world-class shipping, leading-edge expertise · 2020. 11. 5. · world-class shipping, leading-edge...

World-Class Shipping, Leading-Edge Expertise

Corporate Presentation | November 2020

Danaos by the NumbersDisclaimer

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, future operating revenues and cash flows, capital expenditures, vessel market values,

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. Important factors that could cause actual results to differ materially from those discussed in the forward-looking statements

include the strength of world economies, general market conditions, including charter rates and vessel values, counterparty performance under existing

charters, changes in operating expenses, ability to obtain financing and comply with covenants in financing arrangements, including the terms of its new

credit facilities and agreements entered into in connection with the refinancing, the affects of the refinancing transactions and the Company’s ability to

achieve the benefits of the refinancing, actions taken by regulatory authorities, potential liability from litigation and international political conditions. Danaos

Corporation is listed in the New York Stock Exchange under the ticker symbol “DAC”. Before you invest, you should also read the 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

Readers of this presentation should review our Annual Report on Form 20-F filed with the SEC on February 27, 2020, including the section entitled “Key

Information – Risk Factors”, and our other filings with the SEC for a discussion of factors and circumstances that could affect our future financial results and

our ability to realize the expectations stated herein.

EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS may be included in our presentations. EBITDA, Adjusted EBITDA, Adjusted Net Income

and Adjusted EPS are presented because they are used by management and certain investors to measure a company’s financial performance and underlying

trends as they exclude certain items impacting overall comparability. EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are “non-GAAP

financial measures” 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. Reconciliations to

GAAP measures are included in the Appendix to this presentation.

Certain shipping industry information, statistics and charts contained herein have been derived from industry sources. You are hereby advised that such

information, statistics and charts have not been prepared specifically for inclusion in this presentation and the Company has not undertaken any independent

investigation to confirm the accuracy or completeness of such information.

2

kBusiness Overview

3

• One of the largest publicly-listed owners of modern containerships with long track record in the shipping market

• One of the most efficient operators in the industry with highly competitive breakeven levels

• Management is the largest shareholder (~46%)(1) and is aligned with public shareholders

✓

A LEADING CONTAINERSHIP OWNER AND OPERATOR

• Adjusted Net Debt / EBITDA ratio of 4.5x and consistent reduction in

leverage through amortization schedule

• Going forward financial covenants in line with conservative operating

expectations

• Repurchased 17.5% of outstanding shares in October 2020

✓

HEALTHY CAPITAL STRUCTURE

LIMIT RE-CHARTERING RISK AND POTENTIAL FOR UPSIDE

✓

• Charter backlog of $1.1 billion through 2028 with world’s leading liner

companies provides good cash flow visibility

• Large, modern 13,100 TEU vessels are all on long-term charters through

2024

• Strong contract coverage of 87% for the next 12 months limits downside

risk and provides potential for upside

(1) Inclusive of extended Coustas family interest. .

MARKET UPDATE

• The charter market has improved significantly

since the initial shock at the start of the COVID-19

pandemic, and volumes have recovered faster

than expected

• Consistent capacity management by liner

companies addressed the drop in volumes brought

on by the pandemic, alleviating pressure on our

customers’ cash flows and stabilizing freight rates

• Volumes has seen consistent improvements,

particularly in Transpacific eastbound, intra-Asia

and North-South trade lanes

• The portion of the global containership fleet that is

sitting idle (based on TEU) has declined from a

high of 11.4% at the end of May to 3.3% as of

October 23 (5-year average is 4.0%)

• SCFI comprehensive index reached its highest

level since 2012 in mid-October and is up more

than 80% from April lows

• Historically-low orderbook for containerships,

provides potential for a swift recovery when the

situation normalizes

Danaos by the Numbers

$1.1bnContracted cash flow through 2028

4.5xNet debt to LTM Adjusted EBITDA

$313mnLTM Adjusted EBITDA 3Q 2020

46%Ownership through founder / management

$1.6bnEnterprise value

3.0xReduction in leverage over the last three years

4

1,026

504 404

244 207 180

470 457 456 386 268 253 247 223 211 209 194 181

Sea

span

Cos

tam

are

Dan

aos

Glo

bal S

hip

Leas

e

Nav

ios

MP

C G

roup

Zod

iac

Mar

itim

e

Sho

ei K

isen

Offe

n, C

laus

Pet

er

BoC

om L

easi

ng

Eas

tern

Pac

ific

Shp

g

Fre

drik

sen

Gro

up

Pet

er D

ohle

/H

amm

onia

Sch

ulte

Gro

up

Nis

sen

Kai

un

Zea

born

Nor

ddeu

tsch

e R

.H.

Sch

uldt

Min

shen

g F

inan

cial

Leas

ing

40+ Year Legacy of Leadership in Container Shipping

Source: Clarksons Research.

