Good morning, everyone, and thank you for joining us to discuss Seaspan's first quarter earnings. Yesterday, after the market closed, we issued a press release announcing Seaspan's first quarter results for the period ended March 31, 2019.

The release as well as the accompanying presentation for this conference call are available on the Investor Relations section of our website. If we could all please turn to slide 3.

I would like to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from those stated or implied by forward-looking statements, due to risks and uncertainties associated with our business, which are discussed in the risk factors section of our Annual Report filed with the SEC on Form 20-F for the year ended December 31, 2018.

Our risk factors may be updated from time-to-time in our filings with the SEC. Please note that we assume no obligation to update any forward-looking statements.

And with that, I will now pass the call over to our CEO, Mr. Bing Chen to discuss Seaspan's performance.

Thank you, Ryan. Please turn to slide 4, operational and financial performance.

I will first provide brief financial highlights for the quarter and Ryan will elaborate further. Our first quarter utilization of 98.1% was a strong improvement from last year's first quarter performance of 96.8%.

Our revenue came in at approximately $285.3 million. This represents a 27% growth in revenue year-over-year.

Operating income was $344.1 million. This represents a 315% increase from the same quarter of last year, driven by a one-time gain that I'll discuss in more detail later in the presentation.

Our cash flow from operations was $122.6 million for this quarter, which is a 76% increase from the same quarter last year. EPS per diluted share was $1.26 compared to $0.37 for 2018.

Other corporate developments. As previously mentioned in our Q4 2018 earnings, on January 15, 2019, we closed the second tranche of Fairfax $1 billion investment, which provided gross proceeds of $500 million.

Also in the first quarter, we took over the management of two 2500 TEU vessels, the Seaspan Loga and Seaspan Hannover, which we acquired in February 2018. Please turn to slide 5.

While we continue to deliver on our five priorities, I would like to provide an update each quarter on key priorities for each of these focuses. We have made significant progresses on these priorities this quarter and throughout the presentation, we will discuss some of our recent major accomplishments as they relate to these key priorities.

As you can see, our record operating earnings, we had a significant one-time gain that was a result of modifying a series of charters requested by one of our customers. Please note that each of these vessels are now on new charter arrangements, majority of vessels are multi-year charter, [Technical Difficulty] charters.

As highlighted in our strategic priorities, a customer centric focus is a core value of Seaspan at the charters. It is in the normal course of our business that [Technical Difficulty].

With our integrated path, we are well positioned by solutions [Technical Difficulty] for our customers occupation, commercial, technical, regulatory and financial climates. Our ability to always deliver a mutually beneficial solutions for our customers is a demonstration of our core life cycle vessel management expertise.

Both Seaspan and our customers are satisfied by the solution, which allowed us to enhance charter value through optimized redeployment. Our proven customer partnerships across business enabled us to be charter for relevant vessels that’s [Technical Difficulty] business transformation.

In addition to the above, this transaction also enhances our credit profile with approximately $700 million of pro forma liquidity. Ryan will discuss this more during the financial section of the call.

Please turn to slide 6. We continue to strengthen partnership to stay focused on the operational excellence.

At the trusted and [Technical Difficulty], our customers have been coming to us for technical advice related to IMO 2020, these include [Technical Difficulty] related matters. This highlights one of the benefits of our integrated bidding platform.

Having in house expertise regularly side by side for our customers, appreciate the service quality, efficiency and creates added value for our customers. Since the beginning of the year, we have did 11 fixtures with one of our largest customers of COSCO Ship, including several new multi-gear time charters and extensions with CMA for these vessels.

Expanding on our partnership with COSCO Ship, we have also entered into a framework agreement with COSCO Shipping Energy Transportation to collaborate on potential opportunities relating to LNG, other related mutually beneficial projects. This quarter also marks several significant operational achievements.

Our lost time injury frequency continued to improve upon our numbers from 2018, which was our fifth year on record. We also took over management of two vessels [Technical Difficulty] Seaspan Loga and Seaspan Hannover, leveraging on our scale and platform, I’m proud to say that our 107 time charter vessels are how managed by this.

We continue investing and strive towards operational excellence. This is the foundation for our business and one of the key value drivers for our customers as they continue to broaden and deepen their partnerships with Seaspan.

I will now pass the call over to Peter Curtis who will discuss current industry outlook.

Thank you, Bing and good morning, all. Please turn to slide 7.

