Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Document and Entity Information | |
Entity Registrant Name | Danaos Corp |
Entity Central Index Key | 1,369,241 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 109,799,352 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 66,895 | $ 73,717 |
Restricted cash | 2,812 | 2,812 |
Accounts receivable, net | 6,502 | 8,028 |
Inventories | 8,841 | 11,395 |
Prepaid expenses | 1,234 | 1,351 |
Due from related parties | 34,007 | 32,603 |
Other current assets | 5,708 | 6,048 |
Total current assets | 125,999 | 135,954 |
NON-CURRENT ASSETS | ||
Fixed assets at cost, net of accumulated depreciation of $763,190 (2016: $647,962) | 2,795,971 | 2,906,721 |
Deferred charges, net | 8,962 | 8,199 |
Investments in affiliates | 5,998 | 5,033 |
Other non-current assets | 49,466 | 71,157 |
Total non-current assets | 2,860,397 | 2,991,110 |
Total assets | 2,986,396 | 3,127,064 |
CURRENT LIABILITIES | ||
Accounts payable | 11,371 | 11,156 |
Accrued liabilities | 15,226 | 15,464 |
Current portion of long-term debt, net | 2,329,601 | 2,504,932 |
Unearned revenue | 22,853 | 27,724 |
Other current liabilities | 788 | 7,005 |
Total current liabilities | 2,379,839 | 2,566,281 |
LONG-TERM LIABILITIES | ||
Unearned revenue, net of current portion | 56,159 | 70,589 |
Other long-term liabilities | 1,693 | 2,481 |
Total long-term liabilities | 57,852 | 73,070 |
Total liabilities | 2,437,691 | 2,639,351 |
Commitments and Contingencies | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock (par value $0.01, 100,000,000 preferred shares authorized and not issued as of December 31, 2017 and December 31, 2016) | ||
Common stock (par value $0.01, 750,000,000 common shares authorized as of December 31, 2017 and December 31, 2016. 109,799,352 issued and outstanding as of December 31, 2017 and December 31, 2016) | 1,098 | 1,098 |
Additional paid-in capital | 546,898 | 546,898 |
Accumulated other comprehensive loss | (114,076) | (91,163) |
Retained earnings | 114,785 | 30,880 |
Total stockholders' equity | 548,705 | 487,713 |
Total liabilities and stockholders' equity | $ 2,986,396 | $ 3,127,064 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Accumulated depreciation | $ 763,190 | $ 647,962 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 109,799,352 | 109,799,352 |
Common stock, shares outstanding | 109,799,352 | 109,799,352 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
OPERATING REVENUES | $ 451,731 | $ 498,332 | $ 567,936 |
OPERATING EXPENSES | |||
Voyage expenses | (12,587) | (13,925) | (12,284) |
Vessel operating expenses | (106,999) | (109,384) | (112,736) |
Depreciation | (115,228) | (129,045) | (131,783) |
Amortization of deferred drydocking and special survey costs | (6,748) | (5,528) | (3,845) |
Impairment loss | (415,118) | (41,080) | |
Bad debt expense | (15,834) | ||
General and administrative expenses | (22,672) | (22,105) | (21,831) |
Loss on sale of vessels | (36) | ||
Income/(loss) from operations | 187,497 | (212,643) | 244,377 |
OTHER INCOME (EXPENSES): | |||
Interest income | 5,576 | 4,682 | 3,419 |
Interest expense | (86,556) | (82,966) | (84,435) |
Other finance expenses | (4,126) | (4,932) | (4,658) |
Equity income/(loss) on investments | 965 | (16,252) | (1,941) |
Other income/(expense), net | (15,757) | (41,602) | 111 |
Net unrealized and realized losses on derivatives | (3,694) | (12,482) | (39,857) |
Total Other Expenses, net | (103,592) | (153,552) | (127,361) |
Net Income/(Loss) | $ 83,905 | $ (366,195) | $ 117,016 |
EARNINGS/(LOSS) PER SHARE | |||
Basic and diluted earnings/(loss) per share | $ 0.76 | $ (3.34) | $ 1.07 |
Basic and diluted weighted average number of common shares | 109,824,329 | 109,801,586 | 109,785,484 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) | |||
Net Income/(Loss) | $ 83,905 | $ (366,195) | $ 117,016 |
Other comprehensive income/(loss): | |||
Unrealized losses on available for sale securities | (26,607) | ||
Amortization of deferred realized losses on cash flow hedges | 3,694 | 4,028 | 4,017 |
Accelerated amortization of deferred realized losses on cash flow hedges | 7,706 | ||
Reclassification of unrealized losses to earnings | 184 | 32,644 | |
Total Other Comprehensive Income/(Loss) | (22,913) | 11,918 | 36,661 |
Comprehensive Income/(Loss) | $ 60,992 | $ (354,277) | $ 153,677 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional paid-in capital | Accumulated other comprehensive loss | Retained earnings | Total |
Balance at Dec. 31, 2014 | $ 1,097 | $ 546,735 | $ (139,742) | $ 280,059 | $ 688,149 |
Balance (in shares) at Dec. 31, 2014 | 109,669,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net Income/(Loss) | 117,016 | 117,016 | |||
Net movement in other comprehensive income | 36,661 | 36,661 | |||
Issuance of common stock | $ 1 | (1) | |||
Issuance of common stock (in shares) | 113,000 | ||||
Stock compensation | 88 | 88 | |||
Balance at Dec. 31, 2015 | $ 1,098 | 546,822 | (103,081) | 397,075 | 841,914 |
Balance (in shares) at Dec. 31, 2015 | 109,782,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net Income/(Loss) | (366,195) | (366,195) | |||
Net movement in other comprehensive income | 11,918 | 11,918 | |||
Issuance of common stock (in shares) | 17,000 | ||||
Stock compensation | 76 | 76 | |||
Balance at Dec. 31, 2016 | $ 1,098 | 546,898 | (91,163) | 30,880 | 487,713 |
Balance (in shares) at Dec. 31, 2016 | 109,799,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net Income/(Loss) | 83,905 | 83,905 | |||
Net movement in other comprehensive income | (22,913) | $ (22,913) | |||
Issuance of common stock (in shares) | 0 | ||||
Balance at Dec. 31, 2017 | $ 1,098 | $ 546,898 | $ (114,076) | $ 114,785 | $ 548,705 |
Balance (in shares) at Dec. 31, 2017 | 109,799,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net income /(loss) | $ 83,905 | $ (366,195) | $ 117,016 |
Adjustments to reconcile net income/(loss) to net cash provided by operating activities | |||
Depreciation | 115,228 | 129,045 | 131,783 |
Amortization of deferred drydocking and special survey costs | 6,748 | 5,528 | 3,845 |
Impairment losses | 444,502 | 41,080 | |
Amortization of finance costs | 11,153 | 12,652 | 14,038 |
Exit fees accrued on debt | 3,169 | 3,447 | 3,639 |
Bad debt expense | 15,834 | ||
Loss on sale of securities | 2,357 | 12,906 | |
Payments for drydocking and special survey costs deferred | (7,511) | (8,976) | (2,341) |
Loss on sale of vessels | 36 | ||
Stock based compensation | 76 | 88 | |
Amortization of deferred realized losses on interest rate swaps | 3,694 | 11,734 | 4,017 |
Unrealized gains on derivatives | (4,649) | (16,285) | |
Equity (income)/loss on investments | (965) | 16,252 | 1,941 |
(Increase)/Decrease in | |||
Accounts receivable | (2,544) | (13,210) | (2,748) |
Inventories | 2,554 | (355) | 625 |
Prepaid expenses | 117 | (654) | 16 |
Due from related parties | (1,404) | (13,596) | (8,410) |
Other assets, current and non-current | (9,099) | (5,455) | 2,975 |
Increase/(Decrease) in | |||
Accounts payable | 215 | (383) | (971) |
Accrued liabilities | (238) | 1,450 | (10,691) |
Unearned revenue, current and long-term | (19,301) | 26,501 | (9,852) |
Other liabilities, current and long-term | (7,005) | (4,523) | 1,911 |
Net cash provided by operating activities | 181,073 | 261,967 | 271,676 |
Cash flows from investing activities | |||
Vessels additions | (4,478) | (4,561) | (1,112) |
Investments in affiliates | (9,996) | (13,230) | |
Net proceeds from sale of securities | 6,236 | ||
Net proceeds from sale of vessels | 5,178 | 1,050 | |
Net cash provided by/(used in) investing activities | 1,758 | (9,379) | (13,292) |
Cash flows from financing activities | |||
Payments of long-term debt | (189,653) | (251,130) | (178,808) |
Payments of vendor financing | (64,367) | ||
Deferred finance costs | (692) | ||
Decrease in restricted cash | 6 | 6 | |
Net cash used in financing activities | (189,653) | (251,124) | (243,861) |
Net increase/(decrease) in cash and cash equivalents | (6,822) | 1,464 | 14,523 |
Cash and cash equivalents, beginning of year | 73,717 | 72,253 | 57,730 |
Cash and cash equivalents, end of year | 66,895 | 73,717 | 72,253 |
Supplemental cash flow information | |||
Cash paid for interest | $ 74,643 | 69,180 | $ 71,795 |
Non-cash investing and financing activities | |||
Acquisition of debt securities and equity investment | $ 24,627 |
Basis of Presentation and Gener
Basis of Presentation and General Information | 12 Months Ended |
Dec. 31, 2017 | |
Basis of Presentation and General Information | |
Basis of Presentation and General Information | 1. Basis of Presentation and General Information The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The reporting and functional currency of Danaos Corporation and its subsidiaries (the "Company") is the United States Dollar. Danaos Corporation, formerly Danaos Holdings Limited, was formed on December 7, 1998 under the laws of Liberia and is presently the sole owner of all outstanding shares of the companies listed below. Danaos Holdings Limited was redomiciled in the Marshall Islands on October 7, 2005. In connection with the redomiciliation, the Company changed its name to Danaos Corporation. On October 14, 2005, the Company filed and the Marshall Islands accepted Amended and Restated Articles of Incorporation. The authorized capital stock of Danaos Corporation is 750,000,000 shares of common stock with a par value of $0.01 and 100,000,000 shares of preferred stock with a par value of $0.01. Refer to Note 19, "Stockholders' Equity". The Company's vessels operate worldwide, carrying containers for many established charterers. The Company's principal business is the acquisition and operation of vessels. Danaos conducts its operations through the vessel owning companies whose principal activity is the ownership and operation of containerships (refer to Note 2, "Significant Accounting Policies") that are under the exclusive management of a related party of the Company (refer to Note 12, "Related Party Transactions"). The consolidated financial statements of the Company have been prepared to reflect the consolidation of the companies listed below. The historical balance sheets and results of operations of the companies listed below have been reflected in the consolidated balance sheets and consolidated statements of operations, consolidated statements of comprehensive income/(loss), cash flows and stockholders' equity at and for each period since their respective incorporation dates. The Company's consolidated financial statement have been prepared on a going concern basis and contemplate the realization of assets and satisfaction of liabilities in the normal course of business. There are conditions and events, which raise substantial doubt about the Company's ability to continue as a going concern and the ability to meet its obligations as they become due within one year after these consolidated financial statements are issued. However, the Company's going concern assumption is based on management's intention to complete the restructuring of the Company's debt before December 31, 2018. Refer to Note 3, "Going Concern" for further details. As of December 31, 2017, Danaos consolidated the vessel owning companies (the "Danaos Subsidiaries") listed below. All vessels are container vessels: Company Date of Incorporation Vessel Name Year Built TEU(1) Megacarrier (No. 1) Corp. September 10, 2007 Hyundai Honour (ex Hyundai Together) Megacarrier (No. 