Danaos Corporation · NYSE:DAC
Danaos — Investor Presentation (November 2015)
24 slides from Danaos's investor presentation, November 2015
Slide 1: World-Class Shipping, Leading-Edge Expertise
Danaos Corporation | NOVEMBER 2015 World-Class Shipping, Leading-Edge Expertise
Slide 2: Disclosures
Disclosures This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, that address activities, events or developments that the Company expec
Slide 3: Business Overview
Business Overview DISCIPLINED BUSINESS MODEL • One of the largest independent owners of modern containerships • Long-term charters and relationships with the world’s leading liner companies • High charter coverage protects significant free cash flow generation and limits market risk • Steady delever
Slide 4: Recent Operational and Financial Highlights
Recent Operational and Financial Highlights FLEET DEVELOPMENT • Newbuilding program successfully completed in 2012 • Fleet age reduced 15% in the last five years • Nine older vessels sold in 2013 and five in 2014 • Four 2,500-3,500 TEU geared vessels purchased in 2013 and two 6,400 TEU vessels in 20
Slide 5: Fleet Profile
Fleet Profile 59* Container Vessels ranging from 2,200 TEU to 13,100 TEU 8 X 2,200 TEU 1 X 4,650 TEU 7 X 8,500 TEU 2 X 2,500 TEU 2 X 5,500 TEU 2 X 9,600 TEU 1 X 2,600 TEU 3 X 6,400 TEU 3 X 10,100 TEU 6 X 3,400 TEU 7 X 6,500 TEU 5 X 13,100 TEU 12 X 4,300 TEU Fleet Capacity by Year* 400K Capacity Addi
Slide 6: Young Fleet with Long-term Charters
Young Fleet with Long-term Charters Fleet age in years (weighted by TEU) 8.5 15% Reduction in Fleet Age 7.3 6.6 6.4 6.5 7.2 Over the last 5 years 2010 2011 2012 2013 2014 3Q 2015 Charter Length in years (weighted by aggregate contracted charter hire) 9.7 9.8 9.7 8.9 7.4 8.0 7.4 Average length of cur
Slide 7: Leading Position with 59 Vessel Fleet
Leading Position with 59* Vessel Fleet Independent Owners KGS A market leader among the KG market retraction benefits independent large charter owners charter owners like Danaos 800,000 CAPACITY (TEU MILLIONS) 600,000 400,000 200,000 0 Rickmers C-POffen HansaT'hand NSCSchiff. ShoeiKisen NSBN'elbe Sc
Slide 8: Diverse Charters with Strong Counterparties
Diverse Charters with Strong Counterparties Last 12 Months | Revenues per Charterer 28% 26% 17% 13% 8% 6% 2% Other $3.3 billion contracted revenue from long-term fixed rate diversified charters 6
Slide 9: Experienced Senior Management and Board
Experienced Senior Management and Board Management Dr. John Coustas Chairman & Chief Executive Officer – Director Iraklis Prokopakis Senior Vice President & Chief Operating Officer - Director Evangelos Chatzis Chief Financial Officer Dimitris Vastarouchas Deputy Chief Operating Officer Non-Executive
Slide 10: Industry Overview
Industry Overview
Slide 11: Demand / Supply Fundamentals
Demand / Supply Fundamentals Global Throughput Growth Global Capacity Growth 14.2% 13.8% 13.2% 12.4% 9.1% 9.1% 8.4% 7.9% 6.3% 6.0% 5.8% 5.8% 5.5% 5.4% 5.4% ANNUAL GROWTH 4.8% 4.3% 3.8% 3.4% (8.5%) 2007 2008 2009 2010 2011 2012 2013 2014 2015F 2016F Source: Alphaliner 8
Slide 12: Healthy Orderbook
Healthy Orderbook 1.80 70% 1.60 60% Fleet & Orderbook (TEU Millions) 1.40 50% 1.20 1.00 40% 0.80 30% 0.60 20% 0.40 10% 0.20 0.00 0% D-00 D-01 D-02 D-03 D-04 D-05 D-06 D-07 D-08 D-09 D-10 D-11 D-12 D-13 D-14 O-15 Fleet Orderbook Orderbook-to-Fleet Ratio Source: Clarkson Research Services 9
Slide 13: Financial Overview
