February 11, 2013 at 16:05 PM EST
Danaos Corporation Reports Fourth Quarter and Full Year Results for the Year Ended December 31, 2012

ATHENS, GREECE -- (Marketwire) -- 02/11/13 -- Danaos Corporation ("Danaos") (NYSE: DAC), a leading international owner of containerships, today reported unaudited results for the quarter and full year ended December 31, 2012.

Highlights for the Fourth Quarter and Full Year Ended December 31, 2012:

  • Operating revenues of $151.8 million for the three months ended December 31, 2012 compared to $128.3 million for the three months ended December 31, 2011, an increase of 18.3%. Operating revenues of $589.0 million for the year ended December 31, 2012 compared to $468.1 million for the year ended December 31, 2011, an increase of 25.8%.
  • Adjusted EBITDA(1) of $112.4 million for the three months ended December 31, 2012 compared to $88.8 million for the three months ended December 31, 2011, an increase of 26.6%. Adjusted EBITDA(1) of $431.7 million for the year ended December 31, 2012 compared to $318.6 million for the year ended December 31, 2011, an increase of 35.5%.
  • Adjusted net income(1) of $11.7 million, or $0.11 per share, for the three months ended December 31, 2012 compared to $16.1 million, or $0.15 per share, for the three months ended December 31, 2011. Adjusted net income(1) of $60.5 million, or $0.55 per share, for the year ended December 31, 2012 compared to $61.2 million, or $0.56 per share, for the year ended December 31, 2011.
  • We recorded an impairment loss of $129.6 million for thirteen of our older vessels, which are currently either on lay-up or on short-term charters expiring in 2013.
  • We managed to improve our daily vessel operating cost by 7.3%, to $5,857 per day for the three months ended December 31, 2012 compared to $6,318 per day for the three months ended December 31, 2011.
  • The remaining average charter duration of our fleet was 9.7 years as of December 31, 2012 (weighted by aggregate contracted charter hire).
  • Total contracted operating revenues were $4.9 billion as of December 31, 2012, through 2028.
  • Charter coverage of 81% for the next 12 months in terms of contracted operating days and 97% in terms of operating revenues.




               Three and Twelve Months Ended December 31, 2012
                              Financial Summary
(Expressed in thousands of United States dollars, except per share amounts):

                    Three months   Three months Twelve months  Twelve months
                       ended          ended         ended          ended
                    December 31,   December 31,  December 31,   December 31,
                   -------------  ------------- -------------  -------------
                        2012           2011          2012           2011
                   -------------  ------------- -------------  -------------
                                          (unaudited)
Operating revenues $     151,826  $     128,344 $     589,009  $     468,101
Net (loss)/income  $    (116,478) $       9,058 $    (105,204) $      13,437
Adjusted net
 income(1)         $      11,699  $      16,129 $      60,453  $      61,164
(Losses)/earnings
 per share         $       (1.06) $        0.08 $       (0.96) $        0.12
Adjusted earnings
 per share(1)      $        0.11  $        0.15 $        0.55  $        0.56
Weighted average
 number of shares
 (in thousands)          109,622        109,142       109,613        109,045
Adjusted EBITDA(1) $     112,368  $      88,810 $     431,690  $     318,607

(1) Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income/(loss) to adjusted net income and net income to adjusted EBITDA.

Danaos' CEO Dr. John Coustas commented:

Despite the challenging container market environment, in 2012 we managed to maintain the Company's profitability at the 2011 levels. Adjusted Net Income for 2012 came in at $60.5 million or 55 cents per share, compared to $61.2 million or 56 cents per share for 2011, effectively remaining stable, while Adjusted EBITDA increased by 35.5% to $431.7 million for 2012 compared to $318.6 million in 2011 as a result of our fleet expansion program that was concluded this year.

Demand & supply fundamentals for 2012 confirm that this has been a sluggish year, with supply outpacing demand by almost 3%. Although there are signs that this disparity may be somehow moderated in the coming quarters, we still expect supply to outpace demand in 2013.

Mainlane trade volumes in 2012 expanded by a mere 1% on average, while the Asia - Europe trade contracted by almost 3.5%, mainly due to the ongoing weakness in European consumer demand. At the same time, this is the route that has faced the biggest inflow of new tonnage with deliveries of the large post 10,000 TEU containerships. We expect this trend will continue in 2013 as vessels ordered during the early 2011 "mini-boom" are being delivered.

On the other hand, it was non-mainlane trade volumes that to a certain extent "saved the day" expanding by around 6.5% mainly on the back of strong intra-Asia and North-South trade growth. This growth facilitated cascading that helped ease the supply pressure in the mainlane trades but at the expense of the charter market as liner operators have been increasingly utilizing their own tonnage and are generally less inclined to renew expiring charters. It has to be noted that almost 85% of idle capacity, which currently stands at around 5% of the world fleet is now charter owned tonnage. This of course also reflects on us, as we currently have 7 vessels on cold lay-up.

In summary, the combined effect of the above is that the weakness of growth on the longer haul mainlanes has resulted in global TEU-mile growth increasing by just 4% in 2012, with supply increasing by almost 7% for the same period, while this imbalance has mostly affected asset values, time-charter earnings and employment potential of the mid-size vessels. In this context we are currently investigating to make selective acquisitions within 2013 to renew part of our older fleet.

The good news is that liner operators have so far managed the situation effectively with a variety of cost reduction initiatives as well as supply control strategies such as service rationalization, idling of tonnage, scrapping and extra slow steaming through which they have managed to maintain freight rates at decent levels. This is positive, as the financial health of the liner companies is important for containership lessors like us, since the majority of our tonnage is deployed under long-term time charters.

With a strong 97% contract coverage and only 3% of our current revenue stream at stake through re-chartering over the next 12 months, we are largely insulated from the effects of the weak charter market while expect our EBITDA and free cash flow generation to be safeguarded.

At the same time, we continue to be one of the most cost competitive operators in the market. Our daily vessel operating expenses actually came down by 5.4% year-on-year to $5,907 per day for 2012 from $6,246 per day in 2011.

With a resilient business model both from an operating and financial standpoint, we will continue to manage our fleet efficiently, while in 2013 we will focus on rapidly de-leveraging the company and creating value for our shareholders.