(1) Includes Gemini Shipholdings Vessels (TEU), a joint venture in which Danaos owns a 49% stake: Suez Canal (5,610), Genoa (5,544), Catherine C (6,422), Leo C (6,422) and Belita (8,533) and 2 new vessel acquisitions (2 x 9,012), expected

to be delivered to us between December 2020 and January 2021.

(2) Global Ship Lease includes Pro Forma TEU for Poseidon / Technomar Acquisition which closed November 15, 2018.

Publicly Traded Pure-Play Operators Financial / Independent Owners

Market Share1, 2 Among Top Public Containership Owners GloballyBy TEU, thousands

5

1972

Founded by Dimitris

Coustas

1987

Dr. John Coustas steps into

Chief Executive role

2005

Incorporation in Marshall

Islands

2006

NYSE IPO

Raised $200mm

2018 to present

Refinancing, share

offering and growth

2010

$200mm equity

raise

38.5%

7.8%27.1%

23.2%

1.0%1.8% 0.7%

Diverse, High-Quality Fleet

2x5,500 TEU

2x 6,500 TEU

1x 8,500 TEU

9x 6,400 – 6,500 TEU

Average Age: 12.2 years

Remaining Charter Term: 3.0 years

10x4,300 – 5,500 TEU



8x3,500 TEU


Remaining Charter Term: 0.5 years 11x 2,200 – 2,600 TEU



Note: Figures as of September 30th 2020. Please refer to appendix for additional detail.

(1) Excludes Gemini Shipholdings Vessels (TEU), a joint venture in which Danaos owns a 49% stake: Suez Canal (5,610), Genoa (5,544), Catherine C (6,422), Leo C (6,422) and Belita (8,533).

(2) Includes 2 new vessel acquisitions (2 x 9,012), expected to be delivered to us between December 2020 and January 2021.

Fleet Overview(1)

5x 13,100 TEU



12x(2)8,500 – 9,000 TEU



5x9,600 - 10,100 TEU



Gemini Vessels

Contracted

Revenue

Contribution(1)

6

Danaos by the NumbersBalanced Counterparty Concentration

Note: Distributed by TEU.

30%

16%

16%

8%

7%

5%

18%

(20 years)

(25 years)

(37 years)

(15 years)

(34 years)

(40+ years)

Overview of Customer Base

• Long history chartering to most major global liner companies

• Engaged with container alliances on deployments across major and minor global

routes

• Have collaborated with customers in ordering 46 newbuildings in excess of 300,000 TEU over

our history at a cost in excess of $4 billion

Close Alignment Working with Customers

• Consistently developing operating expertise to obtain and retain customers

• Delivering on-time new ships to customers’ specifications

• Prioritizing reputation, customer service and safety

• Maintain a strategic focus on regular engagement with customers, particularly in

regards to new customer needs and

technological advancements

Length of Customer Relationships Noted in Italics

7

ONE

Strong Charter Coverage through 2024

Note: Charter Revenue assumes Gross Daily Charter Rate. Contracted Revenue and Charter Expiration Schedule exclude Gemini Shipholdings.

(1) Assumes non-contracted vessels employed at current contracted charter rates.

Shorter charter durations limited to vessels in more liquid chartering markets

Contracted Revenue by Year mm $ by Asset Class

Revenue-Weighted Charter Coverage(1)

8

99% 81%

59% 41%

5%

2020 2021 2022 2023 2024+

$455 $393

$282

$189

$119

2020 2021 2022 2023 2024+

13,000 9,500-10,000 8,500 6,400-6,500 4,300-5,500 3,500 2,200-2,600

$313

$209

$66

($62) ($6)

($12) ($9) ($15)

($143)

LTM Q3 2020EBITDA

Net Cash Interest JV Earnings Revenue Recognition(Non-Cash)

Other Dry Docking Operating Cash Flow Debt Amortization LTM Q3 2020 FCF

Good Free Cash Flow Visibility

Source: Company filings as of 09/30/2020.

Note: Recurring Free Cash Flow calculated excluding non-recurring items such as Vessels Addition Capital Expenditures and Financing Costs.

(1) Non-GAAP measure. See appendix for definitions and reconciliations to the nearest GAAP measure.