In Q1, we saw stabilizing rates in smaller segments and increasing rates in the post Panamax size classes. In particular, activity increased and the market flattened in early March in the 8000 to 9500 TEU segments.

In these segments, liners have been fixing vessels for longer vessels -- for longer periods at increasing rates and segment capacity is almost fully occupied. In the 4000 to 5000 to 5500 TEU Panamax segments, there have been a number of idle vessels in the market during Q1, but we have seen encouraging support for rates, indicating an underlying need for capacity from liners, with idle capacity reduced significantly.

In addition to the container volume growth at more or less 4% is still forecasted to exceed capacity growth at more or less 3%. Across all tonnage segments, sale and purchase activity remained modest through the quarter.

Deliveries of new buildings remain polarized with no order book in the 4000 to 10,000 TEU range. We expect limited deliveries to continue to provide support for asset values, while order books continue to favor larger vessels over 18,000 TEU.

We remain optimistic about rates and asset values for the remainder of the year, as we continue to see improved supply and demand characteristics. There are several other factors in play that will provide support going forward, including demand increases as vessels are taken out of service for scrubbers, seasonality and continued slow steaming.

Please turn to slide 8. In terms of supply and demand, the rate of global trade growth slowed marginally, as indicated by the WTO softening their 2019 global trade growth outlook.

However, as mentioned, we also see improvement in the balancing of supply and demand. In the leasing space, liners with very large scrubber programs have been active at securing larger tonnage for longer periods to secure coverage for a year or two.

As large vessels are taken out of service for scrubber installation, this has proven to be a positive factor for charter rates with significant increases in charter rates for the 8500 to 10,000 TEU segment where idle capacity is almost nil at this time. Scrubber retrofitting is expected to artificially reduce fleet growth by around 1% of total TEU for the next one to two years.

The main trades have demonstrated a typical pattern in Q1, notably with this quarter being subsequent to the 2018 Q4 front running, prior to the anticipated tariff increases on the TransPacific Congress. The network developments by the line of companies and the alliances within which they operate have created a demand late in Q1, which has increased chartering activity in all sizes from Panamax and above.

As we outlined last quarter, several regions such as Africa, Southeast Asia, India and Oceania enjoy improving important factor, opening them up to vessel segments larger than the traditional fleet size and allowing upsizing. Regions such as these have complemented the soft growth of Asia, Europe trade, and the normalized Trans Pacific trade.

Our view is that with no new builds in the 4250 to 9000 TEU segment, the upsizing demand in these trades bode well for the segment. Please turn to slide 9.

Turning to the supply side, the idle fleet order book and demolition volumes have shown strong fundamentals in the first quarter of 2019 and demonstrate that the industry is continuing to appropriately manage supply of vessels. The order book to existing fleet ratio remains at among all-time lows at about 11.7%, having reduced year-on-year.

Fleet capacity has increased just 0.5% since the beginning of the year. Given that the order book is baked in until late 2021, we anticipate a continued improvement in the balance between supply and demand as global capacity growth remains below throughput growth and this continues to develop a more stable environment in the container industry.

Regarding idle vessels, approximately 2.1% of the fleet is idle, down from the 3.9% from our fourth quarter earnings call. It has been a steep decline in idle vessels from February to April, with much of the remaining idle capacity being below 3000 TEU in size.

More specifically, the idle capacity declined approximately 50% from one month ago. And we note importantly, that less than half of the idle tonnage is lessor owned, being the lowest level since 2012.

In regard to recycling, we anticipate that with the requirements for ballast water treatment systems now being accrued, as vessels pass their deadlines and IMO 2020 compliant fuel requirements, increasing the operating costs of less fuel efficient vehicles, there will likely be more positive impetus to recycle all the tonnage. I would now like to pass the call over to Ryan to discuss our financial results and forward-looking guidance.

Thank you, Peter. If we could all please turn to slide 10, I'll provide a summary of our financial results for the first quarter.

Our vessel utilization for the quarter was 98.1%, an increase from the 96.8% in the first quarter of 2018. Operating cost per ownership day was $5,993, a 3% decrease from the first quarter of 2018.

Ownership and operating days increased 20% and 22% year-over-year. This increase was primarily driven by our acquisition of GCI and 2018 vessel deliveries.