Three months ended December 31, 2012 compared to the three months ended December 31, 2011

During the three months ended December 31, 2012, Danaos had an average of 64.0 containerships compared to 57.9 containerships for the same period in 2011. Our fleet utilization declined to 90.4% in the three months ended December 31, 2012 compared to 96.9% in the same period of 2011, mainly due to the 501 days for which seven of our vessels were off-charter and laid-up in the fourth quarter of 2012 compared to 138 days for which two of our vessels were off-charter and laid-up in the fourth quarter of 2011. During the three months ended December 31, 2012, our fleet utilization for the fleet under employment was 98.8% (which excludes the vessels on lay up).

Our adjusted net income was $11.7 million, or $0.11 per share, for the three months ended December 31, 2012 compared to $16.1 million, or $0.15 per share, for the three months ended December 31, 2011. We have adjusted our net income in the fourth quarter of 2012 for an impairment loss on certain of our older vessels of $129.6 million, unrealized gains on derivatives of $7.6 million, realized losses on swaps of $1.4 million attributable to our over-hedging position (as described below), as well as a non-cash expense of $4.8 million for fees related to our comprehensive financing plan (comprised of non-cash, amortizing and accrued finance fees). Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

The decrease of 27.3%, or $4.4 million, in adjusted net income for the three months ended December 31, 2012 compared to the three months ended December 31, 2011, was mainly attributable to the softening of the charter market during the last year. Although the vessel additions, with associated contracted long-term charters, to our fleet over the course of the last year were accretive to the bottom line, the soft charter market has resulted in the cold lay-up of 7 vessels until the end of 2012 (one of which we subsequently agreed to sell) and has also affected the re-chartering of certain vessels in 2012 that currently run at operating break even levels, while they had a positive contribution to operating income during the 4th quarter of 2011.

On a non-adjusted basis our net loss was $116.5 million, or $1.06 per share, for the fourth quarter of 2012, compared to net income of $9.1 million, or $0.08 per share, for the fourth quarter of 2011, which is mainly attributable to the impairment loss we incurred in the current quarter on certain of our older vessels.

As a result of our comprehensive financing plan, we were in an over-hedged position under our cash flow interest rate swaps, which was due to deferred progress payments to shipyards, cancellation of three newbuildings in 2011, the replacement of variable interest rate debt with fixed interest rate vendor financing and equity proceeds from our private placement in 2010, all of which reduced initially forecasted variable interest rate debt and resulted in notional cash flow interest rate swaps being above our variable interest rate debt eligible for hedging. The over-hedged position described above was eliminated during the fourth quarter of 2012.

As of December 31, 2012, we recorded an impairment loss of $129.6 million for thirteen of our older vessels. The indicators of potential impairment of these vessels included volatility in the spot market and decline in the vessels' market values, as well as the potential impact the current charter marketplace may have on the future operation of the older vessels in our fleet, which are either laid up, or on short-term charters.

Operating Revenue
Operating revenue increased 18.3%, or $23.5 million, to $151.8 million in the three months ended December 31, 2012, from $128.3 million in the three months ended December 31, 2011. The increase was primarily attributable to the addition of six vessels to our fleet, as follows:


Vessel Name                   Vessel Size (TEU)     Date Delivered
------------------------  ------------------------  ------------------------
HyundaiTogether                    13,100           February 16, 2012
CMA CGM Melisande                   8,530           February 28, 2012
Hyundai Tenacity                   13,100           March 8, 2012
Hyundai Smart                      13,100           May 3, 2012
Hyundai Speed                      13,100           June 7, 2012
Hyundai Ambition                   13,100           June 29, 2012

These additions to our fleet contributed revenues of $31.8 million during the three months ended December 31, 2012 (552 operating days in total).

Furthermore, operating revenues for the three months ended December 31, 2012, reflect:

  • $4.5 million of incremental revenues in the three months ended December 31, 2012 compared to the same period of 2011, related to two 8,530 TEU containerships (the CMA CGM Bianca and the CMA CGM Samson, which were added to our fleet on October 26, 2011 and December 15, 2011, respectively).

  • $1.2 million decrease in revenues in the three months ended December 31, 2012 compared to the same period of 2011, related to the sale of one 2,130 TEU containership, the Montreal, on April 27, 2012.

  • $11.6 million decrease in revenues in the three months ended December 31, 2012 compared to the same period of 2011. This was mainly attributable to an increase in off-hire days of 398 days, to 565 days in the three months ended December 31, 2012, from 167 days in the three months ended December 31, 2011 ($6.3 million reduction in revenue in relation to the vessels that were off-charter and laid up for 501 days during the fourth quarter of 2012 compared to 138 days during the fourth quarter of 2011), as well as re-chartering of certain vessels in 2012 at lower charter rates compared to what these vessels were earning during the 4th quarter of 2011.

Vessel Operating Expenses
Vessel operating expenses decreased 3.8%, or $1.2 million, to $30.5 million in the three months ended December 31, 2012, from $31.7 million in the three months ended December 31, 2011. The reduction is mainly attributable to the reduced costs of 5.3 vessels on average which were on lay-up during the fourth quarter of 2012 compared to 1.4 vessels on average during the fourth quarter of 2011. The overall decrease in vessel operating expenses was offset in part by the increased average number of vessels in our fleet during the three months ended December 31, 2012 compared to the same period of 2011.

The average daily operating cost per vessel was reduced to $5,857 for the three months ended December 31, 2012, from $6,318 for the three months ended December 31, 2011 (excluding those vessels on lay-up).

Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.

Depreciation
Depreciation expense increased 30.1%, or $8.9 million, to $38.5 million in the three months ended December 31, 2012, from $29.6 million in the three months ended December 31, 2011. The increase in depreciation expense was due to the increased average number of vessels in our fleet (with higher cost base) during the three months ended December 31, 2012 compared to the same period of 2011.

Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased 58.3%, or $0.7 million, to $1.9 million in the three months ended December 31, 2012, from $1.2 million in the three months ended December 31, 2011. The increase reflects increased dry-docking and special survey costs incurred within the year and amortized during the three months ended December 31, 2012 compared to the same period of 2011.

