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Summary of Key Financial Results (in thousands of USD):
Quarter Ended
December 31, Change
------------------------------------------
2011 2010 $ %
------------------------------------------
Reported net earnings $ 23,517 $ 141,590 $ (118,073) (83.4%)
Normalized net earnings(1) $ 35,453 $ 26,954 $ 8,499 31.5%
Earnings per share, basic $ 0.13 $ 1.96 $ (1.83) (93.4%)
Earnings per share, diluted $ 0.13 $ 1.60 $ (1.47) (91.9%)
Normalized earnings per share,
converted(1) (Series A preferred
shares converted at $15) $ 0.31 $ 0.31 $ - -
Cash available for distribution
to common shareholders(2) $ 65,564 $ 55,117 $ 10,447 19.0%
Adjusted EBITDA(3) $ 118,376 $ 85,390 $ 32,986 38.6%
Year Ended December 31, Change
----------------------------------------------
2011 2010 $ %
----------------------------------------------
Reported net loss $ (83,400) $ (87,747) $ 4,347 5.0%
Normalized net earnings(1) $ 123,407 $ 94,991 $ 28,416 29.9%
Loss per share, basic and
diluted $ (2.04) $ (1.70) $ (0.34) (20.0%)
Normalized earnings per share,
converted(1) (Series A
preferred shares converted
at $15) $ 1.08 $ 1.12 $ (0.04) (3.6%)
Cash available for
distribution to common
shareholders(2) $ 233,926 $ 193,389 $ 40,537 21.0%
Adjusted EBITDA(3) $ 416,406 $ 289,501 $ 126,905 43.8%
(1) Normalized net earnings and normalized earnings per share are non-GAAP measures that are adjusted for items such as the change in fair value of financial instruments, interest expense, interest expense at the hedged rate, loss on vessels, organizational development costs and certain other items that
(2) Cash available for distribution to common shareholders is a non-GAAP measure that represents net earnings (loss) adjusted for depreciation, amortization of deferred charges, non-cash share-based compensation, dry-dock adjustment, change in fair value of financial instruments, interest expense, interest expense at the hedged rate, cash dividends paid on preferred shares, loss on vessels, bareboat charter adjustment, organizational development costs and certain other items that
(3) Adjusted EBITDA is a non-GAAP measure that represents net earnings (loss) before interest expense and other debt-related expenses, interest income, income tax expense, depreciation and amortization expense, change in fair value of financial instruments, loss on vessels, bareboat charter adjustment, organizational development costs and certain non-cash charges and certain other items that
Summary of Key Highlights
-- Achieved vessel utilization of 99.5% and 99.3%, respectively, for the
quarter and year ended December 31, 2011 .
-- Accepted delivery of 10 newbuilding vessels in 2011, bringing Seaspan's
operating fleet to a total of 65 vessels at December 31, 2011 . Four of
the 10 delivered vessels are 13100 TEU vessels, the largest vessels in
Seaspan's fleet and flagship vessels in COSCON's containership fleet.
-- Paid a third quarter dividend of $0.59375 per Series C preferred share
on October 31, 2011 , representing a distribution of $8.3 million . The
dividend was paid to all Series C shareholders of record as of October
28, 2011 for the period from July 30, 2011 to October 29, 2011 . Full
year dividend paid for 2011 for Series C preferred shares is $2.39 per
share.
-- Paid a third quarter dividend of $0.1875 per common share on November
23, 2011 ; paid a fourth quarter dividend of $0.1875 per common share on
February 22, 2012 , increasing cumulative dividends paid to $7.72 per
common share since Seaspan's August 2005 initial public offering. Full
year dividend paid for 2011 for common shares was $0.75 per share.
-- Redeemed all of the 260,000 outstanding Series B preferred shares for
$24.6 million on November 30, 2011 .