The GCI and 2018 vessel deliveries also were the primary drivers of both revenue and OpEx with revenue up 27% and OpEx up only 17%. We will have lapped both GCI into 2018 vessel deliveries by the third quarter 2019.

General and administrative expenses were $8.8 million in the first quarter. The increase versus the prior year was primarily due to higher stock-based compensation and one-time items.

We continue to expect to be within our guidance range for the full year. Our operating earnings for the first quarter were $344.1 million, a 315% increase over the comparable quarter in 2018, primarily due to the $227 million one-time payment described earlier by Bing.

GAAP diluted EPS for the quarter was $1.26 compared to $0.37 in the first quarter of 2018. The increase was also primarily driven by the same $227 million one-time payment.

Cash flow from operations for the quarter was $122.6 million compared to $69.6 million in the same quarter in the prior year, a 76% increase. Please turn to slide 11, where we will discuss our capital structure developments.

As we often discuss, we're focused on prudent, thoughtful capital allocation with the strategy of improving our credit profile as outlined at our 2018 Investor Day. Since the beginning of 2018, we have made significant improvements across our capital structure.

This progress has continued into 2019. Over the first quarter, we closed the second tranche of Fairfax's $500 million equity investment.

Fairfax's $1 billion total investment has been instrumental in advancing our capital structure, increasing our capital stack, equity capital stack and balance sheet flexibility. With the second Fairfax tranche coming in, our de-leveraging has accelerated.

In the first quarter, we repaid total borrowings in the amount of $300 million. And in addition, subsequently, in April 2019, we repaid our 2019 notes.

We now stand at our lowest net debt to equity ratio since 2007. We have ample flexibility with 37 unencumbered assets, and $700 million of pro forma liquidity.

We will continue to augment our balance sheet strength in order to build sustainable long term franchise value. Please turn slide 12.

Please note that any forward-looking guidance is based on current information and all estimates are subject to change. Given the modification in payment mentioned by Bing, we will be lowering our full year revenue guidance to $1.1 billion to $1.12 billion, based on pulling forward these contracted cash flows.

For the purposes of being clear, we're keeping our guidance for all other metrics the same. That concludes my formal remarks.

We thank you for your time today. And with that, I will pass the call back to the operator who will open the call for questions.

Operator?

Hi, this is Liam on for Chris. Thank you for taking my question.

So I just wanted to follow up on the time charter modifications that you guys discussed. And just see if you can just provide a little more context around those, if you could.

I'm just wondering, what really motivated the decision to enter into the modifications and if it's likely that we'll see further modifications in the near future?

Thank you, Liam. This is Bing.

It is our normal course of business that we’re working very closely with all our customers on a regular basis to address all their business needs. This particular case where is our customers who have decided to focus their future business away from the existing container shipping activities, so what we’ve done is that leverage our existing full vessel lifecycle expertise based on the existing time charter contractual obligations, working with our global customer network with a focus on reducing the cost and risk by developing mutually beneficial solutions for all parties that are involved.

So, the outcome of this is that not that we have one satisfied customer, we have three customer, volume of this modification, because each everyone gets what they needed in their business. And also for the initiated customer, we actually strengthened our partnership, simply because the way that we reacted in terms of the time and most of the solutions that we provide.

And from a Seaspan perspective, not only we’re able to place all the relevant vessels back into market, also from -- in a multi-year contract, but also we’re able to achieve a net NPV positive outcome. So contact that this is a great example of how we working with our customers through a trusted partnership by default, providing these [indiscernible] for all for the parties involved.

So once again, this is the course of our business, we are pride of our capabilities and continue to working with our customers for whatever their needs are but everybody and provide a similar type of solutions.

Great, thank you for that context. And just following up on that.

I mean, what do you guys plan to do with the 227 million. I'm assuming it focuses primarily on de-leveraging.

But I'm just wondering if it impacts your deleveraging timeline and any of your goals you have with that.

Thanks for that. As we lay out on page 11, we have a pro forma liquidity right now of approximately $700 million.

Our primary focus continues to be on improving our credit profile. We think that this has ample benefits, not only across the debt capital side, but also from an equity standpoint.

So we'll continue to focus on that. And the incremental liquidity will also drive the ability to engage in opportunities that are interesting it does.

Great. And do you guys -- what are your thoughts on like interest expense in 2019, in light of your recent de-leveraging, and including the repayment you guys had on April 1?