Illustrative Walk to LTM Q3 2020 Free Cash Flow(1)

LTM Q3 2020 FCF

excludes CapEx

and one-time /

extraordinary

items

(1)

(1)

Drivers of LTM Q3 2020 FCF

✓ Lower interest rates

✓ Contractual charter escalations

✓ Vessel acquisitions

Uses of FCF

✓ Further debt amortization

✓ Return of capital to shareholders

✓ Vessel acquisitions

9

Focused on Maintaining Conservative Capital Structure

Net Adjusted Debt and Adjusted EBITDA Multiple(1)Capitalization

3,165 3,042

2,892

2,703

2,454

2,274

1,615

1,443 1,415

7.3x 7.0x

7.2x

6.5x

7.0x 7.3x

5.1x 4.6x

4.5x

0

500

1,000

1,500

2,000

2,500

3,000

$3,500

2012 2013 2014 2015 2016 2017 2018 2019 LTM 3Q'20

(1) Based on total adjusted debt, net of deferred finance costs and fair value adjustments, as of September 30th 2020.

(2) Non-GAAP measure. See appendix for definitions and reconciliations to the nearest GAAP measure.

Net Adjusted Debt

9/30/2020$ in millions

Cash $106

Bank Debt: 1,369

Long-term Leaseback Obligation 129

Exit Fee 23

Deferred Finance Costs (31)

Debt Fair Value Adjustment (16)

Total Debt $1,475

adjusted for

Deferred Finance Costs 31

Debt Fair Value Adjustment 16

Total Debt $1,521

Net Debt 1,415

Book Value of Equity 1000

Total Capitalization $2,521

Credit Statistics:

LTM Adj. EBITDA(2) $313

Debt / LTM Adj. EBITDA(2) 4.9x

Net Debt / LTM Adj. EBITDA(2) 4.5x

Net Debt / Book Equity(2) 1.4x

10

Experienced Senior Management

Dr. John Coustas, President & CEO

Dimitris Vastarouchas, Technical Director & Deputy COO

• CEO since 1987

• Over 30 years of experience in the

shipping industry

• Vice Chairman of the board of directors of

The Swedish Club; member of the board

of directors of the Union of Greek

Shipowners and the DNV Council

Evangelos Chatzis, Chief Financial Officer

• Joined Danaos in 2005

• Over 25 years of experience in corporate

finance and the shipping industry

• Formerly CFO of Globe Group of

Companies

• Danaos Technical Manager since 2005

• Has over 20 years of experience in the

shipping industry

• Formerly New Buildings Projects and Site

Manager supervising the construction of

4,250, 5,500 and 8,500 TEU containerships

Iraklis Prokopakis, Senior Vice President, Treasurer & COO

• Joined Danaos in 1998

• Over 40 years of experience in the shipping

industry

• Member of the Board of the Hellenic Chamber

of Shipping and the Owners’ Committee of the

Korean Register of Shipping

11

Governance

Independent Board

Clear reporting of

transactions with Danaos

Shipping (Manager)

− Amounts approved by

independent board

members

Arms length cost

arrangements, which

are amongst lowest

in industry and fixed

through 2024

✓

✓

✓

Social

Code of ethics and

compliance policies

published for Directors /

Officers

Accredited by Global

Reporting Initiative (GRI)

for sustainability best

practices and socially

responsible management

✓

✓

Environmental

Advanced solutions to

reduce emissions through

fuel efficiency optimization

Scrubber installation on

select vessels

Low-sulfur fuel oil

to be procured

Ballast water

system compliance

Partnership with founders

of Poseidon Principles

✓

✓

✓

✓

✓

Longstanding Champion of ESG Principles

Danaos Management is keenly focused on maintaining a strong ESG framework for company operations

12

HINDSIGHT:

• ‘Reflect and learn from past data’ through statistical processing and trend analysis

• Detection of hidden correlations among seemingly un-related data

INSIGHT: ‘Interpret data and respond efficiently to the present’

• KPls real-time monitoring (operational efficiency, safety performance, etc.)

• Vessel’s benchmarking against: theoretical curves, specifications, tests and trials, sister and competitor vessel monitoring

• Timely anomaly detection and alerting for abnormal behavior or deviation from predefined thresholds

FORESIGHT: ‘Predict and get ready for the future’ through scenario testing, system risk assessments and observational

maintenance

As well as Routines System Data monitoring …

• BCS, pMatrix, Power Mgmt, Steam Mgmt, ODA …

• Tanks Mgmt. Bunker Analysis, Bunker Surveys, Bunkering Monitoring ...

• Performance, Propulsion, Emissions ...

Data Analytics/Algorithmic Analysis (Operator-defined) of Fused Data across Monitoring Systems

Workflow Management

Operator-defined workflows for timely and effective response to alarm events: what actions must take place, who from the

crew should be involved, and what actions must be logged / other systems triggered

Waves Fleet Performance

… Riding the Wave of Innovation!

Pioneers in Digitalization

13

Industry Overview

Seaborne Containerized Trade Forecast to Rebound Quickly

Global Seaborne Container Trade

Source: Clarksons Research

15

-15%

-10%

-5%

0%

5%

10%

15%

0

50

100

150

200

250

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

TE

U m

m

World Seaborne Container Trade Y-o-Y Growth

Containership Trade Routes


(1) Basis trades with Far East & Europe.