2) Corp. September 10, 2007 Hyundai Respect (ex Hyundai Tenacity) Megacarrier (No. 3) Corp. September 10, 2007 Maersk Enping (ex Hyundai Smart) Megacarrier (No. 4) Corp. September 10, 2007 Maersk Exeter (ex Hyundai Speed) Megacarrier (No. 5) Corp. September 10, 2007 MSC Ambition (ex Hyundai Ambition) CellContainer (No. 6) Corp. October 31, 2007 Express Berlin CellContainer (No. 7) Corp. October 31, 2007 Express Rome CellContainer (No. 8) Corp. October 31, 2007 Express Athens Karlita Shipping Co. Ltd. February 27, 2003 CSCL Pusan Ramona Marine Co. Ltd. February 27, 2003 CSCL Le Havre Teucarrier (No. 5) Corp. September 17, 2007 CMA CGM Melisande Teucarrier (No. 1) Corp. January 31, 2007 CMA CGM Attila Teucarrier (No. 2) Corp. January 31, 2007 CMA CGM Tancredi Teucarrier (No. 3) Corp. January 31, 2007 CMA CGM Bianca Teucarrier (No. 4) Corp. January 31, 2007 CMA CGM Samson Oceanew Shipping Ltd. January 14, 2002 Europe Oceanprize Navigation Ltd. January 21, 2003 CSCL America Boxcarrier (No. 2) Corp. June 27, 2006 CMA CGM Musset Boxcarrier (No. 3) Corp. June 27, 2006 CMA CGM Nerval Boxcarrier (No. 4) Corp. June 27, 2006 CMA CGM Rabelais Boxcarrier (No. 5) Corp. June 27, 2006 CMA CGM Racine Boxcarrier (No. 1) Corp. June 27, 2006 CMA CGM Moliere Expresscarrier (No. 1) Corp. March 5, 2007 YM Mandate Expresscarrier (No. 2) Corp. March 5, 2007 YM Maturity Actaea Company Limited October 14, 2014 Performance Asteria Shipping Company Limited October 14, 2014 Priority Continent Marine Inc. March 22, 2006 Zim Monaco Medsea Marine Inc. May 8, 2006 Zim Dalian (ex OOCL Novorossiysk) Blacksea Marine Inc. May 8, 2006 Zim Luanda Bayview Shipping Inc. March 22, 2006 Zim Rio Grande Channelview Marine Inc. March 22, 2006 Zim Sao Paolo Balticsea Marine Inc. March 22, 2006 Zim Kingston (ex OOCL Istanbul) Seacarriers Services Inc. June 28, 2005 YM Seattle Seacarriers Lines Inc. June 28, 2005 YM Vancouver Containers Services Inc. May 30, 2002 Deva Containers Lines Inc. May 30, 2002 Derby D Boulevard Shiptrade S.A September 12, 2013 Dimitris C CellContainer (No. 4) Corp. March 23, 2007 Express Spain CellContainer (No. 5) Corp. March 23, 2007 Express Black Sea CellContainer (No. 1) Corp. March 23, 2007 Express Argentina CellContainer (No. 2) Corp. March 23, 2007 Express Brazil CellContainer (No. 3) Corp. March 23, 2007 Express France Wellington Marine Inc. January 27, 2005 Singapore (ex YM Singapore) Auckland Marine Inc. January 27, 2005 Colombo Vilos Navigation Company Ltd. May 30, 2013 MSC Zebra Trindade Maritime Company April 10, 2013 Amalia C Sarond Shipping Inc. January 18, 2013 Danae C Speedcarrier (No. 7) Corp. December 6, 2007 Highway (ex Hyundai Highway) Speedcarrier (No. 6) Corp. December 6, 2007 Hyundai Progress Speedcarrier (No. 8) Corp. December 6, 2007 Bridge (ex Hyundai Bridge) Speedcarrier (No. 1) Corp. June 28, 2007 Vladivostok (ex Hyundai Vladivostok) Speedcarrier (No. 2) Corp. June 28, 2007 Advance (ex Hyundai Advance) Speedcarrier (No. 3) Corp. June 28, 2007 Stride (ex Hyundai Stride) Speedcarrier (No. 5) Corp. June 28, 2007 Future (ex Hyundai Future) Speedcarrier (No. 4) Corp. June 28, 2007 Sprinter (ex Hyundai Sprinter) Vessels sold during 2016 Federal Marine Inc. February 14, 2006 Federal (1) Twenty-foot equivalent unit, the international standard measure for containers and containership capacity. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies Principles of Consolidation: The accompanying consolidated financial statements represent the consolidation of the accounts of the Company and its wholly-owned subsidiaries. The subsidiaries are fully consolidated from the date on which control is obtained by the Company. The Company also consolidates entities that are determined to be variable interest entities, of which the Company is the primary beneficiary, as defined in the accounting guidance, if it determines that it is the primary beneficiary. A variable interest entity is defined as a legal entity where either (a) equity interest holders as a group lack the characteristics of a controlling financial interest, including decision making ability and an interest in the entity's residual risks and rewards, or (b) the equity holders have not provided sufficient equity investment to permit the entity to finance its activities without additional subordinated financial support, or (c) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both and substantially all of the entity's activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Inter-company transaction balances and unrealized gains/(losses) on transactions between the companies are eliminated. Investments in affiliates: The Company's investments in affiliates are accounted for using the equity method of accounting. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company's proportionate share of earnings or losses and distributions. The Company evaluates its investments in affiliates for impairment when events or circumstances indicate that the carrying value of such investments may have experienced other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is considered an other than temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the Consolidated Statements of Operations. Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an on-going basis, management evaluates the estimates and judgments, including those related to future drydock dates, the selection of useful lives for tangible assets, expected future cash flows from long-lived assets to support impairment tests, provisions necessary for accounts receivables, provisions for legal disputes, and contingencies. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions and/or conditions. Reclassifications in Other Comprehensive Income/(Loss): The Company had the following reclassifications out of Accumulated Other Comprehensive Loss as of December 31, 2017, 2016 and 2015, respectively (in thousands): Year ended December 31, Location of Reclassification into Income 2017 2016 2015 Amortization of deferred realized losses on cash flow hedges Net unrealized and realized losses on derivatives Accelerated amortization of deferred realized losses on cash flow hedges Net unrealized and realized losses on derivatives — — Reclassification of unrealized losses to earnings Net unrealized and realized losses on derivatives — Total Reclassifications $ $ $ Foreign Currency Translation: The functional currency of the Company is the U.S. dollar. The Company engages in worldwide commerce with a variety of entities. Although its operations may expose it to certain levels of foreign currency risk, its transactions are predominantly U.S. dollar denominated. Additionally, the Company's wholly-owned vessel subsidiaries transacted a nominal amount of their operations in Euros; however, all of the subsidiaries' primary cash flows are U.S. dollar denominated. Transactions in currencies other than the functional currency are translated at the exchange rate in effect at the date of each transaction. Differences in exchange rates during the period between the date a transaction denominated in a foreign currency is consummated and the date on which it is either settled or translated, are recognized in the Consolidated Statements of Operations. The foreign currency exchange gains/(losses) recognized in the accompanying Consolidated Statements of Operations for each of the years ended December 31, 2017, 2016 and 2015 were $0.4 million loss, $0.1 million loss and $0.1 million loss, respectively. Cash and Cash Equivalents: Cash and cash equivalents consist of interest bearing call deposits, where the Company has instant access to its funds and withdrawals and deposits can be made at any time, as well as time deposits with original maturities of three months or less which are not restricted for use or withdrawal. Cash and cash equivalents of $66.9 million as of December 31, 2017 (December 31, 2016: $73.7 million) comprised cash balances and short-term deposits. Restricted Cash: Cash restricted accounts include retention accounts. Certain of the Company's loan agreements require the Company to deposit one- third of quarterly and one-sixth of the semi-annual principal installments and interest payments, respectively, due on the outstanding loan balance monthly in a retention account. On the rollover settlement date, both principal and interest are paid from the retention account. Refer to Note 4, "Restricted Cash". Accounts Receivable, Net: The amount shown as Accounts Receivable, net, at each balance sheet date includes estimated recoveries from charterers for hire and demurrage billings, net of a provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts based on the Company's history of write-offs, level of past due accounts based on the contractual term of the receivables and its relationships with and economic status of its customers. Bad debts are written off in the period in which they are identified. Insurance Claims: Insurance claims represent the claimable expenses, net of deductibles, which are expected to be recovered from insurance companies. Any costs to complete the claims are included in accrued liabilities. The Company accounts for the cost of possible additional call amounts under its insurance arrangements in accordance with the accounting guidance for contingencies based on the Company's historical experience and the shipping industry practices. Insurance claims are included in the consolidated balance sheet line item "Other current assets". Prepaid Expenses and Inventories: Prepaid expenses consist mainly of insurance expenses, and inventories consist of bunkers, lubricants and provisions remaining on board the vessels at each period end, which are valued at cost as determined using the first-in, first-out method. Costs of spare parts are expensed as incurred. Deferred Financing Costs: Fees incurred for obtaining new loans and loans that have been accounted for as modified are deferred and amortized over the loans' respective repayment periods using the effective interest rate method and are presented in the consolidated balance sheets as a direct deduction from the carrying amount of debt liability. Additionally, amortization of deferred finance costs amounting to $11.2 million, $12.7 million and $14.0 million is included in interest expenses in the Consolidated Statements of Operations for the years ended December 31, 2017, December 31, 2016 and December 31, 2015, respectively. Fixed Assets: Fixed assets consist of vessels. Vessels are stated at cost, less accumulated depreciation. The cost of vessels consists of the contract purchase price and any material expenses incurred upon acquisition (improvements and delivery expenses). Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Otherwise, these expenditures are charged to expense as incurred. Interest costs while under construction are included in vessels' cost. The Company has acquired certain vessels in the secondhand market in prior years, all of which were considered to be acquisitions of assets. Following adoption of ASU 2017-01 "Business Combinations (Topic 805)" on January 1, 2018, the Company will evaluate any vessel acquisition in secondhand market will constitute as a business or not. When substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. The following assets will be considered as a single asset for the purposes of the evaluation (i) a tangible asset that is attached to and cannot be physically removed and used separately from another tangible assets (or an intangible asset representing the right to use a tangible asset); (ii) in place lease intangibles, including favorable and unfavorable intangible assets or liabilities, and the related leased assets. Depreciation: The cost of the Company's vessels is depreciated on a straight-line basis over the vessels' remaining economic useful lives after considering the estimated residual value (refer to Note 5, "Fixed Assets, net"). Management has estimated the useful life of the Company's vessels to be 30 years from the year built. Vessels held for sale: Vessels are classified as "Vessels held for sale" when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale. As of December 31, 2015, the Company recorded an impairment loss of $2.1 million for the vessel held for sale, which is included under "Impairment loss" in the Consolidated Statements of Operations. Accounting for Special Survey and Drydocking Costs: The Company follows the accounting guidance for planned major maintenance activities. Drydocking and special survey costs, which are reported in the balance sheet within "Deferred charges, net", include planned major maintenance and overhaul activities for ongoing certification including the inspection, refurbishment and replacement of steel, engine components, electrical, pipes and valves, and other parts of the vessel. The Company follows the deferral method of accounting for special survey and drydocking costs, whereby actual costs incurred are deferred and amortized on a straight-line basis over the period until the next scheduled survey and drydocking, which is two and a half years. If special survey or drydocking is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. The amortization periods reflect the estimated useful economic life of the deferred charge, which is the period between each special survey and drydocking. Costs incurred during the drydocking period relating to routine repairs and maintenance are expensed. The unamortized portion of special survey and drydocking costs for vessels sold is included as part of the carrying amount of the vessel in determining the gain/(loss) on sale of the vessel. Impairment of Long-lived Assets: The accounting standard for impairment of long-lived assets requires that long-lived assets and certain identifiable intangibles held and used or disposed of by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In the case of long-lived assets held and used, if the future net undiscounted cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value. As of December 31, 2017, the Company concluded that there are no events and circumstances, which may trigger the existence of potential impairment of the Company's vessels. As of December 31, 2016 and December 31, 2015, the Company concluded that events and circumstances triggered the existence of potential impairment of its long-lived assets. These indicators included loss of a charterer, volatility in the spot market and decline in the vessels' market values, as well as the potential impact the current marketplace may have on its future operations. As a result, the Company performed step one of the impairment assessment of the Company's long-lived assets by comparing the undiscounted projected net operating cash flows for each vessel to its carrying value. The Company's strategy is to charter its vessels under multi-year, fixed rate period charters that range from less than 1 to 18 years for vessels in its fleet, providing the Company with contracted stable cash flows. The significant factors and assumptions the Company used in its undiscounted projected net operating cash flow analysis included, among others, operating revenues, off-hire revenues, drydocking costs, operating expenses and management fees estimates. Revenue assumptions were based on contracted time charter rates up to the end of life of the current contract of each vessel as well as the estimated average time charter equivalent rates for the remaining life of the vessel after the completion of its current contract. The estimated daily time charter equivalent rates used for non-contracted revenue days are based on a combination of (i) recent charter market rates, (ii) conditions existing in the containership market as of December 31, 2016 and December 31, 2015 in relation to laid up vessels; (iii) historical average time charter rates, based on publications by independent third party maritime research services, and (iv) estimated future time charter rates, based on publications by independent third party maritime research services that provide such forecasts. Recognizing that the container transportation industry is cyclical and subject to significant volatility based on factors beyond the Company's control, management believes the use of revenue estimates, based on the combination of factors (i) to (iv) above, to be reasonable as of the reporting date. In addition, the Company used an annual operating expenses escalation factor and estimates of scheduled and unscheduled off-hire revenues based on historical experience. All estimates used and assumptions made were in accordance with the Company's internal budgets and historical experience of the shipping industry. As of December 31, 2016 and December 31, 2015, the Company's assessment concluded that step two of the impairment analysis was required for certain of its vessels, as undiscounted projected net operating cash flows of certain vessels did not exceed the carrying value of the respective vessels. Fair value of each vessel was determined with the assistance from valuations obtained by third party independent shipbrokers (on the basis of a commercial transaction between a willing buyer and a willing seller). As of December 31, 2016 and December 31, 2015, the Company recorded an impairment loss of $415.1 million and $39.0 million, respectively for its vessels mainly due to the decrease in the estimated average time charter equivalent rates for the remaining life of the vessels, after the completion of their current contracts. The impairment loss is included under "Impairment loss" in the Consolidated Statements of Operations. Investments in Debt Securities: The Company classified its debt securities originally as held-to-maturity based on management's positive intent and ability to hold to maturity and were reported at amortized cost, subject to impairment up until December 31, 2016. During 2017, the Company sold a portion of its debt securities, originally classified as held to maturity and as such reclassified remaining held to maturity debt securities into the available for sale category. The transfer between the categories is accounted for at fair value. The unrealized holding gain/(loss) upon transfer from held to maturity category to available for sale category is recorded in accumulated other comprehensive income/(loss). Available for sale securities are carried at fair value with net unrealized gain/(loss) included in accumulated other comprehensive income/(loss), subject to impairment. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Interest income, including amortization of premiums and accretion of discounts are recognized in the interest income in the consolidated statements of operations. Upon sale, realized gain/(loss) is recognized in the consolidated statement of operations based on specific identification method. Management evaluates securities for other than temporary impairment on a quarterly basis. An investment is considered impaired if the fair value of the investment is less than its amortized cost. Consideration is given to: 1) if the Company intends to sell the security (that is, it has decided to sell the security); 2) it is more likely than not that the Company will be required to sell the security before the recovery of its entire amortized cost basis; or 3) a credit loss exists—that is, the Company does not expect to recover the entire amortized cost basis of the security (the present value of cash flows expected to be collected is less than the amortized cost basis of the security). Investments in Equity Securities: The Company classifies its equity securities of ZIM at cost as the Company does not have the ability to exercise significant influence. Equity securities of HMM were acquired and held principally for the purpose of resale in the near term and were classified as trading securities based on management's intention on the date of acquisition and were recorded at fair value based on quoted market prices with changes in fair value and realized gains/(losses) presented under "Other income/(expenses), net" in the Consolidated Statements of Operations. The Company sold equity securities of HMM during 2016. Management evaluates the equity security for other than temporary impairment on a quarterly basis. An investment is considered impaired if the fair value of the investment is less than its cost. Consideration is given to significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee, significant adverse change in the regulatory, economic, or technological environment of the investee, significant adverse change in the general market condition of either the geographic area or the industry in which the investee operates, as well as factors that raise significant concerns about the investee's ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. Pension and Retirement Benefit Obligations-Crew: The crew on board the companies' vessels serve in such capacity under short-term contracts (usually up to seven months) and accordingly, the vessel-owning companies are not liable for any pension or post-retirement benefits. Accounting for Revenue and Expenses: Revenues from time chartering of vessels are accounted for as operating leases and are thus recognized on a straight line basis as the average revenue over the rental periods of such charter agreements, as service is performed. The Company earns revenue from bareboat and time charters. Bareboat and time charters involve placing a vessel at the charterers' disposal for a period of time during which the charterer uses the vessel in return for the payment of a specified daily hire rate. Under a time charter, the daily hire rate includes the crew, lubricants, insurance, spares and stores. Under a bareboat charter, the charterer is provided only with the vessel. Voyage Expenses: Voyage expenses include port and canal charges, bunker (fuel) expenses (bunker costs are normally covered by the Company's charterers, except in certain cases such as vessel re-positioning), address commissions and brokerage commissions. Under multi-year time charters and bareboat charters, such as those on which the Company charters its containerships and under short-term time charters, the charterers bear the voyage expenses other than brokerage and address commissions. As such, voyage expenses represent a relatively small portion of the vessels' overall expenses. Vessel Operating Expenses: Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses for repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Aggregate expenses increase as the size of the Company's fleet increases. Under multi-year time charters, the Company pays for vessel operating expenses. Under bareboat charters, the Company's charterers bear most vessel operating expenses, including the costs of crewing, insurance, surveys, drydockings, maintenance and repairs. General and administrative expenses: General and administrative expenses include management fees paid to the