General and Administrative Expenses
General and administrative expenses decreased 25.7%, or $1.8 million, to $5.2 million in the three months ended December 31, 2012, from $7.0 million in the same period of 2011. The decrease was mainly the result of a non-cash stock based compensation expense of $2.1 million recorded in the fourth quarter of 2011 compared to $0.1 million in the fourth quarter of 2012. Furthermore, fees to our Manager increased by $0.4 million in the three months ended December 31, 2012 compared to the same period of 2011, due to the increase in the average number of vessels in our fleet.

Other Operating Expenses
Other Operating Expenses includes Voyage Expenses

Voyage Expenses
Voyage expenses increased by $0.6 million, to $3.5 million in the three months ended December 31, 2012, from $2.9 million in the three months ended December 31, 2011. The increase was mainly the result of increased commissions to our Manager, due to the increase in the average number of vessels in our fleet and the increase in the commission on gross charter hires to our Manager, to 1.0% from 0.75%, effective January 1, 2012.

Interest Expense and Interest Income
Interest expense increased by 45.6%, or $7.3 million, to $23.3 million in the three months ended December 31, 2012, from $16.0 million in the three months ended December 31, 2011. The change in interest expense was due to the increase in our average debt by $420.4 million, to $3,402.8 million in the three months ended December 31, 2012, from $2,982.4 million in the three months ended December 31, 2011. Furthermore, the financing of our newbuilding program resulted in $3.2 million of interest being capitalized, rather than such interest being recognized as an expense, for the three months ended December 31, 2011 compared to nil interest being capitalized for the three months ended December 31, 2012, following the completion of our newbuilding program in June 2012.

Interest income was $0.4 million in the three months ended December 31, 2012 compared to $0.3 million in the three months ended December 31, 2011.

Other finance costs, net
Other finance costs, net, increased by $1.4 million, to $5.1 million in the three months ended December 31, 2012, from $3.7 million in the three months ended December 31, 2011. This increase was mainly due to the $0.7 million increase in amortizing finance fees (which were deferred and are amortized over the term of the respective credit facilities), as well as increased accrued finance fees of $0.5 million (which accrete in our Statement of Income over the term of the respective facilities) in the three months ended December 31, 2012 compared to the three months ended December 31, 2011.

Other income/(expenses), net
Other income/(expenses), net, was negligible in the three months ended December 31, 2012 and 2011, respectively.

Unrealized gain/(loss) on derivatives
Unrealized gain/(loss) on interest rate swap hedges was a gain of $7.6 million in the three months ended December 31, 2012 compared to a gain of $7.1 million in the three months ended December 31, 2011. The unrealized gains were attributable to hedge accounting ineffectiveness, mark to market valuation of our swaps. Furthermore, we reclassified unrealized losses from Accumulated Other Comprehensive Loss to our earnings due to the discontinuation of hedge accounting since July 1, 2012.

Realized (loss)/gain on derivatives
Realized loss on interest rate swap hedges, increased by $3.8 million, to $38.7 million in the three months ended December 31, 2012, from $34.9 million in the three months ended December 31, 2011. This increase is mainly attributable to $6.4 million of realized losses that had been deferred during the 4th quarter of 2011 (as discussed below) and were not deferred in the current quarter, partially offset by the lower average notional amount of swaps during the three months ended December 31, 2012 compared to the same period in 2011 which resulted in lower realized losses on derivatives of $2.6 million during the 4th quarter of 2012.

Following the delivery of all our newbuildings, no realized losses on cash flow hedges were deferred during the three months ended December 31, 2012. During the three months ended December 31, 2011, realized losses on cash flow hedges of $6.4 million were deferred in "Accumulated Other Comprehensive Loss", rather than being recognized as expenses, and are being reclassified into earnings over the depreciable lives of these vessels that were under construction and financed by loans with interest rates that were hedged by our interest rate swap contracts. The table below provides an analysis of the items discussed above, and which were recorded in the three months ended December 31, 2012 and 2011:


                                                Three months   Three months
                                                   ended          ended
                                                December 31,   December 31,
                                               -------------  -------------
                                                    2012           2011
                                               -------------  -------------
                                                       (in millions)
Total realized losses of swaps                 $       (38.7) $       (41.3)
Realized losses of swaps deferred in OCL                  --            6.4
                                               -------------  -------------
  Realized losses of swaps expensed in P&L             (38.7)         (34.9)
Realized losses attributable to overhedging              1.4            8.7
                                               -------------  -------------
  Adjusted realized losses attributable to
   hedged debt                                 $       (37.3) $       (26.2)
                                               =============  =============

Adjusted EBITDA
Adjusted EBITDA increased 26.6%, or $23.6 million, to $112.4 million in the three months ended December 31, 2012, from $88.8 million in the three months ended December 31, 2011. Adjusted EBITDA for the fourth quarter of 2012, is adjusted for an impairment loss of $129.6 million, unrealized gain on derivatives of $7.6 million and realized losses on derivatives of $37.7 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Twelve months ended December 31, 2012 compared to the twelve months ended December 31, 2011

During the twelve months ended December 31, 2012, Danaos had an average of 62.6 containerships compared to 54.9 containerships for the same period in 2011. Our fleet utilization declined to 93.0% in the twelve months ended December 31, 2012 compared to 97.6% in the same period in 2011, mainly due to the 1,349 days for which certain of our vessels were off-charter and laid-up by us in the twelve months ended December 31, 2012 compared to 155 days in the twelve months ended December 31, 2011. During the twelve months ended December 31, 2012, our fleet utilization for the fleet under employment was 98.8% (which excludes the laid up vessels).

Our adjusted net income was $60.5 million, or $0.55 per share, for the twelve months ended December 31, 2012 compared to $61.2 million, or $0.56 per share, for the twelve months ended December 31, 2011. We have adjusted our net income in the twelve months ended December 31, 2012, for an impairment loss of $129.6 million, unrealized losses on derivatives of $0.7 million, realized losses on swaps of $19.0 million attributable to our over-hedging position, as well as a non-cash expense of $17.1 million for fees related to our comprehensive financing plan (comprised of non-cash, amortizing and accrued finance fees) and a gain on sale of vessel of $0.8 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.