(2) Basis full year estimate / forecast.

• Units of 15,000+ TEU are almost exclusively deployed on the Far East-Europe trade

• Deployment of boxships sized 12-14,999 TEU continues to broaden notably onto the Transpacific route and also

onto some non-mainlane trades

• Boxships sized 6,000-11,999 TEU offer flexible deployment opportunities, with further reductions in

reliance on the mainlanes over the years, although

demand can be sensitive to short-term shifts

• Approximately 39% of capacity deployed on intra-regional trade routes is accounted for by units of 3,000+ TEU; this

share has been fairly steady for the last 18 months

• Intra-regional routes, and deployment of sub-3,000 TEU units thereon, appear ‘protected’ against significant vessel

upsizing to some degree, by infrastructure, volume and

other operational constraints

Mainlane, 28.7%

Non-Mainlane

East-West, 10.4%

North-South, 16.5%

Intra-Regional,

44.5%

201mm

TEU

Largest vessels primarily deployed on long trade routes

Container Trade by Trade Lane 2020f

16

Geographic Deployment Favoring Certain Size Vessels

Largest vessels primarily deployed on long trade routes

Capacity Deployment By Routemm $ by Asset Class


0%

20%

40%

60%

80%

100%

0.00

0.25

0.50

0.75

1.00

1.25

2020 2021 2022

12,000+ TEU 8,000–11,999 TEU 3,000–7,999 TEU 100–2,999 TEU

Supply Growth Primary in Largest Vessel Segments

Orderbook is concentrated in 8,000+ TEU vessels where Danaos has the greatest charter coverage

Containership Orderbook, as % of Fleet by SegmentTEU, mm


Containership Orderbook, By Scheduled Delivery YearTEU, mm

18

8.0%

11.7%

0.5%

8.3%

0%

5%

10%

15%

Containership Orderbook %Fleet

Containership 8,000+ TEUOrderbook % Fleet

Containership 3-7,999 TEUOrderbook % Fleet

Containership

Charter Rates Near Multi-Year Highs

4,400 TEU gls ‘Old Panamax’ Containership

6-12 Month TC Rate$/day, thousands

9,000 TEU gls Containership 3-yr TC Rate1$/day, thousands


Note: Limited activity on longer TCs with wide spread on rate ideas.

(1) Based on ‘Neo-Panamax’ ships.

6,800 TEU Containership 3-yr TC Rate$/day, thousands

2,500 TEU grd Containership 6-12 month TC Rate$/day, thousands

19

0

10

20

30

40

50

Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Sep-20

0

5

10

15

20

25

30


0

10

20

30

40


0

10

20

30

40


Asset Values Steady, and Transactions have Increased

4,500 TEU ‘Old Panamax’ Containership 10 Year Old

Secondhand Pricemm $

8,800 TEU Containership 5 Year Old Secondhand Pricemm $


Note: Limited activity on longer TCs with wide spread on rate ideas.

(1) Based on ‘Neo-Panamax’ ships.

6,600 TEU Containership 5 Year Old Secondhand Pricemm $

2,500 TEU grd Containership 10-Year-Old

Secondhand Pricemm $

20

0

20

40

60

80

100

120

140


20

40

60

80

100

120


0

10

20

30

40

50


0

10

20


Financial Overview

Historical Financials

Net Leverage Adjusted Net Income

mm $

Operating Revenuesmm $

Adjusted EBITDAmm $

$589 $588 $552 $568

$498 $452 $459 $447 $452

2012 2013 2014 2015 2016 2017 2018 2019 LTM3Q '20

$432 $434 $404 $418

$351 $310 $318 $311 $313

2012 2013 2014 2015 2016 2017 2018 2019 LTM3Q '20

Source: Company filings.

Note: Adjusted Net Income reflects add-backs of various income statement items, most notably impairment charges, amortization of deferred financing costs and other one-off extraordinary items.