vessels' manager (refer to Note 12, "Related Party Transactions"), audit fees, legal fees, board remuneration, executive officers compensation, directors & officers insurance and stock exchange fees. Repairs and Maintenance: All repair and maintenance expenses are charged against income when incurred and are included in vessel operating expenses in the accompanying Consolidated Statements of Operations. Dividends: Dividends, if any, are recorded in the Company's financial statements in the period in which they are declared by the Company's board of directors. Segment Reporting: The Company reports financial information and evaluates its operations by total charter revenues. Although revenue can be identified for different types of charters, management does not identify expenses, profitability or other financial information for different charters. As a result, management, including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet, and thus the Company has determined that it has only one operating and reportable segment. Going Concern: The management of the Company assesses the Company's ability to continue as a going concern at each period end. The assessment evaluates whether there are conditions that give rise to substantial doubt to continue as a going concern within one year from the consolidated financial statements issuance date. If a substantial doubt to continue as a going concern is identified and after considering management's plans this substantial doubt is alleviated the Company discloses the following: (i) principal conditions or events that raised substantial doubt about the Company's ability to continue as a going concern (before consideration of management's plans), (ii) management's evaluation of the significance of those conditions or events in relation to the Company's ability to meet its obligations, (iii) management's plans that alleviated substantial doubt about the Company's ability to continue as a going concern. If a substantial doubt to continue as a going concern is identified and after considering management's plans this substantial doubt is not alleviated the Company discloses the following: (i) a statement indicating that there is substantial doubt about the Company's ability to continue as a going concern, (ii) principal conditions or events that raised substantial doubt about the Company's ability to continue as a going concern, (iii) management's evaluation of the significance of those conditions or events in relation to the Company's ability to meet its obligations, and (iv) management's plans that are intended to mitigate the conditions or events that raised substantial doubt about the Company's ability to continue as a going concern. The Company updates the going concern disclosure in subsequent periods until the period in which substantial doubt no longer exists disclosing how the relevant conditions or events that raised substantial doubt were resolved. Derivative Instruments: The Company entered into interest rate swap contracts to create economic hedges for its interest rate risks. The Company recorded these financial instruments at their fair value. When such derivatives do not qualify for hedge accounting, changes in their fair value are recorded in the Consolidated Statement of Operations. When the derivatives do qualify for hedge accounting, depending upon the nature of the hedge, changes in the fair value of derivatives are either offset against the fair value of assets, liabilities or firm commitments through income, or recognized in other comprehensive income (effective portion) and are reclassified to earnings when the hedged transaction is reflected in earnings. The ineffective portion of a derivative's change in fair value is immediately recognized in income. At the inception of the transaction, the Company documents the relationship between hedging instruments and hedged items, as well as its risk management objective and the strategy for undertaking various hedging transactions. The Company also documents its assessment, both at the hedge inception and on an ongoing basis, of whether the derivative financial instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. On July 1, 2012, the Company elected to prospectively de-designate fair value and cash flow interest rate swaps for which it was obtaining hedge accounting treatment due to the compliance burden associated with this accounting policy. As a result, all changes in the fair value of the Company's cash flow interest rate swap agreements were recorded in earnings under "Net Unrealized and Realized Losses on Derivatives" from the de-designation date forward. The Company evaluated whether it is probable that the previously hedged forecasted interest payments are probable to not occur in the originally specified time period. The Company has concluded that the previously hedged forecasted interest payments are probable of occurring. Therefore, unrealized gains or losses in accumulated other comprehensive loss associated with the previously designated cash flow interest rate swaps will remain frozen in accumulated other comprehensive loss and recognized in earnings when the interest payments will be recognized. If such interest payments were to be identified as being probable of not occurring, the accumulated other comprehensive loss balance pertaining to these amounts would be reversed through earnings immediately. The Company does not use financial instruments for trading or other speculative purposes. Earnings/(Loss) Per Share: The Company has presented net earnings/(loss) per share for all years presented based on the weighted average number of outstanding shares of common stock of Danaos Corporation at the reported periods. The warrants issued in 2011 were excluded from the diluted earnings/(loss) per share for the year ended December 31, 2017, 2016 and 2015, because they were antidilutive. There are no other dilutive or potentially dilutive securities, accordingly there is no difference between basic and diluted net income per share. Equity Compensation Plan: The Company has adopted an equity compensation plan (the "Plan"), which is generally administered by the compensation committee of the Board of Directors. The Plan allows the plan administrator to grant awards of shares of common stock or the right to receive or purchase shares of common stock to employees, directors or other persons or entities providing significant services to the Company or its subsidiaries. The actual terms of an award will be determined by the plan administrator and set forth in written award agreement with the participant. Any options granted under the Plan will be accounted for in accordance with the accounting guidance for share-based compensation arrangements. The aggregate number of shares of common stock for which awards may be granted under the Plan cannot exceed 6% of the number of shares of common stock issued and outstanding at the time any award is granted. Awards made under the Plan that have been forfeited, cancelled or have expired, will not be treated as having been granted for purposes of the preceding sentence. Unless otherwise set forth in an award agreement, any awards outstanding under the Plan will vest immediately upon a "change of control", as defined in the Plan. The Plan will automatically terminate ten years after it has been most recently approved by the Company's stockholders. Refer to Note 18, "Stock Based Compensation". As of April 18, 2008, the Company established the Directors Share Payment Plan ("Directors Plan") under the Plan. The purpose of the Directors Plan is to provide a means of payment of all or a portion of compensation payable to directors of the Company in the form of Company's Common Stock. Each member of the Board of Directors of the Company may participate in the Directors Plan. Pursuant to the terms of the Directors Plan, Directors may elect to receive in Common Stock all or a portion of their compensation. On the last business day of each quarter, the rights of common stock are credited to each Director's Share Payment Account. Following December 31st of each year, the Company will deliver to each Director the number of shares represented by the rights credited to their Share Payment Account during the preceding calendar year. Refer to Note 18, "Stock Based Compensation". As of April 18, 2008, the Board of Directors and the Compensation Committee approved the Company's ability to provide, from time to time, incentive compensation to the employees of Danaos Shipping Company Limited (the "Manager"), in the form of free shares of the Company's common stock under the Plan. Prior approval is required by the Compensation Committee and the Board of Directors. The plan was effective since December 31, 2008. Pursuant to the terms of the plan, employees of the Manager may receive (from time to time) shares of the Company's common stock as additional compensation for their services offered during the preceding period. The stock will have no vesting period and the employee will own the stock immediately after grant. The total amount of stock to be granted to employees of the Manager will be at the Company's Board of Directors' discretion only and there will be no contractual obligation for any stock to be granted as part of the employees' compensation package in future periods. Refer to Note 18, "Stock Based Compensation". Recent Accounting Pronouncements: In May 2014, the FASB issued Accounting Standards Update No. 2014-9 "Revenue from Contracts with Customers" ("ASU 2014-09"), which will supersede the current revenue recognition guidance and outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The ASU 2014-09 was amen |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2017 | |
Going Concern | |
Going Concern | 3. Going Concern The principal amount of the Company's debt amounting to $2,258.7 million is due for repayment by December 31, 2018. Additionally, as a result of a decrease in operating income of the Company and the charter attached market value of certain of its vessels caused principally by the cancellation of eight charters, in 2016, with Hanjin Shipping, which is currently under bankruptcy proceedings with the Seoul Central District Court, the Company was in breach of certain financial covenants under its Bank Agreement and its other credit facilities as of December 31, 2017 and December 31, 2016. Although none of the Company's lenders have exercised their right to do so, as a result of these covenant breaches the Company's lenders have the right to call the debt. Refer to Note 11 for further details. The Company has therefore classified all of its long-term debt, net of deferred finance costs as current, resulting in total current liabilities amounting to $2,379.8 million substantially exceeding its total current assets amounting to $126.0 million as of December 31, 2017. The Company is currently in discussions with its lenders regarding the non-compliance with these covenants and restructuring its indebtedness, substantially all of which matures in 2018. The Company will need to reach agreements with its lenders to restructure its debt by December 31, 2018 to avoid defaulting on such obligations, which would have a material adverse effect on the Company's business operations, financial condition and liquidity. Any such agreement, or the failure to reach such an agreement, could involve proceedings under court-supervision. These conditions and events raise substantial doubt about the Company's ability to continue as a going concern and the ability to meet its obligations as they become due within one year after these consolidated financial statements are issued. The consolidated financial statements were prepared assuming that the Company will continue as a going concern based on management's intention to complete the restructuring of the Company's debt before December 31, 2018. Until an agreement with the Company's lenders is reached and completed, there will be substantial doubt over the Company's ability to continue as a going concern. In the meantime, the Company continues to generate positive cash flows from its operations and currently has sufficient liquidity to service all its operational obligations as well as all scheduled principal amortization and interest payments under the original terms of the debt agreements leading up to, but not including, the December 31, 2018 maturity date, and assuming none of the Company's lenders exercise their right to call the debt prior to its scheduled maturity. Therefore, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities, other than the reclassification of long-term debt to current liabilities as described above, or any other adjustments that might result in the event the Company is unable to continue as a going concern. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2017 | |
