Post on 21-Mar-2018
Danaos Corporation
W o r l d – C l a s s S h i p p i n g
L e a d i n g – E d g e E x p e r t i s e
Presentation
March 2011
2
Disclosures
This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including, without limitation, the outlook for fleet utilization and shipping rates, general industry conditions including bidding activity, future operating results of the Company’s vessels, capital expenditures, asset sales, expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this presentation are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements. Danaos Corporation is listed in the New York Exchange under the ticker symbol “DAC”. Before you invest, you should also read other documents Danaos Corporation has filed with the SEC for more complete information about the company. You may get these documents for free by visiting EDGAR on the SEC Website at www.sec.gov or via www.danaos.com
EBITDA may be included in our presentations. EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes, if any, plus the restricted-stock portion of deferred stock-based compensation, which is a non-cash item. EBITDA is presented because it is used by certain investors to measure a company’s financial performance. EBITDA is a “non-GAAP financial measure” and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.
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Key Business Aspects
■ Company founded in 1972■ Highly experienced executive team
■ Contracted revenue of $6bn through long term fixed time charters■ Strong contracted fleet growth■ Industry rebounded sharply in 2010■ Counterparties continued to perform even in 2009
■ Listed since 2006■ Management is majority shareholder and is aligned with all public
shareholders
Management
Sound Business Model
4
Fourth Quarter Highlights & Recent Developments
Took delivery of one newly built vessel on October 11, 2010
Took delivery of two more newly built vessel so far in 2011
Fleet stands at 52 vessels
Danaos order book includes 13 more vessels, all on long term charters
4Q fleet utilization 98.5%
Operations
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Fourth Quarter Highlights & Recent Developments
Finalized Comprehensive Financing Plan (CFP) in 1Q11
Secured $426 million of new debt facilities and expanded lending relationships
Received State approvals for an additional $203 million China-Exim bank financing
Reset and harmonised all covenants on commercial loan portfolio
Reduced and harmonised applicable margins over 3-month LIBOR
Revised and extended amortisation schedules on commercial debt
Together with recent capital increase of $200 million, secured fully funded order book
Adjusted 2010 EBITDA and Net income $244m and $28m respectively
Financial
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Key Operational and Financial Highlights
One of the largest owners of modern large size containerships
Long record of success with experienced owner-management team
Long-term relationships with world’s leading liner companies
Operational excellence enhanced by technological innovation
Business model yields steadily increasing cash flowsas new ships deliver
The CFP funds our rapid fleet growth
Capitalizing on leading industry presence
94,317 94,317127,919
151,725 153,174172,433
219,929
299,679
33,602
23,806
19,259
47,496
79,750
63,000
94,317
127,919
151,725 153,174172,433
219,929
299,679
360,549
2005 2006 2007 2008 2009 2010 2011 2012
Cap
acity
(TEU
s)
0
100,000
200,000
300,000
400,000
Net capacity additions
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Danaos Corporation
Owns, operates and charters vessels to Liner Companies under multi-year, fixed rate charters with no fuel or cargo risk
Global Sea Link
Liner companies – our clients
Source and aggregate cargo from shippers
Load and discharge containers
Land based logistics
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Regional Container Activity (Lifts)
0100200300400500600700
1995
2000
2005
2010
(e)
Source: Clarkson Research Services
Mill
ion
TEU
-15%-10%-5%0%5%10%15%20%
Asia N.Am. Eur. Others
Containership Charter Rates
0
10,000
20,000
30,000
40,000
50,000
60,000
1995
2000
2005
2010
Source: Clarkson Research Services, Company data
US
D /D
ay
--- Forecast ---
3,500 TEU4,400 TEU9,500 TEU
Rapid Industry Recovery from 2009 Lows
Container box activity has been growing since 1979 with a 10%CAGR
Long Term Growth TrendsBased On
World demographics and social trends
World trade growth
Long distances between production/consumption
Containerization of transport
Economies of scale
Supply/Demand imbalances
Slow Steaming and rescheduling of routes
Shortage of modern, large containerships
Short Term Charter Rate Direction
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Strong Fundamentals
Industry has returned to normal high activity levels
N/Bs delivery delays cancellations and slow steaming have realigned supply to demand
Demand has recovered dramatically throughout 2010
Idle capacity is 2%, down from 12% in mid 2009 with only smaller vessels still in lay-up
Charter rates and vessel values have increased sharply as the industry recovers
Vessel value sharp rebound reflects expectations for continued industry growth
Charter rate recovery benefits up-coming re-chartering activity
0
50
100
150
200
250
2000
2002
2004
2006
2008
2010
0%
5%
10%
15%
Charter rate (base 2000=100)Cont/ship value (base 2000=100)Idle capacity as percentage on world fleet
Rates, values and Idle Capacity
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Danaos in Leading Position with a 65 Vessel Fleet
KGs Independent Owners
0
200,000
400,000
600,000
800,000C
-PO
ffen
Pet
erD
ohle
E.R
.Sch
iff
NS
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chiff
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Han
saT'
hand
Her
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Geb
ab
FLae
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Sea
span
Zodi
acM
'tim
e
Dan
aos
Cor
p.
