Gerry Wang - Co-Chairman and Chief Executive Officer Sai Chu - Chief Financial Officer

Benjamin Nolan - Stifel Nicolaus Gregory Lewis - Credit Suisse Amit Mehrotra - Deutsche Bank Shawn Collins - Bank of America/Merrill Lynch Charles Rupinski - Seaport Global Chris Wetherbee - Citi

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

Before we begin, please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from results projected by these forward-looking statements.

Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the second quarter 2015 earnings release and earnings webcast presentation slides available on our website at www.seaspancorp.com, as well as in our Annual Report on Form 20-F for the year-ended December 31, 2014 filed with the SEC. I’d like to remind you that during this call, we may - we will discuss certain non-GAAP financial measures, including adjusted EBITDA, cash available for distribution to common shareholders, normalized net earnings and normalized converted earnings per share.

For definitions of such non-GAAP financial measures and for reconciliations of such measures to the most closely comparable U.S. GAAP measures, please refer to our earnings release.

I’ll now pass the call over to Gerry, who will discuss our second quarter highlights as well as some recent developments.

Thank you, Sai. Good morning to everybody.

Please turn to Slide 3 of the webcast presentation. During Q2, we continued to deliver on our strategic objectives.

We continue to grow our fleet and our long-term contracted revenue base. We expanded our operating fleet with the delivery of four 14000 TEU SAVER design vessels.

We ordered seven newbuild vessels during the quarter, which will increase our managed fleet to about 935,000 TEUs and we continued to enhance our capital structure by accessing diverse sources of capital to fund our growth and enhance our capital structure. Turning to our second quarter results, I would like to highlight three points.

First, we ended the quarter with 82 vessels in our operating fleet and 93 vessels in our managed fleet of operating vessels or a total of 118 vessels in our managed fleet, including newbuilds. As noted earlier, we took delivery of our four 14000 TEU vessels, which began 10-year fixed-rate time charters with the Yang Ming.

We are pleased to commence an important commercial relationship with Yang Ming, which you will see a total of 15 14000 TEU vessels delivered through 2016, including managed vessels, all of which are chartered to Yang Ming on 10-year fixed-rate time charters. Our operating fleet achieved 98% utilization for the quarter, including our seven scheduled dry-dockings, and the fleets continue to generate stable cash flows from long-term time charters.

Our new building program has been proceeding smoothly at all four shipyards; YZJ, HHI, HHIC and CSBC. Today, there are 23 vessels under construction for Seaspan and GCI.

Second, we completed several financings and refinancings during the quarter, raising a total of approximately $1 billion thus far in 2015. Finally as noted earlier, we ordered seven newbuild vessels for our managed fleet.

We have signed agreements for the construction of five 11000 TEU fuel-efficient SAVER design containerships with Hanjin Shipbuilding for approximately $470 million for delivery in 2017. These vessels are chartered on 17-year fixed-rate charters with a leading operator.

Pursuant to our right of first refusal with GCI, we have retained three of these vessels and GCI will acquire the remaining two. We also entered into contracts with YZJ for the construction of two 10000 TEU newbuild containerships for an aggregate purchase price of approximately $186 million for delivery in 2017.

They would be the sister vessels to our existing vessels under construction at YZJ. The allocation of these two vessels will be one for Seaspan, one for GCI.

I would now turn the call over to Sai to discuss our quarterly financial results. Sai, please.

Thanks, Gerry. Please turn to Slide 4.

Revenue increased $25.3 million or 14.5% for the full quarter, a revenue from five 2014 deliveries and four deliveries during the current year, which was partially offset by off-hire days. Vessel utilization was 98% compared to 99.3%.

During Q2, we completed seven dry-dockings for 23-day increase since scheduled off-hire. We also experienced 70-day increase in unscheduled off-hire.

The ship OpEx was $49.3 million, an $8.2 million or 20% increase, primarily due to increases in ownership days, costs for spares purchased, repairs and maintenance and other items. We expect quarterly ship OpEx to continue to increase in the year due to the expansion of our fleet and slightly higher costs related to some of the older vessels in our fleet.

