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EXHIBIT 99.1

DANAOS CORPORATION

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis should be read in conjunction with our interim condensed consolidated financial statements (unaudited) and the notes thereto included elsewhere in this report.

Results of Operations

Three months ended June 30, 2022 compared to three months ended June 30, 2021

During the three months ended June 30, 2022, Danaos had an average of 71.0 containerships compared to 60.0 containerships during the three months ended June 30, 2021. Our fleet utilization for the three months ended June 30, 2022 was 99.9% compared to 99.1% for the three months ended June 30, 2021.

Operating Revenues

Operating revenues increased by 71.4%, or $104.5 million, to $250.9 million in the three months ended June 30, 2022 from $146.4 million in the three months ended June 30, 2021.

Operating revenues for the three months ended June 30, 2022 reflect:

| ● | a $62.0 million increase in revenues in the three months ended June 30, 2022 compared to the three months ended June 30, 2021 mainly as a result of higher charter rates;

| ● | a $23.9 million increase in revenues in the three months ended June 30, 2022 compared to the three months ended June 30, 2021 due to the incremental revenue generated by newly acquired vessels;

| ● | a $2.9 million increase in revenue in the three months ended June 30, 2022 compared to the three months ended June 30, 2021 due to higher non-cash revenue recognition in accordance with US GAAP; and

| ● | a $15.7 million increase in revenues in the three months ended June 30, 2022 compared to the three months ended June 30, 2021 due to amortization of assumed time charters.

Voyage Expenses

Voyage expenses increased by $4.4 million to $9.4 million in the three months ended June 30, 2022 from $5.0 million in the three months ended June 30, 2021 primarily as a result of the increase in commissions due to the increase in revenue per vessel and the increase in the average number of vessels in our fleet.

Vessel Operating Expenses

Vessel operating expenses increased by $7.7 million to $40.6 million in the three months ended June 30, 2022 from $32.9 million in the three months ended June 30, 2021, primarily as a result of the increase in the average number of vessels in our fleet and an increase in the average daily operating cost for vessels on time charter to $6,463 per vessel per day for the three months ended June 30, 2022 compared to $6,241 per vessel per day for the three months ended June 30, 2021. The average daily operating cost increased mainly due to the COVID-19 related increase in crew remuneration and insurance expenses mainly due to increased insurance premiums in the three months ended June 30, 2022. Management believes that our daily operating costs remain among the most competitive in the industry.

Depreciation

Depreciation expense increased by 29.5%, or $7.7 million, to $33.8 million in the three months ended June 30, 2022 from $26.1 million in the three months ended June 30, 2021 due to recent acquisitions of eleven vessels.

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Amortization of Deferred Drydocking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs increased by $0.7 million to $3.2 million in the three months ended June 30, 2022 from $2.5 million in the three months ended June 30, 2021.

General and Administrative Expenses

General and administrative expenses remained stable at $7.1 million in each of the three months ended June 30, 2022 and June 30, 2021.

Gain on debt extinguishment

The gain on debt extinguishment of $22.9 million in the three months ended June 30, 2022 related to our early extinguishment of debt compared to $111.6 million in the three months ended June 30, 2021 related to our debt refinancing on April 12, 2021.

Interest Expense and Interest Income

Interest expense decreased by 11.5%, or $2.1 million, to $16.1 million in the three months ended June 30, 2022 from $18.2 million in the three months ended June 30, 2021. The decrease in interest expense is a combined result of:

| ● | a $2.2 million decrease in interest expense due to a decrease in our average indebtedness by $311.1 million between the two periods (average indebtedness of $1,154.2 million in the three months ended June 30, 2022, compared to average indebtedness of $1,465.3 million in the three months ended June 30, 2021), which was partially offset by an increase in our debt service cost by 0.44%, mainly as a result of increased Libor rates;

| ● | a $0.7 million decrease in the amortization of deferred finance costs and debt discount;

| ● | a $0.7 million decrease in interest expense due to capitalized interest on our vessels under construction in the three months ended June 30, 2022 compared to none in the three months ended June 30, 2021; and

| ● | a $1.5 million reduction in the recognition through our income statement of accumulated accrued interest that had been accrued in 2018 in relation to two of our credit facilities that were refinanced on April 12, 2021. As a result of the refinancing, the recognition of such accumulated interest has decreased. In May 2022, we fully repaid the facility related to the 2018 accumulated accrued interest. The remaining accumulated accrued interest of $26.9 million was recognized in gain on debt extinguishment on the repayment date.

During the three months ended June 30, 2022, we reduced debt and lease indebtedness by $467.8 million mainly as a result of $434.1 million of early debt and lease repayments and recognized a $22.9 million gain related to this early debt extinguishment. On the other hand, our indebtedness increased by $130 million following consummation of the loan agreement to finance our six 5,466 TEU vessels that were acquired in 2021.

As of June 30, 2022, our outstanding debt, gross of deferred finance costs, was $885.1 million, which includes $300 million aggregate principal amount of our Senior Notes, and our leaseback obligation was $105.8 million. These balances compare to debt of $1,165.9 million and a leaseback obligation of $237.2 million, gross of deferred finance costs, as of June 30, 2021. See “Liquidity and Capital Resources”.

Interest income decreased by $9.4 million to $0.1 million in the three months ended June 30, 2022 compared to $9.5 million in the three months ended June 30, 2021 mainly as a result of full collection of accrued interest on ZIM and HMM bonds, which were redeemed by the issuers thereof, in the year 2021.

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Gain/(loss) on investments

The loss on investments of $168.6 million was recognized in the three months ended June 30, 2022 compared to a gain of $196.3 million in the three months ended June 30, 2021 relating to the change in fair value of our investment in ZIM Integrated Shipping Services Ltd. (“ZIM”). In April 2022, we sold 1,500,000 of these ZIM ordinary shares resulting in proceeds to us of $85.3 million. Our remaining shareholding interest in ZIM of 5,686,950 ordinary shares of ZIM has been fair valued at $268.6 million as of June 30, 2022 based on the closing price of ZIM’s ordinary shares on the NYSE on that date.

Dividend income

Dividend income of $16.2 million was recognized on ZIM ordinary shares in the three months ended June 30, 2022 compared to none in the three months ended June 30, 2021.

Equity Income on Investments

Equity income on investments in Gemini decreased to nil in the three months ended June 30, 2022 compared to $2.2 million in the three months ended June 30, 2021 following our acquisition and full consolidation of Gemini since July 1, 2021.

Other Finance Expenses

Other finance expenses decreased by $0.3 million to $0.3 million in the three months ended June 30, 2022 compared to $0.6 million in the three months ended June 30, 2021.

Loss on derivatives

Amortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three months ended June 30, 2022 and June 30, 2021.

Other income, net

Other income, net was $0.4 million in the three months ended June 30, 2022 compared to $0.2 million in the three months ended June 30, 2021.

Income taxes

Income taxes were $2.3 million in the three months ended June 30, 2022, related to the taxes withheld on dividend income earned on ZIM ordinary shares compared to no income tax in the three months ended June 30, 2021.

Six months ended June 30, 2022 compared to six months ended June 30, 2021

During the six months ended June 30, 2022, Danaos had an average of 71.0 containerships compared to 60.0 containerships during the six months ended June 30, 2021. Our fleet utilization for the six months ended June 30, 2022 was 98.7% compared to 98.9% for the six months ended June 30, 2021.

Operating Revenues

Operating revenues increased by 72.6%, or $202.3 million, to $480.8 million in the six months ended June 30, 2022 from $278.5 million in the six months ended June 30, 2021.

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Operating revenues for the six months ended June 30, 2022 reflect:

| ● | a $110.9 million increase in revenues in the six months ended June 30, 2022 compared to the six months ended June 30, 2021 mainly as a result of higher charter rates;

| ● | a $44.7 million increase in revenues in the six months ended June 30, 2022 compared to the six months ended June 30, 2021 due to the incremental revenue generated by newly acquired vessels

| ● | a $14.3 million increase in revenue in the six months ended June 30, 2022 compared to the six months ended June 30, 2021 due to higher non-cash revenue recognition in accordance with US GAAP; and

| ● | a $32.4 million increase in revenues in the six months ended June 30, 2022 compared to the six months ended June 30, 2021 due to amortization of assumed time charters.

Voyage Expenses

Voyage expenses increased by $7.4 million to $16.6 million in the six months ended June 30, 2022 from $9.2 million in the six months ended June 30, 2021 primarily as a result of the increase in commissions due to the increase in revenue per vessel and the increase in the average number of vessels in our fleet.

Vessel Operating Expenses

Vessel operating expenses increased by $15.7 million to $79.7 million in the six months ended June 30, 2022 from $64.0 million in the six months ended June 30, 2021, primarily as a result of the increase in the average number of vessels in our fleet and an increase in the average daily operating cost for vessels on time charter to $6,385 per vessel per day for the six months ended June 30, 2022 compared to $6,098 per vessel per day for the six months ended June 30, 2021. The average daily operating cost increased mainly due to the COVID-19 related increase in crew remuneration and insurance expenses mainly due to increased insurance premiums in the six months ended June 30, 2022. Management believes that our daily operating costs remain among the most competitive in the industry.

Depreciation

Depreciation expense increased by 29.3%, or $15.2 million, to $67.1 million in the six months ended June 30, 2022 from $51.9 million in the six months ended June 30, 2021 due to recent acquisitions of eleven vessels.

Amortization of Deferred Drydocking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs increased by $0.9 million to $5.9 million in the six months ended June 30, 2022 from $5.0 million in the six months ended June 30, 2021.

General and Administrative Expenses

General and administrative expenses decreased by $3.5 million to $14.5 million in the six months ended June 30, 2022, from $18.0 million in the six months ended June 30, 2021. The decrease was mainly attributable to decreased stock-based compensation.

Gain on debt extinguishment

The gain on debt extinguishment of $22.9 million in the six months ended June 30, 2022 related to our early extinguishment of debt compared to $111.6 million in the six months ended June 30, 2021 related to our debt refinancing on April 12, 2021.

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Interest Expense and Interest Income

Interest expense decreased by 0.3%, or $0.1 million, to $33.2 million in the six months ended June 30, 2022 from $33.3 million in the six months ended June 30, 2021. The decrease in interest expense is a combined result of:

| ● | a $4.3 million decrease in interest expense due to a decrease in our average indebtedness by $284.6 million between the two periods (average indebtedness of $1,254.9 million in the six months ended June 30, 2022, compared to average indebtedness of $1,539.5 million in the six months ended June 30, 2021), which was partially offset by an increase in our debt service cost by 0.31%, mainly as a result of increased Libor rates;

| ● | a $2.3 million decrease in the amortization of deferred finance costs and debt discount;

| ● | a $0.7 million decrease in interest expense due to capitalized interest on our vessels under construction in the six months ended June 30, 2022 compared to none in the six months ended June 30, 2021; and

| ● | a $7.2 million reduction in the recognition through our income statement of accumulated accrued interest that had been accrued in 2018 in relation to two of our credit facilities that were refinanced on April 12, 2021. As a result of the refinancing, the recognition of such accumulated interest has decreased. In May 2022, we fully repaid the facility related to the 2018 accumulated accrued interest. The remaining accumulated accrued interest of $26.9 million was recognized in gain on debt extinguishment on the repayment date.

During the six months ended June 30, 2022, we reduced debt and lease indebtedness by $507.6 million mainly as a result of $434.1 million of early debt and lease repayments and recognized a $22.9 million gain related to this early debt extinguishment. On the other hand, our indebtedness increased by $130 million following consummation of the loan agreement to finance our six 5,466 TEU vessels that were acquired in 2021.

As of June 30, 2022, our outstanding bank debt, gross of deferred finance costs, was $885.1 million, which includes $300 million aggregate principal amount of our Senior Notes, and our leaseback obligation was $105.8 million. These balances compare to bank debt of $1,165.9 million and a leaseback obligation of $237.2 million, gross of deferred finance costs, as of June 30, 2021.

Interest income decreased by $11.4 million to $0.1 million in the six months ended June 30, 2022 compared to $11.5 million in the six months ended June 30, 2021, mainly as a result of full collection of accrued interest on ZIM and HMM bonds, which were redeemed by the issuers thereof in the year 2021.

Gain/(loss) on investments

The loss on investments of $69.1 million was recognized in the six months ended June 30, 2022 compared to a gain of $444.2 million in the six months ended June 30, 2021 relating to the change in fair value of our investment in ZIM. In April 2022, we sold 1,500,000 of these ZIM ordinary shares resulting in proceeds to us of $85.3 million. Our remaining shareholding interest in ZIM of 5,686,950 ordinary shares of ZIM has been fair valued at $268.6 million as of June 30, 2022 based on the closing price of ZIM’s ordinary shares on the NYSE on that date.

Dividend income

Dividend income of $138.4 million was recognized on ZIM ordinary shares in the six months ended June 30, 2022 compared to none in the six months ended June 30, 2021.

Other finance expenses

Other finance expenses decreased by $0.1 million to $0.9 million in the six months ended June 30, 2022 compared to $1.0 million in the six months ended June 30, 2021.

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Equity income on investments

Equity income on investments in Gemini decreased to nil in the six months ended June 30, 2022 compared to $4.0 million in the six months ended June 30, 2021 following our acquisition and full consolidation of Gemini since July 1, 2021.

Loss on derivatives

Amortization of deferred realized losses on interest rate swaps remained stable at $1.8 million in each of the six months ended June 30, 2022 and June 30, 2021.

Other income, net

Other income, net was $0.9 million in the six months ended June 30, 2022 compared to $4.1 million in the six months ended June 30, 2021. The decrease was mainly due to the collection from Hanjin Shipping of $3.9 million as a partial payment of common benefit claim and interest in the six months ended June 30, 2021.

Income taxes

Income taxes were $14.5 million in the six months ended June 30, 2022, related to the taxes withheld on dividend income earned on ZIM ordinary shares compared to no income tax in the six months ended June 30, 2021.

Liquidity and Capital Resources

Our principal source of funds has been operating cash flows, vessel sales, and long-term bank borrowings, as well as equity provided by our stockholders from our initial public offering in October 2006; common stock sales in August 2010 and the fourth quarter of 2019; and the capital contribution of Danaos Investment Limited as Trustee of the 883 Trust (“DIL”) on August 10, 2018. In February 2021, we sold $300 million of 8.500% senior unsecured notes due 2028 (the “Senior Notes”). We used the net proceeds from the offering of Senior Notes, together with proceeds from a new $815 million senior secured credit facility with a four-year term (the “$815 Million Senior Secured Credit Facility”) and a new $135 million sale and leaseback arrangement (the “2021 Leaseback Agreement”), to implement a $1.25 billion refinancing of a substantial majority of our outstanding senior secured indebtedness consummated on April 12, 2021 (the “2021 Debt Refinancing”). Our principal uses of funds have been capital expenditures to establish, grow and maintain our fleet, comply with international shipping standards, environmental laws and regulations and to fund working capital requirements and repayment of debt.

Our short-term liquidity needs primarily relate to the funding of our vessel operating expenses, installment payments for our six contracted newbuildings, debt interest payments and servicing our debt obligations. Our long-term liquidity needs primarily relate to installment payments for our six contracted newbuildings and any additional vessel acquisitions in the containership sector and debt repayment. We anticipate that our primary sources of funds will be cash from operations and equity or debt financings, as well as any sales of or dividends from our existing investment in ZIM ordinary shares. We currently expect that sources of funds available to us will be sufficient to meet our short-term liquidity and long-term liquidity requirements.

Under our existing multi-year charters as of June 30, 2022, we had $2.3 billion of total contracted cash revenues, or $442.7 million for the remainder of 2022, $697.4 million for 2023 and thereafter $1.17 billion. Although these contracted cash revenues are based on contracted charter rates, we are dependent on the ability and willingness of our charterers to meet their obligations under these charters. On May 5, 2022, we received $238.9 million of charter hire prepayment related to charter contracts for 15 of our vessels, representing partial prepayment of charter hire payable during the period from May 2022 through January 2027. This prepayment is recorded as unearned revenue on our balance sheet and recognized as revenue in our income statement over the term of the applicable charters.

