World-Class Shipping, Leading-Edge Expertise
Danaos by the Numbers Disclaimer This presentation contains certain statements that may be deemed to be “forward - looking statements” within the meaning of the Se curities Exchange Act of 1934. All statements, other than statements of historical facts, that address activities, events or developments that Danaos Corporation ( “Danaos” or 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, vessel values, 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. 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 fr om 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 March 5, 2019, including the sec tion entitled “Key Information – Risk Factors”, and our other filings with the SEC for a discussion of factors and circumstances that could affect our future finan cial results and our ability to realize the expectations stated herein. EBITDA, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, Net Leverage, and Adjusted EPS may be included in our presentations. EBITDA, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, Net Leverage, and Adjusted EPS are presented because they are used by management and certai n 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, Free Cash Flow, Net Leverage, 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
Danaos at a Glance • 40+ year history in container shipping and third largest public owner globally by TEU • $1,855 bn across 55 owned vessels as of September 30, 2019 • A LEADING $414 mm net asset value, or $17 per share (1,2) , pro-forma for the November 2019 equity offering - Versatile fleet ranging from 2,200-13,000 TEU with a TEU-weighted average age of 11 years CONTAINERSHIP - 65% of fleet focused on Post-Panamax / Wide Beam vessels, larger than 5,000 TEU PLATFORM • History of high utilization 98.5% utilization over last twelve months and a 97.9% average over last five years • Dedication to environmental leadership and corporate governance • Pioneers in digitalization of shipping industry EXPERIENCED AND • 38% management ownership (3) ; aligned with public shareholders ALIGNED MANAGEMENT - Insiders invested $27mm in recent equity offering TEAM • $1.4 billion of contracted forward revenues as of September 30, 2019 , with 4.3 years’ average remaining charter duration STRONG FINANCIAL • 83% contracted revenue for 2020 and 72% for 2021 • PROFILE POISED FOR $313 million adjusted EBITDA (4) (as of September 30, 2019 last twelve months) and $186 (4) million of operating RENEWED GROWTH free cash flow • Modest net leverage of 4.9x (5) as of September 30, 2019 PHASE - No balloon payments until year-end 2023 - Minimum debt amortization of $300mm (6) through end 2021 • Historically-low orderbook for containerships, concentrated in larger vessels, and idle fleet capacity of 3.2% , FAVORABLE INDUSTRY including ships being retro-fitted for scrubbers BACKDROP • No reduction in utilization despite global trade war headwinds over the past year Note: Fleet value includes value of charters; Asset value does not include vessels acquired after September 30, 2019, including Conti Champion . Asset value excludes the five Gemini JV vessels. (1) Please refer to page 16 for a calculation of net asset value; additional disclosure in Appendix. (2) On the basis of 24,371,470 shares outstanding as at November 26, 2019 (3) Inclusive of extended Coustas family interest. (4) Non-GAAP measure. See appendix for definition and reconciliations to the nearest GAAP measure. 3 (5) Net leverage is a non-GAAP measure. Calculated as Net Adjusted Debt / Adjusted EBITDA. (6) Calculated as the sum of contractual principal debt repayment and lease repayments under sale leaseback structure.
1. Business Overview
40+ Year Legacy of Leadership Danaos by the Numbers in Container Shipping 1987 2006 2010 Dr. John Coustas steps into NYSE IPO $200mm equity Chief Executive role raise Raised $200mm 1972 2005 2018 Founded by Dimitris Incorporation in Marshall Refinancing and share Coustas Islands split Market Share (1) Among Top Public Containership Owners Globally By TEU, thousands Publicly Traded Pure-Play Operators Financial / Independent Owners 910 472 474 462 396 338 306 253 238 207 226 203 223 219 209 206 183 360 Seaspan Costamare Danaos Navios Global Ship MPC Group Offen, Claus Shoei Kisen Zodiac Maritime BoCom Peter Dohle Ship Finance Eastern Pacific Zeaborn Schulte Group Norddeutsche Minsheng Bank Nissen Kaiun Kaisha Lease Peter Shpg 5 Source: Clarksons Research. (1) Data as of November 2019. Includes Gemini Shipholdings Vessels, a joint venture in which Danaos owns a 49% stake: Suez Canal (5,610), Genoa (5,544), Lodestar (6,422), Leo C (6,422) and Belita (8,533).
Containership Lessors are Integral to Danaos by the Numbers the Global Trade Supply Chain Containership lessors own more than 50% of the … which is chartered predominantly to leading global world’s fleet (1) … liner companies Customers Liners Lessors Contracted TEU- Shipping Fees Supply 20% 45% Shipping Charter Services Hire Earnings 23% The containership leasing model is favorable for both liners and lessors Owners/Lessors Liners 13% ✓ ✓ Longer-term charters Reduced capital with built-in earnings intensity / balance visibility sheet exposure Other Lessors Top 30 Lessors (excl. top 5) Top 5 Lessors Liners ✓ ✓ Little to no Operational control fuel/commodity of assets without ship exposure in contract management structure (pass- overhead ✓ through to liners) Deployment flexibility 6 Source: Maritime Strategies International (MSI).
Diverse, High-Quality Fleet 8x Fleet Overview (1) 3,500 TEU 11x Average Age: 11.7 years Remaining Charter Term: 0.6 years 2,200 – 2,600 TEU 3% 1% 1% Average Age: 21.2 years Remaining Charter Term: 0.4 years 10x 4,300 – 5,500 TEU Average Age: 12.0 years Remaining Charter Term: 0.8 years 5x 38% 23% Contracted 13,100 TEU Revenue Average Age: 7.4 years 9x Remaining Charter Term: 4.6 years Contribution (1) 6,400 – 6,500 TEU Average Age: 11.2 years Remaining Charter Term: 3.6 years 25% 9% 7x 5x Gemini Vessels 8,500 TEU 2x Average Age: 9.9 years 9,600 - 10,100 TEU Remaining Charter Term: 4.1 years Average Age: 10.2 years 5,500 TEU Remaining Charter Term: 2.8 years 2x 6,500 TEU 1x 8,500 TEU 7 Note: Figures as of November 2019. Please refer to appendix for additional detail on pages 29 and 30. (1) Excludes Gemini Shipholdings Vessels (TEU), a joint venture in which Danaos owns a 49% stake: Suez Canal (5,610), Genoa (5,544), Lodestar (6,422), Leo C (6,422) and Bellta (8,533).
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