General and administrative expenses were $6.1 million, a $1.1 million decrease or 14.7%, primarily due to a reduction in non-cash stock-based compensation expense. Operating lease expense was $8.6 million, a $7.5 million increase due to the addition of lease financings for four of the 10,000 TEU MOL vessels and one 14000 Yang Ming vessel.

We may finance further newbuilds using similar leases which could increase our operating lease expense going forward. Beginning Q2, we changed our non-GAAP presentation of certain lease financing arrangements.

Previously we amortized a gain on sale over the term of lease. However given the timing of cash receipt and that the economic reality of the transaction, we feel it’s more appropriate to recognize the gain on sale as an upfront one-time item.

This will impact our non-cash - non-GAAP cash metrics of adjusted EBITDA and distributable cash flow. Normalized net earnings is not impacted, as this continues to be an accrual-based metric.

This results in higher adjusted EBITDA and distributable cash flow upon vessel loading and lower adjusted EBITDA and distributable cash flow in subsequent periods. Comparative periods will be presented under this revised presentation in the future.

Adjusted EBITDA for the quarter was $169 million, a $38 million or 29% increase. Cash available for distribution for the quarter was $106 million, a $38 million or 55% increase.

Both cash metrics are higher due to realized gain on sale of the Yang Ming Winner, in addition to deliveries and lower amounts reserved for dry-dockings, partially offset by increases in share dividends, higher interest expense and hedge rate. Normalized net earnings for the quarter increased $3.1 million or almost 10%.

Normalized EPS was $0.22 compared to $0.19 in Q2 of last year, a 16% increase. We expect to see EPS increase due to the 2014 deliveries and the eight 2015 deliveries.

However, EPS improvement will be muted due to the capital costs associated with investing our large newbuild program through 2017 and the effects of the operating leases. Our Board declared a Q2 dividend of $0.375 for common share.

This is a sustainable dividend level that balances returns to our shareholders, while allowing us to maintain financial flexibility and take advantage of attractive growth opportunities. Please turn to Slide 5 for balance sheet information.

The $178 million increase in our total assets is primarily due to delivered operating vessels. Our debt and capital lease balances were versus $3.7 billion versus $3.6 billion at the end of Q4, 2014, a $110 million increase due to the refinancing of three 4500s, the drawdown of term loans for two 14000, partially offset by debt repayments.

Overall, total liabilities increased by $125 million and shareholders’ equity increased by $53 million. Seaspan’s capital structure continues to evolve and diversify with a very active Q2.

We renewed our one-year revolving loan facility with our syndicated banks for $200 million, doubling it and adding several new banks. We entered into term loans, a $195 million loan for two 14000, as well as another $228 million term loan for a 14000 and two 10000 currently under construction.

The Yang Ming 14000s the Wish, Wellhead and Winner were financed with a $296 million facility of secured debt. The Yang Ming Winner was funded with the previously mentioned offering lease for $144 million.

This lease financing provides Seaspan with an attractive price to capital higher advanced than typical secured financings. However we anticipate that the EBITDA and earnings contribution would be lower than if it had been financed with traditional senior secured financing.

We plan to continue to pursue attractive financing alternatives that diversify our capital structure, provide financial flexibility to continue growing and improving returns to our shareholders, which may include additional lease financing arrangements. Please turn to Slide 6 for our latest forward guidance with details of delivery dates, vessel size, customer information, CapEx and tentative dry-docking dates.

Each of these items is based on current information and estimates and remain subject to adjustments. Please refer to Slide 7 for a forward guidance for the next quarter.

Starting this quarter, Seaspan will be providing forward guidance of key financial figures for the following quarter. We do not intend to update our quarterly guidance in the ordinary course of communications.

For Q3, we expect normalized converted EPS in a range of $0.25 to $0.28. Please note that these estimates are subject to change.

Please refer to Slide 8 for details of our 12 ship order book for 139,000 TEU with information on customer, yard, delivery dates, size, charter length and allocation with GCI. We expect to fund the rest of our fleet with $410 million of additional borrowing under debt facility in place, and $565 million in additional financings that we are currently negotiating.