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As of June 30, 2022, we had cash and cash equivalents of $319.6 million. As of June 30, 2022, we had no remaining borrowing availability under our credit facilities. As of June 30, 2022, we had $885.1 million of outstanding indebtedness (gross of deferred finance costs), including $300 million relating to our Senior Notes, and $105.8 million of outstanding leaseback obligations (gross of deferred finance costs) with respect to four of our vessels. As of June 30, 2022, we were obligated to make quarterly fixed amortization payments, totaling $71.5 million to June 30, 2023, related to the long-term bank debt and aggregate payments of $46.3 million ($50.5 million including imputed interest) under our leaseback obligations to June 30, 2023 (gross of deferred finance costs).

On May 12, 2022, we early extinguished $270.0 million of the outstanding Natwest loan principal of the Citibank/Natwest $815 mil. Facility, which reduced the future quarterly instalments of the remaining facility to $12.9 million and the balloon payment at maturity was reduced to $309.0 million. Additionally, the reference to LIBOR was replaced with daily non-cumulative compounded secured overnight financing rate administered and published by the Federal Reserve Bank of New York (“SOFR”) plus credit spread adjustment. On May 12, 2022, we also early terminated our leaseback obligation related to the 2021 Leaseback Agreement and repaid an aggregate outstanding amount of $94.2 million, together with additional fees amounting to $2.8 million. Additionally, in the three months ended June 30, 2022, we early repaid in full to our lenders the: (i) $43 million loan outstanding with the Macquarie Bank, (ii) $20.55 million loan outstanding with Eurobank and (iii) $9.8 million loan outstanding with SinoPac. We may also at any time and from time to time, seek to retire or purchase our outstanding debt securities through cash purchases, in open-market purchases, privately negotiated transactions or otherwise.

In June 2022, we drew down $130.0 million under a new senior secured term loan facility from BNP Paribas and Credit Agricole with five-year term, which is secured by six 5,466 TEU sister vessels acquired in 2021.

On March 11, 2022, we entered into contracts for the construction of two 7,100 TEU container vessels for an aggregate purchase price of $156.0 million, out of which $31.2 million was advanced in April 2022, $31.2 million is expected to be paid in 2023 and $93.6 million at vessels delivery expected in 2024. On April 1, 2022, as amended on April 21, 2022, we entered into contracts for the construction of four 8,000 TEU container vessels for an aggregate purchase price of $372.7 million, out of which $49.2 million was advanced before June 30, 2022, an amount of $96.7 million is expected to be paid in 2022 and $226.8 million is expected to be paid at vessels delivery in 2024. Additionally, a supervision fee of $725,000 per newbuilding vessel will be payable to Danaos Shipping Company Limited.

We have declared a dividend of $0.75 per share of common stock, which is expected to amount to approximately $15.2 million in the aggregate, payable on August 29, 2022, to holders of record on August 17, 2022. We intend to pay a regular quarterly dividend on our common stock, which will have an impact on our liquidity. Payments of dividends are subject to the discretion of our board of directors, provisions of Marshall Islands law affecting the payment of distributions to stockholders and the terms of our credit facilities, which permit the payment of dividends so long as there has been no event of default thereunder nor would occur as a result of such dividend payment, and will be subject to conditions in the container shipping industry, our financial performance and us having sufficient available excess cash and distributable reserves.

In June 2022, we announced a share repurchase program of up to $100 million of our common stock. We repurchased 177,900 shares of our common stock in the open market for $11.2 million in June 2022, out of which 77,600 shares valued at $4.9 million remained unsettled as of June 30, 2022. Additionally, we repurchased 231,300 shares in the open market for $13.9 million in July 2022. All purchases have been made on the open market within the safe harbor provisions of Regulation 10b-18 under the Exchange Act. Under the share repurchase program, shares of our common stock may be purchased in open market or privately negotiated transactions, at times and prices that are considered to be appropriate by the Company, and the program may be suspended or discontinued at any time.

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ZIM Equity Securities

On January 27, 2021, ZIM completed its initial public offering and listing on the New York Stock Exchange of its ordinary shares. Following this offering the Company owned 10,186,950 ordinary shares of ZIM. These shares were recorded at a book value of $75 thousands as of December 31, 2020. In 2021, we sold 3,000,000 ZIM ordinary shares resulting in net proceeds to us of $120.7 million and in April 2022, we sold 1,500,000 ZIM ordinary shares resulting in net proceeds to us of $85.3 million. The remaining shareholding interest of 5,686,950 ordinary shares has been fair valued at $268.6 million as of June 30, 2022, based on the closing price of ZIM ordinary shares on the NYSE on that date. For the six months ended June 30, 2022, we recognized a total loss of $69.1 million on these shares. Τhe change in fair value is reflected under “Gain/(loss) on investments” in the condensed consolidated statement of income. The unrealized gain related to the ZIM ordinary shares still held on June 30, 2022 amounted to $268.6 million. Additionally, we recognized a dividend on our ZIM ordinary shares amounting to $138.4 million in the six months ended June 30, 2022 gross of withholding taxes of $14.5 million. See Note 6, “Other Current and Non-current Assets” to our unaudited condensed consolidated financial statements included in this report.

Impact of the War in Ukraine on our Business

As disclosed in our Annual Report on Form 20-F for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 3, 2022, the current conflict between Russia and Ukraine, and related sanctions imposed by the U.S., EU and others, could adversely affect the crewing operations of our Manager, which has crewing offices in St. Petersburg, Odessa and Mariupol, and trade patterns involving ports in the Black Sea or Russia. The extent of the impact will depend largely on future developments.

Impact of COVID-19 on our Business

The spread of the COVID-19 virus, which was declared a pandemic by the World Health Organization, in 2020 has caused substantial disruptions in the global economy and the shipping industry, as well as significant volatility in the financial markets. The duration and full effects of this global health emergency and related disruptions are uncertain. The pandemic had severe impacts on the global economic activity. These trends may continue for the near future as, while the availability of effective vaccines has led to a developing economic recovery in parts of the world, the success and timing of COVID-19 containment strategies are uncertain, including due to the emergence of new variants, and negative impacts are expected to reverberate beyond the duration of the pandemic itself. However, the container shipping industry, in contrast with other sectors, has already reversed many of the negative impacts suffered in the first half of 2020.

In particular as it pertains to our business, the COVID-19 pandemic initially negatively affected global demand for the seaborne transportation of containerized cargoes. Global seaborne container trade declined in 2020, with an estimated impact of around 1% in TEU terms. Liner companies initially responded to these circumstances by reducing service and cutting sailings, which increased idle containership fleet capacity in the first half of 2020 to a peak of 12%. As a result, container freight rates were volatile and containership charter market rates declined significantly in the first half of 2020. However, the ability of the liner companies to consistently manage capacity addressed the drop in volumes at the onset of the pandemic, which alleviated pressure on our customers’ cash flows, many of whom have since reported strong profitability, and stabilized and increased freight rates. The second half of 2020 through June 30, 2022 saw robust demand for seaborne transportation of containerized cargo, with freight volumes and freight rates rebounding sharply. The growth of e-commerce, together with the temporary grounding of aircraft resulting from travel restrictions, has shifted significant shipping volume to seaborne containers. The resulting demand for containerships has resulted in negligible vessel capacity available in certain size segments as of June 30, 2022, increasing charter rates for all segments and enabled us to recharter many of our smaller vessels which had charters expiring during this year at higher rates. Many liner operators and containership owners reported improved results in the second half of 2020, in 2021 and the first half of 2022, due in part to improving container shipping industry market conditions. Our operating revenues increased to $480.8 million in the six months ended June 30, 2022 compared to $278.6 million in the six months ended June 30, 2021.

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COVID-19 related travel restrictions imposed on a global level also caused disruptions in scheduled crew changes on our vessels, caused an increase in remuneration of our crew on the vessels and delays in carrying out of certain hull repairs and maintenance in 2020, which disruptions could continue to affect our operations. During the first quarter of 2020, we experienced delays in Chinese shipyards related to the scheduled installations of the scrubbers on certain of our vessels and delays in carrying out dry-docking repairs, which resulted in incremental 188 off-hire days of our vessels ultimately leading to decreased operating revenue by approximately $3.2 million compared to our expectations. The average daily operating cost per vessel per day for vessels on time charter for the year ended December 31, 2021 increased to $5,986 compared to $5,586 per vessel per day for the year ended December 31, 2020, mainly due to the COVID-19 related increase in crew remuneration in the year ended December 31, 2021. The average daily operating cost per vessel per day for vessels on time charter for the six months ended June 30, 2022 increased to $6,385 compared to $6,098 per vessel per day for the six months ended June 30, 2021, mainly due to the COVID-19 related increase in crew remuneration and insurance expenses due to increased insured values of the vessels in the six months ended June 30, 2022.

In response to the pandemic, we have instituted enhanced safety protocols such as having a substantial portion of our on-shore staff working remotely, more frequent disinfection of our on-shore facilities, temperature readings, limitation of on-site visitors and travel, vaccination, mandatory self-isolation of personnel returning from travel and replacing physical meetings with virtual meetings. We expect to continue such measures, which have not had a significant impact on our expenses, to some degree until the pandemic abates. In addition, the prevailing low interest rates, in part due to actions taken by central banks to stimulate economic activity in the face of the pandemic, has also reduced our interest expense, while lower fuel prices during 2020, which is a substantial expense borne by our customers, helped to bolster their financial position. Recently, fuel costs for our charterers have increased significantly along with the price of oil, and prevailing interest rates have begun to increase and are expected to increase further.

The COVID-19 pandemic continues to unfold and may negatively affect our business, financial performance and results of our operations in the future, as it did in the first half of 2020. The extent of any such effects depends on factors beyond our control and cannot be predicted with certainty. Any prolonged slowdown in the global economy, or the effects of containment strategies such as recent lockdowns imposed in China, may again negatively impact worldwide demand for products transported by containerships, adversely affect the liquidity and financial position of our charterers and may decrease rechartering hire rates for our vessels, as could any decrease in demand for consumer products and other containerized cargo as the pandemic abates or otherwise. This could result in reductions in our revenue and the market value of our vessels, which could materially adversely affect our business and results of operations, as well as our ability to service or refinance our debt and comply with financial covenants of our credit facilities.

Cash Flows

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six Months | ​ | Six Months
​ | ​ | ended | ​ | ended
​ |  | June 30, 2022 |  | June 30, 2021
​ | ​ | (In thousands)
Net cash provided by operating activities | ​ | $ | 620,478 | ​ | $ | 192,743
Net cash provided by investing activities | ​ | $ | 14,286 | ​ | $ | 144,066
Net cash used in financing activities | ​ | $ | (431,947) | ​ | $ | (108,054)

​

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities increased by $427.8 million, to $620.5 million provided by operating activities in the six months ended June 30, 2022 compared to $192.7 million provided by operating activities in the six months ended June 30, 2021. The increase was the result mainly of a $169.9 million increase in operating revenues (net of $32.4 million amortization of assumed time charters in the six months ended June 30, 2022), a collection of $123.9 million in dividends from ZIM (net of withholding taxes) and a $185.0 million change in working capital in the six months ended June 30, 2022 compared to the six months ended June 30, 2021 mainly caused by the charter hire prepayment, which were partially offset by a $24.2 million increase in operating expenses, a $8.6 million increase in dry-docking expenses, a $14.3 million increase in net finance cost and a partial collection of common benefit claim of $3.9 million from Hanjin Shipping in the six months ended June 30, 2021 compared to none in the six months ended June 30, 2022.

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Net Cash Provided by Investing Activities

Net cash flows provided by investing activities decreased by $129.8 million, to $14.3 million provided by investing activities in the six months ended June 30, 2022 compared to $144.1 million provided by investing activities in the six months ended June 30, 2021. The decrease was mainly due to a $82.2 million increase in advances for vessels under construction and vessels additions and a $60.6 million decreased inflow from investments in the six months ended June 30, 2022 compared to the six months ended June 30, 2021, which was partially offset by a $13.0 million advance payment received for the sale of vessels in the six months ended June 30, 2022 compared to no such payments received in the six months ended June 30, 2021.

Net Cash Used in Financing Activities

Net cash flows used in financing activities increased by $323.9 million, to $431.9 million used in financing activities in the six months ended June 30, 2022 compared to $108.0 million used in financing activities in the six months ended June 30, 2021 mainly due to a $296.8 million increase in net debt and finance costs payments related to early debt extinguishment described above, a $20.8 million increase in dividend payments on our common stock and a $6.3 million increase in repurchases of our common stock in the six months ended June 30, 2022 compared to the six months ended June 30, 2021.

Non-GAAP Financial Measures

We report our financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes, however, 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 our performance. See the table below for supplemental financial data and corresponding reconciliation to GAAP financial measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP.

EBITDA and Adjusted EBITDA

EBITDA represents net income before interest income and expense, taxes, depreciation, as well as amortization of deferred drydocking & special survey costs, amortization of assumed time charters, amortization of deferred realized losses of cash flow interest rate swaps, amortization of finance costs and finance costs accrued. Adjusted EBITDA represents net income before interest income and expense, taxes other than withholding taxes on dividends received, depreciation, amortization of deferred drydocking & special survey costs, amortization of assumed time charters, amortization of deferred realized losses of cash flow interest rate swaps, amortization of finance costs and finance costs accrued, gain/loss on investments, equity income on investments, gain on debt extinguishment and stock-based compensation. We believe that EBITDA and Adjusted EBITDA assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. EBITDA and Adjusted EBITDA are also used: (i) by prospective and current customers as well as potential lenders to evaluate potential transactions; and (ii) to evaluate and price potential acquisition candidates. Our EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.

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EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA/Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA/Adjusted EBITDA do not reflect any cash requirements for such capital expenditures. 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. Because of these limitations, EBITDA/Adjusted EBITDA should not be considered as principal indicators of our performance.

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six Months |  | Six Months
​ | ​ | ended | ​ | ended
​ |  | June 30, 2022 |  | June 30, 2021
​ | ​ | (In thousands)
Net income | ​ | $ | 339,689 | ​ | $ | 669,617
Depreciation and amortization of right-of-use assets | ​ |  | 67,112 | ​ |  | 51,898
Amortization of deferred drydocking & special survey costs | ​ |  | 5,922 | ​ |  | 5,054
Amortization of assumed time charters | ​ |  | (32,364) | ​ |  | —
Amortization of deferred realized losses of cash flow interest rate swaps | ​ |  | 1,796 | ​ |  | 1,796
Amortization of finance costs and debt discount | ​ |  | 6,561 | ​ |  | 8,808
Finance costs accrued (Exit Fees under our Bank Agreements) | ​ |  | — | ​ |  | 149
Interest income | ​ |  | (121) | ​ |  | (11,509)
Interest expense | ​ |  | 26,632 | ​ |  | 24,507
Income taxes | ​ |  | 14,480 | ​ |  | —
EBITDA | ​ |  | 429,707 | ​ |  | 750,320
(Gain)/loss on investments and dividend withholding taxes | ​ |  | 54,616 | ​ |  | (444,165)
Gain on debt extinguishment | ​ |  | (22,939) | ​ |  | (111,616)
Stock based compensation | ​ |  | 248 | ​ |  | 5,479
Adjusted EBITDA | ​ | $ | 461,632 | ​ | $ | 200,018

​

EBITDA decreased by $320.6 million, to $429.7 million in the six months ended June 30, 2022 from $750.3 million in the six months ended June 30, 2021. This decrease was mainly attributed to a change in fair value of investment and dividends from ZIM of $374.9 million, a $88.7 million decrease in gain on debt extinguishment, a $19.0 million increase in total operating expenses, a partial collection of common benefit claim of $3.9 million from Hanjin Shipping in the six months ended June 30, 2021, a $4.0 million decrease in our equity income from our investment in Gemini following our acquisition and full consolidation of Gemini since July 1, 2021, which were partially offset by a $169.9 million increase in operating revenues (net of $32.4 million amortization of assumed time charters recognized in the six months ended June 30, 2022).