So, we provided guidance at the beginning of the year on a variety of operating metrics. Our de-leveraging will -- is from a capital allocation standpoint, continues to be our primary strategy and primary focus and we evaluate all of the tools in our toolkit, as we think about moving that forward.

So whether it's the charter modification, or whether it's thinking through the individual bilateral facilities we have, we're constantly focused on making sure we're making the best decisions across our capital stack. And so you'll see us evaluate that from time to time and we provide significant disclosure as it relates to the individual facilities and the individual expenses related to that in our 6-K, which will be released in the next couple of days.

And so you'll get a better sense of how that looks and how to model that out for the rest of 2019.

Yeah, hi. This is Frank on for Ben.

My question is related to the pace of development for investing in assets outside of the container shipping business. That's been about a year and a half since the company signaled the intention to invest incremental capital outside the business.

And while there's been the investment in Swiber, there hasn't been a lot. And so my question is around the reason for that, has it been a function of waiting for the balance sheet?

Or have you been having trouble finding projects that hit your return criteria?

Thanks, Frank. This is Bing.

As we previously discussed that we evaluate in the investment opportunities based on following. One is that our investment goals, any investment that we make, whether it's within the container or outside the container space, but first and foremost, that we need to make sure that we create long term sustainable value for our shareholder.

And secondly, any investment we make have to have business rationale in the sense that it complements to our existing business as well as satisfy our customers’ needs. And we have a very disciplined investment criteria, both qualitative and quantitative in the sense that make sure that financially it’s accretive and also have the impact on the -- evaluate the impact on our balance sheet as well as looking at the business rationale, the customer operation from a cost perspective.

So, you are right, that is this is the last acquisition that we have paid, GCI. The answer to that is that we continuously own it in the market.

We evaluate opportunities and the risk. Our key focus is really looking at the right opportunity that meets our investment objective and possibly meet our investment criteria.

Once those opportunities arises, whether it's in the [indiscernible] we are able to execute as the GCI. So this is matter of, we are disciplined.

We're looking for the right opportunities.

Yeah. I think the other – this is Dave Sokol.

The other thing to recognize is we really didn't start this diversification effort until a year ago once we had Bing on and our team transitioned over. And the direction the board is given is capital allocation is critical, and only investing in transactions that have significant accretive value to our shareholders is what we're going to do.

And so we've evaluated a lot of things, we’ll continue to. The developmental projects like Swiber take time.

By history, in that sector, you build real long term value overtime, acquisitions and additional lease charter opportunities can happen more quickly, but they have to make economic sense for us. And, I think one of the things the sector has suffered from in the past is sort of a hand to mouth financial survival mentality, in many cases, over dividend, very low credit quality, and, we're just not going to do that.

We're going to maintain a solid credit capability, we're going to keep, as Torsten is doing with the operations side, have the best operations platform in the industry, satisfy the customers’ needs, and then some, and then as opportunities come along, we’ll invest in them. But, if we don't have an appropriate rate of return on a transaction, we're not going to go forward with it.

And, in my history, cycles turn and opportunities come and those who are best prepared to take advantage of them make the best when those opportunities come, but it is a process of evaluation and finding the right ones. And, like I said, no hesitation on our part to move forward.

We think we've got the balance sheet trajectory where we want it, and the liquidity and availability of capital now is very significant. And I think we've accreted our credit metrics at least a full notch, at least in the last year.

And so as the opportunities come about, we’ll take advantage of them. But we're not, we've got a very good platform and don't need to stretch to do something.

And frankly, my experience has been that when people stretch to do transactions, just so they have announcements, that ultimately is shareholder harmful, not beneficial.

And then I guess the second question I have is about the modification of the time charters. From the Seaspan perspective, how much of the negotiations are focused on the ability to pull cash forward, to bring in capital versus the mocking upside potential of being able to re-charter those vessels out?

Yeah, this is Bing again. Our focus is first is for our customers’ needs.

We don't really have liquidity needs to pull this cash forward. Rather is to facilitate our customers.

business transformation needs. As I stated earlier, this is more of our normal course of business, our customer comes first for a variety of different needs, in this case, it’s specifically because they changed their business focus.

So therefore, we accommodate their needs, leveraging our network of other customers that we have, and we are able to leverage our asset lifecycle management expertise, which is something we're very proud and very good at doing. And that actually is the activities for value that we provided to both the -- our customers, the ones that initiate this request, and also other customers [indiscernible] this is the core competence that we have, as part of the vessel lifecycle management experts.