Adjusted net income decreased by 1.1%, or $0.7 million, in the twelve months ended December 31, 2012 compared to the twelve months ended December 31, 2011. Although the vessel additions to our fleet over the course of the last year was accretive to the bottom line, the soft charter market has resulted in the cold lay-up of 7 vessels until the end of 2012 (one of which we subsequently agreed to sell) and has also affected the re-chartering of certain vessels that currently run at operating breakeven levels, while they had a positive contribution to earnings during 2011.

Furthermore, the decrease was attributable to an increase in realized losses on our interest rate swap contracts (after the adjustment for the over-hedging portion), as well as increased interest expense (mainly due to the higher average indebtedness and the reduced interest being capitalized in 2012 following the completion of our newbuilding program in June 2012) during the twelve months ended December 31, 2012 compared to the same period in 2011, which was partially off-set by increased Income from Operations.

On a non-adjusted basis our net loss was $105.2 million, or $0.96 per share, for the twelve months ended December 31, 2012, compared to net income of $13.4 million, or $0.12 per share, for the twelve months ended December 31, 2011, which is mainly attributable to the impairment loss we incurred in the 4th quarter of 2012 on certain of our older vessels.

On July 1, 2012, we elected to prospectively de-designate interest rate swaps for which we were applying hedge accounting treatment due to the compliance burden associated with this accounting policy. As a result, all changes in the fair value of our interest rate swaps will be recorded in earnings under "Unrealized (Losses)/Gains on Derivatives" from the de-designation date forward. In addition, unrealized losses in Accumulated Other Comprehensive Loss associated with the previously designated cash flow interest rate swaps will be reclassified to earnings as the respective interest payments are recognized in earnings.

Discontinuation of hedge accounting increases the potential volatility in our reported earnings due to the recognition of non-cash fair value movements of our interest rate swaps directly to our earnings, however our adjusted earnings will not be affected.

Operating Revenue
Operating revenue increased 25.8%, or $120.9 million, to $589.0 million in the twelve months ended December 31, 2012, from $468.1 million in the twelve months ended December 31, 2011. The increase was primarily attributable to the addition of six vessels to our fleet, as follows:


Vessel Name                   Vessel Size (TEU)     Date Delivered
------------------------  ------------------------  ------------------------
Hyundai Together                   13,100           February 16, 2012
CMA CGM Melisande                   8,530           February 28, 2012
Hyundai Tenacity                   13,100           March 8, 2012
Hyundai Smart                      13,100           May 3, 2012
Hyundai Speed                      13,100           June 7, 2012
Hyundai Ambition                   13,100           June 29, 2012

These additions to our fleet contributed revenues of $88.8 million during the twelve months ended December 31, 2012 (1,564 operating days in total).

Furthermore, operating revenues for the twelve months ended December 31, 2012, reflect:

  • $64.0 million of incremental revenues in the twelve months ended December 31, 2012 compared to the same period of 2011, related to two 3,400 TEU containerships (the Hanjin Algeciras and the Hanjin Constantza, which were added to our fleet on January 26, 2011 and April 15, 2011, respectively), three 10,100 TEU containerships (the Hanjin Germany, the Hanjin Italy and the Hanjin Greece, which were added to our fleet on March 10, 2011, April 6, 2011 and May 4, 2011, respectively) and four 8,530 TEU containerships (the CMA CGM Attila, the CMA CGM Tancredi, the CMA CGM Bianca and the CMA CGM Samson, which were added to our fleet on July 8, 2011, August 22, 2011, October 26, 2011 and December 15, 2011, respectively).

  • $2.4 million decrease in revenues in the twelve months ended December 31, 2012 compared to the same period in 2011, related to the sale of one 2,130 TEU containership, the Montreal, on April 27, 2012.

  • $29.5 million decrease in revenues in the twelve months ended December 31, 2012 compared to the same period of 2011. This was mainly attributable to increased off-hire days by 1,136 days, to 1,613 days in the twelve months ended December 31, 2012, from 477 days in the twelve months ended December 31, 2011 ($18.5 million reduction in revenue in relation to certain vessels that were off-charter and laid up for 1,349 days during the twelve months ended December 31, 2012 compared to 155 days during the twelve months ended December 31, 2011).

Vessel Operating Expenses
Vessel operating expenses increased 3.6%, or $4.3 million, to $123.4 million in the twelve months ended December 31, 2012, from $119.1 million in the twelve months ended December 31, 2011. The increase is mainly attributable to the increased average number of vessels in our fleet during the twelve months ended December 31, 2012 compared to the same period of 2011. This overall increase was offset in part by the lower average daily operating cost per vessel of $5,907 for the twelve months ended December 31, 2012 compared to $6,246 for the twelve months ended December 31, 2011 (excluding vessels on lay-up).

Depreciation & Amortization
Depreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.

Depreciation
Depreciation expense increased 35.5%, or $37.7 million, to $143.9 million in the twelve months ended December 31, 2012, from $106.2 million in the twelve months ended December 31, 2011. The increase in depreciation expense was due to the increased average number of vessels in our fleet (with higher cost base) during the twelve months ended December 31, 2012 compared to the same period of 2011.

Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased 5.2%, or $0.3 million, to $6.1 million in the twelve months ended December 31, 2012, from $5.8 million in the twelve months ended December 31, 2011. The increase reflects increased dry-docking and special survey costs incurred and amortized during the twelve months ended December 31, 2012 compared to the same period of 2011.

General and Administrative Expenses
General and administrative expenses decreased 2.9%, or $0.6 million, to $20.4 million in the twelve months ended December 31, 2012, from $21.0 million in the same period of 2011. The decrease was mainly the result of a non-cash stock based compensation expense of $2.2 million recorded in the twelve months ended December 31, 2011 compared to $0.1 million in the same period of 2012. Furthermore, fees to our Manager increased by $1.9 million, due to the increase in the average number of vessels in our fleet.

Other Operating Expenses
Other Operating Expenses includes Voyage Expenses

Voyage Expenses
Voyage expenses increased by $2.7 million, to $13.5 million in the twelve months ended December 31, 2012, from $10.8 million in the twelve months ended December 31, 2011. The increase was the result of increased commissions to our Manager by $2.4 million, due to the increase in the average number of vessels in our fleet and the increase in the commission on gross charter hires to our Manager, to 1.0% from 0.75%, effective January 1, 2012, as well as increased other voyage expenses due to the increase in the average number of vessels in the twelve months ended December 31, 2012 compared to the same period of 2011.