I’ll now turn the call back over to Gerry.

Thanks Sai. Please turn to Slide 9, where I will briefly discuss the industry.

Utilization levels of around 90% on certain trade lanes have led to a challenging freight rate involvement for certain carriers. However, we continue to expect stable charter rates due to the low idle fleet rate of about 1.6%.

On the supply side, we expect tonnage growth of about 6% to 8% for 2015 and around 5% in 2016. Major operators continue to manage supply through scrapping, deployment, slow steaming and idling of ships.

The total order book remains at approximately 20% off effective loading capacity or about 6% per annum on average. Vessel scrapping is expected to continue, particularly for the 80s and 90s build ships.

On the demand side, we expect global containership volume measured in TEUs to grow by around 5% to 6% in 2015, and 5% in 2016. Panamax charter rates have steadied, following a rapid increase in demand, while supply remains fairly tight.

85% of vessel deliveries in 2015 are for vessels of up to 7500 TEU or larger as the liner of majors continue to modernize their fleet and improve their cost structures with large modern vessels. We have seen a continued demand and interest for our several design vessels of 10000 TEU and 14000 TEU classes from our customers as they focus on reducing tanker fuel costs and improving loadabilty.

Finally, we expect the outsourcing trend by liner companies to continue as demonstrated over previous cycles, given that we are the leader in this space and that we continue to maintain our strong customer relationships, we expect to continue to capture our substantial share of the growth opportunities in our industry. Please move to Slide 10.

This chart shows the standard maturity profile of our chartered portfolio. The average remaining charter length of our operating fleet is approximately six years on a TEU-weighted average basis.

For the remainder of 2015, we have up to two, three Panamax vessels up for renewal for charter, and in 2016, up to 13 vessels depending on the exercise of existing charter options. Overall, the remaining 2015 vessels up for re-charter represent less than 1% of estimated 2015 EBITDA, and the 2016 vessels represent approximately 5% of estimated 2016 EBITDA.

Even though, we have seen noticeable improvement in charter rates for Panamax vessels, we would continue to monitor market conditions to determine the best strategy for those vessels. In Q2, we took delivery of four 14000 TEU vessels; the Yang Ming Wish, the Yang Ming Wellhead, the Yang Ming Winner and the Yang Ming Witness.

For the remainder of 2015, we expect our fleet to expand further with the delivery of two 14000 TEU and one 10000 TEU vessels. In 2016, we expect to take delivery of two 14000 TEU and a three 10000 TEU vessels.

In 2017, we expect to take delivery of three 11000 TEU vessels and one 10000 TEU vessel. All those future deliveries together represent TEU growth of roughly 26% of our current fleet capacity.

Despite the substantial fleet growth, we have experienced over the past few years, we expect to continue to see opportunities for further growth. Please turn to Slide 11, where I would reiterate our vision for the future.

We believe Seaspan is well positioned to continue to enhance its leadership position and to create shareholder value over the long-term. We will continue to pursue fleet growth with a controlled and balanced approach, being patient and disciplined using our financial strength and technical and operational leadership position to capitalize on opportunities that meet our strict criteria.

Our core focus will remain on designing, owning and chartering large modern fuel-efficient containerships to creditworthy customers. We have a history of retaining capital to shareholders and we remain committed to sustainably increasing our common share dividend over the long-term as we continue to opportunistically grow our business.

As a ship leasing franchise, we consider it to be critical to consistently maintain a strong balance sheet, diversifying our capital and enhancing our financial strength, including maintaining appropriate leverage will remain top priorities. As previously stated, we may expect our 2015 results to be somewhat muted as we continue to invest in new vessels for our future.

However, we also expect our strong base of cash flows from existing charters, as well as future growth, will enhance our franchise to become stronger and well established for the long-term value of our shareholders. We would like now open the call for question.

Operator, please start.

Thanks. So I had a few questions.

Number one, I know in the past you guys have said that you would look to may be sell some of the older assets when the charter market got a little bit better and SFAs [ph] have gotten - have gone higher. And I appreciate that you don't really have that many older assets that would be ideal candidates, but the market has improved a bit and asset values are higher.