Fourth Quarter Developments
Term Loan Financing
In
Subsequent Events
Dividends
On
On
In
Tender offer
On
Acquisition of
On
The purchase price for the acquisition, excluding potential balance sheet adjustments and any contingent consideration for managed fleet growth payments, was
The Manager provides technical, administrative and strategic services to
Open Market Share Repurchase Plan
Results for the Quarter and Year Ended
The following tables summarize vessel utilization and the impact of off-hire time on
First Quarter Second Quarter Third Quarter
--------------- --------------- ---------------
2011 2010 2011 2010 2011 2010
------- ------- ------- ------- ------- -------
Vessel Utilization:
Ownership Days 5,087 3,908 5,421 4,390 5,857 4,871
Less Off-hire Days:
Scheduled 5-Year Survey (53) (20) (58) (42) (6) (52)
Unscheduled Off-hire (2) (91) (3) (4) (7) (10)
------- ------- ------- ------- ------- -------
Operating Days 5,032 3,797 5,360 4,344 5,844 4,809
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Vessel Utilization 98.9% 97.2% 98.9% 99.0% 99.8% 98.7%
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Fourth Quarter Year Ended
--------------------- ---------------------
2011 2010 2011 2010
---------- ---------- ---------- ----------
Vessel Utilization:
Ownership Days 5,741 5,015 22,106 18,184
Less Off-hire Days:
Scheduled 5-Year Survey (17) (5) (134) (119)
Unscheduled Off-hire (12) (9) (24) (114)
---------- ---------- ---------- ----------
Operating Days 5,712 5,001 21,948 17,951
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Vessel Utilization 99.5% 99.7% 99.3% 98.7%
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
First Quarter Second Quarter Third Quarter
-------------------- ------------------- -------------------
2011 2010 2011 2010 2011 2010
---------- --------- --------- --------- --------- ---------
Revenue (in thousands of USD)
Revenue -
Impact of Off-
Hire:
100%
Utilization $ 121,983 $ 82,378 $ 134,902 $ 98,360 $ 155,056 $ 112,473
Less Off-hire:
Scheduled 5-
Year Survey (955) (347) (1,173) (738) (98) (914)
Unscheduled
Off-hire(4) (33) (1,662) (57) (77) (132) (208)
---------- --------- --------- --------- --------- ---------
Actual Revenue
Earned $ 120,995 $ 80,369 $133,672 $97,545 $154,826 $111,351
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
Fourth Quarter Year Ended
--------------------- ---------------------
2011 2010 2011 2010
---------- ---------- ---------- ----------
Revenue (in thousands of USD)
Revenue - Impact of Off-Hire:
100% Utilization $ 155,822 $ 118,186 $ 567,763 $ 411,397
Less Off-hire:
Scheduled 5-Year Survey (305) (85) (2,531) (2,084)
Unscheduled Off-hire(4) (280) (155) (502) (2,102)
------------------------------------------ ---------- ---------- ----------
Actual Revenue Earned $ 155,237 $ 117,946 $ 564,730 $ 407,211
------------------------------------------ ---------- ---------- ----------
------------------------------------------ ---------- ---------- ----------
(4) Includes charterer deductions that are not related to off-hire.
