Danaos Stock

Danaos Corporation (Danaos) operates as an international owner of containerships, chartering its vessels to many of the world’s largest liner companies.

As of March 7, 2023, the company had a fleet of 68 containerships aggregating 421,293 TEUs (twenty foot equivalent units) and 6 under construction containerships aggregating 46,200 TEUs.

The company’s strategy is to charter its containerships under multi-year, fixed-rate period charters to a diverse group of liner companies, including many of the largest companies globally. As of March 7, 2023, these customers included CMA-CGM, Hyundai Merchant Marine (‘HMM’), MSC, Yang Ming, Hapag Lloyd, ZIM, Maersk, COSCO, OOCL, ONE, PIL, KMTC, Niledutch, Samudera, RifLine, OSC and TS Lines.

As of December 31, 2022, the average remaining duration of the charters for the company’s 69 containerships was 3.4 years (weighted by aggregate contracted charter hire). In January 2023, the company completed the sale of the Amalia C, which was held for sale as of December 31, 2022. The company’s charters have initial terms ranging up to 18 years, which provide the company with stable cash flows and high utilization rates. The company’s fleet ranges in size from 2,200–13,100 TEU, providing the company flexibility to serve the diverse needs of its customers.

Fleet

The company’s fleet includes some of the largest containerships in the world, which are designed with certain technological advances and customized modifications that make them efficient with respect to both voyage speed and loading capability when compared to many existing vessels operating in the containership sector.

The company deploys its containership fleet principally under multi-year charters with major liner companies that operate regularly scheduled routes between large commercial ports, although in weaker containership charter markets, such as is prevailing the company charter more of its vessels on shorter term charters so as to be available to take advantage of any increase in charter rates. As of March 7, 2023, the company’s containership fleet was consisted of 66 containerships deployed on time charters, 10 of which are scheduled to expire in 2023, and 2 containerships deployed on bareboat charters. The average age (weighted by TEU) of the 68 vessels in the company’s containership fleet was approximately 14.1 years as of February 28, 2023. As of December 31, 2022, the average remaining duration of the charters for the company’s containership fleet was 3.4 years (weighted by aggregate contracted charter hire).

Charterers

As of March 7, 2023, the company’s diverse group of customers in the containership sector included CMA-CGM, HMM, MSC, Yang Ming, Hapag Lloyd, ZIM, Maersk, COSCO, OOCL, ONE, PIL, KMTC, Niledutch, Samudera, RifLine, OSC and TS Lines.

Environmental and Other Regulations

Government regulation significantly affects the ownership and operation of the company’s vessels. They are subject to international conventions, national, state and local laws, regulations and standards in force in international waters and the countries in which the company’s vessels may operate or are registered, including those governing the management and disposal of hazardous substances and wastes, the cleanup of oil spills and other contamination, air emissions, wastewater discharges and BWM. These laws and regulations include OPA, the U.S. Comprehensive Environmental Response, Compensation, and Liability Act (‘CERCLA’), the U.S. Clean Water Act, MARPOL, regulations adopted by the IMO and the EU, various volatile organic compound air emission requirements and various SOLAS amendments, as well as other regulations described below.

A variety of governmental and private entities subject the company’s vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (U.S. Coast Guard, harbor master or equivalent), classification societies, flag state administration (country of registry), charterers and, particularly, terminal operators.

The company’s vessels are subject to standards imposed by the IMO (the United Nations agency for maritime safety and the prevention of pollution by ships).

The company has obtained International Air Pollution Prevention certificates for all of the company’s vessels.

The operation of the company’s vessels is also affected by the requirements set forth in the ISM Code, which was made effective in July 1998. Each of the vessels in the company’s fleet is ISM Code-certified. The company’s entire fleet has been issued a certificate attesting that insurance is in force in accordance with the insurance provisions of the Convention.

While the company does not carry oil as cargo, the company does carry fuel oil (or ‘bunkers’) in its vessels, making the company’s vessels subject to the OPA requirements.

The company has complied with the USCG regulations by providing a financial guaranty in the required amount.

Under the U.S. Environmental Protection Agency (‘EPA’) regulations, the company is required to obtain a CWA permit regulating and authorizing any discharges of ballast water or other wastewaters incidental to the company’s normal vessel operations if the company operates within the three-mile territorial waters or inland waters of the United States.

The company has submitted NOIs for all of its vessels that operate or potentially operate in the U.S. waters and has submitted annual reports for all of the company’s covered vessels.

The company’s vessels are subject to CAA (the Federal Clean Air Act) vapor control and recovery standards for cleaning fuel tanks and conducting other operations in regulated port areas and emissions standards for so-called ‘Category 3’ marine diesel engines operating in the U.S. waters.

Certain of the company’s vessels have obtained extensions for drydocking and will install the BWM systems in the next scheduled dry-docking date and certain vessels installed the BWM systems afloat in 2022.

The company has implemented the various security measures addressed by the MTSA, SOLAS and the ISPS Code; and has ensured that the company’s vessels are compliant with all applicable security requirements.

History

The company was founded in 1963. It was incorporated in 1998. The company was formerly known as Danaos Holdings Limited and changed its name to Danaos Corporation in 2005.