Interest Expense and Interest Income
Interest expense increased by 58.4%, or $32.2 million, to $87.3 million in the twelve months ended December 31, 2012, from $55.1 million in the twelve months ended December 31, 2011. The change in interest expense was due to the increase in our average debt by $495.3 million, to $3,308.3 million in the twelve months ended December 31, 2012, from $2,813.0 million in the twelve months ended December 31, 2011, as well as the increased average LIBOR payable on interest under our credit facilities in the twelve months ended December 31, 2012 compared to the twelve months ended December 31, 2011. Furthermore, the financing of our newbuilding program resulted in $3.7 million of interest being capitalized, rather than such interest being recognized as an expense, for the twelve months ended December 31, 2012 compared to $16.1 million of capitalized interest for the twelve months ended December 31, 2011.

Interest income was $1.6 million in the twelve months ended December 31, 2012 compared to $1.3 million in the twelve months ended December 31, 2011.

Other finance costs, net
Other finance costs, net, increased by $3.5 million, to $18.1 million in the twelve months ended December 31, 2012, from $14.6 million in the twelve months ended December 31, 2011. This increase was due to a $4.6 million increase in amortization in relation to finance fees (which were deferred and are amortized over the term of the respective credit facilities) in the twelve months ended December 31, 2012 compared to the same period in 2011, as well as a $1.2 million increase in accrued finance fees (which accrete in our Statement of Income over the term of the respective facilities) in the twelve months ended December 31, 2012 compared to the same period in 2011, which was partially offset by an expense of $2.3 million recorded in the twelve months ended December 31, 2011, in relation to non-cash changes in fair value of warrants, which did not recur in the twelve months ended December 31, 2012.

Other income/(expenses), net
Other income/(expenses), net, was income of $0.8 million in the twelve months ended December 31, 2012, compared to an expense of $2.0 million in the twelve months ended December 31, 2011. This was mainly the result of legal and advisory fees of $2.3 million related to preparing and structuring the comprehensive financing plan, which were recorded during the twelve months ended December 31, 2011 and did not recur in the twelve months ended December 31, 2012.

Unrealized (loss)/gain on derivatives
Unrealized (loss)/gain on interest rate swap hedges was a loss of $0.7 million in the twelve months ended December 31, 2012, compared to a gain of $9.0 million in the twelve months ended December 31, 2011, which is attributable to hedge accounting ineffectiveness, mark to market valuation of our swaps and reclassification of unrealized losses from Accumulated Other Comprehensive Loss to our earnings (due to the discontinuation of hedge accounting from July 1, 2012).

As discussed above, on July 1, 2012, we elected to prospectively de-designate interest rate swaps for which we were applying hedge accounting treatment due to the compliance burden associated with this accounting policy.

Realized (loss)/gain on derivatives
Realized loss on interest rate swap hedges, increased by $24.1 million, to $154.4 million in the twelve months ended December 31, 2012, from $130.3 million in the twelve months ended December 31, 2011. The increase is attributable to the realized losses being deferred for the respective periods (as discussed below), which is partially offset by the higher floating LIBOR rates during the twelve months ended December 31, 2012 compared to the same period of 2011.

Realized losses on cash flow hedges of $7.0 million and $31.3 million in the twelve months ended December 31, 2012 and 2011, respectively, were deferred in "Accumulated Other Comprehensive Loss", rather than such realized losses being recognized as expenses, and will be reclassified into earnings over the depreciable lives of the vessels under construction which were financed by loans with interest rates that have been hedged by our interest rate swap contracts. The reduction of the deferred realized losses is attributable to the gradual delivery of all our vessels under construction through June 2012, when our newbuilding program was completed. The table below provides an analysis of the items discussed above, and which were recorded in the twelve months ended December 31, 2012 and 2011:


                                               Twelve months  Twelve months
                                                   ended          ended
                                                December 31,   December 31,
                                               -------------  -------------
                                                    2012           2011
                                               -------------  -------------
                                                       (in millions)
Total realized losses of swaps                 $      (161.4) $      (161.6)
Realized losses of swaps deferred in OCL                 7.0           31.3
                                               -------------  -------------
  Realized losses of swaps expensed in P&L            (154.4)        (130.3)
Realized losses attributable to overhedging             19.0           38.9
                                               -------------  -------------
  Adjusted realized losses attributable to
   hedged debt                                 $      (135.4) $       (91.4)
                                               =============  =============

Adjusted EBITDA
Adjusted EBITDA increased 35.5%, or $113.1 million, to $431.7 million in the twelve months ended December 31, 2012, from $318.6 million in the twelve months ended December 31, 2011. Adjusted EBITDA for the twelve months ended December 31, 2012, is adjusted for an impairment loss of $129.6 million, unrealized loss on derivatives of $0.7 million, realized losses on derivatives of $150.9 million and a gain on sale of vessel of $0.8 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Recent news
On January 17, 2013, we entered into an agreement to sell the Independence for a gross sale consideration of $7.0 million. We expect the vessel to be delivered to its buyers in the second half of February 2013. The Independence is 26 years old and has been on cold lay-up since November 13, 2011.

Conference Call and Webcast
On Tuesday, February 12, 2013, at 9:00 A.M. EST, the Company's management will host a conference call to discuss the results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (US Toll Free Dial In), 0800 953 0329 (UK Toll Free Dial In) or +44 (0)1452 542 301 (Standard International Dial In). Please quote "Danaos" to the operator.

A telephonic replay of the conference call will be available until February 19, 2013 by dialing 1 866 247 4222 (US Toll Free Dial In), 0800 953 1533 (UK Toll Free Dial In) or +44 (0)1452 550 000 (Standard International Dial In). Access Code: 1186615#

There will also be a live and then archived webcast of the conference call through the Danaos website (www.danaos.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About Danaos Corporation
Danaos Corporation is an international owner of containerships, chartering its vessels to many of the world's largest liner companies. Our current fleet of 64 containerships aggregating 363,049 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Danaos is one of the largest US listed containership companies based on fleet size. The Company's shares trade on the New York Stock Exchange under the symbol "DAC".