Is it at a point where you would consider doing something at this level or it’s still not really anything to do?

Ben, on the - yes, we do have few older vessels. Firstly, those vessels are generating very good net cash flows to us.

We get $13,000 to $14,000 per day whereas our OpEx is about $6,000 per day. So pretty fast and the financing which had to minimize for those older vessels which had to attach to more financing for our new vessels.

Secondly, the value has gone up but we feel the value in charter rates still have a disconnect. We don't think the values have gone up enough to reflect the inability in the charter rates for this kind of vessels, so we will just wait for sometime and see what happens.

I think the most important thing is, for us, we have the flexibility of either keeping those vessels or disposing of them, if needed. So we have very minimum impact on our balance sheet, on our capital structure.

So we’re happy to be in a position where we are.

Okay. And then my next question relates I guess to the market in general.

We've clearly seen box rates come down quite a bit. As you mentioned, utilization on some of the lines - some of that trade lines has fallen.

What is the typical response of the - historically, what is the typical response of the liner majors in an environment where their rates are falling pretty sharply? How do they normally react specifically as it relates to the charters?

Do you typically see them lightning their charter positions. Is there typically a change in new building activity?

What's the normal way that it plays out in environment that looks like we're in now?

Okay. Well, there is couple of things they normally would do.

Historically dealing with the cycles at different rates, ups and downs. Today, situation is obviously the carriers are really blessed by very favorable tanker prices as a result of very low oil price at $47 per barrel, if I'm correct, number one.

Number two, the carriers also enjoy very strong U.S. dollar.

Our business is all in U.S. dollars.

Once the U.S. dollar is converted into the domestic currencies, obviously there is certain benefit.

So those are the favorable factors. I do agree with you, the freight rates for certain chase have come down especially for Asia and Europe, the number one lane.

Typical response from the liner operators will be to focus further on cost reduction, which would actually lead to more larger vessels to be considered where they’re chartering or ordered by themselves and we've seen certain activities recently in response to that. And as far as the impact on the charter market, typically those larger vessels and the long-term charters, so they are not really part of the sporadic day to day response to the short-term market conditions.

We see the outsourcing trend to continue. I don't see any change in that.

As far as our business is concerned, we see the charter activities for, especially larger vessels, picking up a little bit being quite busy over the last couple of months talking and dealing with the liner operators. One thing that is noticeable is the interest in the 10000 TEUs and 14000 TEUs and the larger vessels have remained very, very firm, which is good for us.

So as far as our business is concerned, there were few still quite confident with still feel the opportunities ahead of us to remain there, which is focus on building, designing good ships and operating them very well. One important distinction today is you have to operate those vessels very, very well.

You have to be part of the total solution for the carriers in order to help them really manage them cost effectively. I am seeing and I've heard that very loud from our charters, they demand for very, very high standards of operations from charter owners like ourselves.

That's something I want to convey to you and the audience here.

Okay, that’s helpful. Thanks Gerry.

And then the last one for me. You guys have several vessels that have come off contract or will be coming of contract pretty shortly.

What sort of tenure are you looking? Is it relatively short-term renewals?

How we should think about those?

Ben, at the beginning of the year, we had potentially 16 vessels that were large and Panamax sizes came out for renewal. And we’ve covered 13 of them at a rate about $13,000 per day for six months, all the way to two years.

I would see that pattern to continue, because to be honest, we do not want to fix too long for lower rates and obviously six months, 12 months, 18 months would be the sweet spot. We believe the remaining two, three vessels will either be renewed by the existing charters or would be fixed in that pattern.

Okay, very helpful. Thank you.

Thank you very much.

Yes, thanks. And good afternoon, guys, or I guess, good morning, Sai.

I guess my first question is you guys have been public for it seems like how long...

10 years.

10 years. What was the thought process around starting to give quarterly guidance and why not just - given your model and the stability and the outlook, why not give full-year guidance?

Sai, can you answer the question please?

Yes, sure. Greg, I think that what we've experienced in the last while is just we felt it was best to provide some guidance just because of the way that the financings work, and we found that there were some disconnects between what was being published and walkthrough the models at times.