I think another piece of that is, the customer had a objective, given their change in business status. And the key was to find a solution to work for them, a solution that could involve some of our other customers who could benefit from this modification.

And then to make sure that at a minimum, we retained our whole net present value of both cash and earnings from the contractual obligations that existed, and frankly I can speak for the board extremely proud of the team's efforts to accomplish all three of those things that customer achieved their goals, it was pleased with the outcome. Our other customers were able to fill some gaps in their chartering needs that benefited them and we get more than the full net present value of both the cash and the earnings through the transaction.

So it was one of those things where when a customer needs you, you need to be there and find solutions. That doesn't mean and the customer never expected us to contribute to the process.

They just asked us, can you help us find solutions here that are happy for everybody? And the team did an extraordinary job.

And, it's unlikely that the same type of transaction will continue to be seen. But if it does, we'd want the team to respond exactly the same way.

I want to focus again on the charter modification. And if you can give us some reason why the charter would like to modify and get rid of these vessels.

Are these vessels not desirable by the specific customer? Also, if you can give us an idea of what is going to be the impact in the posterior gears, I know that you do not give a 2020 anonymous guidance, but I was wondering how -- what would be the difference in the projected EBITDA based on today's rate.

And one last question, if you can also tell us how the movement -- if the movement in the balance sheet, some of the lead liabilities becoming current are related to this transaction?

Thank you. This is Bing again.

I will answer the first question and Ryan will help with the other two questions you have. Once again, the reason why the customer decided to modify the contracts for simple reasons, because they have changed their business strategy, they are focusing their other activities other than the container shipping activities so they would like to exit that space.

And that is the sole reason why they want to modify the contract. And Ryan will be able to give you some – the sense as to what the impacts of the future years and also your third question.

Thanks, Bing. So from a guidance standpoint, you're right, we don't provide forward guidance on 2019.

And we did update the revenue guidance there. So you can kind of see what the impact is for 2019.

What I would say for -- thinking about it for 2020, 2021 and beyond, we provide very detailed disclosure as it relates to our vessels and our related charter parties in our 6-K. That will be coming out in the next few days.

And once you take a look at that, you'll get a sense of what the forward-looking impact would be. On the liquidity side, Fotis, I think you're talking about the increase in the current portion of long term debt.

Yes, and there were kind of $60 million financial obligations that it became current and there was also a significant increase in the capital leases that they became current?

Yes, so those were just normal course payments, there was no increase in current liabilities as it relates to -- or no material increase as it relates to the charter modification. The $160 million current portion of the operating lease liabilities relates to the change in accounting standards, which puts operating leases on our balance sheet.

That's discussed in more detail in our disclosures and filings, but that is just the update in the operating lease accounting standard.

One more question about the financing. These vessels that they came out of leases, are they able to get any debt right now or they are in the categories that the lenders would not like to finance without a charter and also you have a couple of 10,000 TEU ships which are unencumbered, that they are operating in the spot market.

How much debt these vessels can get. And if you can let us know the third vessel that you have financed, how much debt it has right now.

You have a couple of questions in there and I'll try to address them all. The first thing just to maybe a clarification, none of our 10,000 TEU ships are on the spot market right now, all are on multi-year contracts.

From a debt standpoint, one of the things that we think about internally that we believe is important, and perhaps it's important to discuss here is, the debt capital structure on a ship by ship basis may make sense for some members in the industry. But for us, we are a large corporate entity with significant amount of cash flows across the corporate base.

And so when we think about financing, it's not just on a ship by ship basis, but across our broader portfolio. That leads to a lot of interesting opportunities, as it relates to the long term capital structure for our business.

And it goes back to one of our key tenants of improving our financial strength, which is balance sheet flexibility. And so, whether it's an individual ship or a fleet of sister ships, or a set of charters, we have a lot of autonomy on how we think about financing assets in a portfolio.

So, from individual ship and within these charter modifications, we don't think about it on a ship by ship basis. As you can see from our capital structure developments, we're very focused on de-leveraging and increasing the flexibility and right now, we have 37 unencumbered assets, which allows us kind of a wide range of options of how we think about financing the total portfolio.

Okay, well, thank you very much. Thank you, everyone, for taking the time for the call and I wish you all have a great day.

Thank you very much.