Financial Overview
Slide 14: Operating Revenues Projections
Operating Revenues Projections Operating Revenues from Continuing Operations (1) Marsoft High Case Marsoft Base Case Marsoft Low Case Contracted Revenue $700 $589 $588 $600 $552 $500 $468 (amounts in million US$) $400 $360 $320 $299 $300 $259 $566 $205 $524 $489 $446 $200 $100 $0 2006 2007 2008 2009
Slide 15: EBITDA Projections
EBITDA Projections Adjusted EBITDA from Continuing Operations (1) Marsoft High Case Marsoft Base Case Marsoft Low Case Contracted Revenue $500 $432 $434 $404 $400 (amounts in million US$) $319 $300 $244 $204 $189 $416 $200 $174 $397 $374 $345 $140 $100 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 16: Expiring Swaps Benefit Net Income and Free Cash Flow
Expiring Swaps Benefit Net Income and Free Cash Flow Net Finance Costs (amounts in million US$) Under Base Case Marsoft Scenario $250 1.80% $198 1.60% $200 1.40% 1.20% Libor Rate $150 $119 1.00% 0.80% $100 $71 $66 $64 0.60% $50 0.40% 0.20% $0 0.00% 2014 2015 2016 2017 2018 Net Interest Expense Swaps
Slide 17: Significant Free Cash Flow per Share
Significant Free Cash Flow per Share Free Cash Flow per Share (1) Marsoft High Case Marsoft Base Case Marsoft Low Case $3.5 $3.3 $3.4 $3.3 $3.2 $3.2 $2.9 $3.0 $2.9 $2.6 $2.6 $2.6 $1.8 2014 2015 2016 2017 2018 (1) Defined as Net Cash generated for the period before Net Vessel Acquisitions / Disposals
Slide 18: Rapid De-leveraging
Rapid De-leveraging Base Case Low Case Net Debt and Adjusted EBITDA Multiple (1) Net Debt and Adjusted EBITDA Multiple (1) (Amounts in million of US$) (Amounts in million of US$) $3,500 Net Debt $3,500 Net Debt 7.3x 7.3x $2,945 6.4x $2,945 6.4x $3,000 $3,000 $2,676 $2,676 5.8x 5.4x $2,500 $2,337 $2,
Slide 19: Investment Highlights
Investment Highlights CLEAR PATH TO UNLOCKING VALUE • Cash flow and earnings per share visibility through 2018 • Rapid deleveraging schedule will have a positive effect on multiples • Impact of expiring swaps is very material and is not fully appreciated • Danaos is continually evaluating accretive
Slide 20: World-Class Shipping, Leading-Edge Expertise
World-Class Shipping, Leading-Edge Expertise Company Contacts Investor Relations EVANGELOS CHATZIS IRAKLIS PROKOPAKIS ROSE & COMPANY Chief Financial Officer Senior VP & Chief Operating Officer 405 Park Avenue, Suite 901 Danaos Corporation Danaos Corporation New York, NY 10022 Athens, Greece Athens,
Slide 21: Appendix
Appendix
Slide 22: Underlying Assumptions
Underlying Assumptions Operating Revenues • Contracted periods run until earliest dates charters can expire, no options exercised • Assumes full performance by all counterparties to existing charters, which depends on such charterers’ ability to meet their obligations under these charters • Nine of
Slide 23: Underlying Assumptions: Adjusted EBITDA
Underlying Assumptions Adjusted EBITDA (1) • Non-GAAP measure, defined herein as Earnings before Interest, Depreciation, Amortization, non-cash and one- off items • Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA under Base and Low Case Scenarios: Reconciliation of Net
Slide 24: Underlying Assumptions
Underlying Assumptions • Calculation of interest and swap cash flows are based on the following forward US$ interest rate Libor curve as at September 28, 2015 Libor Curve Assumption 2.00% 1.61% 1.50% 1.16% 1.00% 0.63% 0.43% 0.50% 0.27% 0.23% 0.30% 0.00% 2012 2013 2014 2015 2016 2017 2018 • Interest