John Coustas - CEO Evangelos Chatzis – CFO

Thank you, operator. Good morning, everyone and thank you for joining us this morning.

Before we begin, I quickly want to remind everyone that management's remarks this morning may contain certain forward-looking statements, and that actual results could differ materially from those projected today. These forward-looking statements are made as of today and we undertake no obligation to update them.

Factors that might affect future results are discussed in our filings with the SEC, and we encourage you to review these detailed Safe Harbor and Risk Factor disclosures. Please also note that where we feel appropriate, we will continue to refer to non-GAAP financial measures such as EBITDA, adjusted EBITDA and adjusted net income to evaluate our business.

Reconciliations of non-GAAP financial measures to GAAP financial measures are included in our earnings release and the accompanying materials. With this, let me now turn the call over to Dr.

Coustas, who will provide the broad overview of the quarter.

Thank you, Evangelos. Good morning and thank you all for joining today's call to discuss our results for the second quarter 2017.

Our earnings for the second quarter of 2017 continue to reflect the effect of the Hanjin bankruptcy on the company's financial performance. Adjusted net income came in at 29 million for this quarter, compared to 47.7 million for the second quarter of 2016, a decrease of 18.7 million.

This decrease was attributable to a 19.3 million decrease in the operating revenues of the vessels that were previously chartered to Hanjin, and was partially offset by marginally improved operating performance of 0.6 million. Fleet utilization increased to 97.9% this quarter compared to 96.9% in the second quarter of 2016.

As previously reported, the Company is in breach of certain financial covenants as a result of the Hanjin bankruptcy. We are currently engaged in discussions with our lenders regarding refinancing substantially all of our debt maturing in 2018.

These discussions encompass potential amendments to the associated financial covenants that have been breached. In the meantime, we continue to generate positive cash flows from our operations and currently are in a position to service all our operational obligations as well as all scheduled principal amortization and interest payments under the original terms of our debt agreements.

The charter market is moving sideways at levels slightly above the lows of 2016 but we have not yet seen a meaningful improvement to signal a market recovery. Box rates have improved as a result of improved capacity deployment through the alliances and the recent industry consolidation activity has reduced our counterparty risks.

On the other hand, consolidation in the liner industry combined with legacy newbuilding orders for large vessels still to be delivered is anticipated to maintain pressure on charter rates for a considerable amount of time. Danaos continues to have low near term exposure to the weak spot market with charter coverage of 87% for the next 12 months based on current operating revenues and 66% in terms of contracted operating days.

Our commitment to provide best-in-class service to our customers is now being reinforced by the utilization of our in-house developed IT tool for online acquisition and analysis of big data for online performance monitoring of our vessels, a unique feature for efficient ship management in the industry. During this extended period of market weakness which has presented many challenges, we remain focused on taking necessary actions to preserve the value of our company by managing our fleet efficiently and taking prudent measures to manage and ultimately deleverage our balance sheet.

With that, I hand over the call back to Evangelos, who will take you through the financial for the quarter.

Thank you John, and good morning again to everyone, and thanks again to all of you for joining us today. I will briefly review the results for the quarter and then give call participants the opportunity to ask questions.

During the second quarter of 2017 we had an average of 55 containerships as was also the case for the second quarter of 2016. Our adjusted net income was $29 million or $0.26 per share for the quarter compared to $47.7 million or $0.43 per share of adjusted net income for the second quarter of 2016.

This decrease of 18.7 million is mainly attributed to 19.3 million of lower operating revenues as a result of the Hanjin fallout. While a further decline in revenues of 4.3 million was a result of a weaker charter market conditions and both of these partially offset by a 0.5 million increase in operating revenues due to improved fleet utilization for the quarter and 3.5 million decrease in total operating expenses, 0.5 million decrease in net finance costs mainly due to interstate swap expirations and the $400,000 improvement in the operating performance of our equity investment in Gemini Shipholdings Corp.

Vessel operating expenses decreased by 2.9% or 0.8 million to 27.2 million in the current quarter compared to 28 million for the second quarter of 2016 as a result of the decrease in the daily operating cost per vessel to $5,734 per day this quarter from $5802 per day in the second quarter of 2016. G&A expenses remained stable at 5.3 million in the current quarter compared to 5.4 million in the second quarter of 2016.

Interest expense excluding amortization of deferred finance costs increased by 1.2 million to 18.6 million in the current quarter compared to 17.4 million in the second quarter of 2016, mainly as a result of approximately 0.5 percentage point of high LIBOR rates between the two periods. These increasing LIBOR rates were partially offset by our persistent efforts to delever our balance sheet.

During the last 12 months, we have reduced our indebtedness by 255 million. Finally adjusted EBITDA decreased by 21.8% or 21.8 million to 78.1 million in the current quarter from 99.9 in the second quarter of 2016 for the reasons outlined earlier on this call.

With that I would like to thank you all for listening to the first part of our call, operator we are ready to open the call to Q&A.

Thank you all for joining this conference call and your continued interest in our story. We look forward to hosting you in our next earning calls.

Have a nice day thank you.