Forward-Looking Statements
Matters discussed in this release may constitute forward-looking statements within the meaning of the safeharbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although Danaos Corporation believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, Danaos Corporation cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, shipyard performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in Danaos Corporation's operating expenses, including bunker prices, dry-docking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by Danaos Corporation with the U.S. Securities and Exchange Commission.

Visit our website at www.danaos.com

Appendix

Fleet Utilization

Danaos had 508 unscheduled off-hire days in the fourth quarter of 2012 (including 501 days related to the Marathonas, the Independence, the Henry, the Pride, the Duka, the Messologi and the Honour, which have been off-charter and laid up). The following table summarizes vessel utilization and the impact of the off-hire days on the Company's revenue relating to the last four quarters.


                             First    Second     Third    Fourth
Vessel Utilization          Quarter   Quarter   Quarter   Quarter
(No. of Days)                2012      2012      2012      2012      Total
                           --------  --------  --------  --------  --------
Ownership Days                5,471     5,663     5,888     5,888    22,910
Less Off-hire Days:
  Scheduled Off-hire Days       (49)      (45)      (58)      (57)     (209)
  Other Off-hire Days          (254)     (266)     (376)     (508)   (1,404)
                           --------  --------  --------  --------  --------
Operating Days                5,168     5,352     5,454     5,323    21,297
                           ========  ========  ========  ========  ========
Vessel Utilization             94.5%     94.5%     92.6%     90.4%     93.0%

Operating Revenues(in
 '000s of US Dollars)      $134,237  $146,657  $156,289  $151,826  $589,009
Average Gross Daily
 Charter Rate              $ 25,975  $ 27,402  $ 28,656  $ 28,523  $ 27,657

Fleet List

The following table describes in detail our fleet deployment profile as of February 11, 2013.


                           Vessel Size
Vessel Name                   (TEU)     Year Built  Expiration of Charter(1)
------------------------- ------------ ------------ ------------------------
Containerships
-------------------------

Hyundai Ambition             13,100        2012     June 2024
Hyundai Speed                13,100        2012     June 2024
Hyundai Smart                13,100        2012     May 2024
Hyundai Tenacity             13,100        2012     March 2024
Hyundai Together             13,100        2012     February 2024
Hanjin Italy                 10,100        2011     April 2023
Hanjin Germany               10,100        2011     March 2023
Hanjin Greece                10,100        2011     May 2023
CSCL Le Havre                 9,580        2006     September 2018
CSCL Pusan                    9,580        2006     July 2018
CMA CGM Melisande             8,530        2012     November 2023
CMA CGM Attila                8,530        2011     April 2023
CMA CGM Tancredi              8,530        2011     May 2023
CMA CGM Bianca                8,530        2011     July 2023
CMA CGM Samson                8,530        2011     September 2023
CSCL America                  8,468        2004     September 2016
CSCL Europe                   8,468        2004     June 2016
CMA CGM Moliere(2)            6,500        2009     August 2021
CMA CGM Musset(2)             6,500        2010     February 2022
CMA CGM Nerval(2)             6,500        2010     April 2022
CMA CGM Rabelais(2)           6,500        2010     June 2022
YM Mandate                    6,500        2010     January 2028
CMA CGM Racine(2)             6,500        2010     July 2022
YM Maturity                   6,500        2010     April 2028
Marathonas                    4,814        1991     Laid-up
Messologi                     4,814        1991     Laid-up
Mytilini                      4,814        1991     March 2013
Hyundai Commodore(3)          4,651        1992     February 2013
Duka(4)                       4,651        1992     Laid-up
Hyundai Federal(5)            4,651        1994     April 2013
SNL Colombo(6)                4,300        2004     March 2019
YM Singapore                  4,300        2004     October 2019
YM Seattle(7)                 4,253        2007     July 2019
YM Vancouver                  4,253        2007     September 2019
Derby D                       4,253        2004     February 2014
Deva                          4,253        2004     December 2013
ZIM Rio Grande                4,253        2008     May 2020
ZIM Sao Paolo                 4,253        2008     August 2020
ZIM Kingston                  4,253        2008     September 2020
ZIM Monaco                    4,253        2009     November 2020
ZIM Dalian                    4,253        2009     February 2021
ZIM Luanda                    4,253        2009     May 2021
Honour                        3,908        1989     Laid-up
Hope                          3,908        1989     July 2013
Hanjin Constantza             3,400        2011     February 2021
Hanjin Algeciras              3,400        2011     November 2020
Hanjin Buenos Aires           3,400        2010     March 2020
Hanjin Santos                 3,400        2010     May 2020
Hanjin Versailles             3,400        2010     August 2020
Pride(8)                      3,129        1988     Laid-up
Lotus                         3,098        1988     July 2013
Independence(9)               3,045        1986     Laid-up
Henry                         3,039        1986     Laid-up
Elbe                          2,917        1991     May 2013
Kalamata                      2,917        1991     August 2013
Komodo                        2,917        1991     August 2013
Hyundai Advance               2,200        1997     June 2017
Hyundai Future                2,200        1997     August 2017
Hyundai Sprinter              2,200        1997     August 2017
Hyundai Stride                2,200        1997     July 2017
Hyundai Progress              2,200        1998     December 2017
Hyundai Bridge                2,200        1998     January 2018
Hyundai Highway               2,200        1998     January 2018
Hyundai Vladivostok           2,200        1997     May 2017

(1) Earliest date charters could expire. Some charters include options to extend their terms.
(2) Vessel subject to charterer's option to purchase vessel after first eight years of time charter term for $78.0 million.
(3) On April 20, 2012, the APL Commodore was renamed to Hyundai Commodore at the request of the charterer of this vessel.
(4) On October 25, 2012, the Hyundai Duke was renamed to Duka.
(5) On January 31, 2012, the APL Federal was renamed to Hyundai Federal at the request of the charterer of this vessel.
(6) On March 18, 2012, the YM Colombo was renamed to SNL Colombo at the request of the charterer of this vessel.
(7) On April 9, 2012, the Taiwan Express was renamed to YM Seattle at the request of the charterer of this vessel.
(8) On July 21, 2012, the SCI Pride was renamed to Pride.
(9) On January 17, 2013, we entered into an agreement to sell the Independence.