Note: LTM reflects twelve months period ending September 30, 2020

$60 $54 $60

$159 $141

$115 $131

$149 $161

2012 2013 2014 2015 2016 2017 2018 2019 LTM3Q '20

22

Summary Results

7.3x 7.0x 7.2x 6.5x

7.0x 7.3x

5.1x 4.6x 4.5x

2012 2013 2014 2015 2016 2017 2018 2019 LTM3Q '20

Third Quarter 2020 Earnings

Three Months ended Sept. 30 Nine Months ended Sept. 30

2020 2019 % yoy 2020 2019 % yoy

Operating Revenue $118,932 $111,830 6.4% $341,952 $337,040 1.5%

Adjusted EBITDA1 $83,331 $79,328 5.0% $235,322 $232,447 1.2%

Adjusted Net Income $47,303 $37,882 24.9% $123,078 $110,706 11.2%

Adjusted Earnings per Share, diluted2 $1.91 $2.46 -22.6% $4.97 $7.23 -31.3%

Summary of Resultsthousands $, expect per share figures

Third Quarter Highlights

• Adjusted EBITDA increased by 5.0% when compared to Q3 2019 as operating revenues improved by 6.4% compared to the same period due contractual increases in charter rates for vessels on long-term charters and revenues from newly-

acquired vessels

• Fleet utilization for the three months ended September 30, 2020 was 98.7% compared to 97.1% in the prior quarter

• Charter contract coverage of 87% in terms of operating revenues and 64% in terms of operating days over the next 12 months

(1) Adjusted EBITDA represents net income before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs

and deferred finance costs, amortization of deferred realized losses on interest rate swaps, loss on sale of securities, gain on debt extinguishment, stock based compensation and refinancing professional fees.

(2) Based on weighted average diluted shares outstanding.23

Last Twelve

Months

$452,156

$313,440

$161,047

$6.91

Charter-Adjusted Total AssetValue

Net Debt Net Working Capital & Other Net Asset Value Net Asset Value(Pro-forma)

Charter Adjusted Net Asset Value

Note: Asset value does not include vessels acquired after September 30, 2020. Refer to appendix for additional details regarding calculation of Net Asset Value.

(1) Net debt includes (1) $1,391.9 million of long-term debt, including current portion, which adds back deferred finance costs of $26.9 million and debt fair value adjustment of $15.7 million, and (2) $129.4 million of long-term leaseback obligations,

including current portion which adds back deferred finance costs of $3.7 million, less (3) cash and cash equivalents of $106.4 million. Please refer to Appendix. Does not include accumulated accrued interest of $162.0 million as of September 30, 2020.

(2) Includes carrying value of investments in Gemini JV of $13.7 million and ZIM and HMM notes of $39 million, as well as net working capital and other assets and liabilities. Excludes assets and liabilities relating to accruals for certain non-cash items

relating to straight-line revenue recognition, unearned revenue with respect to ZIM and HMM notes and deferred Handling Fees. Please refer to Appendix for further details.

(3) Based on 24.789 mm shares outstanding as of September 30, 2020.

(4) Based on the current NAV of $452.43 mil. reduced by $31.13 mil. (cash required for the share buy back) divided by the new number of shares which is 20,450,041

(in US$ millions)

(2)(1)

NAV / Share: $18.3(3)As of September 30, 2020

• As calculated in accordance with the financial covenants contained in the Company’s credit facilities as of September 30, 2020, market value of the Company’s existing fleet of 58 containerships on a charter-inclusive basis was approximately $1.8 billion.

− Broker appraisals for charter-free asset value and charter-adjustments are as of June 30, 2020• Adjustments to calculate net asset value include:

− Net debt, which is adjusted to include non-cash fair value adjustments and deferred finance costs − Net working capital & other, which includes DAC’s equity stake in the Gemini joint venture at carrying value

$1,795 ($1,415)

$72

$452

24

NAV / Share: $20.6(4)As of September 30, 2020

$421

(Pro-forma)

Summary

kFinancial Strategy Positioning Danaos for Success

Balanced chartering strategy to ensure cash flow visibility with 99% and 81% of 2020 and 2021 revenues contracted(3)

✓

Opportunistic vessel acquisition strategy

- Acquired three vessels in last nine months, two of which have been fixed on multi-year charters

- Two additional 9,000 TEU vessels acquired and expected to be delivered at the end of 2020

✓

Following consummation of recent equity offering the Company is permitted, under its loan agreements, to re-instate dividends

✓

(1) Calculated as the sum of contractual principal debt repayment and lease repayments under sale leaseback structure.

(2) Net leverage is a non-GAAP measure. Calculated as Net Adjusted Debt / Adjusted EBITDA. Adjusted EBITDA is a non-GAAP measure. See appendix for definitions and reconciliations to the nearest GAAP measure.

