857 5,498 Other liabilities, current and non-current 591 17,878 ------------ ------------Net Cash provided by Operating Activities 48,673 65,819 ------------ ------------Investing Activities: Vessels under construction and vessels additions (981) (183,874) Net proceeds from sale of vessel 16,850 -- ------------ ------------Net Cash provided by/(used in) Investing Activities 15,869 (183,874) ------------ ------------Financing Activities: Debt draw downs -- 117,320 Debt repayment (22,368) (11,607) Deferred costs -- (100) Increase in restricted cash (15,998) 2,812 ------------ ------------Net Cash (used in)/provided by Financing Activities (38,366) 108,425 ------------ ------------Net Increase/(Decrease) in cash and cash equivalents 26,176 (9,630)Cash and cash equivalents, beginning of period 55,628 51,362 ------------ ------------Cash and cash equivalents, end of period $ 81,804 $ 41,732 ============ ============ Reconciliation of Net Income to Adjusted EBITDA (Expressed in thousands of United States dollars) Three months Three months ended ended March 31, March 31, ------------ ------------ 2013 2012 ------------ ------------Net income $ 13,432 $ 9,342Depreciation 33,983 31,681Amortization of deferred drydocking & special survey costs 1,730 1,202Amortization of deferred finance costs and other finance fees accrued 4,841 3,661Amortization of deferred realized losses on interest rate swaps 990 649Interest income (492) (353)Interest expense 22,864 18,390Loss on sale of vessels 15 --Stock based compensation -- 23Realized loss on derivatives 35,625 34,794Unrealized (gain)/loss on derivatives (4,404) (2,951) ------------ ------------Adjusted EBITDA(1) $ 108,584 $ 96,438 ============ ============