Adjusted EBITDA increased by $261.6 million, to $461.6 million in the six months ended June 30, 2022 from $200.0 million in the six months ended June 30, 2021. This increase was mainly attributed to a $169.9 million increase in operating revenues (net of $32.4 million amortization of assumed time charters recognized in the six months ended June 30, 2022) and a recognition of a $123.9 million dividend from ZIM (net of withholding taxes) in the six months ended June 30, 2022, which were partially offset by a $24.3 million increase in total operating expenses, a $4.0 million decrease in our equity income from our investment in Gemini following our acquisition and full consolidation of Gemini since July 1, 2021 and a partial collection of common benefit claim of $3.9 million from Hanjin Shipping in the six months ended June 30, 2021. Adjusted EBITDA for the six months ended June 30, 2022 is adjusted for a $54.6 million change in fair value of the investment in ZIM and dividend withholding taxes, a gain on debt extinguishment of $22.9 million and $0.2 million of stock-based compensation.

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Credit Facilities

We, as borrower or guarantor, and certain of our subsidiaries, as borrowers or guarantors, have entered into a number of credit facilities in connection with financing the acquisition of certain vessels in our fleet and the 2021 Debt Refinancing, which are described in Note 8 “Long-term Debt, net” in the unaudited condensed consolidated financial statements included in this report. Our existing credit facilities are secured by, among other things, our vessels (as described below). We do not have any additional amounts available for borrowing under our existing credit facilities. The following summarizes certain terms of our credit facilities and our Senior Notes:

​

​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Outstanding |  | ​
​ | ​ | Principal | ​ | ​
​ | ​ | Amount | ​ | ​
Credit Facility |  | (in millions) (1) |  | Collateral Vessels
Citibank/Natwest $815 mil. Facility(2) | ​ | $ | 463.5 |  | The Progress C, the Highway, the Bridge, the Zim Monaco, the Express Argentina, the Express France, the Express Spain, the CMA CGM Racine, the America, the Hyundai Smart, the Express Berlin, the Le Havre, the Derby D, the Vladivostok, the Advance, the Stride, the Future, the Sprinter, the Amalia C, the Zebra, the Artotina, the Dimitris C, the Zim Savannah, the Europe, the Dimitra C, the Hyundai Speed, the Express Rome, the CMA CGM Rabelais, the Pusan C, the Tongala, the CMA CGM Moliere, the CMA CGM Musset, the Rio Grande, the Zim Sao Paolo, the Zim Kingston, the Colombo, the Seattle C, the Vancouver, the Singapore, the Express Athens, the Hyundai Ambition, the Dalian, the Express Brazil, the YM Maturity, the Express Black Sea, the Zim Luanda, the CMA CGM Nerval and the YM Mandate
BNP Paribas/Credit Agricole $130 mil. Facility | ​ | $ | 130.0 |  | The Wide Alpha, the Stephanie C (ex Wide Bravo), the Maersk Euphrates, the Wide Hotel, the Wide India and the Wide Juliet
Senior Notes | ​ | $ | 300.0 |  | None

| (1) | As of June 30, 2022.

| (2) | Danaos Corporation is the borrower, and its subsidiaries owning the 48 collateral vessels set forth opposite the name of the facility in the table, are guarantors, under this credit facility.

As of June 30, 2022, there was no remaining borrowing availability under any of our credit facilities. We were in compliance with the financial covenants of the credit facilities as of June 30, 2022 and December 31, 2021. As of June 30, 2022 thirteen of our vessels were unencumbered. For additional information regarding the credit facilities and related repayment schedule, please refer to Note 8 “Long-term Debt, net” in the unaudited condensed consolidated financial statements included in this report.

In May 2020, we refinanced two of our 13,100 TEU vessels, the Hyundai Honour and the Hyundai Respect, through a sale and leaseback arrangement with a four-year term at the end of which we will reacquire the vessels for an aggregate amount of $36.0 million, or earlier, at our option. Additionally, on July 1, 2021, the Company acquired a finance

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lease liability related to the Gemini’s vessels Suez Canal and Kota Lima, which expired in July 2022, at which time the Company reacquired legal title to these two vessels for an aggregate amount of $19.5 million. As of June 30, 2022, we had a total of $105.8 million of outstanding leasing obligations, which relate to all these four vessels.

On May 12, 2022, we early repaid our leaseback obligation related to the vessels CMA CGM Melisande, CMA CGM Attila, CMA CGM Tancredi, CMA CGM Bianca and CMA CGM Samson. Following the repayment of the leaseback obligation on May 12, 2022, the Company acquired the legal title of these vessels.

On May 12, 2022, we early extinguished $270.0 million of the outstanding Natwest loan principal of the Citibank/Natwest $815 mil. Facility. The future quarterly instalments of the remaining facility were reduced to $12.9 million and the balloon payment at maturity was reduced to $309.0 million. Additionally, the reference to LIBOR was replaced with daily non-cumulative compounded secured overnight financing rate administered and published by the Federal Reserve Bank of New York (“SOFR”) plus credit spread adjustment

Additionally, in the three months ended June 30, 2022, we early repaid in full to our lenders the (i) $43 million loan outstanding with Macquarie Bank, (ii) $20.6 million loan outstanding with Eurobank and (iii) $9.8 million loan outstanding with SinoPac.

In June 2022, we drew down $130.0 million under a senior secured term loan facility from BNP Paribas and Credit Agricole with a five-year term, which is secured by six 5,466 TEU sister vessels acquired in 2021.

See Note 4 “Fixed Assets, net and Right-of-use Assets” and Note 8 “Long-term Debt, net” to our unaudited condensed consolidated financial statements included in this report.

Senior Notes

On February 11, 2021, we consummated an offering of $300 million aggregate principal amount of 8.500% Senior Notes due 2028 of Danaos Corporation, which we refer to as the Senior Notes. The net proceeds from the offering were initially placed into an escrow account, with Citibank, N.A., as escrow agent, and subsequently released in April 2021 for use in connection with the 2021 Debt Refinancing.

The Senior Notes were issued pursuant to an Indenture, dated as of February 11, 2021, between the Company and Citibank, N.A., London Branch, as trustee, paying agent, registrar and transfer agent. The Senior Notes bear interest at a rate of 8.500% per year, payable in cash on March 1 and September 1 of each year, commencing September 1, 2021. The Senior Notes will mature on March 1, 2028. The Senior Notes are general senior unsecured obligations of Danaos Corporation.

For additional details regarding the Senior Notes please refer to Note 8, “Long-term Debt, net” in the unaudited condensed consolidated financial statements included elsewhere in this report and “Item 5. Operating and Financial Review and Prospects –Senior Notes” in our Annual Report on Form 20-F for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 3, 2022.

Qualitative and Quantitative Disclosures about Market Risk

Interest Rate Swaps

In the past, we entered into interest rate swap agreements converting floating interest rate exposure into fixed interest rates in order to hedge our exposure to fluctuations in prevailing market interest rates, as well as interest rate swap agreements converting the fixed rate we paid in connection with certain of our credit facilities into floating interest rates in order to economically hedge the fair value of the fixed rate credit facilities against fluctuations in prevailing market interest rates. All of these interest rate swap agreements have expired and we do not currently have any outstanding interest rate swap agreements. Refer to Note 9, “Financial Instruments”, to our unaudited condensed consolidated financial statements included in this report.

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Foreign Currency Exchange Risk

We did not enter into derivative instruments to hedge the foreign currency translation of assets or liabilities or foreign currency transactions during the six months ended June 30, 2022 and 2021.

Capitalization and Indebtedness

The table below sets forth our consolidated capitalization as of June 30, 2022.

| ● | on an actual basis; and

| ● | on an as adjusted basis to reflect, in the period from July 1, 2022 to August 1, 2022, the scheduled debt repayment under the Citibank/Natwest $815 million Senior Secured Credit Facility amounting to $12.9 million and scheduled $21.8 million repayments related to our leasing obligations.

Other than these adjustments, there have been no other material changes to our capitalization from debt or equity issuances, re-capitalizations, special dividends, or debt repayments as adjusted in the table below between July 1, 2022 and August 1, 2022.

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of June 30, 2022
​ |  | Actual |  | As adjusted
​ | ​ | (US Dollars in thousands)
Debt: |  | ​ |  |  | ​ |
Citibank/Natwest $815 mil. facility | ​ | $ | 463,500 | ​ | $ | 450,625
Senior unsecured notes | ​ |  | 300,000 | ​ |  | 300,000
Other loan facilities | ​ |  | 130,000 | ​ |  | 130,000
Leasing obligations | ​ |  | 105,783 | ​ |  | 83,982
Total debt (1)(2) | ​ | $ | 999,283 | ​ | $ | 964,607
Stockholders’ equity: | ​ |  |  | ​ |  |
Preferred stock, par value $0.01 per share; 100,000,000 preferred shares authorized and none issued; actual and as adjusted | ​ |  | — | ​ |  | —
Common stock, par value $0.01 per share; 750,000,000 shares authorized; 25,055,841 shares issued and 20,538,670 shares outstanding; actual and as adjusted (3) | ​ |  | 205 | ​ |  | 205
Additional paid-in capital (3) | ​ |  | 759,723 | ​ |  | 759,723
Accumulated other comprehensive loss | ​ |  | (69,659) | ​ |  | (69,659)
Retained earnings (4) | ​ |  | 1,697,209 | ​ |  | 1,697,209
Total stockholders’ equity | ​ |  | 2,387,478 | ​ |  | 2,387,478
Total capitalization | ​ | $ | 3,386,761 | ​ | $ | 3,352,085

| (1) | All of the indebtedness reflected in the table, other than our Senior Notes due 2028 ($300.0 million on an actual basis), is secured and is guaranteed by Danaos Corporation, in the case of indebtedness of our subsidiaries ($130.0 million on an actual basis) and leasing obligations of our subsidiaries ($105.8 million on an actual basis), or by our subsidiaries, in the case of indebtedness of Danaos Corporation ($463.5 million on an actual basis). See Note 4 “Fixed Assets, net and Right-of-use Assets” and Note 8 “Long-Term Debt, net” to our unaudited condensed consolidated financial statements included elsewhere in this report.

| (2) | Total debt is presented gross of the fair value adjustment and deferred finance costs, which amount to $8.4 million and $24.8 million, respectively.

| (3) | Actual and as adjusted issued and outstanding common stock include 19,076 shares of restricted stock, which are scheduled to vest on December 31, 2022, subject to satisfaction of the vesting terms. Additionally, as adjusted common stock and additional paid-in capital do not reflect our common stock repurchase, from the open market, of 231,300 shares for $13.9 million in July 2022.

| (4) | Does not reflect dividend of $0.75 per share of common stock declared by the Company payable on August 29, 2022 to holders of record as of August 17, 2022.

​

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Our Fleet

The following table describes in detail our fleet deployment profile as of August 1, 2022:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year | ​ | Size | ​ | Expiration of | ​ | ​ | ​ | Contracted Employment | ​ | Charter | ​ | Extension Options (4) | ​
Vessel Name |  | Built |  | (TEU) |  | Charter (1) |  | Charterer |  | through (2) |  | Rate (3) |  | Period |  | Charter Rate | ​
Hyundai Ambition |  | 2012 |  | 13,100 |  | June 2024 |  | HMM |  | June 2024 | ​ | $ | 64,918 |  | + 3 years | ​ | $ | 60,418 | ​
Hyundai Speed |  | 2012 |  | 13,100 |  | June 2024 |  | HMM |  | June 2024 | ​ | $ | 64,918 |  | + 3 years | ​ | $ | 60,418 | ​
Hyundai Smart |  | 2012 |  | 13,100 |  | May 2024 |  | HMM |  | May 2024 | ​ | $ | 64,918 |  | + 3 years | ​ | $ | 60,418 | ​
Hyundai Respect (5) |  | 2012 |  | 13,100 |  | March 2024 |  | HMM |  | March 2024 | ​ | $ | 64,918 |  | + 3 years | ​ | $ | 60,418 | ​
Hyundai Honour (5) |  | 2012 |  | 13,100 |  | February 2024 |  | HMM |  | February 2024 | ​ | $ | 64,918 |  | + 3 years | ​ | $ | 60,418 | ​
Express Rome |  | 2011 |  | 10,100 |  | March 2023 |  | Hapag Lloyd |  | March 2023 | ​ | $ | 29,000 |  | + 10 up to 14 months | ​ | $ | 30,000 | ​
Express Berlin |  | 2011 |  | 10,100 |  | June 2023 |  | Yang Ming |  | June 2023 | ​ | $ | 27,750 |  | + 3 months | ​ | $ | 27,750 | ​
Express Athens |  | 2011 |  | 10,100 |  | March 2023 |  | Hapag Lloyd |  | March 2023 | ​ | $ | 29,000 |  | + 10 up to 14 months | ​ | $ | 30,000 | ​
Le Havre |  | 2006 |  | 9,580 |  | June 2028 |  | MSC |  | August 2023 | ​ | $ | 23,000 |  |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ |  | Confidential | (10)​ | June 2028 | ​ | $ | 58,500 |  | +4 months | ​ | $ | 58,500 | ​
Pusan C |  | 2006 |  | 9,580 |  | May 2028 |  | MSC | ​ | July 2023 | ​ | $ | 23,000 |  |  | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ |  | Confidential | (10)​ | May 2028 | ​ | $ | 58,500 |  | +4 months | ​ | $ | 58,500 | ​
Bremen |  | 2009 |  | 9,012 |  | January 2028 |  | MSC | ​ | March 2023 | ​ | $ | 23,000 |  |  | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ |  | Confidential | (10)​ | January 2028 | ​ | $ | 56,000 |  | +4 months | ​ | $ | 56,000 | ​
C Hamburg |  | 2009 |  | 9,012 |  | January 2028 |  | MSC | ​ | March 2023 | ​ | $ | 23,000 |  |  | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ |  | Confidential | (10)​ | January 2028 | ​ | $ | 56,000 |  | +4 months | ​ | $ | 56,000 | ​
Niledutch Lion |  | 2008 |  | 8,626 |  | May 2026 |  | Niledutch |  | May 2026 | ​ | $ | 47,500 |  | + 4 months | ​ | $ | 47,500 | ​
Belita (8) |  | 2006 |  | 8,533 |  | July 2026 |  | CMA CGM |  | July 2026 | ​ | $ | 45,000 |  | + 6 months | ​ | $ | 45,000 | ​
Kota Manzanillo (ex Charleston) |  | 2005 |  | 8,533 |  | February 2026 |  | PIL |  | February 2026 | ​ | $ | 47,500 |  | + 4 months | ​ | $ | 47,500 | ​
CMA CGM Melisande |  | 2012 |  | 8,530 |  | June 2024 |  | CMA CGM |  | December 2023 | ​ | $ | 43,000 |  | + 6 months | ​ | $ | 43,000 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | June 2024 / December 2024 | ​ |  | at market | (6)​ | + 6 months | ​ |  | at market | (6)​
CMA CGM Attila |  | 2011 |  | 8,530 |  | October 2023 |  | CMA CGM |  | April 2023 | ​ | $ | 43,000 | ​ | + 6 months | ​ | $ | 43,000 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | October 2023 / April 2024 | ​ |  | at market | (6)​ | + 6 months | ​ |  | at market | (6)​
CMA CGM Tancredi |  | 2011 |  | 8,530 |  | November 2023 |  | CMA CGM |  | May 2023 | ​ | $ | 43,000 | ​ | + 6 months | ​ | $ | 43,000 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | November 2023 / May 2024 | ​ |  | at market | (6)​ | + 6 months | ​ |  | at market | (6)​
CMA CGM Bianca |  | 2011 |  | 8,530 |  | January 2024 |  | CMA CGM |  | July 2023 | ​ | $ | 43,000 | ​ | + 6 months | ​ | $ | 43,000 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | January 2024 / July 2024 | ​ |  | at market | (6)​ | + 6 months | ​ |  | at market | (6)​
CMA CGM Samson |  | 2011 |  | 8,530 |  | March 2024 |  | CMA CGM |  | September 2023 | ​ | $ | 43,000 | ​ | + 6 months | ​ | $ | 43,000 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | March 2024 / September 2024 | ​ |  | at market | (6)​ | + 6 months | ​ |  | at market | (6)​
America |  | 2004 |  | 8,468 |  | April 2028 |  | MSC |  | June 2023 | ​ | $ | 22,000 | ​ |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ |  | Confidential | (10)​ | April 2028 | ​ | $ | 56,000 | ​ | + 4 months | ​ | $ | 56,000 | ​
Europe |  | 2004 |  | 8,468 |  | May 2028 |  | MSC | ​ | July 2023 | ​ | $ | 22,000 | ​ |  | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ |  | Confidential | (10)​ | May 2028 | ​ | $ | 56,000 | ​ | + 4 months | ​ | $ | 56,000 | ​
Phoebe |  | 2005 |  | 8,463 |  | August 2026 |  | ONE | ​ | August 2022 | ​ | $ | 24,000 | ​ |  | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ |  | PIL | ​ | August 2023 | ​ | $ | 60,000 | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | August 2025 | ​ | $ | 55,000 | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | August 2026 | ​ | $ | 50,000 | ​ | + 4 months | ​ | $ | 55,000 | ​
CMA CGM Moliere |  | 2009 |  | 6,500 |  | March 2027 |  | Confidential | (10)​ | March 2027 | ​ | $ | 55,000 | ​ | + 2 months | ​ | $ | 55,000 | ​
CMA CGM Musset |  | 2010 |  | 6,500 |  | September 2025 |  | CMA CGM | ​ | October 2022 | ​ | $ | 152,500 | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Confidential | (10)​ | September 2025 | ​ | $ | 60,000 | ​ | + 24 months | ​ | $ | 55,000 | ​
CMA CGM Nerval |  | 2010 |  | 6,500 |  | December 2022 |  | CMA CGM | ​ | December 2022 | ​ | $ | 149,167 | ​ | + 6 months | ​ | $ | 149,167 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
CMA CGM Rabelais |  | 2010 |  | 6,500 |  | February 2023 |  | CMA CGM | ​ | August 2022 | ​ | $ | 34,350 | ​ |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | February 2023 | ​ | $ | 144,167 | ​ | + 6 months | ​ | $ | 144,167 | ​
CMA CGM Racine |  | 2010 |  | 6,500 |  | March 2023 |  | CMA CGM | ​ | September 2022 | ​ | $ | 34,350 | ​ |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | March 2023 | ​ |  | at market | (6)​ | + 6 months | ​ |  | at market | (6)​
YM Mandate |  | 2010 |  | 6,500 |  | January 2028 |  | Yang Ming | ​ | January 2028 | ​ | $ | 26,890 | (7)​ | + 8 months | ​ | $ | 26,890 | (7)​
YM Maturity |  | 2010 |  | 6,500 |  | April 2028 |  | Yang Ming | ​ | April 2028 | ​ | $ | 26,890 | (7)​ | + 8 months | ​ | $ | 26,890 | (7)​
Leo C (8)(11) |  | 2002 |  | 6,422 |  | November 2022 |  | MSC | ​ | November 2022 | ​ | $ | 18,000 | ​ |  | ​ |  |  | ​
Catherine C (8)(11) |  | 2001 |  | 6,422 |  | November 2022 |  | MSC | ​ | November 2022 | ​ | $ | 18,000 | ​ |  | ​ |  |  | ​
Dimitra C |  | 2002 |  | 6,402 |  | January 2023 |  | Hapag Lloyd | ​ | January 2023 | ​ | $ | 20,000 | ​ | + 3 months | ​ | $ | 20,000 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | + 12 months | ​ | $ | 21,500 | ​
Zim Savannah |  | 2002 |  | 6,402 |  | May 2024 |  | ZIM | ​ | May 2024 | ​ | $ | 36,000 | ​ | + 6 months | ​ | $ | 36,000 | ​
Kota Lima (8) |  | 2002 |  | 5,544 |  | November 2024 |  | PIL | ​ | November 2024 | ​ | $ | 39,999 | ​ | + 4 months | ​ | $ | 39,999 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | + 10 up to 14 months | ​ | $ | 27,500 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | + 10 up to 12 months | ​ | $ | 24,000 | ​
Suez Canal (8) |  | 2002 |  | 5,610 |  | March 2023 |  | TS Lines | ​ | March 2023 | ​ | $ | 30,000 |  | + 4 months | ​ | $ | 30,000 | ​
Wide Alpha (9) |  | 2014 |  | 5,466 |  | March 2024 |  | ONE | ​ | March 2024 | ​ | $ | 18,500 |  | + 3 months | ​ | $ | 18,500 | ​
Stephanie C (ex Wide Bravo) (9) |  | 2014 |  | 5,466 |  | June 2025 |  | Confidential | (10)​ | June 2025 | ​ | $ | 55,500 |  | + 4 months | ​ | $ | 55,500 | ​
Maersk Euphrates (9) |  | 2014 |  | 5,466 |  | April 2024 |  | Maersk |  | April 2024 | ​ | $ | 17,500 |  | + 4 months | ​ | $ | 17,500 | ​