(3) Assumes contracted vessels operate on gross daily charter rate, accounts for revenue exclusively derived from long-term charter contracts. 26

Continued de-levering from strong contracted cash flows- Minimum debt amortization of $317mm(1) in 2020 and 2021

✓

38.4% reduction in leverage

between 2017 and today(2)

7.3x5.1x 4.6x 4.5x

2017 2018 2019 2020 Q3

The Company repurchased 17.5% of its outstanding shares in October 2020 for an aggregate purchase price of $31.1 million

✓

Appendix

Substantial Fleet Employment and Coverage

(1) Age as of September 30, 2020

5x13,100 TEU

5x9,600 – 10,100 TEU

10x8,500 – 9,000 TEU

9x6,400 – 6,500 TEU

2018 2019 2020 2021 2022 2023 2024 2025

Hyundai Honour

Hyundai Respect

Hyundai Smart

Hyundai Speed

Hyundai Ambition

Pusan C

Le Havre

Express Berlin

Express Rome

Express Athens

Europe

America

Phoebe

SM Charleston

Niledutch Lion

CMA CGM Attila

CMA CGM Tancredi

CMA CGM Bianca

CMA CGM Samson

CMA CGM Melisande

Performance

Dimitra C

CMA CGM Moliere

CMA CGM Musset

CMA CGM Nerval

YM Mandate

CMA CGM Rabelais

CMA CGM Racine

YM Maturity

2028

Charterer Age1 Vessel

8.6

8.6

8.4

8.3

8.3

14.1

13.9

9.6

9.5

9.4

16.1

15.9

15.3

14.8

12.3

9.2

9.1

8.9

8.8

8.6

18.6

18.3

11.0

10.6

10.4

10.4

10.3

10.1

10.1

Total Charter

Revenue

Contribution

38.5%

7.8%

27.1%

23.2%

28

ONE

Substantial Fleet Employment and Coverage

Charterer Age1 Vessel

Total Charter

Revenue

Contribution

10x4,300 – 5,500 TEU

8x3,500 TEU

11x2,200 – 2,600 TEU

2018 2019 2020 2021 2022 2023 2024

ANL Tongala

Derby D

Seattle C

YM Vancouver

Rio Grande

Zim Sao Paolo

Zim Kingston

Zim Monaco

Zim Dalian

Zim Luanda

Dimitris C

Colombo

Singapore

Express Argentina

Express Brazil

Express France

Express Spain

Express Black Sea

Future

Sprinter

Vladivostok

Advance

Stride

Progress C

Amalia C

Highway

Bridge

Danae C

Zebra

16.6

16.4

13.1

12.9

12.2

12.0

11.9

11.8

11.5

11.3

19.6

16.6

16.1

10.4

10.2

10.0

9.7

9.5

23.5

23.3

23.2

23.1

23.1

22.6

22.6

22.6

22.5

19.3

18.8

(1) Age as of September 30, 2020

1.0%

1.8%

0.7%

29

Adjusted EBITDA


Three Months Three Months Nine Months Nine Months Twelve Months

ended ended ended ended ended

($ In thousands) Sept. 30, 2020 Sept. 30, 2019 Sept 30, 2020 Sept 30, 2019 Sept 30, 2020

Net income / (Loss) from Continuing Operations

(unadjusted)$42,786 $33,855 $110,371 $97,436 $144,188

Adjustments:

Depreciation 25,765 24,336 75,604 72,141 99,968

Amortization of deferred drydocking & special survey

costs3,174 2,271 8,425 6,525 10,633

Amortization of deferred realized losses of cash flow

interest rate swaps913 913 2,719 2,709 3,632

Amortization of deferred finance costs 4,517 4,027 12,707 13,270 16,859

Interest income (1,650) (1,586) (4,952) (4,751) (6,615)

Interest expense 7,525 14,317 29,551 42,057 42,697

EBITDA $83,030 $78,133 $234,425 $229,387 $311,362

Stock based compensation 301 1,195 897 3,060 2,078

ADJUSTED EBITDA $83,331 $79,328 $235,322 $232,447 $313,440

Reconciliation of Net Income / (Loss) to EBITDA and Adjusted EBITDA

September 30, 2020

30

Historical Adjusted EBITDA

Source: Company filings. 31

Historical Reconciliation of Net Income to EBITDA and Adjusted EBITDA

Years ended 2012 – LTM 3Q 2020

Twelve months

ended

($ in thousands) 2012 2013 2014 2015 2016 2017 2018 2019 Sept. 30, 2020

Net Income $(105,204) $37,523 $(3,920) $117,016 $(366,195) $83,905 $(32,936) $131,252 $144,188

Adjustments

Depreciation 143,938 137,414 137,061 131,783 129,045 115,228 107,757 96,505 99,968

Amortization of deferred drydocking & special survey costs 6,070 5,482 4,387 3,845 5,528 6,748 9,237 8,733 10,633

Amortization of deferred realized losses on cash flow interest rate swaps 3,524 4,017 4,016 4,017 4,028 3,694 3,694 3,622 3,632

Amortization of finance costs and debt discount 14,314 15,431 15,070 14,038 12,652 11,153 14,957 16,866 16,336

Finance costs accrued (Exit Fees under our Bank Agreements) 2,762 3,763 3,745 3,639 3,447 3,169 2,059 556 523