Restricted Cash | |
Restricted Cash | 4. Restricted Cash The Company was required to maintain cash of $2.8 million as of December 31, 2017 and December 31, 2016 in retention bank accounts as a collateral for the upcoming scheduled debt payments of its KEXIM-ABN Amro credit facility, which were recorded under current assets in the Company's Consolidated Balance Sheets. |
Fixed Assets, Net
Fixed Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Fixed Assets, Net | |
Fixed Assets, Net | 5. Fixed Assets, Net On December 23, 2015, the Company entered into an agreement to sell the Federal for gross sale consideration of $7.2 million, of which $1.4 million was received in advance during the year ended December 31, 2015 and the remaining $5.8 million was received upon the completion of the sale on January 8, 2016. The sale of the vessel resulted in a loss on sale of the vessel of $36 thousand in the year ended December 31, 2016. The net loss on sale of the vessels is separately reflected in the accompanying Consolidated Statements of Operations. As of December 31, 2017, the Company concluded that there are no events and circumstances, which may trigger the existence of potential impairment of the Company's vessels. The indicators which were considered were mainly the current improved charter market and the improved vessel's market values compared to the prior year, as well as the potential impact the current marketplace may have on our future operations. As of December 31, 2016 and December 31, 2015 the Company concluded that events and circumstances triggered the existence of potential impairment of its long-lived assets. These indicators included loss of a charterer in 2016, volatility in the spot market and decline in the vessels' market values, as well as the potential impact the current marketplace may have on its future operations. As a result, the Company performed step one of the impairment assessment of the Company's long-lived assets by comparing the undiscounted projected net operating cash flows for each vessel to its carrying value. As at December 31, 2016 and December 31, 2015, the Company's assessment concluded that step two of the impairment analysis was required for certain of its vessels, as the undiscounted projected net operating cash flows of certain vessels did not exceed the carrying value of the respective vessels. Fair value of each vessel was determined with the assistance from valuations obtained by third party independent shipbrokers. As of December 31, 2016 and December 31, 2015, the Company recorded an impairment loss of $415.1 million and $39.0 million, respectively for its vessels that are held and used, which is reflected under Impairment loss in the accompanying Consolidated Statements of Operations. There was no impairment loss as of December 31, 2017. The residual value (estimated scrap value at the end of the vessels' useful lives) of the fleet was estimated at $378.2 million and $379.6 million as of December 31, 2017 and December 31, 2016, respectively. The Company has calculated the residual value of the vessels taking into consideration the 10 year average and the 5 year average of the scrap. The Company has applied uniformly the scrap value of $300 per ton for all vessels. The Company believes that $300 per ton is a reasonable estimate of future scrap prices, taking into consideration the cyclicality of the nature of future demand for scrap steel. Although the Company believes that the assumptions used to determine the scrap rate are reasonable and appropriate, such assumptions are highly subjective, in part, because of the cyclical nature of future demand for scrap steel. |
Deferred Charges, Net
Deferred Charges, Net | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Charges, Net | |
Deferred Charges, Net | 6. Deferred Charges, Net Deferred charges, net consisted of the following (in thousands): Drydocking and As of January 1, 2015 $ Additions Amortization ) As of December 31, 2015 $ Additions Amortization ) As of December 31, 2016 $ Additions Amortization ) As of December 31, 2017 $ The Company follows the deferral method of accounting for drydocking and special survey costs in accordance with accounting for planned major maintenance activities, whereby actual costs incurred are deferred and amortized on a straight-line basis over the period until the next scheduled survey, which is two and a half years. If special survey or drydocking is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. Furthermore, when a vessel is drydocked for more than one reporting period, the respective costs are identified and recorded in the period in which they were incurred and not at the conclusion of the drydocking. |
Investments in affiliates
Investments in affiliates | 12 Months Ended |
Dec. 31, 2017 | |
Investments in affiliates | |
Investments in affiliates | 7. Investments in affiliates In August 2015, an affiliated company Gemini Shipholdings Corporation ("Gemini") was formed by the Company and Virage International Ltd. ("Virage"), a company controlled by the Company's largest shareholder. Gemini acquired a 100% interest in two entities with capital leases for the Suez Canal and Genoa and two entities that own the container vessels NYK Lodestar and NYK Leo . Gemini financed these acquisitions with the assumption of capital lease obligations of $35.4 million, $19.0 million of borrowings under secured loan facilities and an aggregate of $47.4 million from equity contributions from the Company and Virage, which subscribed in cash for 49% and 51%, respectively, of Gemini's issued and outstanding share capital. As of December 31, 2017, Gemini consolidated its wholly owned subsidiaries listed below: Company Vessel Name Year Built TEU Date of vessel delivery Averto Shipping S.A. Suez Canal July 20, 2015 Sinoi Marine Ltd. Genoa August 2, 2015 Kingsland International Shipping Limited NYK Lodestar September 21, 2015 Leo Shipping and Trading S.A. NYK Leo February 4, 2016 The Company has determined that Gemini is a variable interest entity of which the Company is not the primary beneficiary, and as such, this affiliated company is accounted for under the equity method and recorded under "Equity income/(loss) on investments" in the Consolidated Statements of Operations. The Company does not guarantee the debt of Gemini and its subsidiaries and has the right to purchase all of the beneficial interest in Gemini that it does not own for fair market value at any time after December 31, 2018, or earlier if permitted under its credit facilities. The net assets of Gemini total $12.2 million and $10.3 million as of December 31, 2017 and December 31, 2016, respectively. The Company's exposure is limited to its share of the net assets of Gemini proportionate to its 49% equity interest in Gemini. A condensed summary of the financial information for equity accounted investments 49% owned by the Company shown on a 100% basis are as follows (in thousands): 2017 2016 2015 Current assets $ $ Non-current assets $ $ Current liabilities $ $ Long-term liabilities $ $ Net operating revenues $ $ $ Impairment loss — $ — Net income/(loss) $ $ ) $ ) |
Other Non-current Assets
Other Non-current Assets | 12 Months Ended |
Dec. 31, 2017 | |
Other Non-current Assets | |
Other Non-current Assets | 8. Other Non-current Assets Other non-current assets consisted of the following as at December 31 (in thousands): 2017 2016 Available for sale securities: ZIM notes, net $ — HMM notes, net — Held to maturity securities: ZIM notes, net — $ HMM notes, net — Equity participation ZIM — — Other assets Total $ $ a. ZIM In July 2014, after the charter restructuring agreements with ZIM, the Company obtained equity participation in ZIM and interest bearing unsecured ZIM notes maturing in 2023, consisting of $8.8 million Series 1 Notes and $41.1 million of Series 2 Notes. ZIM notes were originally classified as held to maturity securities and recorded at amortized costs less other than temporary impairment since initial recognition. The Company classifies its equity participation in ZIM at cost as the Company does not have the ability to exercise significant influence. In 2016, the Company tested for impairment of its equity participation in ZIM based on the existence of triggering events that indicate the interest in equity may have been impaired and recorded an impairment loss of $28.7 million, thus reducing its book value to nil. The Company also tests periodically for impairment of its investments in debt securities based on the existence of triggering events that indicate debt instruments may have been impaired. As of December 31, 2016, the Company recorded an impairment loss of $0.7 million impairment loss on ZIM notes, which were recognized under "Other Income/(Expenses), net" in the accompanying Consolidated Statements of Operations. In relation to ZIM Notes, the Company received redemption of $0.3 million in the year ended December 31, 2016. The Company recognized $1.3 million, $1.3 million and $1.1 million in relation to their fair value unwinding of ZIM notes in the Consolidated Statements of Operations in "Interest income" for years ended December 31, 2017, December 31, 2016 and December 31, 2015, respectively. Furthermore, for the years ended December 31, 2017, December 31, 2016 and December 31, 2015, the Company recognized in the Consolidated Statements of Operations in "Interest income", a non-cash interest income of $0.9 million, $0.9 million and $0.8 million, respectively, in relation to ZIM notes, which is accrued quarterly with deferred cash payment on maturity. Furthermore, in July 2014, an amount of $39.1 million, which represents the additional compensation received from ZIM, was recorded as unearned revenue representing compensation to the Company for the future reductions in the daily charter rates payable by ZIM under its time charters, expiring in 2020 or 2021, for six of the Company's vessels. This amount is recognized in the Consolidated Statements of Operations in "Operating revenues" over the remaining life of the respective time charters. For