​

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year | ​ | Size | ​ | Expiration of | ​ | ​ | ​ | Contracted Employment | ​ | Charter | ​ | Extension Options (4)
Vessel Name |  | Built |  | (TEU) |  | Charter (1) |  | Charterer |  | through (2) |  | Rate (3) |  | Period |  | Charter Rate
Wide Hotel (9) |  | 2015 |  | 5,466 |  | May 2024 |  | ONE |  | May 2024 | ​ | $ | 18,500 |  | + 3 months | ​ | $ | 18,500
Wide India (9) |  | 2015 |  | 5,466 |  | September 2025 |  | Maersk |  | October 2022 | ​ | $ | 19,500 |  |  | ​ |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ |  | Confidential | (10)​ | September 2025 | ​ | $ | 53,500 |  | +4 months | ​ | $ | 53,500
Wide Juliet (9) |  | 2015 |  | 5,466 |  | June 2023 |  | ONE |  | June 2023 | ​ | $ | 19,950 |  | + 3 months | ​ | $ | 19,950
Rio Grande |  | 2008 |  | 4,253 |  | November 2024 |  | OOCL |  | January 2023 | ​ | $ | 68,000 |  |  | ​ |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | December 2023 | ​ | $ | 50,000 | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | November 2024 | ​ | $ | 17,000 |  | + 2 months | ​ | $ | 45,000
ZIM Sao Paolo |  | 2008 |  | 4,253 |  | February 2023 |  | ZIM |  | February 2023 | ​ | $ | 21,150 |  | + 4 months | ​ | $ | 21,150
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | + 13 months | ​ | $ | 25,000
ZIM Kingston |  | 2008 |  | 4,253 |  | April 2023 |  | ZIM |  | April 2023 | ​ | $ | 25,500 |  | + 4 months | ​ | $ | 25,500
ZIM Monaco |  | 2009 |  | 4,253 |  | February 2023 |  | ZIM |  | September 2022 | ​ | $ | 20,000 |  |  | ​ |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | February 2023 | ​ | $ | 22,000 |  | + 2 months | ​ | $ | 22,000
Dalian |  | 2009 |  | 4,253 |  | November 2022 |  | KMTC |  | November 2022 | ​ | $ | 30,750 |  | + 4 months | ​ | $ | 30,750
ZIM Luanda |  | 2009 |  | 4,253 |  | August 2025 |  | ZIM |  | August 2025 | ​ | $ | 30,000 |  | + 4 months | ​ | $ | 30,000
Seattle C |  | 2007 |  | 4,253 |  | October 2024 |  | OOCL |  | December 2022 | ​ | $ | 68,000 |  |  | ​ |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | November 2023 | ​ | $ | 50,000 | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | October 2024 | ​ | $ | 17,000 |  | + 2 months | ​ | $ | 45,000
Vancouver |  | 2007 |  | 4,253 |  | November 2024 |  | OOCL |  | January 2023 | ​ | $ | 68,000 |  |  | ​ |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | December 2023 | ​ | $ | 50,000 | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | November 2024 | ​ | $ | 17,000 |  | + 2 months | ​ | $ | 45,000
Derby D |  | 2004 |  | 4,253 |  | January 2027 |  | CMA CGM |  | January 2027 | ​ | $ | 36,275 |  | + 3 months | ​ | $ | 36,275
Tongala |  | 2004 |  | 4,253 |  | January 2023 |  | ZIM |  | January 2023 | ​ | $ | 30,750 |  | + 4 months | ​ | $ | 30,750
Dimitris C |  | 2001 |  | 3,430 |  | November 2025 |  | CMA CGM |  | November 2025 | ​ | $ | 40,000 |  | + 4 months | ​ | $ | 40,000
Express Argentina |  | 2010 |  | 3,400 |  | May 2023 |  | Maersk |  | May 2023 | ​ | $ | 26,500 |  | + 4 months | ​ | $ | 26,500
Express Brazil |  | 2010 |  | 3,400 |  | June 2025 |  | CMA CGM |  | June 2025 | ​ | $ | 37,750 |  | + 2 months | ​ | $ | 37,750
Express France |  | 2010 |  | 3,400 |  | September 2025 |  | CMA CGM |  | September 2025 | ​ | $ | 37,750 |  | + 2 months | ​ | $ | 37,750
Express Spain |  | 2011 |  | 3,400 |  | January 2025 |  | Cosco |  | January 2025 | ​ | $ | 40,000 |  | + 2 months | ​ | $ | 40,000
Express Black Sea |  | 2011 |  | 3,400 |  | January 2025 |  | Cosco |  | January 2025 | ​ | $ | 40,000 |  | + 2 months | ​ | $ | 40,000
Singapore |  | 2004 |  | 3,314 |  | May 2024 |  | OOCL |  | November 2022 | ​ | $ | 44,000 |  |  | ​ |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | November 2023 | ​ | $ | 38,450 | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | May 2024 | ​ | $ | 21,000 |  | + 6 months | ​ | $ | 37,000
Colombo |  | 2004 |  | 3,314 |  | January 2025 |  | Cosco |  | January 2025 | ​ | $ | 40,000 |  | + 2 months | ​ | $ | 40,000
Zebra |  | 2001 |  | 2,602 |  | November 2024 |  | Maersk |  | November 2024 | ​ | $ | 32,000 |  | + 4 months | ​ | $ | 32,000
Artotina |  | 2001 |  | 2,524 |  | May 2025 |  | Confidential | (10)​ | May 2025 | ​ | $ | 28,000 |  | +2 months | ​ | $ | 28,000
Amalia C |  | 1998 |  | 2,452 |  | January 2023 |  | OOCL |  | January 2023 | ​ | $ | 24,000 |  | + 2 months | ​ | $ | 24,000
Vladivostok |  | 1997 |  | 2,200 |  | March 2025 |  | Maersk |  | March 2025 | ​ | $ | 28,000 |  | + 6 months | ​ | $ | 28,000
Stride |  | 1997 |  | 2,200 |  | January 2025 |  | Cosco |  | January 2025 | ​ | $ | 26,250 |  | + 2 months | ​ | $ | 26,250
Sprinter |  | 1997 |  | 2,200 |  | December 2024 |  | Cosco |  | December 2024 | ​ | $ | 26,250 |  | + 2 months | ​ | $ | 26,250
Future |  | 1997 |  | 2,200 |  | December 2024 |  | Cosco |  | December 2024 | ​ | $ | 26,250 |  | + 2 months | ​ | $ | 26,250
Advance |  | 1997 |  | 2,200 |  | January 2025 |  | Cosco |  | January 2025 | ​ | $ | 26,250 |  | + 2 months | ​ | $ | 26,250
Bridge |  | 1998 |  | 2,200 |  | December 2024 |  | Samudera |  | December 2024 | ​ | $ | 23,000 |  | + 6 months | ​ | $ | 23,000
Highway |  | 1998 |  | 2,200 |  | August 2022 |  | Cosco |  | August 2022 | ​ | $ | 17,000 |  | + 4 months | ​ | $ | 17,000
Progress C |  | 1998 |  | 2,200 |  | November 2024 |  | Cosco |  | November 2024 | ​ | $ | 26,250 |  | + 2 months | ​ | $ | 26,250

| 1. | Earliest date charters could expire. Most charters include options for the charterers to extend their terms as described in the “Extension Options” column.

| 2. | This column indicates the date through which the charter rate set forth in the column to the immediate right of such date is payable. For charters with the same charter rate throughout the fixed term of the charter, this date is the same as the charter expiration date set forth in the “Expiration of Charter” column.

| 3. | Gross charter rate, which does not include charter commissions.

| 4. | At the option of the charterer.

| 5. | A subsidiary of Danaos Corporation holds a leasehold bareboat charter interest in such vessel, pursuant to which such subsidiary will acquire all rights to such vessel at the end of such lease.

| 6. | Daily charter rate for the contracted period of minimum 6 months – maximum 12 months will be the prevailing market rate at that time for such period.

| 7. | Bareboat charter rate.

| 8. | Vessels previously owned by Gemini Shipholdings Corporation, in which Danaos Corporation held a 49% equity interest through the end of the second quarter of 2021. On July 1, 2021, Danaos Corporation exercised its option to acquire the remaining 51% equity interests in Gemini Shipholdings Corporation and now holds 100%.

16

Table of Contents

| 9. | We took delivery of: (i) ‘Maersk Euphrates’ on August 25, 2021, (ii) ‘Wide India’ on September 20, 2021, (iii) ‘Stephanie C (ex Wide Bravo)’ on September 23, 2021, (iv) ‘Wide Juliet’ on September 27, 2021, (v) ‘Wide Alpha’ on September 28, 2021, and (vi) ‘Wide Hotel’ on October 6, 2021.

| 10. | Charterer not disclosed due to confidentiality arrangements.

| 11. | We have agreed to sell two of our vessels, Catherine C and Leo C, for gross proceeds of $130 million, which are expected to be delivered to the buyer in November 2022.

​

The specifications of our 6 contracted vessels under construction as of August 1, 2022 are as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Name |  | Year Built |  | Size (TEU) |  | Shipyard |  | Expected Delivery Period
Hull No. C7100-7 |  | 2024 |  | 7,100 |  | Dalian Shipbuilding Industry |  | 2nd Quarter 2024
Hull No. C7100-8 |  | 2024 |  | 7,100 |  | Dalian Shipbuilding Industry |  | 3rd Quarter 2024
Hull No. HN4009 |  | 2024 |  | 8,000 |  | Daehan Shipbuilding |  | 1st Quarter 2024
Hull No. HN4010 |  | 2024 |  | 8,000 |  | Daehan Shipbuilding |  | 2nd Quarter 2024
Hull No. HN4011 |  | 2024 |  | 8,000 |  | Daehan Shipbuilding |  | 2nd Quarter 2024
Hull No. HN4012 |  | 2024 |  | 8,000 |  | Daehan Shipbuilding |  | 3rd Quarter 2024

​

Forward Looking Statements

Matters discussed in this report may constitute forward-looking statements within the meaning of the safe harbor 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 our operations, cash flows, financial position, including with respect to vessel and other asset values, plans, objectives, goals, strategies, future events, performance or business prospects, changes and trends in our business and the markets in which we operate, 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. 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 impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity, demand for seaborne transportation of containerized cargo, the ability and willingness of charterers to fulfill their obligations to us, charter rates for containerships, shipyards constructing our contracted newbuilding vessels, performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing, Danaos’ ability to achieve the expected benefits of the 2021 Debt Refinancing and comply with the terms of its new credit facilities and other financing agreements entered into in connection with the 2021 Debt Refinancing, the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in our 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, including the conflict in Ukraine and related sanctions, or acts by terrorists.