Interest Income (1,642) (2,210) (1,703) (3,419) (4,682) (5,576) (5,781) (6,414) (6,615)

Interest Expense 87,340 91,185 79,980 70,397 70,314 75,403 70,749 55,203 42,697

EBITDA 151,102 292,605 238,636 341,316 (145,863) 293,724 169,736 306,323 311,362

Adjusted for:

Impairment loss 129,630 19,004 75,776 41,080 415,118 - 210,715 - -

Gain on debt extinguishment - - - - - - (116,365) - -

Re-financing professional fees - - - - - 14,297 51,314 - -

Accelerated amortization of accumulated other comprehensive loss - - - - 7,705 - 1,443 - -

Realized (Gain) / Loss on derivatives 150,910 144,254 119,612 52,125 5,397 - - - -

Unrealized (Gain) / Loss on fair value of derivatives 739 (22,121) (24,915) (16,285) (4,648) - - - -

Stock based compensation 139 75 638 88 76 - 1,005 4,241 2,078

Bad debt expense - - - - 15,834 - - - -

Impairment loss component of equity loss on investments - - - - 14,642 - - - -

Loss on sale of HMM securities - - - - 12,906 2,357 - - -

Impairment loss on securities - - - - 29,384 - - - -

(Gain) / Loss on sale of vessels (830) 449 (5,709) - 36 - - - -

Adjusted EBITDA 431,690 434,266 404,038 418,324 350,587 310,378 317,849 310,564 313,440

Three Months Three Months Nine Months Nine Months Twelve Months

ended ended ended ended ended

($ In thousands, except per share items) Sept. 30, 2020 Sept. 30, 2019 Sept. 30, 2020 Sept. 30, 2019 Sept. 30, 2020

Net income / (Loss) from Continuing Operations $42,786 $33,855 $110,371 $97,436 $144,188

Adjustments:

Amortization of deferred finance costs 4,517 4,027 12,707 13,270 16,859

ADJUSTED NET INCOME $47,303 $37,882 $123,078 $110,706 $161,047

ADJUSTED EARNINGS PER SHARE

Diluted net income per share $1.91 $2.46 $4.97 $7.23 $6.91

Diluted weighted average number of shares 24,789 15,373 24,789 15,309 23,316

Adjusted Net Income


Reconciliation of Net Income to Adjusted Net Income and Adjusted Earnings per Share

September 30, 2020

32

Historical Adjusted Net Income


Reconciliation of Adjusted Net Income

Years ended December 2012 – LTM 3Q 2020

Twelve months

ended

2012 2013 2014 2015 2016 2017 2018 2019 Sept. 30, 2020

Net Income $(105,204) $37,523 $(3,920) $117,016 $(366,195) $83,905 $(32,936) $131,252 $144,188

Adjust for:

Impairment loss 129,630 19,004 75,776 41,080 415,118 - 210,715 - -

Gain on debt extinguishment - - - - - - (116,365) - -

Amortization of finance costs 14,314 15,431 15,070 14,038 12,652 11,153 11,771 10,795 10,591

Debt discount amortization - - - - - - 3,186 6,071 5,745

Finance costs accrued (Exit Fees under our Bank Agreements) 2,762 3,763 3,745 3,639 3,447 3,169 2,059 556 523

Re-financing professional fees - - - - - 14,297 51,314 - -

Accelerated amortization of accumulated other comprehensive loss - - - - 7,705 - 1,443 - -

Unrealized (Gain) / Loss on fair value of derivatives 739 (22,121) (24,915) (16,285) (4,648) - - - -

Realized loss on over-hedging portion of derivatives 19,042 - - - - - - - -

Bad debt expense - - - - 15,834 - - - -

Impairment loss component of equity loss on investments - - - - 14,642 - - - -

Loss on sale of HMM securities - - - - 12,906 2,357 - - -

Impairment loss on securities - - - - 29,384 - - - -

(Gain) / Loss on sale of vessels (830) 449 (5,709) - 36 - - - -

$60,453 $54,049 $60,047 $159,488 $140,881 $114,881 $131,188 $148,674 $161,047

Sept. 30, 2020 Free Cash Flow


Reconciliation of Free Cash Flow

Twelve months ended Three months ended Twelve months ended

($ in thousands)Dec. 31, 2019 Sept. 30, 2020 Sept. 30, 2020

Net Income $131,252 $42,786 $144,188

Adjustments

Depreciation 96,505 25,765 99,968

Amortization of deferred drydocking & special survey costs 8,733 3,174 10,633

Amortization of deferred realized losses on cash flow interest rate swaps 3,622 913 3,632

Amortization of finance costs and debt discount 16,866 4,383 16,336

Finance costs accrued (Exit Fees under our Bank Agreements) 556 134 523

Interest Income (6,414) (1,650) (6,615)