So we felt it was just appropriate to give some high level sales along with the guiding within a range.

Also Greg just to add on to Sai’s comment, I think we have a tremendous confidence in our business model in the stability and sustainability for our business. We know where the revenue will be, and that we know our operating situation.

And we feel after 10 years we want to have a new start to give more precise guidance on our top line and also bottom line, and just the decision we made going forward and hopefully that would help connect with our analysts and also our shareholders as far as our earnings per share and other things are concerned.

Okay. Well, it makes my job a lot easier, so thank you.

And then just one other question, Sai. Clearly you guys have lots of - you’re in constant conversations with your banks and lenders and Exims [ph].

Given some of the headlines we've been seeing over in China lately, have you noticed any change in tone, in their wantingness moving forward to be providing financing into the shipping markets?

That's a great question, Greg, and I think we've been in business as you noted for 10 years, and we've always been executing a very strict strategy about developing and maintaining access to various markets. We’re not bound [ph] to the Chinese market in anyway or any market for our capital, so we are constantly working with providers around the world, and at some point there are times when certain markets do shut down.

And this is actually quite the opposite. The Chinese market is quite up wide open for us and it's primarily because our track record, our credit strength and the company's execution and access to the various forms of capital.

And in fact, there is a shortage of capital in shipping but like in with any other industry, capital providers do gravitate to the strongest credits, and in fact we’ve seen markets that have been previously closed for various reasons reopening and banks coming back providing us capital that have not been able to provide capital to any shipping companies for many years. So it’s a very good story for Seaspan, our access to capital is excellent.

And as you can see, with a very active period for us and there are plenty of opportunities for us to finance, whether it be in China or Europe or in the U.S.

Okay, perfect guys. Thank you for the time and enjoy the rest of summer.

Yes, Greg. Thanks a lot.

Thanks Greg.

Yes, thanks so much. Gerry, as you said, we're seeing a nice improvement in charter rates for the Panamax vessels, and there is, I guess, a cautious optimism in the post-Panamax market as well.

Can you just talk about what you think has sort of driven that improvement year-to-date and sustainability of that rate improvement in those classes? And then the overall supply appears sort of very low in that segment of that market prospectively, but there is obviously nuances associated with the order book in terms of trickle-down effect, and if you can just sort of give us your most updated thoughts on what you think the impact or implications from that can be appreciated?

Yes, thanks. If you look at that class over last 70, 80 years nothing has been built or very little has been built, so that's the reason why I agree with you, the supply remains fairly tight for that class, number one.

Number two, this vessel is actually a very flexible type. They can do inter-Asia.

They can do Transpacific. They can do Asia, New Zealand and Australia.

They can do Asia, South America. They can do intra-India.

So they are very flexible type of vessels going here and there. That explains why the demand has been strong for this type.

And at the end of the day, I don't see that situation to change in the near future before the newbuilds are coming to replace this vintage type, even those vessels 10, 12 years old on average, but they are still what causes for those trades I’ve just mentioned and we look at certain improved designs for this type, because we do feel the industry will need this type of vessels for flexibility, for different trade lanes. Yes, there would be a trickle-down cascade impact from larger vessels, but due to the restrictions and the geophysical situations, the bigger vessels will have difficulties going to certain parts where those 40, 50s or 4000 or 5000 TEUs can go.

So I see this class will continue to trade fairly strong for some time and we are fairly optimistic.

Okay. That’s really helpful.

Thanks Gerry. I have a couple of more questions, maybe for Sai.

The recharterings in 2016, obviously we've seen a nice inflection in those vessel classes. So can you just give us sort of how accretive maybe those recharterings would be based on the current rates today?

Basically those vessels were in - we expect somewhat between $13,000 to $14,000 per day. As I mentioned, we'll gradually phase-out the financing attached to those vessels when they come up for renewal, and then those vessels will contribute fairly good net cash flows to our bottom line and will load up a little bit more for the newer vessels, the bigger vessels as far as that is concerned.