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

​

​

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INDEX TO FINANCIAL STATEMENTS

​

Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 (unaudited) | F-2
​ | ​
Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited) | F-3
​ | ​
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited) | F-4
​ | ​
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2022 and 2021 (unaudited) | F-5
​ | ​
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (unaudited) | F-6
​ | ​
Notes to the Unaudited Condensed Consolidated Financial Statements | F-7

​

​

​

F-1

Table of Contents

DANAOS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(Expressed in thousands of United States Dollars, except share and per share amounts)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | As of
​ |  | ​ |  | June 30, | ​ | December 31,
​ |  | Notes |  | 2022 |  | 2021
​ | ​ | ​ | ​ | (unaudited) | ​ | ​ | ​
ASSETS | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
CURRENT ASSETS | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | 3 | ​ | $ | 319,573 | ​ | $ | 129,410
Restricted cash | ​ | 3 | ​ | $ | 13,000 | ​ | $ | 346
Accounts receivable, net | ​ | ​ | ​ |  | 5,540 | ​ |  | 7,118
Inventories | ​ | ​ | ​ |  | 14,442 | ​ |  | 12,579
Prepaid expenses | ​ | ​ | ​ |  | 3,211 | ​ |  | 2,032
Due from related parties | ​ | 14 | ​ |  | 32,118 | ​ |  | 21,875
Other current assets | ​ | 6 | ​ |  | 313,909 | ​ |  | 459,132
Total current assets | ​ | ​ | ​ |  | 701,793 | ​ |  | 632,492
NON-CURRENT ASSETS | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Fixed assets at cost, net of accumulated depreciation of $1,119,847 (2021: $1,055,792) | ​ | 4 | ​ | ​ | 2,800,286 | ​ | ​ | 2,861,651
Right-of-use assets, net of accumulated amortization of $6,142 (2021: $3,085) | ​ | 4 | ​ |  | 76,580 | ​ |  | 79,442
Advances for vessels under construction | ​ | 4 | ​ | ​ | 81,162 | ​ | ​ | —
Deferred charges, net | ​ | 5 | ​ |  | 15,605 | ​ |  | 11,801
Other non-current assets | ​ | 6 | ​ |  | 62,677 | ​ |  | 41,739
Total non-current assets | ​ | ​ | ​ |  | 3,036,310 | ​ |  | 2,994,633
Total assets | ​ | ​ | ​ | $ | 3,738,103 | ​ | $ | 3,627,125
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES AND STOCKHOLDERS’ EQUITY | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
CURRENT LIABILITIES | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accounts payable | ​ | ​ | ​ | $ | 18,559 | ​ | $ | 18,925
Accrued liabilities | ​ | 7 | ​ |  | 26,743 | ​ |  | 20,846
Current portion of long-term debt, net | ​ | 8 | ​ | ​ | 71,500 | ​ | ​ | 95,750
Current portion of long-term leaseback obligation, net | ​ | 4 | ​ |  | 46,285 | ​ |  | 85,815
Accumulated accrued interest, current portion | ​ | ​ | ​ | ​ | — | ​ | ​ | 6,146
Unearned revenue | ​ | ​ | ​ |  | 154,111 | ​ |  | 83,180
Other current liabilities | ​ | ​ | ​ |  | 18,878 | ​ |  | 8,645
Total current liabilities | ​ | ​ | ​ |  | 336,076 | ​ |  | 319,307
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LONG-TERM LIABILITIES | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Long-term debt, net | ​ | 8 | ​ |  | 790,270 | ​ |  | 1,017,916
Long-term leaseback obligation, net of current portion | ​ | 4 | ​ | ​ | 58,093 | ​ | ​ | 136,513
Accumulated accrued interest, net of current portion | ​ | ​ | ​ | ​ | — | ​ | ​ | 24,155
Unearned revenue, net of current portion | ​ | ​ | ​ | ​ | 152,564 | ​ | ​ | 37,977
Other long-term liabilities | ​ | ​ | ​ |  | 13,622 | ​ |  | 3,234
Total long-term liabilities | ​ | ​ | ​ |  | 1,014,549 | ​ |  | 1,219,795
Total liabilities | ​ | ​ | ​ |  | 1,350,625 | ​ |  | 1,539,102
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commitments and Contingencies | ​ | 10 | ​ |  | ​ | ​ |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
STOCKHOLDERS’ EQUITY | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Preferred stock (par value $0.01, 100,000,000 preferred shares authorized and not issued as of June 30, 2022 and December 31, 2021) | ​ | 11 | ​ |  | — | ​ |  | —
Common stock (par value $0.01, 750,000,000 common shares authorized as of June 30, 2022 and December 31, 2021. 25,055,841 and 25,056,009 shares issued as of June 30, 2022 and December 31, 2021; and 20,538,670 and 20,716,738 shares outstanding as of June 30, 2022 and December 31, 2021) | ​ | 11 | ​ |  | 205 | ​ |  | 207
Additional paid-in capital | ​ | ​ | ​ |  | 759,723 | ​ |  | 770,676
Accumulated other comprehensive loss | ​ | 9 | ​ |  | (69,659) | ​ |  | (71,455)
Retained earnings | ​ | ​ | ​ |  | 1,697,209 | ​ |  | 1,388,595
Total stockholders’ equity | ​ | ​ | ​ |  | 2,387,478 | ​ |  | 2,088,023
Total liabilities and stockholders’ equity | ​ | ​ | ​ | $ | 3,738,103 | ​ | $ | 3,627,125

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

​

F-2

Table of Contents

DANAOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Expressed in thousands of United States Dollars, except share and per share amounts)

​

​ | ​ | ​ | ​ | Three months ended | ​ | Six months ended
​ | ​ | ​ | ​ | June 30, | ​ | June 30,
​ |  | Notes |  | 2022 |  | 2021 |  | 2022 |  | 2021
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
OPERATING REVENUES | ​ | 12 | ​ | $ | 250,923 | ​ | $ | 146,434 | ​ | $ | 480,824 | ​ | $ | 278,552
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
OPERATING EXPENSES | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Voyage expenses | ​ | 14 | ​ | ​ | (9,443) | ​ |  | (4,966) | ​ | ​ | (16,632) | ​ |  | (9,194)
Vessel operating expenses | ​ | ​ | ​ | ​ | (40,579) | ​ |  | (32,940) | ​ | ​ | (79,743) | ​ |  | (64,018)
Depreciation and amortization of right-of-use assets |  | ​ | ​ | ​ | (33,753) | ​ |  | (26,099) | ​ | ​ | (67,112) | ​ |  | (51,898)
Amortization of deferred drydocking and special survey costs |  | 5 | ​ | ​ | (3,202) | ​ |  | (2,545) | ​ | ​ | (5,922) | ​ |  | (5,054)
General and administrative expenses | ​ | 14 | ​ | ​ | (7,136) | ​ |  | (7,130) | ​ | ​ | (14,527) | ​ |  | (18,025)
Income From Operations | ​ | ​ | ​ | ​ | 156,810 | ​ |  | 72,754 | ​ | ​ | 296,888 | ​ |  | 130,363
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
OTHER INCOME (EXPENSES): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest income | ​ | ​ | ​ | ​ | 120 | ​ |  | 9,531 | ​ | ​ | 121 | ​ |  | 11,509
Interest expense | ​ | ​ | ​ | ​ | (16,079) | ​ |  | (18,204) | ​ | ​ | (33,193) | ​ |  | (33,315)
Gain/(loss) on investments | ​ | 6 | ​ | ​ | (168,635) | ​ |  | 196,290 | ​ | ​ | (69,096) | ​ |  | 444,165
Dividend income | ​ | 6 | ​ | ​ | 16,208 | ​ | ​ | — | ​ | ​ | 138,386 | ​ | ​ | —
Gain on debt extinguishment | ​ | 8 | ​ | ​ | 22,939 | ​ | ​ | 111,616 | ​ | ​ | 22,939 | ​ | ​ | 111,616
Equity income on investments | ​ | ​ | ​ | ​ | — | ​ | ​ | 2,162 | ​ | ​ | — | ​ | ​ | 3,965
Other finance expenses | ​ | ​ | ​ | ​ | (336) | ​ | ​ | (582) | ​ | ​ | (941) | ​ | ​ | (1,034)
Other income/(expenses), net | ​ | 10 | ​ | ​ | 362 | ​ |  | 173 | ​ | ​ | 861 | ​ |  | 4,144
Loss on derivatives |  | 9 | ​ | ​ | (903) | ​ |  | (903) | ​ | ​ | (1,796) | ​ |  | (1,796)
Total Other Income/(Expenses), net | ​ | ​ | ​ | ​ | (146,324) | ​ |  | 300,083 | ​ | ​ | 57,281 | ​ |  | 539,254
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income before income taxes | ​ | ​ | ​ | ​ | 10,486 | ​ | ​ | 372,837 | ​ | ​ | 354,169 | ​ | ​ | 669,617
Income taxes | ​ | 6 | ​ | ​ | (2,262) | ​ | ​ | — | ​ | ​ | (14,480) | ​ | ​ | —
Net Income | ​ | ​ | ​ | $ | 8,224 | ​ | $ | 372,837 | ​ | $ | 339,689 | ​ | $ | 669,617
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
EARNINGS PER SHARE | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic earnings per share | ​ | ​ | ​ | $ | 0.40 | ​ | $ | 18.32 | ​ | $ | 16.42 | ​ | $ | 32.95
Diluted earnings per share | ​ | ​ | ​ | $ | 0.40 | ​ | $ | 18.10 | ​ | $ | 16.40 | ​ | $ | 32.57
Basic weighted average number of common shares (in thousands) | ​ | 13 | ​ | ​ | 20,689 | ​ | ​ | 20,354 | ​ | ​ | 20,693 | ​ | ​ | 20,323
Diluted weighted average number of common shares (in thousands) | ​ | 13 | ​ | ​ | 20,708 | ​ |  | 20,599 | ​ | ​ | 20,712 | ​ |  | 20,557

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

​

​

F-3

Table of Contents

DANAOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

(Expressed in thousands of United States Dollars)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Three months ended | ​ | Six months ended
​ | ​ | ​ | ​ | June 30, | ​ | June 30,
​ |  | Notes |  | 2022 |  | 2021 |  | 2022 |  | 2021
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income for the period | ​ | ​ | ​ | $ | 8,224 | ​ | $ | 372,837 | ​ | $ | 339,689 | ​ | $ | 669,617
Other comprehensive income: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized gain on available for sale securities | ​ | ​ | ​ | ​ | — | ​ | ​ | 130 | ​ | ​ | — | ​ | ​ | 19,717
Reclassification to interest income | ​ | ​ | ​ | ​ | — | ​ | ​ | (8,695) | ​ | ​ | — | ​ | ​ | (8,695)
Amortization of deferred realized losses on cash flow hedges | ​ | 9 | ​ |  | 903 | ​ |  | 903 | ​ |  | 1,796 | ​ |  | 1,796
Total Other Comprehensive Income/(Loss) | ​ | ​ | ​ |  | 903 | ​ |  | (7,662) | ​ |  | 1,796 | ​ |  | 12,818
Comprehensive Income | ​ | ​ | ​ | $ | 9,127 | ​ | $ | 365,175 | ​ | $ | 341,485 | ​ | $ | 682,435

​

The accompanying notes are an integral part of these condensed consolidated financial statements

​

F-4

Table of Contents

DANAOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited)

(Expressed in thousands of United States Dollars)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Common Stock |  | ​ | ​ |  | Accumulated |  | ​ | ​ |  | ​ | ​
​ | ​ | Number | ​ | ​ | ​ | ​ | Additional | ​ | other | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | of | ​ | Par | ​ | paid‑in | ​ | comprehensive | ​ | Retained | ​ | ​ | ​
​ |  | shares |  | value |  | capital |  | loss |  | earnings |  | Total
As of December 31, 2020 |  | 20,449 | ​ | $ | 204 | ​ | $ | 755,390 | ​ | $ | (86,669) | ​ | $ | 366,652 | ​ | $ | 1,035,577
Net Income |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 296,780 | ​ |  | 296,780
Stock compensation |  | 150 | ​ |  | 2 | ​ |  | 4,907 | ​ |  | — | ​ |  | — | ​ |  | 4,909
Net movement in other comprehensive income |  | — | ​ |  | — | ​ |  | — | ​ |  | 20,480 | ​ |  | — | ​ |  | 20,480
As of March 31, 2021 | ​ | 20,599 | ​ | $ | 206 | ​ | $ | 760,297 | ​ | $ | (66,189) | ​ | $ | 663,432 | ​ | $ | 1,357,746
Net Income | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 372,837 | ​ | ​ | 372,837
Dividends | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (10,300) | ​ | ​ | (10,300)
Stock compensation | ​ | — | ​ | ​ | — | ​ | ​ | 570 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 570
Issuance of common stock | ​ | — | ​ | ​ | — | ​ | ​ | 2 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2
Net movement in other comprehensive income | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (7,662) | ​ | ​ | — | ​ | ​ | (7,662)
As of June 30, 2021 |  | 20,599 | ​ | $ | 206 | ​ | $ | 760,869 | ​ | $ | (73,851) | ​ | $ | 1,025,969 | ​ | $ | 1,713,193

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Common Stock |  | ​ | ​ |  | Accumulated |  | ​ | ​ |  | ​ | ​
​ | ​ | Number | ​ | ​ | ​ | ​ | Additional | ​ | other | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | of | ​ | Par | ​ | paid‑in | ​ | comprehensive | ​ | Retained | ​ | ​ | ​
​ |  | shares |  | value |  | capital |  | loss |  | earnings |  | Total
As of December 31, 2021 |  | 20,717 | ​ | $ | 207 | ​ | $ | 770,676 | ​ | $ | (71,455) | ​ | $ | 1,388,595 | ​ | $ | 2,088,023
Net Income |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 331,465 | ​ |  | 331,465
Dividends | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (15,537) | ​ | ​ | (15,537)
Stock compensation |  | — | ​ |  | — | ​ |  | 124 | ​ |  | — | ​ |  | — | ​ |  | 124
Net movement in other comprehensive income |  | — | ​ |  | — | ​ |  | — | ​ |  | 893 | ​ |  | — | ​ |  | 893
As of March 31, 2022 | ​ | 20,717 | ​ | $ | 207 | ​ | $ | 770,800 | ​ | $ | (70,562) | ​ | $ | 1,704,523 | ​ | $ | 2,404,968
Net Income | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 8,224 | ​ | ​ | 8,224
Repurchase of common stock | ​ | (178) | ​ | ​ | (2) | ​ | ​ | (11,206) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (11,208)
Dividends | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (15,538) | ​ | ​ | (15,538)
Stock compensation | ​ | — | ​ | ​ | — | ​ | ​ | 124 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 124
Issuance of common stock | ​ | — | ​ | ​ | — | ​ | ​ | 5 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5
Net movement in other comprehensive income | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 903 | ​ | ​ | — | ​ | ​ | 903
As of June 30, 2022 |  | 20,539 | ​ | $ | 205 | ​ | $ | 759,723 | ​ | $ | (69,659) | ​ | $ | 1,697,209 | ​ | $ | 2,387,478

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

​

F-5

Table of Contents

DANAOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(Expressed in thousands of United States Dollars)