Quarter Ended Year Ended
December 31, Increase December 31, Increase
------------------------------------------------------------
2011 2010 Days % 2011 2010 Days %
------------------------------------------------------------
Operating days 5,712 5,001 711 14.2% 21,948 17,951 3,997 22.3%
Ownership days 5,741 5,015 726 14.5% 22,106 18,184 3,922 21.6%
Financial Summary Quarter Ended Year Ended
(in millions) December 31, Change December 31, Change
-----------------------------------------------------------
2011 2010 $ % 2011 2010 $ %
-----------------------------------------------------------
Revenue $ 155.2 $ 117.9 $ 37.3 31.6% $564.7 $ 407.2 $ 157.5 38.7%
Ship operating
expense 35.9 29.8 6.1 20.5% 135.7 108.1 27.6 25.5%
Depreciation 37.5 28.4 9.1 32.0% 138.0 99.7 38.3 38.5%
General and
administrative
expenses 5.2 2.7 2.5 92.6% 16.8 9.6 7.2 75.0%
Interest expense 16.0 8.5 7.5 88.2% 50.8 28.8 22.0 76.6%
Change in fair
value of
financial
instruments loss 27.5 (95.5) 123.0 128.8% 281.0 241.0 40.0 16.6%
Loss on vessels 7.3 - 7.3 100.0% 16.2 - 16.2 100.0%
Equity loss on
investment 1.2 - 1.2 100.0% 1.2 - 1.2 100.0%
Revenue
The increase in operating days and the dollar impact thereof, for the quarter and year ended
Quarter Ended Year Ended
December 31, 2011 December 31, 2011
----------------------- -----------------------
$ impact $ impact
Operating (in Operating (in
Days Impact millions)Days Impact millions)
----------- ----------- ----------- -----------
2011 vessel deliveries 920 $ 41.4 2,270 $ 97.7
Full period contribution for
2010 vessel deliveries 45 1.8 1,891 63.9
Changes due to bareboat
charter (239) (5.6) (239) (5.6)
Changes in daily charterhire
rates - - - 0.3
Scheduled off-hire (12) (0.2) (15) (0.4)
Unscheduled off-hire (3) (0.1) 90 1.6
----------- ----------- ----------- -----------
Total 711 $ 37.3 3,997 $ 157.5
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Vessel utilization was 99.5% and 99.3%, respectively, for the quarter and year ended
The increase in vessel utilization for the year ended
During the year ended
Vessel Commenced
----------------------------------------------------
CSCL Sao Paulo(5) Q1
Jakarta Express Q1
Saigon Express Q1
Rio Grande Express Q1
Lahore Express Q2
Santos Express Q2
Victor Q2
CSCL Chiwan Q3
Manila Express Q4
(5) CSCL Sao Paulo's next dry-docking was originally scheduled for 2013; however,
Ship Operating Expense
The increase in ownership days, and the dollar impact thereof, for the quarter and year ended
Quarter Ended Year Ended
December 31, 2011 December 31, 2011
----------------------- ------------------------
Ownership
Days $ impact(in Ownership $ impact(in
impact millions)Days impact millions)
---------- ------------ ----------- ------------
2011 vessel deliveries 920 $ 6.6 2,270 $ 16.2
Full period contribution
for 2010 vessel deliveries 45 0.3 1,891 11.7
Changes due to bareboat
charter (239) (1.8) (239) (1.8)
Other operating expenses - 0.2 - 0.2
Changes in extraordinary
costs and expenses(6) not
covered by the fixed fee - 0.8 - 1.3
---------- ------------ ----------- ------------
Total 726 $ 6.1 3,922 $ 27.6
---------- ------------ ----------- ------------
---------- ------------ ----------- ------------
(6) Extraordinary costs and expenses are defined in
Depreciation
The increases in depreciation expense for the quarter and year ended
General and Administrative Expenses
The increases in general and administrative expenses for the quarter and year ended
Interest Expense
Interest expense is comprised of interest at the variable rate plus the applicable margin incurred on debt for operating vessels and a reclassification of amounts from accumulated other comprehensive income related to previously designated hedging relationships. The increases in interest expense for the quarter and year ended
Equity loss on investment
Change in Fair Value of Financial Instruments
The change in fair value of financial instruments resulted in a loss of
Dividends Declared:
For the quarter ended
Since
About