So that our overall capital structure remains with a gearing ratio below 60%, that's our overall approach and we are planning different financings to different types of vessels. And we feel this Panamax vessels will not really be our liability per se.

They will be net contributors. As far as the detail of the accretion is concerned, I don't see too much to be honest of why they do not represent too much of cash revenue base.

As I said all those vessel, 16 vessels probably account for less than 10% of our revenue. Even less, maybe 5%, 6%.

So net-net, the variations would be material for our business.

Okay. And one last question, if I may.

The company’s decision intra-quarter I guess to include gains on asset sales in the definition of distributable cash flow. I understand that's real cash and why you'd want to do that, but it does have the potential, I guess, to introduce some volatility in the quarterly cash flows.

And so curious to just understand how you think about those gains from a recurring perspective? And then just a follow-up to that, from an optic standpoint, there is the effect of I guess, increasing the gap between the dividend and the distributable cash flow when you do have some large gains in the quarter.

And so curious how the company thinks about those cash flows in terms of maybe allocating a little bit more of those to dividends versus redeploying for your growth plans as well?

Yes, it’s a great question and the way that we view it is really the distributable cash flow and EBITDA are really cash metrics, and we are achieving a true economic gain on the sale of these assets realizes and reflects the company’s good decision-making and acquiring assets at a very good value, because we’re getting approximately 125% LTV on the cost of the assets. So it does reflect a gain over the actual cost of vessels, which we do receive upfront.

You’re right that it does represent a bit more of a bumpier cash flows, but it does reflect the cash that comes into the business which can be reinvested and redeployed and give us enormous flexibility in our cash flows. But again, the primary objective of the company is creating a long stable cash flows that are predictable.

They do represent a portion of our capital structure, but we don’t feel it’s going to represent a huge proportion of our capital structure. So we do look at it as the capital structure and all the cash flows that come in, it gives us a flexibility of deciding on whether or not to reinvest in the business and it does provide sources of capital to reinvest in the ships but also for distributions to our shareholders, but we do look at it on an annualized basis on a steady state.

So hopefully that makes sense and that answers your question, Amit.

Yes, it does. Thanks so much, Sai, Gerry.

I appreciate it.

Thank you.

Hi, Shawn.

Great. Good morning, Gerry and Sai.

Thanks for taking my question. So you had a busy quarter.

You have four ships delivered in the quarter. You acquired seven new ships.

You lined up a lot of financing. So it's a very accomplished quarter.

I wanted to go to the April announcement of the five new 11000 TEU ships. I know they are on a unique structure with 17-year charter and a predetermined purchase price for the customer rather than a traditional time charter.

I know you touched upon this at the last earnings call and how this is due to a special customer circumstance. I just wanted to ask if you could outline this again and talk about some of those [Technical Difficulty] and if you envision any more of these types of transactions in the future?

Good question. As the one-off transaction, to be honest, when this deal was presented just from one of the leading operators, we felt compelled to take a look at it and the good thing about it obvious, it helps us deploy the capital and achieve the result [ph] we want and then it also helps us in terms of diversification of our customer base including building ships at different yard.

So once all of those will take into account, financing also take into account, then it was a good deal to pursue and we did it pretty quickly working very closely with the leading operator. And that also paves the way for our future cooperation with them.

As I said, adopt similar deal with what happened. Very often it’s one-off, one-one situation.

Okay, great. Understand.

Thanks.

We typically want to operate our vessels because we have the technical operational strength. Remember, we operate flagships for several carriers and we’re experts in designing, building and operating very large modern containerships.

That is our forte. That is our identity.

We want to take advantage of that and provide our customers with very well-built well-designed vessels and operate it very well. This is really Seaspan’s DNA.

We want to build, design and now operate modern ships to meet the requirements of our customers who want to really focus on cost effectiveness i.e., fuel consumption and also loadability. Those vessels will be in the core services.

The demand for top-notch standards of operations from us, it is a matter of fact couple of customers have asked us to perform duties for very sensitive duties that they think we can do better than their own ships.

Okay, that's helpful. That makes sense.

You operate almost 100 ships out there.

Absolutely.