each of the years ended December 31, 2017, December 31, 2016 and December 31, 2015, the Company recorded an amount of $6.0 million of unearned revenue amortization in "Operating revenues". As of December 31, 2017, the outstanding balances of the current and non-current portion of unearned revenue in relation to ZIM amounted to $6.0 million and $12.5 million, respectively. As of December 31, 2016, the corresponding outstanding balances of the current and non-current portion of unearned revenue amounted to $6.0 million and $18.4 million, respectively. Refer to Note 14c, "Financial Instruments—Fair value of Financial Instruments". As of December 31, 2017, ZIM notes are in a continuous unrealized loss position for approximately 1 year. The Company considers the decline in fair value of ZIM notes as temporary. b. HMM In July 2016, after the charter restructuring agreements with HMM, the Company obtained interest bearing senior unsecured HMM notes consisting of $32.8 million Loan Notes 1 maturing in July 2024 and $6.2 million Loan Notes 2 maturing in December 2022 and 4.6 million HMM shares. The HMM notes were originally classified as held to maturity securities and recorded at amortized costs less other than temporary impairment since initial recognition. Based on the management's intention, the HMM shares were held principally for the purpose of the resale in the near term and were classified as trading securities. The Company also tests periodically for impairment of its investments in debt securities based on the existence of triggering events that indicate debt instruments may have been impaired. On September 1, 2016, the Company sold all HMM shares obtained after the charter restructuring agreements with HMM for cash proceeds on sale of $38.1 million resulting in a loss on sale of $12.9 million, which was recorded under "Other income/(expenses), net" in the Consolidated Statement of Operations for the year ended December 31, 2016. The HMM shares were considered trading securities and the proceeds were classified as operating activities in the Consolidated Statement of Cash Flows for the year ended December 31, 2016. The proceeds were used to repay outstanding debt obligations. Furthermore, for the years ended December 31, 2017 and December 31, 2016, the Company recognized $1.8 million and $1.0 million of non-cash interest income and fair value unwinding of HMM notes under "Interest income" in the Consolidated Statement of Operations. On July 18, 2016, the Company recognized unearned revenue of $75.6 million representing compensation to the Company for the future reductions in the daily charter rates payable by HMM under the time charter agreements, which represents non-cash transaction for the Statement of Cash Flows for the year ended December 31, 2016. The amortization of unearned revenue is recognized in the Consolidated Statement of Operations under "Operating revenues" over the remaining life of the respective charters. For the years ended December 31, 2017 and December 31, 2016, the Company recorded an amount of $15.6 million and $7.9 million, respectively of unearned revenue amortization. As of December 31, 2017, the outstanding balances of the current and non-current portion of unearned revenue in relation to HMM amounted to $8.8 million and $43.4 million, respectively. As of December 31, 2016, the corresponding outstanding balances of the current and non-current portion of unearned revenue amounted to $15.6 million and $52.1 million, respectively. Refer also to Note 14c, "Financial Instruments—Fair value of Financial Instruments". As of December 31, 2017, HMM notes are in a continuous unrealized loss position for less than 12 months. The Company considers the decline in fair value of HMM notes as temporary. c. Transfer to Available for sale category On March 28, 2017, the Company sold $13.0 million principal amount of HMM Loan Notes 1 maturing in July 2024 carried at amortized costs of $8.6 million for gross cash proceeds on sale of $6.2 million, which were received in April 2017. The sale resulted in a loss of $2.4 million, which was recognized in the "Other income/(expenses), net" in the accompanying Consolidated Statements of Operations for year ended December 31, 2017. The proceeds were used to repay related outstanding debt obligations. The sale of these notes resulted in a transfer of all remaining held to maturity HMM and ZIM notes into the available for sale securities at fair value and unrealized losses, which were recognized in other comprehensive loss and are analyzed in the table below as of December 31, 2017 (in thousands): Description of securities Amortized Fair value Unrealized loss ZIM notes $ $ $ HMM notes Total $ $ $ |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities | |
Accrued Liabilities | 9. Accrued Liabilities Accrued liabilities consisted of the following as at December 31 (in thousands): 2017 2016 Accrued payroll $ $ Accrued interest Accrued expenses Total $ $ Accrued expenses mainly consisted of accruals related to the operation of the Company's fleet and other expenses as of December 31, 2017 and December 31, 2016. |
Lease Arrangements
Lease Arrangements | 12 Months Ended |
Dec. 31, 2017 | |
Lease Arrangements | |
Lease Arrangements | 10. Lease Arrangements Charters-out The future minimum rentals, expected to be earned on non-cancellable time charters consisted of the following as at December 31, 2017 (in thousands): 2018 $ 2019 2020 2021 2022 2023 and thereafter Total future rentals $ Rentals from time charters are not generally received when a vessel is off-hire, including time required for normal periodic maintenance of the vessel. In arriving at the future minimum rentals, an estimated time off-hire to perform periodic maintenance on each vessel has been deducted, although there is no assurance that such estimate will be reflective of the actual off-hire in the future. The off-hire assumptions used relate mainly to drydocking and special survey maintenance carried out approximately every 2.5 years per vessel, or every 5 years for vessels less than 15-years old, and which may last approximately 10 to 15 days. |
Long-Term Debt, net
Long-Term Debt, net | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt, net | |
Long-Term Debt, net | 11. Long-Term Debt, net Long-term debt as of December 31, 2017 consisted of the following (in thousands): Credit Facility Balance as of Balance as of The Royal Bank of Scotland $ $ HSH Nordbank AG-Aegean Baltic Bank-Piraeus Bank HSH Nordbank-EnTrustPermal — The Export-Import Bank of Korea & ABN Amro Deutsche Bank Citibank Credit Suisse ABN Amro-Bank of America Merrill Lynch-Burlington Loan Management—National Bank of Greece EnTrustPermal-Credit Suisse-CitiGroup The Royal Bank of Scotland (January 2011 Credit Facility) HSH Nordbank AG-Aegean Baltic Bank-Piraeus Bank (January 2011 Credit Facility) ABN Amro-Bank of America Merrill Lynch-Burlington Loan Management—National Bank of Greece (January 2011 Credit Facility) Sinosure CEXIM-Citibank-ABN Amro Credit Facility Club Facility (January 2011 Credit Facility) — Citibank—Eurobank Credit Facility (January 2011 Credit Facility) Comprehensive Financing Plan exit fees accrued Total long-term debt $ $ Less: Deferred finance costs, net ) ) Total long-term debt net of deferred finance cost $ $ All floating rate loans discussed above are collateralized by first and second preferred mortgages over the vessels financed, general assignment of all hire freights, income and earnings, the assignment of their insurance policies, as well as any proceeds from the sale of mortgaged vessels and the corporate guarantee of Danaos Corporation. The lenders have the right to call the debt due to the breach of certain covenants as further described below. The scheduled maturities of long-term debt subsequent to December 31, 2017 are as follows (in thousands): Fixed Variable Final Payment Total 2018 $ — $ $ 2019 — — 2020 — — 2021 — — Total long-term debt $ — $ $ * The last payment due on December 31, 2018, includes the unamortized remaining principal debt balances under the Bank Agreement, as such amount will be determinable following the fixed and variable amortization. The maturities of long term debt for the twelve month periods subsequent to December 31, 2017 are based on the terms of the Bank Agreement, under which the Company was not required to repay any outstanding principal amounts under its credit facilities, other than the KEXIM ABN Amro credit facility which is not covered by the Bank Agreement, until May 15, 2013; thereafter until December 31, 2018 it is required to make quarterly principal payments in fixed amounts. In addition, the Company is required to make an additional payment in such amount that, together with the fixed principal payment, equals a certain percentage of its Actual Free Cash Flow of the preceding financial quarter. The table above includes both the fixed payments for which the Company has a contractual obligation, as well as the Company's estimate of the future Actual Free Cash Flows and resulting variable amortization. The last payment due on December 31, 2018, will also include the unamortized remaining principal debt balances, as such amount will be determinable following the fixed and variable amortization. On September 12, 2013, the Company signed a supplemental letter extending the terms of the February 9, 2012 supplemental letter through November 20, 2018 (the maturity of the respective credit facility), which amended the interest rate margin and the financial covenants of its KEXIM-ABN Amro credit facility. More specifically, under the February 9, 2012 supplemental letter the financial covenants were aligned with those set forth in the Bank Agreement (see below), and the interest rate margin was increased by 0.5 percentage points. Bank Agreement On January 24, 2011, the Company entered into a definitive agreement, which became effective on March 4, 2011, referred to as the Bank Agreement, that superseded, amended and supplemented the terms of each of the Company's then existing credit facilities (other than its credit facilities with KEXIM and KEXIM-ABN Amro which are not covered thereby), and provided for, among other things, revised amortization schedules, maturities, interest rates, financial covenants, events of defaults, guarantee and security packages and approximately $425 million of new debt financing. Subject to the terms of the Bank Agreement and the intercreditor agreement (the "Intercreditor Agreement"), which the Company entered into with each of the lenders participating under the Bank Agreement to govern the relationships between the lenders thereunder, under the January 2011 Credit Facilities (as described and defined below) and under the Hyundai Samho Vendor Financing described below, the lenders participating thereunder continued to provide the Company's then outstanding credit facilities and amended the covenants under such credit facilities in accordance with the terms of the Bank Agreement. In accordance with the accounting guidance for troubled debt restructuring, the Company's debt did not meet the conditions of troubled debt restructuring as the lenders have not granted a concession. The effective borrowing rate of the restructured debt was higher than the effective borrowing rate of the old debt. Interest and Fees Under the terms of the Bank Agreement, borrowings under each of the Company's existing credit facilities, other than the