Conference Call and Webcast
SEASPAN CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEET AS OFDECEMBER 31, 2011 (IN THOUSANDS OF US DOLLARS) December 31, 2011 December 31, 2010 ----------------- ----------------- Assets Current assets: Cash and cash equivalents $ 481,123 $ 34,219 Accounts receivable 6,837 1,017 Prepaid expenses 17,398 11,528 Gross investment in lease 14,640 - ---------------- ---------------- 519,998 46,764 Vessels 4,289,331 3,191,734 Vessels under construction 407,918 1,019,138 Deferred charges 45,917 37,607 Other assets 88,754 81,985 Gross investment in lease 95,798 - ---------------- ---------------- $ 5,447,716 $ 4,377,228 ---------------- ---------------- ---------------- ---------------- Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 47,400 $ 28,394 Deferred revenue 23,257 10,696 Current portion of long-term debt 81,482 - Current portion of other long-term liabilities 37,649 19,096 ---------------- ---------------- 189,788 58,186 Long-term deferred revenue 12,503 - Long-term debt 2,914,247 2,396,771 Other long-term liabilities 583,263 524,716 Fair value of financial instruments 564,490 407,819 ---------------- ---------------- 4,264,291 3,387,492 Share capital 838 691 Additional paid-in capital 1,860,979 1,526,822 Deficit (622,406) (469,616) Accumulated other comprehensive loss (55,986) (68,161) ---------------- ---------------- Total shareholders' equity 1,183,425 989,736 ---------------- ---------------- $ 5,447,716 $ 4,377,228 ---------------- ---------------- ---------------- ---------------- SEASPAN CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT FOR THE QUARTERS AND YEARS ENDEDDECEMBER 31, 2011 AND 2010 (IN THOUSANDS OF US DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS) Quarter Quarter ended ended Year ended Year ended December December December December 31, 2011 31, 2010 31, 2011 31, 2010 ---------- ---------- ---------- ---------- Revenue $ 155,237 $ 117,946 $ 564,730 $ 407,211 Operating expenses: Ship operating 35,891 29,829 135,696 108,098 Depreciation 37,515 28,351 137,987 99,653 General and administrative 5,160 2,727 16,818 9,612 Loss on vessels 7,347 - 16,237 - ---------- ---------- ---------- ---------- 85,913 60,907 306,738 217,363 ---------- ---------- ---------- ---------- Operating earnings 69,324 57,039 257,992 189,848 Other expenses (earnings): Interest expense 16,048 8,529 50,849 28,801 Interest income (383) (19) (854) (60) Interest income from leasing (880) - (880) - Undrawn credit facility fees 848 1,443 4,282 4,515 Amortization of deferred charges 1,492 1,010 5,788 3,306 Equity loss on investment 1,180 - 1,180 - Change in fair value of financial instruments 27,502 (95,514) 281,027 241,033 ---------- ---------- ---------- ---------- 45,807 (84,551) 341,392 277,595 ---------- ---------- ---------- ---------- Net earnings (loss) $ 23,517 $ 141,590 $ (83,400)$ (87,747) Deficit, beginning of period (627,340) (602,055) (469,616) (349,802) Dividends on common shares (12,989) (8,553) (47,414) (30,658) Dividends on Series B preferred shares - (598) (1,813) (1,409) Redemption of Series B preferred shares 2,873 - 2,873 - Dividends on Series C preferred shares (8,312) - (22,206) - Amortization of Series C issuance costs (155) - (830) - ---------- ---------- ---------- ---------- Deficit, end of period $ (622,406)$ (469,616)$ (622,406)$ (469,616) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Weighted average number of shares, basic (thousands) 69,551 68,479 69,217 68,195 Weighted average number of shares, diluted (thousands) 69,551 87,866 69,217 89,353 ---------- ---------- ---------- ---------- Earnings (loss) per share, basic$ 0.13 $ 1.96 $ (2.04)$ (1.70) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Earnings (loss) per share, basic and diluted $ 0.13 $ 1.60 $ (2.04)$ (1.70) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- SEASPAN CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND LOSS FOR THE QUARTERS AND YEARS ENDEDDECEMBER 31, 2011 AND 2010 (IN THOUSANDS OF US