​

​ | ​ | Six months ended
​ | ​ | June 30,
​ |  | 2022 |  | 2021
​ | ​ | ​ | ​ | ​ | ​
Cash Flows from Operating Activities | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | $ | 339,689 |  | $ | 669,617
​ | ​ | ​ | ​ | ​ | ​ | ​
Adjustments to reconcile net income to net cash provided by operating activities | ​ | ​ | ​ | ​ | ​ | ​
Depreciation and amortization of right-of-use assets | ​ |  | 67,112 |  | ​ | 51,898
Amortization of deferred drydocking and special survey costs | ​ |  | 5,922 |  | ​ | 5,054
Amortization of assumed time charters | ​ | ​ | (32,364) | ​ | ​ | —
Amortization of finance costs | ​ |  | 4,922 |  | ​ | 6,218
Exit fee accrued on debt | ​ |  | — |  | ​ | 149
Debt discount amortization | ​ | ​ | 1,639 | ​ | ​ | 2,590
Loss/ (gain) on investments | ​ | ​ | 69,096 | ​ | ​ | (444,165)
Gain on debt extinguishment | ​ | ​ | (22,939) | ​ | ​ | (111,616)
Equity income on investments | ​ | ​ | — | ​ | ​ | (3,965)
PIK interest | ​ | ​ | — | ​ | ​ | 726
Payments for drydocking and special survey costs deferred | ​ |  | (9,726) |  | ​ | (1,155)
Stock based compensation | ​ | ​ | 248 | ​ | ​ | 5,479
Amortization of deferred realized losses on interest rate swaps | ​ |  | 1,796 |  | ​ | 1,796
(Increase)/Decrease in | ​ | ​ | ​ | ​ | ​ | ​
Accounts receivable | ​ |  | 1,578 |  | ​ | 444
Inventories | ​ |  | (1,863) |  | ​ | (180)
Prepaid expenses | ​ |  | (1,179) |  | ​ | (367)
Due from related parties | ​ |  | (10,243) |  | ​ | (900)
Other assets, current and non-current | ​ |  | (30,145) |  | ​ | 3,093
Increase/(Decrease) in | ​ | ​ | ​ | ​ | ​ | ​
Accounts payable | ​ |  | (1,061) |  | ​ | 1,425
Accrued liabilities | ​ |  | 5,902 |  | ​ | 8,921
Unearned revenue, current and long-term | ​ |  | 217,882 |  | ​ | (2,109)
Other liabilities, current and long-term | ​ |  | 14,212 |  | ​ | (210)
Net Cash provided by Operating Activities | ​ |  | 620,478 |  | ​ | 192,743
​ | ​ | ​ | ​ | ​ | ​ | ​
Cash Flows from Investing Activities | ​ | ​ | ​ | ​ | ​ | ​
Vessels additions and advances for vessels under construction | ​ |  | (84,047) |  | ​ | (1,811)
Advances for sale of vessels | ​ | ​ | 13,000 | ​ | ​ | —
Investments | ​ | ​ | 85,333 | ​ | ​ | 145,877
Net Cash provided by Investing Activities | ​ |  | 14,286 |  | ​ | 144,066
​ | ​ | ​ | ​ | ​ | ​ | ​
Cash Flows from Financing Activities | ​ | ​ | ​ | ​ | ​ | ​
Proceeds from long-term debt | ​ |  | 127,725 |  | ​ | 1,105,311
Payments of long-term debt | ​ | ​ | (383,125) | ​ | ​ | (1,295,025)
Proceeds from sale-leaseback of vessels | ​ | ​ | — | ​ | ​ | 135,000
Payments of leaseback obligation | ​ | ​ | (120,687) | ​ | ​ | (21,175)
Dividends paid | ​ | ​ | (31,070) | ​ | ​ | (10,298)
Repurchase of common stock | ​ | ​ | (6,325) | ​ | ​ | —
Payments of accumulated accrued interest | ​ | ​ | (3,373) | ​ | ​ | (7,358)
Finance costs | ​ | ​ | (15,092) | ​ | ​ | (14,509)
Net Cash used in Financing Activities | ​ |  | (431,947) |  | ​ | (108,054)
​ | ​ | ​ | ​ | ​ | ​ | ​
Net Increase in cash, cash equivalents and restricted cash | ​ |  | 202,817 |  | ​ | 228,755
Cash, cash equivalents and restricted cash at beginning of period | ​ |  | 129,756 |  | ​ | 65,663
Cash, cash equivalents and restricted cash at end of period | ​ | $ | 332,573 | ​ | $ | 294,418

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

​

F-6

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 Basis of Presentation and General Information

​

The accompanying condensed consolidated financial statements (unaudited) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The reporting and functional currency of the Company is the United States Dollar.

​

Danaos Corporation (“Danaos” or “Company”), formerly Danaos Holdings Limited, was formed on December 7, 1998 under the laws of Liberia and is presently the sole owner of all outstanding shares of the companies listed below. Danaos Holdings Limited was redomiciled in the Marshall Islands on October 7, 2005. In connection with the redomiciliation, the Company changed its name to Danaos Corporation. On October 14, 2005, the Company filed and the Marshall Islands accepted Amended and Restated Articles of Incorporation. The authorized capital stock of Danaos Corporation is 750,000,000 shares of common stock with a par value of $0.01 and 100,000,000 shares of preferred stock with a par value of $0.01. Refer to Note 11, “Stockholders’ Equity”. The Company’s principal business is the acquisition and operation of vessels. Danaos conducts its operations through the vessel owning companies whose principal activity is the ownership and operation of containerships that are under the exclusive management of a related party of the Company.

​

In the opinion of management, the accompanying condensed consolidated financial statements (unaudited) of Danaos and subsidiaries contain all adjustments necessary to state fairly, in all material respects, the Company’s condensed consolidated financial position as of June 30, 2022, the condensed consolidated results of operations for the three and six months ended June 30, 2022 and 2021 and the condensed consolidated cash flows for the six months ended June 30, 2022 and 2021. All such adjustments are deemed to be of a normal, recurring nature. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in Danaos’ Annual Report on Form 20-F for the year ended December 31, 2021. The results of operations for the three and six months ended June 30, 2022, are not necessarily indicative of the results to be expected for the full year. The year-end condensed consolidated balance sheet data was derived from annual financial statements. These condensed consolidated financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America.

The accompanying condensed consolidated financial statements (unaudited) represent the consolidation of the accounts of the Company and its wholly owned subsidiaries. The subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases. Inter-company transaction balances and unrealized gains on transactions between the companies are eliminated.

​

The condensed consolidated financial statements (unaudited) have been prepared to reflect the consolidation of the companies listed below. The historical balance sheets and results of operations of the companies listed below have been reflected in the condensed consolidated balance sheets and condensed consolidated statements of income, cash flows and stockholders’ equity at and for each period since their respective incorporation dates. The consolidated companies are referred to as “Danaos,” or “the Company.”

F-7

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

1 Basis of Presentation and General Information (Continued)

​

As of June 30, 2022, Danaos included the vessel owning companies (the “Danaos Subsidiaries”) listed below. All vessels are container vessels:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Company |  | Date of Incorporation |  | Vessel Name |  | Year Built |  | TEU (1)
Megacarrier (No. 1) Corp. | ​ | September 10, 2007 | ​ | Hyundai Honour | ​ | 2012 | ​ | 13,100
Megacarrier (No. 2) Corp. | ​ | September 10, 2007 | ​ | Hyundai Respect | ​ | 2012 | ​ | 13,100
Megacarrier (No. 3) Corp. | ​ | September 10, 2007 | ​ | Hyundai Smart | ​ | 2012 | ​ | 13,100
Megacarrier (No. 4) Corp. | ​ | September 10, 2007 | ​ | Hyundai Speed | ​ | 2012 | ​ | 13,100
Megacarrier (No. 5) Corp. | ​ | September 10, 2007 | ​ | Hyundai Ambition | ​ | 2012 | ​ | 13,100
CellContainer (No. 6) Corp. | ​ | October 31, 2007 | ​ | Express Berlin | ​ | 2011 | ​ | 10,100
CellContainer (No. 7) Corp. | ​ | October 31, 2007 | ​ | Express Rome | ​ | 2011 | ​ | 10,100
CellContainer (No. 8) Corp. | ​ | October 31, 2007 | ​ | Express Athens | ​ | 2011 | ​ | 10,100
Karlita Shipping Co. Ltd. | ​ | February 27, 2003 | ​ | Pusan C | ​ | 2006 | ​ | 9,580
Ramona Marine Co. Ltd. | ​ | February 27, 2003 | ​ | Le Havre | ​ | 2006 | ​ | 9,580
Oceancarrier (No. 2) Corp. | ​ | October 15, 2020 | ​ | Bremen | ​ | 2009 | ​ | 9,012
Oceancarrier (No. 3) Corp. | ​ | October 15, 2020 | ​ | C Hamburg | ​ | 2009 | ​ | 9,012
Blackwell Seaways Inc. | ​ | January 9, 2020 | ​ | Niledutch Lion | ​ | 2008 | ​ | 8,626
Oceancarrier (No.1) Corp. | ​ | February 19, 2020 | ​ | Kota Manzanillo (ex Charleston) | ​ | 2005 | ​ | 8,533
Springer Shipping Co. | ​ | April 29, 2019 | ​ | Belita | ​ | 2006 | ​ | 8,533
Teucarrier (No. 5) Corp. | ​ | September 17, 2007 | ​ | CMA CGM Melisande | ​ | 2012 | ​ | 8,530
Teucarrier (No. 1) Corp. | ​ | January 31, 2007 | ​ | CMA CGM Attila | ​ | 2011 | ​ | 8,530
Teucarrier (No. 2) Corp. | ​ | January 31, 2007 | ​ | CMA CGM Tancredi | ​ | 2011 | ​ | 8,530
Teucarrier (No. 3) Corp. | ​ | January 31, 2007 | ​ | CMA CGM Bianca | ​ | 2011 | ​ | 8,530
Teucarrier (No. 4) Corp. | ​ | January 31, 2007 | ​ | CMA CGM Samson | ​ | 2011 | ​ | 8,530
Oceanew Shipping Ltd. | ​ | January 14, 2002 | ​ | Europe | ​ | 2004 | ​ | 8,468
Oceanprize Navigation Ltd. | ​ | January 21, 2003 | ​ | America | ​ | 2004 | ​ | 8,468
Rewarding International Shipping Inc. | ​ | October 1, 2019 | ​ | Phoebe | ​ | 2005 | ​ | 8,463
Boxcarrier (No. 2) Corp. | ​ | June 27, 2006 | ​ | CMA CGM Musset | ​ | 2010 | ​ | 6,500
Boxcarrier (No. 3) Corp. | ​ | June 27, 2006 | ​ | CMA CGM Nerval | ​ | 2010 | ​ | 6,500
Boxcarrier (No. 4) Corp. | ​ | June 27, 2006 | ​ | CMA CGM Rabelais | ​ | 2010 | ​ | 6,500
Boxcarrier (No. 5) Corp. | ​ | June 27, 2006 | ​ | CMA CGM Racine | ​ | 2010 | ​ | 6,500
Boxcarrier (No. 1) Corp. | ​ | June 27, 2006 | ​ | CMA CGM Moliere | ​ | 2009 | ​ | 6,500
Expresscarrier (No. 1) Corp. | ​ | March 5, 2007 | ​ | YM Mandate | ​ | 2010 | ​ | 6,500
Expresscarrier (No. 2) Corp. | ​ | March 5, 2007 | ​ | YM Maturity | ​ | 2010 | ​ | 6,500
Kingsland International Shipping Limited | ​ | June 26, 2015 | ​ | Catherine C | ​ | 2001 | ​ | 6,422
Leo Shipping and Trading S.A. | ​ | October 29, 2015 | ​ | Leo C | ​ | 2002 | ​ | 6,422
Actaea Company Limited | ​ | October 14, 2014 | ​ | Zim Savannah | ​ | 2002 | ​ | 6,402
Asteria Shipping Company Limited | ​ | October 14, 2014 | ​ | Dimitra C | ​ | 2002 | ​ | 6,402
Averto Shipping S.A. | ​ | June 12, 2015 | ​ | Suez Canal | ​ | 2002 | ​ | 5,610
Sinoi Marine Ltd. | ​ | June 12, 2015 | ​ | Kota Lima | ​ | 2002 | ​ | 5,544
Oceancarrier (No. 4) Corp. | ​ | July 6, 2021 | ​ | Wide Alpha | ​ | 2014 | ​ | 5,466
Oceancarrier (No. 5) Corp. | ​ | July 6, 2021 | ​ | Stephanie C (ex Wide Bravo) | ​ | 2014 | ​ | 5,466
Oceancarrier (No. 6) Corp. | ​ | July 6, 2021 | ​ | Maersk Euphrates | ​ | 2014 | ​ | 5,466
Oceancarrier (No. 7) Corp. | ​ | July 6, 2021 | ​ | Wide Hotel | ​ | 2015 | ​ | 5,466
Oceancarrier (No. 8) Corp. | ​ | July 6, 2021 | ​ | Wide India | ​ | 2015 | ​ | 5,466
Oceancarrier (No. 9) Corp. | ​ | July 6, 2021 | ​ | Wide Juliet | ​ | 2015 | ​ | 5,466
Continent Marine Inc. | ​ | March 22, 2006 | ​ | Zim Monaco | ​ | 2009 | ​ | 4,253
Medsea Marine Inc. | ​ | May 8, 2006 | ​ | Dalian | ​ | 2009 | ​ | 4,253
Blacksea Marine Inc. | ​ | May 8, 2006 | ​ | Zim Luanda | ​ | 2009 | ​ | 4,253
Bayview Shipping Inc. | ​ | March 22, 2006 | ​ | Rio Grande | ​ | 2008 | ​ | 4,253
Channelview Marine Inc. | ​ | March 22, 2006 | ​ | Zim Sao Paolo | ​ | 2008 | ​ | 4,253
Balticsea Marine Inc. | ​ | March 22, 2006 | ​ | Zim Kingston | ​ | 2008 | ​ | 4,253
Seacarriers Services Inc. | ​ | June 28, 2005 | ​ | Seattle C | ​ | 2007 | ​ | 4,253
Seacarriers Lines Inc. | ​ | June 28, 2005 | ​ | Vancouver | ​ | 2007 | ​ | 4,253
Containers Services Inc. | ​ | May 30, 2002 | ​ | Tongala | ​ | 2004 | ​ | 4,253
Containers Lines Inc. | ​ | May 30, 2002 | ​ | Derby D | ​ | 2004 | ​ | 4,253
Boulevard Shiptrade S.A | ​ | September 12, 2013 | ​ | Dimitris C | ​ | 2001 | ​ | 3,430
CellContainer (No. 4) Corp. | ​ | March 23, 2007 | ​ | Express Spain | ​ | 2011 | ​ | 3,400
CellContainer (No. 5) Corp. | ​ | March 23, 2007 | ​ | Express Black Sea | ​ | 2011 | ​ | 3,400
CellContainer (No. 1) Corp. | ​ | March 23, 2007 | ​ | Express Argentina | ​ | 2010 | ​ | 3,400
CellContainer (No. 2) Corp. | ​ | March 23, 2007 | ​ | Express Brazil | ​ | 2010 | ​ | 3,400
CellContainer (No. 3) Corp. | ​ | March 23, 2007 | ​ | Express France | ​ | 2010 | ​ | 3,400
Wellington Marine Inc. | ​ | January 27, 2005 | ​ | Singapore | ​ | 2004 | ​ | 3,314
Auckland Marine Inc. | ​ | January 27, 2005 | ​ | Colombo | ​ | 2004 | ​ | 3,314
Vilos Navigation Company Ltd. | ​ | May 30, 2013 | ​ | Zebra | ​ | 2001 | ​ | 2,602
Trindade Maritime Company | ​ | April 10, 2013 | ​ | Amalia C | ​ | 1998 | ​ | 2,452
Sarond Shipping Inc. | ​ | January 18, 2013 | ​ | Artotina | ​ | 2001 | ​ | 2,524
Speedcarrier (No. 7) Corp. | ​ | December 6, 2007 | ​ | Highway | ​ | 1998 | ​ | 2,200
Speedcarrier (No. 6) Corp. | ​ | December 6, 2007 | ​ | Progress C | ​ | 1998 | ​ | 2,200
Speedcarrier (No. 8) Corp. | ​ | December 6, 2007 | ​ | Bridge | ​ | 1998 | ​ | 2,200
Speedcarrier (No. 1) Corp. | ​ | June 28, 2007 | ​ | Vladivostok | ​ | 1997 | ​ | 2,200
Speedcarrier (No. 2) Corp. | ​ | June 28, 2007 | ​ | Advance | ​ | 1997 | ​ | 2,200
Speedcarrier (No. 3) Corp. | ​ | June 28, 2007 | ​ | Stride | ​ | 1997 | ​ | 2,200
Speedcarrier (No. 5) Corp. | ​ | June 28, 2007 | ​ | Future | ​ | 1997 | ​ | 2,200
Speedcarrier (No. 4) Corp. | ​ | June 28, 2007 | ​ | Sprinter | ​ | 1997 | ​ | 2,200
Vessels under construction | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Boxsail (No. 1) Corp. | ​ | March 4, 2022 | ​ | Hull No. C7100-7 | ​ | 2024 | ​ | 7,100
Boxsail (No. 2) Corp. | ​ | March 4, 2022 | ​ | Hull No. C7100-8 | ​ | 2024 | ​ | 7,100
Teushipper (No. 1) Corp. | ​ | March 14, 2022 | ​ | Hull No. HN4009 | ​ | 2024 | ​ | 8,000
Teushipper (No. 2) Corp. | ​ | March 14, 2022 | ​ | Hull No. HN4010 | ​ | 2024 | ​ | 8,000
Teushipper (No. 3) Corp. | ​ | March 14, 2022 | ​ | Hull No. HN4011 | ​ | 2024 | ​ | 8,000
Teushipper (No. 4) Corp. | ​ | March 14, 2022 | ​ | Hull No. HN4012 | ​ | 2024 | ​ | 8,000

| (1) | Twenty-feet equivalent unit, the international standard measure for containers and containership capacity.