KEXIM-ABN Amro credit facility which is not covered by the Bank Agreement, bear interest at an annual interest rate of LIBOR plus a margin of 1.85%. The Company was required to pay an amendment fee equal to 0.5% of the outstanding commitments under each existing financing arrangement, or $12.5 million in the aggregate, of which 20% was paid and deferred on the signing of a commitment letter for the Bank Agreement in August 2010, 40% was paid in January 2011 upon the signing of the Bank Agreement and the remaining 40% was due on December 31, 2014. The Company settled in full this amendment fee by paying $4.3 million on December 23, 2014 and $0.7 million on January 7, 2015. This amendment fee is deferred and amortized over the life of the respective credit facilities with the effective interest method. In addition, the Company is required to pay exit fees, which are discussed in detail below. The Company was also required to pay a fee of 0.25% of the total committed amount contemplated by the August 6, 2010 commitment letter for the Bank Agreement for the period starting from August 6, 2010 up until March 4, 2011 (the effective date of the agreement) and which commitment fee was amended to 0.75% for the period after March 4, 2011, which fees were capitalized in cost of vessels under construction as it related to undrawn committed debt designated for specific newbuildings, and a $4.38 million amendment fee (of which $1.22 million was paid in December 2010 and $3.16 million was paid in January 2011) relating to conditions in respect of the Sinosure-CEXIM credit facility. This amendment fee was deferred and is being amortized over the life of the new debt using the effective interest rate method. Principal Payments Under the terms of the Bank Agreement (other than the KEXIM-ABN Amro credit facility, which is not covered by the Bank Agreement), the Company is required to make quarterly principal payments in fixed amounts, in relation to the Company's total debt commitments from the Company's lenders under the Bank Agreement and the January 2011 Credit Facilities, as specified in the table below (in thousands): February 15, May 15, August 15, November 15, December 31, Total 2018 $ $ $ $ $ $ * These principal payments represent originally scheduled maturities and assume debt will not be called by the lenders earlier due to the breaches of financial covenants. The Company may elect to make the scheduled payments shown in the above table three months earlier. Furthermore, an additional variable payment in such amount that, together with the fixed principal payment (as disclosed above), equals 92.5% of Actual Free Cash Flow for such quarter until the earlier of (x) the date on which the Company's consolidated net leverage is below 6:1 and (y) May 15, 2015; and thereafter through maturity, which will be December 31, 2018 for each covered credit facility, it will be required to make fixed quarterly principal payments in fixed amounts as specified in the Bank Agreement and described above plus an additional payment in such amount that, together with the fixed principal payment, equals 89.5% of Actual Free Cash Flow for such quarter. In addition, any additional amounts of cash and cash equivalents from January 1, 2015 until maturity in excess of the greater of (1) $50 million of accumulated unrestricted cash and cash equivalents and (2) 2% of the Company's consolidated debt, would be applied first to the prepayment of the January 2011 Credit Facilities and after the January 2011 Credit Facilities are repaid, to the outstanding credit facilities covered by the Bank Agreement. The last payment due on December 31, 2018, will also include the unamortized remaining principal debt balances, as such amount will be determinable following the fixed and variable amortization. Under the Bank Agreement, "Actual Free Cash Flow" with respect to each credit facility covered thereby is equal to revenue from the vessels collateralizing such facility, less the sum of (a) interest expense under such credit facility, (b) pro rata portion of payments under its interest rate swap arrangements, (c) interest expense and scheduled amortization under the Hyundai Samho Vendor Financing and (d) per vessel operating expenses and pro rata per vessel allocation of general and administrative expenses (which are not permitted to exceed the relevant budget by more than 20%), plus (e) the pro rata share of operating cash flow of any Applicable Second Lien Vessel (which will mean, with respect to an existing facility, a vessel with respect to which the participating lenders under such facility have a second lien security interest and the first lien credit facility has been repaid in full). Under the terms of the Bank Agreement, the Company continues to be required to make any mandatory prepayments provided for under the terms of its existing credit facilities and is required to make additional prepayments as follows: 50% of the first $300 million of net equity proceeds (including convertible debt and hybrid instruments), after entering into the Bank Agreement and 25% of any additional net equity proceeds; and any debt proceeds (after repayment of any underlying secured debt covered by vessels collateralizing the new borrowings) (excluding the January 2011 Credit Facilities, the Sinosure CEXIM Credit Facility and the Hyundai Samho Vendor Financing), which amounts would first be applied to repayment of amounts outstanding under the January 2011 Credit Facilities and then to the existing credit facilities. Any equity proceeds retained by the Company and not used within 12 months for certain specified purposes would be applied for prepayment of the January 2011 Credit Facilities and then to the credit facilities covered by the Bank Agreement. The Company would also be required to prepay the portion of a credit facility attributable to a particular vessel upon the sale or total loss of such vessel; the termination or loss of an existing charter for a vessel, unless replaced within a specified period by a similar charter acceptable to the lenders; or the termination of a newbuilding contract. The Company's respective lenders under its credit facilities covered by the Bank Agreement and the January 2011 Credit Facilities may, at their option, require the Company to repay in full amounts outstanding under such respective credit facilities, upon a "Change of Control" of the Company, which for these purposes is defined as (i) Dr. Coustas ceasing to be its Chief Executive Officer, (ii) its common stock ceasing to be listed on the NYSE (or Nasdaq or other recognized stock exchange), (iii) whilst an event of default is continuing, a change in the ultimate beneficial ownership of the capital stock of any of its subsidiaries or ultimate control of the voting rights of those shares, (iv) Dr. Coustas and members of his family ceasing to collectively own over one third of the voting interest in its outstanding capital stock or (v) any other person or group controlling more than 20% of the voting power of its outstanding capital stock. Covenants and Events of Defaults On January 24, 2011, the Company entered into the Bank Agreement that superseded, amended and supplemented the terms of each of its existing credit facilities (other than its credit facility with KEXIM-ABN Amro) and provided for, among other things, revised financial covenant levels under such existing credit facilities as described below. As a result of a decrease in operating income of the Company and the charter attached value of certain of the Company's vessels caused mainly by the loss of contractual revenue from Hanjin Shipping, the Company was in breach of the minimum security cover, consolidated net leverage and consolidated net worth financial covenants related to its loan facilities The Company incurred $14.3 million professional fees related to the refinancing discussions with its lenders reported under "Other income/(expenses), net" in the accompanying Consolidated Statements of Operations for the year ended December 31, 2017. Under the Bank Agreement, the financial covenants under each of the Company's existing credit facilities (other than under the KEXIM-ABN Amro credit facility which is not covered thereby, but which has been aligned with those covenants until maturity of the respective facility under the supplemental letter dated September 12, 2013), have been reset to require the Company to: maintain a ratio of (i) the market value of all of the vessels in the Company's fleet, on a charter-inclusive basis, plus the net realizable value of any additional collateral, to (ii) the Company's consolidated total debt above specified minimum levels gradually increasing from 90% through December 31, 2011 to 130% from September 30, 2017 through September 30, 2018; maintain a minimum ratio of (i) the market value of the nine vessels ( Maersk Enping (ex Hyundai Smart) , Maersk Exeter (ex Hyundai Speed) , MSC Ambition (ex Hyundai Ambition) , Hyundai Honour (ex Hyundai Together) , Hyundai Respect (ex Hyundai Tenacity) , Express Athens , Express Rome , Express Berlin and CMA CGM Rabelais ) collateralizing the New Credit Facilities, calculated on a charter-free basis, plus the net realizable value of any additional collateral, to (ii) the Company's aggregate debt outstanding under the New Credit Facilities of 100% from September 30, 2012 through September 30, 2018; maintain minimum free consolidated unrestricted cash and cash equivalents, less the amount of the aggregate variable principal amortization amounts, described above, of $30.0 million at the end of each calendar quarter; ensure that the Company's (i) consolidated total debt less unrestricted cash and cash equivalents to (ii) consolidated EBITDA (defined as net income before interest, gains or losses under any hedging arrangements, tax, depreciation, amortization and any other non-cash item, capital gains or losses realized from the sale of any vessel, finance charges and capital losses on vessel cancellations and before any non-recurring items and excluding any accrued interest due to us but not received on or before the end of the relevant period; provided that non-recurring items excluded from this calculation shall not exceed 5% of EBITDA calculated in this manner) for the last twelve months does not exceed a maximum ratio gradually decreasing from 12:1 on December 31, 2010 to 4.75:1 on September 30, 2018; ensure that the ratio of the Company's (i) consolidated EBITDA for the last twelve months to (ii) net interest expense (defined as interest expense (excluding capitalized interest), less interest income, less realized gains on interest rate swaps (excluding capitalized gains) and plus realized losses on interest rate swaps (excluding capitalized losses)) exceeds a minimum level of 1.50:1 through September 30, 2013 and thereafter gradually increasing to 2.80:1 by September 30, 2018; and maintain a consolidated market value adjusted net worth (defined as the amount by which the Company's total consolidated assets adjusted for the market value of the Company's vessels in the water less cash and cash equivalents in excess of the Company's debt service requirements exceeds the Company's total consolidated liabilities after excluding the net asset or liability relating to the fair value of derivatives as reflected in the Company's financial statements for the relevant period) of at least $400 million. For the purpose of these covenants, the market value of