DOLLARS) Quarter ended Quarter ended Year ended Year ended December 31, December 31, December 31, December 31, 2011 2010 2011 2010 ------------- --------------- ------------- ------------- Net earnings (loss) $ 23,517 $ 141,590 $ (83,400)$ (87,747) Other comprehensive income: Amounts reclassified to earnings (loss) during the period 2,863 3,443 12,175 13,086 ------------- --------------- ------------- ------------- Comprehensive income (loss) $ 26,380 $ 145,033 $ (71,225)$ (74,661) ------------- --------------- ------------- ------------- ------------- --------------- ------------- ------------- SEASPAN CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE QUARTERS AND YEARS ENDEDDECEMBER 31, 2011 AND 2010 (IN THOUSANDS OF US DOLLARS) Quarter Quarter ended ended Year ended Year ended December December December December 31, 2011 31, 2010 31, 2011 31, 2010 ---------- ---------- ---------- ---------- Cash provided by (used in): Operating activities: Net earnings (loss) $ 23,517 $ 141,590 $ (83,400)$ (87,747) Items not involving cash: Depreciation 37,515 28,351 137,987 99,653 Share-based compensation 1,012 690 3,278 2,670 Amortization of deferred charges 1,492 1,010 5,788 3,306 Amounts reclassified from other comprehensive loss 2,700 3,353 11,670 12,797 Unrealized change in fair value of financial instruments (4,071) (125,088) 156,671 127,374 Loss on vessels 7,347 - 16,237 - Equity loss on investment 1,180 - 1,180 - Change in assets and liabilities 10,514 6,008 (9,547) (4,466) ---------- ---------- ---------- ---------- Cash provided by operating activities 81,206 55,914 239,864 153,587 ---------- ---------- ---------- ---------- Financing activities: Preferred shares issued, net of share issue costs (28) 16 344,539 25,896 Preferred shares redeemed, net of cost (24,600) - (24,600) - Draws on credit facilities 54,417 26,325 601,577 513,625 Repayment on credit facilities (2,253) - (2,619) - Repayment on other long-term liabilities (7,151) - (19,061) 21,250 Financing fees (1,982) (4,042) (9,990) (7,356) Dividends on common shares(7) (9,371) (6,328) (34,375) (22,958) Dividends on Series B preferred shares - (328) (972) (777) Dividends on Series C preferred shares (8,312) - (22,206) - ---------- ---------- ---------- ---------- Cash provided by financing activities 720 15,643 832,293 529,680 ---------- ---------- ---------- ---------- Investing activities: Expenditures for vessels (19,776) (123,569) (621,947) (715,640) Restricted cash - (60,000) - (65,000) Investment in affiliate 2,051 - (1,964) - Intangible assets 1,186 (478) (1,342) (1,808) ---------- ---------- ---------- ---------- Cash used in investing activities (16,539) (184,047) (625,253) (782,448) ---------- ---------- ---------- ---------- Increase (decrease) in cash and cash equivalents 65,387 (112,490) 446,904 (99,181) Cash and cash equivalents, beginning of period 415,736 146,709 34,219 133,400 ---------- ---------- ---------- ---------- Cash and cash equivalents, end of period $ 481,123 $ 34,219 $ 481,123 $ 34,219 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(7) During the quarter and year ended
SEASPAN CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FOR THE QUARTERS AND YEARS ENDEDDECEMBER 31, 2011 AND 2010 (IN THOUSANDS OF US DOLLARS)
Description of Non-GAAP Financial Measures
A. Cash Available for Distribution to Common Shareholders
Cash available for distribution to common shareholders is defined as net earnings (loss) adjusted for depreciation, interest expense, amortization of deferred charges, non-cash share-based compensation, change in fair value of financial instruments, loss on vessels, bareboat charter adjustment, organizational development costs, amounts paid for dry-docking, cash dividends paid on preferred shares, interest expense at the hedged rate and certain other items that
Cash available for distribution to common shareholders is a non-GAAP measure used to assist in evaluating
Quarter Quarter
ended ended Year ended Year ended
December December December December