                             DANAOS CORPORATION
                 Condensed Statements of Income - Unaudited
(Expressed in thousands of United States dollars, except per share amounts)

                      Three months  Three months    Twelve        Twelve
                          ended         ended    months ended  months ended
                      December 31,  December 31, December 31,  December 31,
                      ------------  ------------ ------------  ------------
                          2012          2011         2012          2011
                      ------------  ------------ ------------  ------------

OPERATING REVENUES    $    151,826  $    128,344 $    589,009  $    468,101

OPERATING EXPENSES
  Vessel operating
   expenses                (30,525)      (31,679)    (123,356)     (119,127)
  Depreciation &
   amortization            (40,396)      (30,750)    (150,008)     (111,978)
  Impairment loss         (129,630)           --     (129,630)           --
  General &
   administrative           (5,202)       (6,982)     (20,379)      (21,028)
  Gain on sale of
   vessels                      --            --          830            --
  Other operating
   expenses                 (3,543)       (2,850)     (13,503)      (10,765)
                      ------------  ------------ ------------  ------------
Income From
 Operations                (57,470)       56,083      152,963       205,203
                      ------------  ------------ ------------  ------------

OTHER EARNINGS
 (EXPENSES)
  Interest income              462           335        1,642         1,304
  Interest expense         (23,288)      (15,958)     (87,340)      (55,124)
  Other finance cost,
   net                      (5,114)       (3,665)     (18,107)      (14,581)
  Other
   income/(expenses),
   net                          48            (5)         811        (1,986)
  Realized
   (loss)/gain on
   derivatives             (38,709)      (34,879)    (154,434)     (130,341)
  Unrealized
   gain/(loss) on
   derivatives               7,593         7,147         (739)        8,962
                      ------------  ------------ ------------  ------------
Total Other Income
 (Expenses), net           (59,008)      (47,025)    (258,167)     (191,766)
                      ------------  ------------ ------------  ------------

Net (Loss)/Income     $   (116,478) $      9,058 $   (105,204) $     13,437
                      ============  ============ ============  ============

(LOSS)/EARNINGS PER
 SHARE
Basic & diluted net
 (loss)/ income per
 share                $      (1.06) $       0.08 $      (0.96) $       0.12
                      ============  ============ ============  ============
Basic & diluted
 weighted average
 number of common
 shares (in thousands
 of shares)                109,622       109,142      109,613       109,045
                      ============  ============ ============  ============



                             Non-GAAP Measures*
      Reconciliation of Net Income to Adjusted Net Income - Unaudited

                      Three months  Three months    Twelve        Twelve
                          ended         ended    months ended  months ended
                      December 31,  December 31, December 31,  December 31,
                      ------------  ------------ ------------  ------------
                          2012          2011         2012          2011
                      ------------  ------------ ------------  ------------
Net (loss)/income     $   (116,478) $      9,058 $   (105,204) $     13,437
Unrealized
 (gain)/loss on
 derivatives                (7,593)       (7,147)         739        (8,962)
Realized loss on
 over-hedging portion
 of derivatives              1,362         8,663       19,042        38,858
Comprehensive
 Financing Plan
 related fees                   --            --           --         2,266
Amortization of
 financing fees &
 finance fees accrued        4,778         3,535       17,076        11,292
Impairment loss            129,630            --      129,630            --
Loss on fair value of
 warrants                       --            --           --         2,253
Stock based
 compensation                   --         2,020           --         2,020
Gain on sale of
 vessels                        --            --         (830)           --
                      ------------  ------------ ------------  ------------
Adjusted Net Income   $     11,699  $     16,129 $     60,453  $     61,164
                      ============  ============ ============  ============
Adjusted Earnings Per
 Share                $       0.11  $       0.15 $       0.55  $       0.56
                      ============  ============ ============  ============
Weighted average
 number of shares          109,622       109,142      109,613       109,045

* 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 and twelve months ended December 31, 2012 and 2011. 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
             (Expressed in thousands of United States dollars)

                                                   As of          As of
                                                December 31,   December 31,
                                               -------------  -------------
                                                    2012           2011
                                               -------------  -------------
ASSETS                                          (Unaudited)    (Unaudited)

CURRENT ASSETS
  Cash and cash equivalents                    $      55,628  $      51,362
  Restricted cash                                      2,821          2,909
  Accounts receivable, net                             3,741          4,176
  Other current assets                                36,483         34,844
                                               -------------  -------------
                                                      98,673         93,291
                                               -------------  -------------
NON-CURRENT ASSETS
  Fixed assets, net                                3,986,138      3,241,951
  Advances for vessels under construction                 --        524,286
  Restricted cash, net of current portion                430             --
  Deferred charges, net                               88,821         99,711
  Fair value of financial instruments                  2,908          3,964
  Other non-current assets                            35,075         24,901
                                               -------------  -------------
                                                   4,113,372      3,894,813
                                               -------------  -------------
TOTAL ASSETS                                   $   4,212,045  $   3,988,104
                                               =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Long-term debt, current portion              $     125,076  $      41,959
  Vendor Financing, current portion                   57,388         10,857
  Accounts payable, accrued liabilities &
   other current liabilities                          52,688         58,254
  Fair value of financial instruments, current
   portion                                           130,100        120,623
                                               -------------  -------------
                                                     365,252        231,693
                                               -------------  -------------
LONG-TERM LIABILITIES
  Long-term debt, net of current portion           3,097,472      2,960,288
  Vendor financing, net of current portion           121,754         54,288
  Fair value of financial instruments, net of
   current portion                                   176,948        291,829
  Other long-term liabilities                         10,315          7,471
                                               -------------  -------------
                                                   3,406,489      3,313,876
                                               -------------  -------------

STOCKHOLDERS' EQUITY
  Common stock                                         1,096          1,096
  Additional paid-in capital                         546,023        545,884
  Accumulated other comprehensive loss              (353,271)      (456,105)
  Retained earnings                                  246,456        351,660
                                               -------------  -------------
                                                     440,304        442,535
                                               -------------  -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $   4,212,045  $   3,988,104
                                               =============  =============



