World-Class Shipping, Leading-Edge Expertise Corporate Presentation | February 2020
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 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 expend itures, 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 an d 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 t he 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 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 per formance 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 o perations 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
Business Overview k A LEADING CONTAINERSHIP OWNER AND OPERATOR • 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 (~37.3%) (1) and is aligned with public shareholders HEALTHY CAPITAL STRUCTURE • Adjusted Net Debt / EBITDA ratio of 4.6x and consistent reduction in leverage through amortization schedule ✓ • Going forward financial covenants in line with conservative operating expectations • Significant financial commitment by founder and largest shareholder LIMIT RE-CHARTERING RISK AND POTENTIAL FOR UPSIDE • Charter backlog of $1.34 billion through 2028 with world’s leading liner companies provides good cash flow visibility ✓ • Large, modern 13,000 TEU vessels are all on long-term charters through 2024 • Active chartering market with more limited capacity growth , for majority of vessels on shorter charters, limiting market downside risk FAVORABLE INDUSTRY BACKDROP • Historically-low orderbook for containerships , concentrated in larger vessels, and idle fleet capacity of 3.2%, including ships being retro- fitted for scrubbers ✓ • No reduction in utilization despite global trade war headwinds over the past year 3 (1) Inclusive of extended Coustas family interest. .
Danaos by the Numbers $1.34bn 37.3% Contracted cash flow through 2028 Ownership through founder / management 4.6x $2.1bn Enterprise value Net debt to Adjusted EBITDA $311mn 2.7x Reduction in leverage over the last two years Adjusted EBITDA 2019 4
40+ Year Legacy of Leadership in Container Shipping 1987 2006 2010 Dr. John Coustas steps into NYSE IPO $200mm equity Chief Executive role raise Raised $200mm 1972 2005 2018 to present Founded by Dimitris Incorporation in Marshall Refinancing, share Coustas Islands offering and growth Market Share 1, 2 Among Top Public Containership Owners Globally By TEU, thousands Publicly Traded Pure-Play Operators Financial / Independent Owners 910 472 474 459 410 369 343 253 253 248 230 226 223 207 200 200 183 195 Seaspan Costamare Danaos Global Ship Lease Navios MPC Group Offen, Claus Peter Shoei Kisen Zodiac Maritime BoCom Leasing Fredriksen Group Eastern Pacific Shpg Peter Dohle / Zeaborn Schulte Group Nissen Kaiun Minsheng Financial Norddeutsche R.H. Hammonia Leasing Schuldt 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), Lodestar (6,422), Leo C (6,422) and Bellta (8,533). (2) Global Ship Lease includes Pro Forma TEU for Poseidon / Technomar Acquisition which closed November 15, 2018 5
Diverse, High-Quality Fleet 8x Fleet Overview (1) 3,500 TEU 11x Average Age: 12.0 years Remaining Charter Term: 0.5 years 2,200 – 2,600 TEU 1% 1% Average Age: 21.4 years 2% Remaining Charter Term: 0.3 years 10x 4,300 – 5,500 TEU Average Age: 12.2 years Remaining Charter Term: 0.6 years 24% 5x 37% Contracted 13,100 TEU Revenue Average Age: 7.7 years 9x Remaining Charter Term: 4.3 years Contribution (1) 6,400 – 6,500 TEU Average Age: 11.4 years Remaining Charter Term: 3.7 years 9% 26% 8x 5x Gemini Vessels 8,500 TEU 2x Average Age: 10.4 years 9,600 - 10,100 TEU Remaining Charter Term: 3.6 years Average Age: 10.5 years 5,500 TEU Remaining Charter Term: 2.6 years 2x 6,500 TEU 1x 8,500 TEU Note: Figures as of December 31 st 2019. Please refer to appendix for additional detail on pages 28 and 29. (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). 6
Balanced Counterparty Danaos by the Numbers Concentration Length of Customer Relationships Noted in Italics Overview of Customer Base • Long history chartering to most major global Other liner companies • Engaged with container alliances on deployments across major and minor global routes 14% • Have collaborated with customers in ordering (20 years) 46 newbuildings in excess of 300,000 TEU over 29% 7% our history at a cost in excess of $4 billion (40+ years) Close Alignment Working with Customers 8% • Consistently developing operating expertise to (15 years) obtain and retain customers • Delivering on- time new ships to customers’ 9% 18% specifications (34 years) • Prioritizing reputation, customer service and 15% safety (25 years) • Maintain a strategic focus on regular engagement with customers, particularly in (37 years) regards to new customer needs and technological advancements Note: Distributed by TEU. 7
Strong Charter Coverage through 2024 Shorter charter durations limited to vessels in more liquid chartering markets Revenue-Weighted Charter Coverage (1) 86% 74% 59% 42% 5% 2020 2021 2022 2023 2024+ Contracted Revenue by Year mm $ by Asset Class $399 $357 $278 $188 $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 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. 8
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