31, 2011 31, 2010 31, 2011 31, 2010
---------- ---------- ---------- ----------
Net earnings (loss) $ 23,517 $ 141,590 $ (83,400)$ (87,747)
Add:
Depreciation 37,515 28,351 137,987 99,653
Interest expense(8) 16,048 8,529 50,849 28,801
Amortization of deferred
charges 1,492 1,010 5,788 3,306
Share-based compensation 1,012 690 3,278 2,670
Change in fair value of
financial instruments 27,502 (95,514) 281,027 241,033
Loss on vessels (9) 7,347 - 16,237 -
Bareboat charter adjustment,
net (10) 1,490 - 1,490 -
Organizational development
costs(11) 3,000 - 3,000 -
Less:
Amounts paid for dry-dock
adjustment (3,085) (1,560) (9,384) (6,454)
Series B preferred share
dividends paid(12) - (328) (972) (777)
Series C preferred share
dividends paid and
accumulated(12) (8,313) - (27,668) -
---------- ---------- ---------- ----------
Net cash flows before interest
payments 107,525 82,768 378,232 280,485
Less:
Interest expense at the hedged
rate(13) (41,961) (27,651) (144,306) (87,096)
---------- ---------- ---------- ----------
Cash available for distribution
to common shareholders $ 65,564 $ 55,117 $ 233,926 $ 193,389
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
SEASPAN CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE QUARTERS AND YEARS ENDED DECEMBER 31, 2011 AND 2010
(IN THOUSANDS OF US DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)
Description of Non-GAAP Financial Measures
B. Normalized Net Earnings and Normalized Earnings per Share
Normalized net earnings is defined as net earnings adjusted for items such as interest expense, change in fair value of financial instruments, loss on vessels, interest expense at the hedged rate, organizational development costs and certain other items
Normalized net earnings is not defined by GAAP and should not be considered as an alternative to net earnings or any other indicator of
Normalized earnings per share, converted, is calculated as normalized net earnings, less dividends on Series B (until their repurchase on
Normalized earnings per share, basic can be computed as normalized net earnings attributable to common shareholders divided by the weighted-average number of shares used to compute reported earnings per share, basic.
Normalized earnings per share, converted, diluted, and basic are not defined by GAAP and should not be considered as an alternative to earnings per share or any other indicator of
Quarter Quarter
ended ended Year ended Year ended
December December December December
31, 2011 31, 2010 31, 2011 31, 2010
---------- ---------- ---------- ----------
Net earnings (loss) $ 23,517 $ 141,590 $ (83,400)$ (87,747)
Adjust:
Interest expense(8) 16,048 8,529 50,849 28,801
Change in fair value of
financial instruments 27,502 (95,514) 281,027 241,033
Loss on vessels(9) 7,347 - 16,237 -
Interest expense at the hedged
rate (13) (41,961) (27,651) (144,306) (87,096)
Organizational development
costs(11) 3,000 - 3,000 -
---------- ---------- ---------- ----------
Normalized net earnings $ 35,453 $ 26,954 $ 123,407 $ 94,991
---------- ---------- ---------- ----------
Less: preferred share dividends
Series A 7,976 7,087 30,295 26,918
Series B - 598 1,813 1,409
Series B-premium on redemption (2,873) - (2,873) -
Series C (including
amortization of issuance
costs) 8,468 - 28,497 -
---------- ---------- ---------- ----------
13,571 7,685 57,732 28,327
---------- ---------- ---------- ----------
Normalized net earnings
attributable to common
shareholders $ 21,882 $ 19,269 $ 65,675 $ 66,664
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average number of
shares used to compute earnings
(loss) per share:
Reported and normalized, basic 69,551 68,479 69,217 68,195
Share-based compensation 162 202 132 117
Series A preferred shares
liquidation preference
converted at $15 17,846 15,856 17,078 15,174
---------- ---------- ---------- ----------
Normalized, converted 87,559 84,537 86,427 83,486
Series A preferred shares 115%
premium (30-day trailing
average) 5,453 3,329 2,158 5,867
