Business Context and Reporting Period
Company: Danaos Corp
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Update for the period ended June 30, 2009, filed July 28, 2009.
Context: The filing provides an update on the company's consolidated capitalization, adjusting December 31, 2008 figures for activity through the first half of 2009.
Key Financial Metrics
The filing focuses on capitalization rather than operational income statement metrics. Revenue, profit, cash flow, and margins are not provided in this specific document.
| Capitalization Item | As of Dec 31, 2008 (Actual) | As Adjusted (Unaudited, June 30, 2009) |
|---|---|---|
| Secured Debt (including current portion) | $2,107,678 | $2,268,939 |
| Total Stockholders' Equity | $219,034 | $420,839 |
| Total Capitalization | $2,326,712 | $2,689,778 |
Note: All figures in thousands except share amounts.
Material Changes vs. Prior Period
The company states there has been no material change in capitalization between December 31, 2008, and June 30, 2009, when adjusted for the following specific items:
- Debt Activity: Additional borrowings of $181.2 million and scheduled principal repayments of $16.1 million.
- Debt Valuation: Change in the fair value of hedged debt of $3.9 million.
- Equity Adjustments: Distribution of 8,358 shares from treasury stock for awards and fees; directors' fees of $49,000 cash and $32,000 in stock.
- Derivatives Impact: Changes in the fair value of interest rate swaps of $180.6 million due to rising interest rates.
- Hedge Accounting: Realized losses on cash flow hedges deferred and amortized of $14.7 million.
- Earnings: Retained earnings of $35.9 million for the period.
Guidance, Outlook, and Risks
Outlook and Commentary: The filing does not contain specific forward-looking guidance or management commentary on future operations. It directs readers to the "Operating and Financial Review and Prospects" section of the Annual Report on Form 20-F for the year ended December 31, 2008, for detailed analysis.
Risks and Contingencies: The filing highlights the impact of rising interest rates on the fair value of interest rate swaps, resulting in a significant adjustment to other comprehensive loss. No other specific risks or contingencies are detailed in this text.
Investor Verification Checklist
- Verify the full details of the $180.6 million change in fair value of interest rate swaps and its impact on future cash flows.
- Review the Annual Report on Form 20-F (filed July 13, 2009) for revenue, profit, and liquidity metrics not included in this 6-K.
- Confirm the status of the $181.2 million in additional borrowings and the terms of the secured debt.
- Assess the impact of rising interest rates on the company's refinancing strategy for the newbuildings.