Danaos Corporation Reports First Quarter Results for the Period Ended March 31, 2018

Athens, Greece - June 26, 2018

Danaos Corporation ("Danaos") (NYSE: DAC), one of the world's largest independent owners of containerships, today reported unaudited results for the quarter ended March 31, 2018.

Highlights for the First Quarter Ended March 31, 2018:

• On June 19, 2018, we reached an agreement with certain of our lenders currently holding approximately $2.2 billion of debt maturing on December 31, 2018, that will significantly strengthen the Company's financial position through a debt reduction of approximately $551 million, the resetting of financial and other covenants, modified interest rates and amortization profiles and an extension of existing debt maturities by approximately five years to December 31, 2023. In connection with this refinancing, the consummation of which is subject to definitive documentation and certain closing conditions, we will issue approximately 99.3 million shares of common stock to certain of our lenders. See "Debt Refinancing".

• Adjusted net income1 of $27.9 million, or $0.25 per share, for the three months ended March 31, 2018 compared to $24.5 million, or $0.22 per share, for the three months ended March 31, 2017, an increase of 13.9%.

• Operating revenues of $111.9 million for the three months ended March 31, 2018 compared to $110.1 million for the three months ended March 31, 2017, an increase of 1.6%.

• Adjusted EBITDA 1 of $76.6 million for the three months ended March 31, 2018 compared to $72.5 million for the three months ended March 31, 2017, an increase of 5.7%.

• Total contracted operating revenues were $1.7 billion as of March 31, 2018, with charters extending through 2028 and remaining average contracted charter duration of 5.4 years, weighted by aggregate contracted charter hire.

• Charter coverage of 90% for the next 12 months based on current operating revenues and 81% in terms of contracted operating days.



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

Danaos' CEO Dr. John Coustas commented:
"We are extremely pleased to have reached an agreement with certain of our lenders currently holding $2.2 billion of debt maturing on December 31, 2018 that will significantly strengthen the Company's capital structure through a debt reduction of $551 million.

This comprehensive debt refinancing will also strengthen the Company's financial position through a resetting of financial and certain other covenants in credit facilities, a modification of interest rates and amortization profiles and an extension of existing debt maturities by approximately five years to December 31, 2023. In connection with these debt write downs, we will issue just under 100 million shares of common stock to certain of our lenders.

This is the culmination of a lengthy negotiation process we have undertaken with our lenders that will position Danaos for long-term success. I would like to thank all of our lenders for their support, as well as our financial and legal advisors for their assistance. The Danaos management team looks forward to the completion of this transaction which is expected to occur by July 31, 2018.

In the near term, we maintain high charter contract coverage of 90% for the next 12 months based on current operating revenues and 81% in terms of contracted operating days. The charter market has stabilized at current levels although trade tensions tend to make liner companies hesitant to commit for longer periods. The benefit, conversely, may be a reduction of speculative ordering or ordering by liner companies, a condition that would improve market conditions.

Danaos continues to be a leader in the container shipping industry as a result of our intense focus on continuously enhancing our operations and leveraging technical innovation to provide the highest quality service to our customers. Our industry has undergone significant changes during the past few years, and with the improved capital structure contemplated by our comprehensive re-financing agreement, we will be well positioned to take advantage of the growth opportunities in the container sector and create value for our shareholders."

Three months ended March 31, 2018 compared to the three months ended March 31, 2017
During the three months ended March 31, 2018 and March 31, 2017, Danaos had an average of 55 containerships. Our fleet utilization for the three months ended March 31, 2018 was 95.6% compared to 92.7% for the three months ended March 31, 2017. The fleet utilization excluding the off charter days of the vessels that were previously chartered to Hanjin Shipping ("Hanjin") was 98.1% in the three months ended March 31, 2017.

Our adjusted net income amounted to $27.9 million, or $0.25 per share, for the three months ended March 31, 2018 compared to $24.5 million, or $0.22 per share, for the three months ended March 31, 2017. We have adjusted our net income in the three months ended March 31, 2018 for refinancing related professional fees of $9.6 million and a non-cash amortization charge of $3.4 million for fees related to our 2011 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 increase of $3.4 million in adjusted net income for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 is attributable mainly to a $3.9 million decrease in total operating expenses and $1.8 million increase in operating revenues, which were partially offset by a $2.3 million increase in net finance expenses.

On a non-adjusted basis, our net income amounted to $15.0 million, or $0.14 per share, for the three months ended March 31, 2018 compared to net income of $18.4 million, or $0.17 per share, for the three months ended March 31, 2017.

Operating Revenues
Operating revenues increased by 1.6%, or $1.8 million, to $111.9 million in the three months ended March 31, 2018 from $110.1 million in the three months ended March 31, 2017.

Operating revenues for the three months ended March 31, 2018 reflect:

• $3.2 million increase in revenues in the three months ended March 31, 2018 compared to the three months ended March 31, 2017 due to the re-chartering of certain of our vessels at higher rates.

• $1.4 million decrease in revenues due to lower fleet utilization for vessels in our fleet, other than the three vessels previously chartered to Hanjin which did not earn any revenues in the three months ended March 31, 2017, compared to the three months ended March 31, 2018.