Interest Expense 55,203 7,525 42,697

EBITDA 306,323 83,030 311,362

Stock based compensation 4,241 301 2,078

Adjusted EBITDA $310,564 $83,331 $313,440

Net cash interest (80,772) (10,472) (62,312)

Equity income / (loss) on investments (1,601) (1,464) (5,823)

Revenue recognition (non-cash) (27,682) (1,190) (11,883)

Other working capital (8,831) (6,307) (9,113)

Payments for dry-docking & special survey costs deferred (7,157) (17) (15,340)

Operating cash flow 184,520 63,881 208,969

Debt Amortization (124,358) (40,450) (142,954)

Free Cash Flow 60,162 23,431 66,015

Debt drawdowns - 13,300 36,700

Vessels additions & advances for vessels additions (18,853) (7,403) (35,267)

Vessel acquisitions & advances for vessel acquisitions (2,507) - (77,557)

Finance costs (30,474) (7,914) (19,913)

Share issuance costs (873) - (873)

Paid-in capital 54,440 - 54,440

Net Increase / (Decrease) in Cash and Cash Equivalents $61,895 $21,414 $23,545

Appendix: Danaos Net Asset Value(1)

(1) Net Asset Value (NAV) is used to assess compliance with our credit facility covenants, and management

believes that many investors use NAV as a reference point in assessing valuation of fleets of ships and

similar assets.

(2) As calculated in accordance with the financial covenants contained in the Company’s credit facilities as of

September 30, 2020, on a charter-inclusive basis, as follows (1) for any vessel having a charter with more

than 12 months remaining duration, the present value of the “bareboat-equivalent” time charter income from

such charter (contracted revenue thereunder less forecasted operating expenses, insurances and dry-

docking costs), plus (2) the present value of the residual charter-free value of any vessel (estimated based on

June 30, 2020 broker valuations using vessel age as of the end of applicable charter, if any), each discounted

to present value using a discount rate 7.0%. See “Item 5. Operating and Financial Review and Prospects” in

the Company’s Annual Report on Form 20-F filed with the SEC on February 27, 2020. These calculations of

vessel value may not be comparable to other methods of determining vessel values or reported book value

($2.4 billion as of September 30, 2020). Vessel values are highly volatile and contracted charter revenue is

subject to counterparty performance and may not be transferable upon sale of a vessel. As such, the

Company’s estimates of market value may not be indicative of the current or future value of its vessels, or

prices that the Company could achieve if it were to sell the vessels.

(3) Consists of (i) Current portion of long term debt, net of $126.326 million and (ii) Long-term debt, net of

current portion of $1,222.971 million plus deferred finance costs, net, of $26.93 million and debt fair value

adjustment of $15.694 million. Does not include accumulated accrued interest of $162.0 million.

(4) Consists of (i) Current portion of leaseback obligation, net of $24.166 million and (ii) Long-term leaseback

obligation, net of current portion of $101.522 million plus deferred finance costs of $3.664 million.

(5) Excludes the following non-cash items included on the Company’s balance sheet, as of September 30,

2020: (i) unearned revenue liabilities totaling $30.916 million relating to an accounting charge recognized

upon the Company’s receipt of the ZIM and HMM notes in respect of charter amendments ($20.934 million

Unearned revenue, net of current portion and $9.982 million included in Unearned revenue, current portion),

(ii) Other current assets ($9.472 million) and Other non-current assets ($22.344 million) related to straight-line

revenue recognition totaling $31.816 million, and (iii) liabilities related to straight-line revenue recognition

totaling $0.710 million (Other current liabilities of $0.423 million and $0.287 million included in Other long-term

liabilities).

(6) Represents investment in Gemini JV.

(7) Included in Other non-current assets on the Company’s balance sheet.

35

(in US$ thousands)

Charter Adjusted Asset Value

Charter Adjusted Fleet Value(2) $1,795,434

Total Charter Adjusted Asset Value $1,795,434

Less:

Net Debt

Bank debt(3) $1,391,921

Long-term leaseback obligation (including current portion)(4) 129,352

Less:

Cash and cash equivalents (106,368)

Total Net Debt $1,414,905

Plus:

Net Working Capital & Other(5)

Accounts receivable, net $10,846

Inventories 9,021

Prepaid Expenses 1,653

Due from related parties 20,851

Other current assets & non-current assets 4,485

Investments in affiliates(6) 13,694

Zim notes(7) 26,742

HMM notes(7) 12,304

Less:

Accounts payable (11,628)

Accrued liabilities (8,770)

Unearned revenue (7,301)

Total Net Working Capital & Other $71,896

Net Asset Value: $452,425

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