---------- ---------- ---------- ----------
Reported, diluted(14) 93,012 87,866 88,585 89,353
---------- ---------- ---------- ----------
Earnings (loss) per share:
Reported, basic $ 0.13 $ 1.96 $ (2.04)$ (1.70)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Reported, diluted $ 0.13 $ 1.60 $ (2.04)$ (1.70)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Normalized, converted -
preferred shares converted at
$15(15) $ 0.31 $ 0.31 $ 1.08 $ 1.12
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
SEASPAN CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE QUARTERS AND YEARS ENDED DECEMBER 31, 2011 AND 2010
(IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE AMOUNTS)
Description of Non-GAAP Financial Measures
C. Adjusted EBITDA
Adjusted EBITDA is defined as net earnings (loss) before interest expense and other debt-related expenses, interest income, income tax expense, depreciation and amortization expense, change in fair value of financial instruments, loss on vessels, bareboat charter adjustment, organizational development costs and certain other items that
Adjusted EBITDA provides useful information to investors in assessing
Quarter Quarter
ended ended Year ended Year ended
December December December December
31, 2011 31, 2010 31, 2011 31, 2010
----------- ----------- ----------- -----------
Net earnings (loss) $ 23,517 $ 141,590 $ (83,400)$ (87,747)
Add:
Interest expense(8) 16,048 8,529 50,849 28,801
Interest income (383) (19) (854) (60)
Undrawn credit facility
fees 848 1,443 4,282 4,515
Depreciation 37,515 28,351 137,987 99,653
Amortization of deferred
charges 1,492 1,010 5,788 3,306
Change in fair value of
financial instruments 27,502 (95,514) 281,027 241,033
Loss on vessels(9) 7,347 - 16,237 -
Bareboat charter
adjustment, net(10) 1,490 - 1,490 -
Organizational development
costs(11) 3,000 - 3,000 -
----------- ----------- ----------- -----------
Adjusted EBITDA $ 118,376 $ 85,390 $ 416,406 $ 289,501
----------- ----------- ----------- -----------
(8) Interest expense as reported on the consolidated statement of operations.
(9) In
(10) Upon delivery of the vessels to MSC, the transactions were accounted for as sales-type leases. The vessels were disposed of and a gross investment in leases was recorded, which is being amortized to income through interest income from leasing. The bareboat charter adjustment is included to reverse the GAAP accounting treatment and reflect the transaction as if the vessels had not been disposed of. Therefore, the bareboat charter fees are added back and the interest income from leasing is deducted resulting in a net bareboat charter adjustment.
(11) Organizational development costs include professional fees and integration costs related to acquisition of the Manager as well as
(12) Dividends related to the Series B and Series C preferred shares have been deducted as they reduce cash available for distribution to common shareholders. All outstanding Series B preferred shares were redeemed on
(13) Interest expense at the hedged rate is calculated as the interest incurred on operating debt at the fixed rate on the related interest rate swaps plus the applicable margin on the related credit facilities and variable rate leases, on an accrual basis. Interest expense on fixed rate leases is calculated on the effective interest rate.
(14) If the effect of Series A preferred shares is anti-dilutive, their effect is excluded from the computation of reported diluted earnings (loss) per share.
(15) Normalized earnings per share, converted, for the quarter ended
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect management's current views with respect to certain future events and performance, including, in particular, statements regarding: future operating results; expansion of
Contacts:Seaspan Corporation - Investor Relations Inquiries Mr.Sai W. Chu Chief Financial Officer 604-638-2575 www.seaspancorp.comThe IGB Group - Media Inquiries Mr.Leon Berman 212-477-8438
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