That’s helpful. Thank you.

A second question, I think I asked you this in April, but the U.S. West Coast port shutdown leftover from the winter, and at that time in April, there were still some delays and some congestion in the system.

I'm just wondering that now we are in late July, if those congestion and delays have worked their way through the system at this point in time as far as you can tell?

The U.S. West Coast situation is pretty much normalized, but as I said during last call, you will see some pattern change.

We are seeing more and more traffic going to U.S. East Coast right now.

If you look at the stats, U.S. East Coast is experiencing more double-digit growth for traffic for the last month and this month as well.

I see that pattern to continue on. As a matter of fact, we are meeting Panama Canal representatives next month to discuss about our 14000 TEUs going to Panama Canal to U.S.

East Coast and recently see customers of ours have approached us to discuss about sending the 10000 TEUs and 14000 TEUs through Panama Canal to U.S. East Coast.

As I predicted, there will be long-term impact for U.S. West Coast.

People are saying this thing that repeats every five years, seven years. So people are looking at alternatives.

One of the alternatives is of course the U.S. East Coast and with the wider Panama Canal, people are really encouraged to look at going through sending bigger ships to Panama Canal to U.S.

East Coast to address the West Coast situation in a structural and a strategic way.

Okay. That’s helpful.

Thank you. Just my last question.

We’re in a choppy macro environment. Most recently this week and last week, China markets are having a meltdown or quite some significant volatility.

We have significant debt issues in Greece. We have commodity prices that are down pretty significantly.

I'm just wondering if you're seeing any direct impact from any of these macro factors in your discussions with customers?

No. Our customers are long-term oriented.

I feel the activities are actually picking up for larger vessels, for fuel-efficient vessels, for ships that can operate more efficiently for loadability. As far as the financing is concerned, as our CFO, Sai has just pointed out, we have a very robust financing in front of us, so we don't see that being impacted negative at all.

As a matter of fact, we see more Chinese banks wanting to do foreign business. We are the largest containership leasing company.

That's the type of borrowers, the customers they want to do business with and I see that in a positive way because they will turn their eyes to what’s more foreign creditworthy customers than focus on domestic.

Okay, that is helpful color. Thank you very much, Gerry and Sai.

Thank you.

Good morning, Gerry and Sai. Thanks for taking my questions.

Hi, Charles.

Hi. I just have - most of my questions have been answered.

You’ve been great on color for the industry. My only question was, as you mentioned on the Far East Europe lines you’re seeing orders for some of these super large vessels 18000, 20000 TEU.

I’m just wondering is this something that over the next cycle that you would consider being a part of your portfolio at some point. And how do you see this effect on say the next vessel class down?

Just curious on your views. Thanks.

Charles, I think you’ve read some press reports about Seaspan’s involvement in this class for couple of customers in the industry. I'll take it very simple.

We’re interested in this class. However, given those vessels are like Airbus A380, they are the largest.

They are unique. They are not liquid, so we would demand for longer term in terms of a charter period, and that's something we would really be very firm on.

And as far as those conditions along with our written conditions are met, we are happy to look at this class. Do we do too much of this class?

Probably not, because at the end of the day, as I said, those vessels are like A380s. They are just not liquid, just not as tradable as the 10000 TEUs which I call them internally 737s and the 14000 TEU is more like 747s.

They are more tradable. Remember, we are a leasing company.

Flexibility is very, very important for us for our assets, for equipment, and we want to be very careful about doing anything that is not as liquid as the 10s and 14s.

Well, thanks a lot. That's great color.

I appreciate it.

Yes, thank you. Thanks Charles.

Yes, hi guys. I just wanted to follow-up on that last question and answer.

I guess in terms of customers’ willingness to indemnify to some extent maybe for some of the asset risk around - the residual risk around some of those larger ships. Is that something that there is more discussions on around now?

I'm just trying to get a rough sense. I can certainly understand your desire to make sure you're covered, particularly in certain such a large asset, but just want to get a rough sense of maybe where the gap is between the bid and ask in that business.

Yes, we are talking to couple of customers for that class of assets. Again, at the end of the day we have yet to come to the agreement on the charter periods.