Cos
tam
are
Sho
eiK
isen
Syn
ergy
Mar
ine
TEU
Capacity on Order Current Capacity
A market leader among the large charter owners
Increased desire by liners to outsource vessel ownership provides growth opportunities to Danaos
KG market retraction benefits independent charter owners like Danaos
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Contracted Fleet Growth
172,433219,929
299,679
47,496
79,750
63,000
50 vls 60 vls 65 vls
2010 2011 2012
Cap
acity
(TEU
s)
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Net capacity additions
Further growing an already large fleet
CAPEX
Growth of 65%Next two years
$563 m $680 m $451 m
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Young Fleet with Longer Charters
Improving the fleet age and charter length
Fleet Age
6
7
8
9
10
11
2010 2011 2012 2013
Year
s
Charter Average Length
6
7
8
9
10
11
2010 2011 2012 2013
Year
s
13
Financial Overview
14
Current Financial Status and Capital Structure
Unlocking the intrinsic value of Danaos
All N/Bs will be delivered to Danaos
Aligns debt amortization and N/B commitments to the corporate free cash generation
Eliminates refinancing risks for the next 10 years
Facilitates further equity raises for accretive new projects
(in USD million) 2010
Cash $ 230
2,274
904
Other assets 81
Other Liabilities & OCI 94
Debt 2,566
Equity net of OCI 829
Vessels net of depreciation
Advances to yards
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2011 Revenue by charterer
$ 6 billion contracted revenue from long term fixed rate diversified charters
Hanjin18%
ZIM11%
Yang Ming14%
MAERSK7%
HMM15%
CMA-CGM20%
MSC2%
Other3% CSCL
10%
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Contracted Revenue
Strong revenue growth and visibility
■ $6 billion in contracted revenue■ Charter cover 70% during next 8 years■ Charter cover 18 years ahead■ Staggered re-chartering reduces risks
Contracted Revenue
95% 89% 87% 85% 83% 82% 79% 73%
11% 13% 15% 17% 18% 21% 27%
5%
2011 2012 2013 2014 2015 2016 2017 2018
Contracted Revenue Non Contracted Revenue
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Significant Contracted Cash from Operations
Solid EBITDA growth with low sensitivity on re-chartering assumptions
■ $4.6 billion in contracted EBITDA■ More than 80% of our annual EBITDA is contracted during next 8 years■ 2011-2012 deliveries increase EBITDA run-rate by approx. 90% from 2010 levels■ Re-chartering assumptions have relatively limited weight on operating cash flow projections
Number of re-charterings (1)
Contracted EBITDA
97% 94% 92% 90% 88% 88% 84% 79%
3% 6% 8% 10% 12% 12% 16% 21%
2011 2012 2013 2014 2015 2016 2017 2018
Non Contracted Cash from OperationsContracted Cash from Operations
11 3 3 1 0 2 6 4
(1) At the earliest possible end of charter not including any options
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Historical Financials
Revenue and cash from operations build up as new vessels enter the fleet
More aggressive growth in the years to follow as the larger and more profitable new buildings are delivered
2011-2012 deliveries contribute to an approximately 90% boost of the current annual EBITDA
Revenue (1)
$259$299 $320
$360
2007 2008 2009 2010
EBITDA (2)
$173$189 $204
$244
2007 2008 2009 2010
(1) Revenue from continuing operations(2) Adjusted for non cash and one time items
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Fleet Value
The charter attached value per share is significant and reflects the cash generating capacity of the operations and the high value long term charter contracts Danaos has already secured for its fleet
Charter Attached Gross and Net Asset Value (1)
4,0454,502 4,389 4,279
1,024 1,203 1,310 1,427
9 p/s 11 p/s 12 p/s 13 p/s0
5001,0001,5002,0002,5003,0003,5004,0004,5005,000
2011 2012 2013 2014
USD
Mill
ion
Charter Attached Value of Vessels (including advances to yards at nominal value and cash) Net Asset Value (Charter Attached) NAV per share
(1) Charter attached value for vessels in operation @8% discount rate over the duration of the charters plus advances to yards at nominal value less net debt
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Our Future is Bright
Our new capital structure allows us to profitably and prudently expand the company
Contracted fleet growth during 2010-2012 will significantly increase our EBITDA and restore net income at high levels
Long term fixed rate charters provide cash flow visibility
Excellent long term customer relationships tested during the last crisis
We are well positioned to grow beyond our current contracted N/Bs and be an industry consolidator
Management retains significant shareholding interest in Danaos
Danaos Corporation
W o r l d – C l a s s S h i p p i n g
L e a d i n g – E d g e E x p e r t i s e
Investor RelationsDIMITRI J. ANDRITSOYIANNISChief Financial OfficerDanaos CorporationAthens, GreeceTel: +30 210 419 6481E-Mail: cfo@danaos.com
Company ContactsIRAKLIS PROKOPAKISChief Operating OfficerDanaos CorporationAthens, GreeceTel: +30 210 419 6400E-Mail: coo@danaos.com
NICOLAS BORNOZISPresidentCapital Link, Inc.New York, USATel: +1212-661-7566E-Mail: nbornozis@capitallink.com