F-8

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

1 Basis of Presentation and General Information (Continued)

​

Impact of COVID-19 on the Company’s Business

​

The spread of the COVID-19 virus, which has been declared a pandemic by the World Health Organization, in 2020 has caused substantial disruptions in the global economy and the shipping industry, as well as significant volatility in the financial markets, the severity and duration of which remains uncertain.

​

The impact of the COVID-19 pandemic continues to unfold and may have a negative effect on the Company’s business, financial performance and the results of its operations, including due to decreased demand for global seaborne container trade and containership charter rates, which was mainly experienced in the first half of 2020. The extent of the impact will depend largely on future developments. As a result, many of the Company’s estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company’s estimates may change in future periods.

​

Impact of the war in Ukraine on the Company’s Business

​

As disclosed in the Company’s Annual Report on Form 20-F for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 3, 2022, the current conflict between Russia and Ukraine, and related sanctions imposed by the U.S., EU and others, could adversely affect the crewing operations of the Company’s Manager, which has crewing offices in St. Petersburg, Odessa and Mariupol, and trade patterns involving ports in the Black Sea or Russia. The extent of the impact will depend largely on future developments.

​

2 Significant Accounting Policies

​

For a detailed discussion about the Company’s significant accounting policies, see Note 2 “Significant Accounting Policies” in the Company’s consolidated financial statements included in the Annual Report on Form 20-F for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 3, 2022. During the six months ended June 30, 2022, there were no significant changes made to the Company’s significant accounting policies.

​

​

​

3 Cash, Cash Equivalents and Restricted Cash

​

Cash, cash equivalents and restricted cash consisted of the following (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of |  | As of |  | As of
​ | ​ | June 30, 2022 | ​ | December 31, 2021 | ​ | December 31, 2020
Cash and cash equivalents | ​ | $ | 319,573 | ​ | $ | 129,410 | ​ | $ | 65,663
Restricted cash | ​ |  | 13,000 | ​ |  | 346 | ​ |  | —
Total | ​ | $ | 332,573 | ​ | $ | 129,756 | ​ | $ | 65,663

​

The Company received an advance payment for sale of the vessels of $13.0 million, which is held in an escrow account as of June 30, 2022. Additionally, the Company was required to maintain cash in a retention account as collateral for then upcoming scheduled debt payments related to the now repaid Eurobank $30 mil. facility, which was recorded in restricted cash under current assets as of December 31, 2021.

​

F-9

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

4 Fixed Assets, net & Right-of-use Assets

​

On April 1, 2022, the Company entered into contracts, as amended on April 21, 2022, for the construction of four 8,000 TEU container vessels for an aggregate purchase price of $372.7 million, out of which $49.2 million was advanced before June 30, 2022, an amount of $96.7 million is expected to be paid in 2022 and $226.8 million is expected to be paid at vessels delivery in 2024. On March 11, 2022, the Company entered into contracts for the construction of two 7,100 TEU container vessels for an aggregate purchase price of $156.0 million, out of which $31.2 million was advanced in April 2022, $31.2 million is expected to be paid in 2023 and $93.6 million at vessels delivery expected in 2024. Additionally, a supervision fee of $725 thousand per newbuilding vessel will be payable to Danaos Shipping Company Limited.

​

On January 17, 2022, the Company entered into agreements to sell its vessels Catherine C and Leo C for an aggregate gross consideration of $130.0 million, out of which $13.0 million was advanced by the buyer and is held in an escrow account as of June 30, 2022. The vessels are expected to be delivered to the buyer in November 2022.

​

The Company assumed time charter liabilities related to its acquisition of vessels in the second half of 2021. The amortization of these assumed time charters amounted to $32.4 million in the six months ended June 30, 2022 and is presented under “Operating revenues” in the condensed consolidated statement of income. The aggregate future amortization of the assumed time charters as of June 30, 2022 is as follows (in thousands):

​

​ | ​ | ​ | ​
Amortization by 12-months period ended: |  | ​ |
June 30, 2023 | ​ | $ | 36,724
June 30, 2024 | ​ |  | 13,366
Total | ​ |  | 50,090
Less: Current portion | ​ |  | (36,724)
Total non-current portion | ​ | $ | 13,366

​

The amount of $36.7 million is presented under current “Unearned revenue” and $13.4 million under “Unearned revenue, net of current portion” in the condensed consolidated balance sheet as of June 30, 2022.

​

The residual value (estimated scrap value at the end of the vessels’ useful lives) of the fleet was estimated at $504.1 million as of June 30, 2022 and as of December 31, 2021. The Company has calculated the residual value of the vessels taking into consideration the 10 year average and the 5 year average of the scrap prices. The Company has applied uniformly the scrap value of $300 per ton for all vessels. The Company believes that $300 per ton is a reasonable estimate of future scrap prices, taking into consideration the cyclicality of the nature of future demand for scrap steel. Although the Company believes that the assumptions used to determine the scrap rate are reasonable and appropriate, such assumptions are highly subjective, in part, because of the cyclical nature of future demand for scrap steel.

​

On May 12, 2020, the Company refinanced the existing leaseback obligation related to the vessels Hyundai Honour and Hyundai Respect with a new sale and leaseback arrangement amounting to $139.1 million with a four years term, at the end of which the Company will reacquire these vessels for an aggregate amount of $36.0 million or earlier, at the Company’s option, for a purchase price set forth in the agreement. This arrangement did not qualify for a sale of the vessels and the net proceeds were recognized as a financial leaseback liability.

​

On April 12, 2021, the Company entered into a sale and leaseback arrangement for the vessels CMA CGM Melisande, CMA CGM Attila, CMA CGM Tancredi, CMA CGM Bianca and CMA CGM Samson amounting to gross proceeds of $135.0 million with a five year term, at the end of which the Company will reacquire these vessels for an aggregate amount of $31.0 million or earlier, at the Company’s option, for a purchase price set forth in the agreement. This arrangement did not qualify for a sale of the vessels and the net proceeds were recognized as a financial leaseback liability. This leaseback liability was early repaid in full on May 12, 2022.

​

F-10

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

4 Fixed Assets, net & Right-of-use Assets (Continued)

On July 1, 2021, the Company acquired finance lease liability related to Gemini’s vessels Suez Canal and Kota Lima, which expired in July 2022.

Under these lease arrangements, the Company is required to be in compliance with the same financial covenants as required by the Citibank/Natwest $815 million senior secured facility – see Note 8 “Long-Term Debt, net”.

​

The carrying value of the four vessels subject to leasing obligations amounted to $330.6 million as of June 30, 2022.

​

The scheduled aggregate leasing instalments subsequent to June 30, 2022 are as follows (in thousands):

​

​ | ​ | ​ | ​
Instalments due by 12-months period ended: |  | ​ | ​
June 30, 2023 | ​ | $ | 50,532
Until May 2024 | ​ |  | 61,833
Total leasing instalments | ​ |  | 112,365
Less: Imputed interest | ​ |  | (6,582)
Total leasing obligation | ​ |  | 105,783
Less: Deferred finance costs, net | ​ | ​ | (1,405)
Less: Current leasing obligation | ​ |  | (46,285)
Leasing obligation, net of current portion | ​ | $ | 58,093

​

​

5 Deferred Charges, net

​

Deferred charges, net consisted of the following (in thousands):

​

​ | ​ | ​ | ​
​ | ​ | Drydocking and
​ |  | Special Survey Costs
As of January 1, 2021 | ​ | $ | 17,339
Additions | ​ |  | 4,643
Amortization | ​ |  | (10,181)
As of December 31, 2021 | ​ | ​ | 11,801
Additions | ​ |  | 9,726
Amortization | ​ |  | (5,922)
As of June 30, 2022 | ​ | $ | 15,605

​

The Company follows the deferral method of accounting for drydocking and special survey costs in accordance with accounting for planned major maintenance activities, whereby actual costs incurred are deferred and amortized on a straight-line basis over the period until the next scheduled survey, which is two and a half years. If special survey or drydocking is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. Furthermore, when a vessel is drydocked for more than one reporting period, the respective costs are identified and recorded in the period in which they were incurred and not at the conclusion of the drydocking.

​

​

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Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

6 Other Current and Non-current Assets

​

Other current and non-current assets consisted of the following (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of | ​ | As of
​ |  | June 30, 2022 |  | December 31, 2021
Equity participation ZIM | ​ | $ | 268,595 | ​ | $ | 423,024
Straight-lining of revenue | ​ | ​ | 23,398 | ​ | ​ | 18,997
Claims receivable | ​ | ​ | 15,239 | ​ | ​ | 8,919
Other assets | ​ | ​ | 6,677 | ​ | ​ | 8,192
Total current assets | ​ | $ | 313,909 | ​ | $ | 459,132
Other non-current assets | ​ | ​ | 62,677 | ​ | ​ | 41,739
Total non-current assets | ​ | $ | 62,677 | ​ | $ | 41,739

​

The Company’s shareholding interest in ZIM of 7,186,950 ordinary shares was fair valued at $423.0 million and presented under “Other current assets” in the condensed consolidated balance sheet as of December 31, 2021, based on the closing price of ZIM ordinary shares on the NYSE on that date. In April 2022, the Company sold 1,500,000 ordinary shares of ZIM resulting in net proceeds of $85.3 million. The remaining shareholding interest of 5,686,950 ordinary shares was fair valued at $268.6 million as of June 30, 2022. For the six months ended June 30, 2022 and June 30, 2021, the Company recognized $69.1 million loss and $444.2 million of gain on these shares, respectively. These gains/losses are reflected under “Gain/(loss) on investments” in the condensed consolidated statement of income. The unrealized gain related to the ZIM ordinary shares still held on June 30, 2022 amounts to $268.6 million. Additionally, the Company recognized dividend income on these shares amounting to $138.4 million in the six months ended June 30, 2022 gross of withholding taxes compared to none in the six months ended June 30, 2021. Withholding taxes amounting to $14.5 million were recognized on dividend income under “Income taxes” in the condensed consolidated statement of income in the six months ended June 30, 2022.

​

Other non-current assets mainly include non-current assets related to straight-lining of the Company’s revenue amounting to $60.9 million and $39.9 million as of June 30, 2022 and December 31, 2021, respectively.

​

7 Accrued Liabilities

​

Accrued liabilities consisted of the following (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of |  | As of
​ | ​ | June 30, 2022 | ​ | December 31, 2021
Accrued payroll | ​ | $ | 6,804 | ​ | $ | 1,001
Accrued interest | ​ | ​ | 11,026 | ​ |  | 11,873
Accrued dry-docking expenses | ​ | ​ | 435 | ​ | ​ | 280
Accrued expenses | ​ | ​ | 8,478 | ​ |  | 7,692
Total | ​ | $ | 26,743 | ​ | $ | 20,846

​

Accrued expenses mainly consisted of accruals related to the operation of the Company’s fleet as of June 30, 2022 and December 31, 2021.

​

F-12

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

8 Long-Term Debt, net

​

Long-term debt, net consisted of the following (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Balance as of | ​ | Balance as of
Credit Facility |  | June 30, 2022 |  | December 31, 2021
Citibank/Natwest $815 mil. Facility | ​ | $ | 463,500 | ​ | $ | 774,250
BNP Paribas/Credit Agricole $130 mil. Facility | ​ | ​ | 130,000 | ​ | ​ | —
Senior unsecured notes | ​ | ​ | 300,000 | ​ | ​ | 300,000
Macquarie Bank $58 mil. Facility | ​ | ​ | — | ​ | ​ | 45,600
SinoPac $13.3 mil. Facility | ​ | ​ | — | ​ | ​ | 10,800
Eurobank $30.0 mil. Facility | ​ | ​ | — | ​ | ​ | 21,375
Fair value of debt adjustment | ​ | ​ | (8,351) | ​ | ​ | (9,990)
Total long-term debt | ​ | $ | 885,149 | ​ | $ | 1,142,035
Less: Deferred finance costs, net | ​ | ​ | (23,379) | ​ | ​ | (28,369)
Less: Current portion | ​ | ​ | (71,500) | ​ | ​ | (95,750)
Total long-term debt net of current portion and deferred finance cost | ​ | $ | 790,270 | ​ | $ | 1,017,916

​

On May 12, 2022, the Company early extinguished $270.0 million of the outstanding Natwest loan principal of the Citibank/Natwest $815 mil. Facility, which reduced the future quarterly instalments of the remaining Citibank facility to $12.9 million and the balloon payment at maturity was reduced to $309.0 million. Additionally, the reference to LIBOR was replaced with daily non-cumulative compounded secured overnight financing rate administered and published by the Federal Reserve Bank of New York (“SOFR”) plus credit spread adjustment. Additionally, the Company early repaid (i) $43.0 million loan outstanding with Macquarie Bank (ii) $20.6 million loan outstanding with Eurobank and (iii) $9.8 million loan outstanding with SinoPac in the three months ended June 30, 2022. These debt extinguishments resulted in a total net gain on debt extinguishment of $22.9 million in the six months ended June 30, 2022 compared to total net gain on debt extinguishment of $111.6 million related to the debt refinancing on April 12, 2021. The Company incurred interest expense amounting of $13.6 million (including interest on leaseback obligations), out of which $0.7 million was capitalized in the six months ended June 30, 2022 compared to $14.3 million of interest expense incurred (including interest on leaseback obligations) and none capitalized in the six months ended June 30, 2021.

​

In June 2022, the Company drew down $130.0 million of senior secured term loan facility from BNP Paribas and Credit Agricole, which is secured by six 5,466 TEU sister vessels acquired in 2021. This facility is repayable in eight quarterly instalments of $5.0 million, twelve quarterly instalments of $1.9 million together with a balloon payment of $67.2 million payable over five-year term. The facility bears interest at daily non-cumulative compounded RFR rate plus a margin of 2.16% as adjusted by the sustainability margin adjustment.

​

On February 11, 2021, the Company issued in a private placement, $300.0 million aggregate principal amount of senior unsecured notes, which bear interest at a fixed rate of 8.50% per annum and mature on March 1, 2028. At any time on or after March 1, 2024, March 1, 2025 and March 1, 2026 the Company may elect to redeem all or any portion of the notes, respectively, at a price equal to 104.25%, 102.125% and 100%, respectively, of the principal amount being redeemed. Prior to March 1, 2024 the Company may redeem up to 35% of the aggregate principal of the notes from equity offering proceeds at a price equal to 108.50% within 90 days after the equity offering closing. Interest payments on the notes are payable semi-annually commencing on September 1, 2021. $9.0 million of bond issuance costs were deferred over the life of the bond and recognized through the new effective interest method.

​

As of June 30, 2022, there was no remaining borrowing availability under the Company’s credit facilities. The Company was in compliance with the financial covenants contained in the credit facilities agreements as of June 30, 2022 and December 31, 2021.