Essentially as you pointed out 100% correctly the residual value coverage, we are looking at north of 15 years for such size customers, so this is not - they would consider 10, 12 years. We'll see.

And at the end of the day, a good thing is customers realize operating those vessels requires top-notch operational technical expertise. The fact they are approaching us and talking with us speaks very loudly about our technical excellence.

And we want to take advantage of that, and will continue with the dialog with them.

Yes, it would seem like you'd be one of the very few people who could potentially put a deal like that together. I guess maybe just the second question following up on I think a previous question.

When you think about the 2016 exposure, I think you mentioned just over 5% of EBITDA is exposed on vessels that recharter. If you were to recharter in the market now, just directionally I guess, do you think you'd see sick upside or downside relative to the 5% EBITDA in this type of market?

I just want to get a rough sense of maybe how that plays out, or is it effectively net neutral?

My bet would be neutral and it would be huge bonus if the rates would go up further and [Technical Difficulty] what they are. And as I said on the supply side, fairly tight, on the demand side, the flexibility dictates the requirements for those vessels.

I don't see that pattern changing in the near-term. And I'll keep my fingers crossed.

I think neutral would be the most suitable bet for the time being.

Okay, that’s helpful. Last question, just around generally demand trends.

We've seen weakening demand trends across several modes of transportation over the course of spring and then the summer. Globally you obviously sit in an interesting position.

Just curious what your take is? How do you think about the demand trends, and do you have any insight in terms of maybe how the second half of the year and 2016 plays relative to what the industry is talking about in terms of in single-digit growth in TEU demand for the next year?

Yes, interesting enough the industry has been pretty good about predicting the cargo volume increases and decreases for all the main trades over all those years. The industry is saying, we're looking at 5% to 6% this year and 5% to 6% next year.

The growth primarily is derived from the GDP growth, the demand for manufacturing goods. If you look at with the inside of container box, you're looking at the furnitures, you're looking at the clothing, you’re looking at TV sets and all those things and some occasionally iPads and iPhones for certain periods of time.

So those are consumable products, so they are fairly stable. And one would argue when you go through tough times, you would demand for more low-end products, therefore the volume would only go up.

That's the disconnect. A lot of people have now figured out, our business is all about volume.

Our business is not about value, okay? We are looking at the number of boxes.

We’re not looking at how many millions of dollars in the container boxes. We are fairly isolated from the dollar-related situations i.e., US dollar strength or global economic situations.

We are talking about the basic consumers wanting shoes and furnitures and clothing from manufacturers all over the world, so they are seeking for the lowest the cost. At the end of the day, we feel that the container shipping business will continue to be robust.

5%, 6% is actually a pretty strong yield. Compare this mode of transport to anything else, airline business, oil business, bulker business.

5%, 6% is actually very, very healthy. So we’re happy with that rate of growth in the industry.

As I said, the order book is about 20% and if you divide that over three, four years, we are looking at 5%, 6% growth of tonnage on the supply side. So there is a fairly balanced approach here from the operators from the industry participants, and we hope this trend will continue for next two, three years.

That’s great. Very helpful.

Thanks guys. Appreciate it.

Thank you, Chris.

No. I just want to wish everybody a great summer, and always nice to catch up with you.

As I mentioned, this year is the 10th anniversary for our business to being public with the largest shipping IPO. I guess, we still remain as the largest shipping IPO record in our hands.

And our business has grown from very small to where we are today, being the largest containership supply in the world in, account for 5% of the overall capacity, and we are very proud of that and we'll continue to work hard and work smart to make sure we do the right things in terms of customer selection, in terms of vessel selection, and also as our CFO has pointed out, to be smart and creative in financings to make sure our balance sheet continues to be strong and our capital structure continues to be flexible with position the franchise not only for good times but also for bad times as well. We want to be there for long-term, and we want to be there to provide long-term shareholder value to our shareholders.

Once again, thanks very much for your interest in Seaspan, in our company, and together let's celebrate our 10-year anniversary. Thank you again and have a great summer.

Thank you.