Vessel Operating Expenses
Vessel operating expenses decreased by 2.5%, or $0.7 million, to $26.8 million in the three months ended March 31, 2018 from $27.5 million in the three months ended March 31, 2017. The average daily operating cost per vessel for vessels on time charter was $5,849 per day for the three months ended March 31, 2018 compared to $5,756 per day for the three months ended March 31, 2017. Management believes that our daily operating cost ranks as one of the most competitive in the industry.

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

Depreciation
Depreciation expense decreased by 6.2%, or $1.8 million, to $27.1 million in the three months ended March 31, 2018 from $28.9 million in the three months ended March 31, 2017.

Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $0.1 million, to $1.8 million in the three months ended March 31, 2018 from $1.7 million in the three months ended March 31, 2017.

General and Administrative Expenses
General and administrative expenses decreased by $0.9 million, to $5.2 million in the three months ended March 31, 2018, from $6.1 million in the three months ended March 31, 2017. The decrease was due to decreased professional fees.

Other Operating Expenses
Other Operating Expenses include Voyage Expenses.

Voyage Expenses
Voyage expenses decreased by $0.6 million, to $3.2 million in the three months ended March 31, 2018 from $3.8 million in the three months ended March 31, 2017. The decrease is mainly due to decreased bunkering expenses.

Interest Expense and Interest Income
Interest expense increased by 9.1%, or $1.9 million, to $22.8 million in the three months ended March 31, 2018 from $20.9 million in the three months ended March 31, 2017. The increase in interest expense was mainly due to the increase in average cost of debt due to the increase in US$ Libor by about 60 bps between the two periods, which was partially offset by a decrease in our average debt by $182.5 million, to $2,301.4 million in the three months ended March 31, 2018, from $2,483.9 million in the three months ended March 31, 2017 and a $0.4 million decrease in the amortization of deferred finance costs.

As of March 31, 2018, our debt outstanding gross of deferred finance costs was $2,299.9 million compared to $2,474.1 million as of March 31, 2017.

Interest income decreased by $0.1 million to $1.4 million in the three months ended March 31, 2018 compared to $1.5 million in the three months ended March 31, 2017.

Other finance costs, net
Other finance costs, net remained stable at $1.0 million in the three months ended March 31, 2018 and 2017.

Equity income/(loss) on investments
Equity income/(loss) on investments decreased by $0.2 million in the three months ended March 31, 2018 from equity income on investments of $0.2 million in the three months ended March 31, 2017 and relates to the operating performance of Gemini, in which the Company has a 49% shareholding interest.

Loss on derivatives
Amortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in the three months ended March 31, 2018 and 2017.

Other income/(expenses), net
Other income/(expenses), net was $9.4 million in expenses in the three months ended March 31, 2018 mainly due to $9.6 million of refinancing-related professional fees compared to $2.4 million in expenses in the three months ended March 31, 2017 due to a $2.4 million realized loss on sale of HMM securities.

Adjusted EBITDA
Adjusted EBITDA increased by 5.7%, or $4.1 million, to $76.6 million in the three months ended March 31, 2018 from $72.5 million in the three months ended March 31, 2017. As outlined above, this increase is mainly attributable to a $2.2 million decrease in operating expenses and a $1.8 million increase in operating revenues. Adjusted EBITDA for the three months ended March 31, 2018 is adjusted for refinancing-related professional fees of $9.6 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Debt Refinancing
On June 19, 2018, we reached an agreement with certain of our lenders currently holding approximately $2.2 billion of debt maturing on December 31, 2018 that will significantly strengthen the Company's capital structure and result in a debt reduction of approximately $551 million. Pursuant to a comprehensive debt refinancing agreement ("RA") with certain of its lenders, as well as Danaos Investment Limited as Trustee of the 883 Trust ("DIL"), its largest stockholder, and its manager, Danaos Shipping Co. Ltd., the Company will strengthen its financial position through a significant debt reduction, resetting of financial and certain other covenants in credit facilities, modified interest rates and amortization profiles and an extension of existing debt maturities by approximately five years to December 31, 2023. In connection with this debt refinancing, the Company will issue 99,342,271 new shares of Danaos common stock to certain of the Company's lenders, which represents 47.5% of the Company's outstanding common stock after giving effect to such issuance and will dilute existing shareholders ratably. The closing of the transaction is expected to occur by July 31, 2018, and is subject to definitive documentation and certain closing conditions and commitments by the Company and DIL. For additional information regarding the debt refinancing agreement, see the Company's Report on Form 6-K filed with the SEC on June 25, 2018.

Conference Call and Webcast
On Wednesday, June 27, 2018 at 9:00 A.M. ET, 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: 1 844 802 2437 (US Toll Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075 441 375 (Standard International Dial In). Please indicate to the operator that you wish to join the Danaos Corporation earnings call.

A telephonic replay of the conference call will be available until July 4, 2018 by dialing 1 877 344 7529 (US Toll Free Dial In) or +1 412 317 0088 (Standard International Dial In) and using 10117035# as the access code.

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

About Danaos Corporation
Danaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 59 containerships aggregating 351,614 TEUs, including four vessels owned by Gemini Shipholdings Corporation, a joint venture, ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Our fleet is chartered to many of the world's largest liner companies on fixed-rate charters. Our long track record of success is predicated on our efficient and rigorous operational standards and environmental controls. Danaos Corporation's shares trade on the New York Stock Exchange under the symbol "DAC".

Danaos Corporation press release