                             DANAOS CORPORATION
              Condensed Statements of Cash Flows - (Unaudited)
             (Expressed in thousands of United States dollars)

                      Three months  Three months    Twelve        Twelve
                          ended         ended    months ended  months ended
                      December 31,  December 31, December 31,  December 31,
                      ------------  ------------ ------------  ------------
                          2012          2011         2012          2011
                      ------------  ------------ ------------  ------------
Operating Activities:
  Net (loss)/income   $   (116,478) $      9,058 $   (105,204) $     13,437
  Adjustments to
   reconcile net
   income to net cash
   provided by
   operating
   activities:
  Depreciation              38,514        29,598      143,938       106,178
  Impairment loss          129,630            --      129,630            --
  Amortization of
   deferred
   drydocking &
   special survey
   costs, finance
   cost and other
   finance fees
   accrued                   6,660         4,687       23,146        17,092
  Stock based
   compensation                100         2,112          139         2,182
  Payments for
   drydocking/special
   survey                   (2,968)         (210)      (9,308)       (7,218)
  Non-cash change in
   fair value of
   warrants                     --            --           --         2,253
  Amortization of
   deferred realized
   losses on cash
   flow interest rate
   swaps                     1,013           529        3,524         1,575
  Realized loss on
   cash flow interest
   rate swaps
   deferred in Other
   Comprehensive Loss           --        (6,413)      (7,035)      (31,320)
  Unrealized
   loss/(gain) on
   derivatives              (7,593)       (7,676)         739       (10,537)
  Gain on sale of
   vessels                      --            --         (830)           --
  Accounts receivable        6,020         1,621          435           (64)
  Other assets,
   current and non-
   current                 (11,641)         (441)     (11,813)      (14,530)
  Accounts payable
   and accrued
   liabilities              (4,665)          751       (2,380)      (15,457)
  Other liabilities,
   current and non-
   current                  (1,069)       (5,262)       1,577        (4,099)
                      ------------  ------------ ------------  ------------
Net Cash provided by
 Operating Activities       37,523        28,354      166,558        59,492
                      ------------  ------------ ------------  ------------

Investing Activities:
  Vessels under
   construction and
   vessels additions           (46)     (190,473)    (375,424)     (644,593)
  Net proceeds from
   sale of vessel               --            --        5,635            --
                      ------------  ------------ ------------  ------------
Net Cash used in
 Investing Activities          (46)     (190,473)    (369,789)     (644,593)
                      ------------  ------------ ------------  ------------

Financing Activities:
  Debt draw downs               --       154,689      266,920       482,286
  Debt repayment           (16,611)       (2,592)     (58,981)      (45,369)
  Deferred costs                --           (70)        (100)      (30,287)
  Increase in
   restricted cash          (2,813)       (2,813)        (342)           (2)
                      ------------  ------------ ------------  ------------
Net Cash (used
 in)/provided by
 Financing Activities      (19,424)      149,214      207,497       406,628
                      ------------  ------------ ------------  ------------
Net
 Increase/(Decrease)
 in cash and cash
 equivalents                18,053       (12,905)       4,266      (178,473)
Cash and cash
 equivalents,
 beginning of period        37,575        64,267       51,362       229,835
                      ------------  ------------ ------------  ------------
Cash and cash
 equivalents, end of
 period               $     55,628  $     51,362 $     55,628  $     51,362
                      ============  ============ ============  ============




              Reconciliation of Net Income to Adjusted EBITDA
             (Expressed in thousands of United States dollars)

                      Three months  Three months    Twelve        Twelve
                          ended         ended    months ended  months ended
                      December 31,  December 31, December 31,  December 31,
                      ------------  ------------ ------------  ------------
                          2012          2011         2012          2011
                      ------------  ------------ ------------  ------------
Net (loss)/income     $   (116,478) $      9,058 $   (105,204) $     13,437
Depreciation                38,514        29,598      143,938       106,178
Amortization of
 deferred drydocking
 & special survey
 costs                       1,882         1,152        6,070         5,800
Amortization of
 deferred finance
 costs and other
 finance fees accrued        4,778         3,535       17,076        11,292
Amortization of
 deferred realized
 losses on interest
 rate swaps                  1,013           529        3,524         1,575
Interest income               (462)         (335)      (1,642)       (1,304)
Interest expense            23,288        15,958       87,340        55,124
Impairment loss            129,630            --      129,630            --
Gain on sale of
 vessels                        --            --         (830)           --
Comprehensive
 Financing Plan
 related fees                   --            --           --         2,266
Stock based
 compensation                  100         2,112          139         2,182
Realized loss on
 derivatives                37,696        34,879      150,910       130,341
Unrealized
 (gain)/loss on
 derivatives                (7,593)       (7,676)         739       (10,537)
Non-cash changes in
 fair value of
 warrants                       --            --           --         2,253
                      ------------  ------------ ------------  ------------
Adjusted EBITDA(1)    $    112,368  $     88,810 $    431,690  $    318,607
                      ============  ============ ============  ============

(1) Adjusted EBITDA represents net income before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs and deferred finance costs, non-cash changes in fair value of warrants, unrealized (gain)/loss on derivatives, realized gain/(loss) on derivatives, stock based compensation, gain/(loss) on sale of vessel, impairment loss and other items in relation to the Company's comprehensive financing plan. However, Adjusted EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or "GAAP." We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted EBITDA is useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that Adjusted EBITDA is useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Note: Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to net income. Charges negatively impacting net income are reflected as increases to net income.

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 these 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 Tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and twelve months ended December 31, 2012 and 2011. 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.

For further information please contact:

Company Contact:
Evangelos Chatzis
Chief Financial Officer
Danaos Corporation
Athens, Greece
Tel.: +30 210 419 6480
E-Mail: cfo@danaos.com

Iraklis Prokopakis
Senior Vice President and Chief Operating Officer
Danaos Corporation
Athens, Greece
Tel.: +30 210 419 6400
E-Mail: coo@danaos.com

Investor Relations and Financial Media
Nicolas Bornozis
President
Capital Link, Inc.
New York
Tel. 212-661-7566
E-Mail: danaos@capitallink.com

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