​

F-13

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

8 Long-Term Debt, net (Continued)

As of June 30, 2022, each of the secured credit facilities is collateralized by first preferred mortgages over the vessels financed, general assignment of all hire freights, income and earnings, the assignment of their insurance policies, as well as any proceeds from the sale of mortgaged vessels, stock pledges and benefits from corporate guarantees. As of June 30, 2022, fifty-four of the Company’s vessels having a net carrying value of $1,852.2 million, were subject to first preferred mortgages as collateral to the Company’s secured credit facilities.

​

The scheduled debt maturities of long-term debt subsequent to June 30, 2022 are as follows (in thousands):

​

​ | ​ | ​ | ​
​ | ​ | Principal
Payments due by period ended |  | repayments
June 30, 2023 | ​ | ​ | 71,500
June 30, 2024 | ​ | ​ | 71,500
June 30, 2025 | ​ | ​ | 368,100
June 30, 2026 | ​ | ​ | 7,600
June 30, 2027 | ​ | ​ | 74,800
Thereafter | ​ | ​ | 300,000
Total long-term debt | ​ | $ | 893,500

​

The Citibank/Natwest $815 million and BNP Paribas/Credit Agricole $130 million senior secured credit facilities contain a requirement to maintain minimum fair market value of collateral vessels to loan value coverage of 120% and 125%, respectively, and financial covenants requiring to maintain the following:

​

| (i) | minimum liquidity of $30.0 million;

| (ii) | maximum consolidated debt (less cash and cash equivalents) to consolidated EBITDA ratio of 6.5 x; and

| (iii) | minimum consolidated EBITDA to net interest expense ratio of 2.5 x.

​

​

​

9 Financial Instruments

​

The following is a summary of the Company’s risk management strategies and the effect of these strategies on the Company’s condensed consolidated financial statements.

​

Interest Rate Risk: Interest rate risk arises on bank borrowings. The Company monitors the interest rate on borrowings closely to ensure that the borrowings are maintained at favorable rates.

​

Concentration of Credit Risk: Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its temporary cash investments, consisting mostly of deposits, with established financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. The Company is exposed to credit risk in the event of non-performance by counterparties, however, the Company limits this exposure by diversifying among counterparties with high credit ratings. The Company depends upon a limited number of customers for a large part of its revenues. Credit risk with respect to trade accounts receivable is generally managed by the selection of customers among the major liner companies in the world and their dispersion across many geographic areas.

F-14

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

9 Financial Instruments (Continued)

Fair Value: The carrying amounts reflected in the accompanying consolidated balance sheets of financial assets and liabilities (excluding long-term bank loans and certain other non-current assets) approximate their respective fair values due to the short maturity of these instruments. The fair values of long-term floating rate bank loans approximate the recorded values, generally due to their variable interest rates. The fair value of senior unsecured notes is measured based on quoted market prices. The fair value of the equity participation in ZIM is measured based on the closing price of ZIM ordinary shares on the NYSE.

​

a. Interest Rate Swap Hedges

​

The Company currently has no outstanding interest rate swaps agreements. However, in the past years, the Company entered into interest rate swap agreements with its lenders in order to manage its floating rate exposure. Certain variable-rate interests on specific borrowings were associated with vessels under construction and were capitalized as a cost of the specific vessels. In accordance with the accounting guidance on derivatives and hedging, the amounts related to realized gains or losses on cash flow hedges that have been entered into and qualified for hedge accounting, in order to hedge the variability of that interest, were recognized in accumulated other comprehensive loss and are reclassified into earnings over the depreciable life of the constructed asset, since that depreciable life coincides with the amortization period for the capitalized interest cost on the debt. An amount of $1.8 million was reclassified into earnings for the six months ended June 30, 2022 and 2021, representing its amortization over the depreciable life of the vessels. An amount of $3.6 million is expected to be reclassified into earnings within the next 12 months.

​

b. Fair Value of Financial Instruments

​

The Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy.

​

Level I: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation of these items does not entail a significant amount of judgment.

Level II: Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.

Level III: Inputs that are unobservable. The Company did not use any Level 3 inputs as of June 30, 2022 and December 31, 2021.

​

The estimated fair values of the Company’s financial instruments are as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of June 30, 2022 | ​ | As of December 31, 2021
​ |  | Book Value |  | Fair Value |  | Book Value |  | Fair Value
​ | ​ | (in thousands of $)
Cash and cash equivalents | ​ | $ | 319,573 | ​ | $ | 319,573 | ​ | $ | 129,410 | ​ | $ | 129,410
Restricted cash(2) | ​ | $ | 13,000 | ​ | $ | 13,000 | ​ | $ | 346 | ​ | $ | 346
Equity participation ZIM | ​ | $ | 268,595 | ​ | $ | 268,595 | ​ | $ | 423,024 | ​ | $ | 423,024
Secured long-term debt, including current portion | ​ | $ | 585,149 | ​ | $ | 585,149 | ​ | $ | 842,035 | ​ | $ | 842,035
Unsecured long-term debt | ​ | $ | 300,000 | ​ | $ | 297,885 | ​ | $ | 300,000 | ​ | $ | 300,000

​

F-15

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

9 Financial Instruments (Continued)

The estimated fair value of the financial instruments that are measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of June 30, 2022:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements as of June 30, 2022
​ |  | Total |  | (Level I) |  | (Level II) |  | (Level III)
​ | ​ | (in thousands of $)
Equity participation ZIM | ​ | $ | 268,595 | ​ | $ | 268,595 | ​ | $ | — | ​ | $ | —

​

The estimated fair value of the financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of June 30, 2022:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements as of June 30, 2022
​ |  | Total |  | (Level I) |  | (Level II) |  | (Level III)
​ | ​ | ​ | (in thousands of $)
Secured long-term debt, including current portion(1) | ​ | $ | 585,149 | ​ | $ | — | ​ | $ | 585,149 | ​ | $ | —
Unsecured long-term debt(1) | ​ | $ | 297,885 | ​ | $ | 297,885 | ​ | $ | — | ​ | $ | —

​

The estimated fair value of the financial instruments that are measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of December 31, 2021:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements as of December 31, 2021
​ |  | Total |  | (Level I) |  | (Level II) |  | (Level III)
​ | ​ | (in thousands of $)
Equity participation ZIM | ​ | $ | 423,024 | ​ | $ | 423,024 | ​ | $ | — | ​ | $ | —

​

The estimated fair value of the financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of December 31, 2021:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements as of December 31, 2021
​ |  | Total |  | (Level I) |  | (Level II) |  | (Level III)
​ | ​ | (in thousands of $)
Secured long-term debt, including current portion(1) | ​ | $ | 842,035 | ​ | $ | — | ​ | $ | 842,035 | ​ | $ | —
Unsecured long-term debt(1) | ​ | ​ | 300,000 | ​ | $ | — | ​ | $ | 300,000 | ​ | $ | —

| (1) | Secured and unsecured long-term debt, including current portion is presented gross of deferred finance costs of $23.4 million and $28.4 million as of June 30, 2022 and December 31, 2021, respectively. The fair value of the Company’s secured debt is estimated based on currently available debt with similar contract terms, interest rate and remaining maturities and does not include amounts related to the accumulated accrued interest.

| (2) | The Company received an advance payment for sale of the vessels of $13.0 million, which is held in an escrow account as of June 30, 2022. Additionally, the Company was required to maintain cash of $0.3 million in a retention account as collateral for the upcoming scheduled debt payments related to the Eurobank $30 mil. Facility, which was recorded in restricted cash under current assets as of December 31, 2021.

​

​

​

F-16

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

10 Commitments and Contingencies

​

There are no material legal proceedings to which the Company is a party or to which any of its properties are the subject, or other contingencies that the Company is aware of, other than routine litigation incidental to the Company’s business. On January 20, 2021, the Company received $3.9 million from Hanjin Shipping as a partial payment of a common benefit claim plus interest. This payment is presented under Other income/(expenses), net in the condensed consolidated statements of income in the six months ended June 30, 2021.

​

The Company has outstanding commitments under vessel construction contracts and buyback obligations related to the sale and leaseback arrangements as of June 30, 2022, see the Note 4 “Fixed Assets, net & Right-of-use Assets”.

​

11 Stockholders’ Equity

​

In the six months ended June 30, 2022, the Company declared and paid dividends of $0.75 per share of common stock in February and May amounting to $31.1 million. The Company issued 56 shares of common stock pursuant to its dividends reinvestment plan in the six months ended June 30, 2022.

​

In June 2022, the Company announced a share repurchase program of up to $100 million of the Company’s common stock. The Company repurchased 177,900 shares of the Company’s common stock in the open market for $11.2 million in June 2022, out of which 77,600 shares valued at $4.9 million remain unsettled as of June 30, 2022. Additionally, the Company repurchased 231,300 shares in the open market for $13.9 million in July 2022. In October 2020, the Company repurchased 4,339,271 shares of the Company’s common stock for an aggregate purchase price of $31.1 million in privately negotiated transactions, including 2,517,013 shares from the Royal Bank of Scotland and 1,822,258 shares from Sphinx Investment Corp.

​

As of April 18, 2008, the Board of Directors and the Compensation Committee approved incentive compensation of the Manager’s employees with its shares from time to time, after specific for each such time, decision by the compensation committee and the Board of Directors in order to provide a means of compensation in the form of free shares to certain employees of the Manager of the Company’s common stock. The plan was effective as of December 31, 2008. Pursuant to the terms of the plan, employees of the Manager may receive (from time to time) shares of the Company’s common stock as additional compensation for their services offered during the preceding period. The total amount of stock to be granted to employees of the Manager will be at the Company’s Board of Directors’ discretion only and there will be no contractual obligation for any stock to be granted as part of the employees’ compensation package in future periods.

F-17

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

11 Stockholders’ Equity (Continued)

​

On February 12, 2021, the Company granted 110,000 fully vested shares to executive officers and Board of Directors members. On March 16, 2021, the Company granted 40,000 shares to certain employees of the Manager, out of which 10,000 fully vested on the grant date, 1,050 were forfeited in 2021 and 9,650 restricted shares vested on December 31, 2021. Additional 224 restricted shares forfeited in the six months period ended June 30, 2022 and the remaining 19,076 restricted shares are scheduled to vest on December 31, 2022. These restricted shares are subject to satisfaction of the vesting terms, under the Company’s 2006 Equity Compensation Plan, as amended. Additionally, on December 10, 2021, the Company granted 110,000 fully vested shares to executive officers and Board of Directors members and on December 21, 2021, the Company granted 10,000 fully vested shares to certain employees of the Manager. The fair value of shares granted was calculated based on the closing trading price of the Company’s shares at the date of the issuance. Stock based compensation expenses of $0.2 million and $5.5 million were recognized under “General and administrative expenses” in the condensed consolidated statements of income in the six months period ended June 30, 2022 and 2021, respectively. 19,076 shares and 19,300 shares of restricted stock were issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.

The aggregate number of shares of common stock for which awards may be granted under the Plan shall not exceed 1,000,000 shares plus the number of unvested shares granted before August 2, 2019. The equity awards may be granted by the Company’s Compensation Committee or Board of Directors under its amended and restated 2006 equity compensation plan. Awards made under the Plan that have been forfeited, cancelled or have expired, will not be treated as having been granted for purposes of the preceding sentence.

​

The Company has also established the Directors Share Payment Plan under its 2006 equity compensation plan. The purpose of the plan is to provide a means of payment of all or a portion of compensation payable to directors of the Company in the form of Company’s Common Stock. The plan was effective as of April 18, 2008. Each member of the Board of Directors of the Company may participate in the plan. Pursuant to the terms of the plan, directors may elect to receive in Common Stock all or a portion of their compensation. Following December 31 of each year, the Company delivers to each Director the number of shares represented by the rights credited to their Share Payment Account during the preceding calendar year. During the six months ended June 30, 2022 and June 30, 2021, none of the directors elected to receive their compensation in Company shares.

​

12 Lease Arrangements

​

Charters-out

​

As of June 30, 2022, the Company generated operating revenues from its 71 vessels on time charters or bareboat charter agreements, with remaining terms ranging from less than one year to June 2028. Under the terms of the charter party agreements, most charterers have options to extend the duration of contracts ranging from less than one year to five years after the expiration of the contract. The Company determines fair value of its vessels at the lease commencement date and at the end of lease term for lease classification with the assistance from valuations obtained by third party independent shipbrokers. The Company manages its risk associated with the residual value of its vessels after the expiration of the charter party agreements by seeking multi-year charter arrangements for its vessels.

​

​

F-18

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

12 Lease Arrangements (Continued)

​

In May 2022, the Company received $238.9 million of charter hire prepayment related to charter contracts for 15 of the Company’s vessels, representing partial prepayment of charter hire payable up to January 2027. The future minimum payments, expected to be received on non-cancellable time charters and bareboat charters classified as operating leases consisted of the following as of June 30, 2022 (in thousands):

​

​ | ​ | ​ | ​
Remainder of 2022 |  | $ | 442,720
2023 |  | ​ | 697,369
2024 |  | ​ | 523,363
2025 |  | ​ | 286,004
2026 | ​ | ​ | 183,272
2027 and thereafter |  | ​ | 179,561
Total future rentals | ​ | $ | 2,312,289

​

Rentals from time charters are not generally received when a vessel is off-hire, including time required for normal periodic maintenance of the vessel. In arriving at the future minimum rentals, an estimated time off-hire to perform periodic maintenance on each vessel has been deducted, although there is no assurance that such estimate will be reflective of the actual off-hire in the future.

​

13 Earnings per Share

​

The following table sets forth the computation of basic and diluted earnings per share:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended
​ |  | June 30, 2022 |  | June 30, 2021
​ | ​ | (in thousands)
Numerator: | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | $ | 8,224 | ​ | $ | 372,837
​ | ​ | ​ | ​ | ​ | ​ | ​
Denominator (number of shares in thousands): | ​ | ​ | ​ | ​ | ​ | ​
Basic weighted average common shares outstanding | ​ |  | 20,689 | ​ |  | 20,354
Effect of dilutive securities: | ​ |  | ​ | ​ |  | ​
Dilutive effect of non-vested shares | ​ |  | 19 | ​ |  | 245
Diluted weighted average common shares outstanding | ​ |  | 20,708 | ​ |  | 20,599

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six months ended
​ |  | June 30, 2022 |  | June 30, 2021
​ | ​ | (in thousands)
Numerator: | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | $ | 339,689 | ​ | $ | 669,617
​ | ​ | ​ | ​ | ​ | ​ | ​
Denominator (number of shares in thousands): | ​ |  | ​ | ​ |  | ​
Basic weighted average common shares outstanding | ​ | ​ | 20,693 | ​ | ​ | 20,323
Effect of dilutive securities: | ​ | ​ | ​ | ​ | ​ | ​
Dilutive effect of non-vested shares | ​ | ​ | 19 | ​ | ​ | 234
Diluted weighted average common shares outstanding | ​ | ​ | 20,712 | ​ | ​ | 20,557

​

​

F-19

Table of Contents

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

​

14 Related Party Transactions

​

Management fees to Danaos Shipping Company Limited (“the Manager”) amounted to $10.9 million and $9.2 million in the six months ended June 30, 2022 and 2021, respectively, and are presented under “General and administrative expenses” in the condensed consolidated statements of income.

​

Commissions to the Manager amounted to $6.3 million and $3.5 million in the six months ended June 30, 2022 and 2021, respectively and are presented under “Voyage expenses” in the condensed consolidated statements of income.

​

The balance “Due from related parties” in the condensed consolidated balance sheets totaling $32.1 million and $21.9 million as of June 30, 2022 and December 31, 2021, respectively, represents advances to the Manager on account of the vessels’ operating and other expenses. An amount of $0.2 million and $0.1 million as of June 30, 2022 and December 31, 2021, respectively, was due to executive officers and is presented under “Accounts payable” in the condensed consolidated balance sheets.

​

15 Subsequent Events

​

The Company has declared a dividend of $0.75 per share of common stock payable on August 29, 2022, to holders of record on August 17, 2022.

​

​

F-20