the Company's vessels will be calculated, except as otherwise indicated above, on a charter-inclusive basis (using the present value of the "bareboat-equivalent" time charter income from such charter) so long as a vessel's charter has a remaining duration at the time of valuation of more than 12 months plus the present value of the residual value of the relevant vessel (generally equivalent to the charter free value of such a vessel at the age such vessel would be at the expiration of the existing time charter). The market value for newbuilding vessels, all of which currently have multi-year charters, would equal the lesser of such amount and the newbuilding vessel's book value. Under the terms of the Bank Agreement, the covered credit facilities also contain customary events of default, including those relating to cross-defaults to other indebtedness, defaults under its swap agreements, non-compliance with security documents, material adverse changes to its business, a Change of Control as described above, a change in its Chief Executive Officer, its common stock ceasing to be listed on the NYSE (or Nasdaq or another recognized stock exchange), a breach of the management agreement for the vessels securing the respective credit facilities and cancellation or amendment of the time charters (unless replaced with a similar time charter with a charterer acceptable to the lenders) for the vessels securing the respective credit facilities. Under the terms of the Bank Agreement, the Company generally will not be permitted to incur any further financial indebtedness or provide any new liens or security interests, unless such security is provided for the equal and ratable benefit of each of the lenders party to the Intercreditor Agreement, other than security arising by operation of law or in connection with the refinancing of outstanding indebtedness, with the consent, not to be unreasonably withheld, of all lenders with a lien on the security pledged against such outstanding indebtedness. In addition, the Company would not be permitted to pay cash dividends or repurchase shares of its capital stock unless (i) its consolidated net leverage is below 6:1 for four consecutive quarters and (ii) the ratio of the aggregate market value of its vessels to its outstanding indebtedness exceeds 125% for four consecutive quarters and provided that an event of default has not occurred and the Company is not, and after giving effect to the payment of the dividend, in breach of any covenant. Collateral and Guarantees Each of the Company's existing credit facilities and swap arrangements, to the extent applicable, continue to be secured by their previous collateral on the same basis, and received, to the extent not previously provided, pledges of the shares of the Company's subsidiaries owning the vessels collateralizing the applicable facilities, cross-guarantees from each subsidiary owning the vessels collateralizing such facilities, assignment of the refund guarantees in relation to any newbuildings funded by such facilities and other customary shipping industry collateral. January 2011 Credit Facilities (HSH Nordbank—Aegean Baltic Bank—Piraeus Bank, RBS, ABN Amro Club facility, Club Facility and Citibank-Eurobank) On January 24, 2011, the Company entered into agreements for the following new term loan credit facilities ("January 2011 Credit Facilities"): (i) a $123.8 million credit facility provided by HSH, which is secured by the Maersk Exeter (ex Hyundai Speed) , the Express Rome and the CMA CGM Rabelais and customary shipping industry collateral related thereto (the $123.8 million amount includes principal commitment of $23.75 million under the HSH Nordbank—Aegean Baltic Bank—Piraeus Bank credit facility already drawn as of December 31, 2010, which was transferred to the new facility upon finalization of the agreement in 2011); (ii) a $100.0 million credit facility provided by RBS, which is secured by the Maersk Enping (ex Hyundai Smart) and the Express Berlin and customary shipping industry collateral related thereto; (iii) a $37.1 million credit facility with ABN Amro and lenders participating under the Bank Agreement which is secured by Express Athens and customary shipping industry collateral related thereto; (iv) a $83.9 million new club credit facility to be provided, on a pro rata basis, by the other existing lenders participating under the Bank Agreement, which is secured by Hyundai Honour (ex Hyundai Together) and Hyundai Respect (ex Hyundai Tenacity) and customary shipping industry collateral related thereto. This facility was fully repaid in 2017; and (v) a $80.0 million credit facility with Citibank and Eurobank, which is secured by the MSC Ambition (ex Hyundai Ambition) and customary shipping industry collateral related thereto ((i)-(v), collectively, the "January 2011 Credit Facilities"). Interest and Fees Borrowings under each of the January 2011 Credit Facilities bear interest at an annual interest rate of LIBOR plus a margin of 1.85%, subject, on and after January 1, 2013, to increases in the applicable margin to: (i) 2.50% if the outstanding indebtedness thereunder exceeds $276 million, (ii) 3.00% if the outstanding indebtedness thereunder exceeds $326 million and (iii) 3.50% if the outstanding indebtedness thereunder exceeds $376 million. The Company paid an arrangement fee of 2.00%, or $8.5 million in the aggregate, $3.3 million of which was paid in August 2010 (the date the commitment letter was entered into) and $5.2 million paid in January 2011, which was deferred and is being amortized into the Consolidated Statements of Operations over the life of the respective facilities with the effective interest rate method. Furthermore, the Company paid a commitment fee of 0.75% per annum payable quarterly in arrears on the committed but undrawn portion of the respective loan. On October 22, 2014, the Company entered into a supplemental agreement with the lenders under the HSH Nordbank AG-Aegean Baltic Bank-Piraeus Bank credit facility in relation to the use of proceeds from the sale of 5 mortgaged vessels (the Marathonas , the Commodore , the Duka , the Mytilini and the Messologi ), all of which were sold during the year ended December 31, 2014 for an aggregate of $55.2 million gross sale proceeds less sale commissions, of which $18.2 million was applied against prepayment of the respective facility on August 18, 2014. The remaining $37.0 million were used to finance the acquisition of two secondhand containership vessels delivered on November 5, 2014. The Company paid the lenders a fee of $0.09 million for fully utilizing the remaining $37.0 million. This fee is deferred and amortized over the life of the respective credit facility with the effective interest method. Principal Payments Under the Bank Agreement, the Company was not required to repay any outstanding principal amounts under its January 2011 Credit Facilities until May 15, 2013 and thereafter it is required to make quarterly principal payments in fixed amounts as specified in the Bank Agreement plus an additional quarterly variable amortization payment, all as described above under "—Bank Agreement—Principal Payments." Covenants, Events of Default and Other Terms The January 2011 Credit Facilities contain substantially the same financial and operating covenants, events of default, dividend restrictions and other terms and conditions as applicable to the Company's then outstanding credit facilities as revised under the Bank Agreement described above. Collateral and Guarantees Lenders participating in the $83.9 million club credit facility described above received a lien on Hyundai Honour (ex Hyundai Together) and Hyundai Respect (ex Hyundai Tenacity) as additional security in respect of the pre-existing credit facilities the Company had with such lenders. The lenders under the other January 2011 Credit Facilities also received a lien on the respective vessels securing such January 2011 Credit Facilities as additional collateral in respect of its pre-existing credit facilities and interest rate swap arrangements with such lenders and Citibank and Eurobank also received a second lien on MSC Ambition (ex Hyundai Ambition) as collateral in respect of its previously unsecured interest rate arrangements with them. In addition, HSH Nordbank—Aegean Baltic Bank—Piraeus Bank also received a second lien on the Deva , the Europe and the CSCL Pusan as collateral in respect of all borrowings from HSH Nordbank—Aegean Baltic Bank—Piraeus Bank. RBS also received a second lien on the Derby D, the CSCL America and the CSCL Le Havre as collateral in respect of all borrowings from RBS. In 2016, following the repayment of the KEXIM loan, the second lien on the CSCL America became a first lien on RBS loan and the second lien on the Europe became a first lien on HSH Nordbank—Aegean Baltic Bank—Piraeus Bank loan. The Company's obligations under the January 2011 Credit Facilities are guaranteed by its subsidiaries owning the vessels collateralizing the respective credit facilities. The Company's Manager has also provided an undertaking to continue to provide the Company with management services and to subordinate its rights to the rights of its lenders, the security trustee and applicable hedge counterparties. Sinosure-CEXIM-Citibank-ABN Amro Credit Facility On February 21, 2011, the Company entered into a bank agreement with Citibank, acting as agent, ABN Amro and the Export-Import Bank of China ("CEXIM") for a senior secured credit facility (the "Sinosure-CEXIM Credit Facility") of up to $203.4 million, in three tranches each in an amount equal to the lesser of $67.8 million and 60.0% of the contract price for the newbuilding vessels, CMA CGM Tancredi , CMA CGM Bianca and CMA CGM Samson , securing such tranche for post-delivery financing of these vessels. The Company took delivery of the respective vessels in 2011. The China Export & Credit Insurance Corporation, or Sinosure, covers a number of political and commercial risks associated with each tranche of the credit facility. Borrowings under the Sinosure-CEXIM Credit Facility bear interest at an annual interest rate of LIBOR plus a margin of 2.85% payable semi-annually in arrears. The Company is required to repay principal amounts drawn under each tranche of the Sinosure-CEXIM Credit Facility in consecutive semi-annual installments over a ten-year period commencing after the delivery of the respective newbuilding being financed by such amount through the final maturity date of the respective tranches and repay the respective tranche in full upon the loss of the respective newbuilding. Covenants, Events of Default and Other Terms The Sinosure-CEXIM credit facility was amended and restated, effective on June 30, 2013, to align its financial covenants with the Company's Bank Agreement (except for the minimum ratio of the charter free market value of certain vessels, as described in the Bank Agreement, which is not applicable) described above and continues to require the Company to maintain a minimum ratio of the market value of the vessel collateralizing a tranche of the facility to debt outstanding under such tranche of 125%. The Sinosure-CEXIM credit facility also contains customary events of default, including those relating to cross-defaults to other indebtedness, defaults under its swap agreements, non-compliance with security documents, material adverse changes to its business, a Change of Control as described above, a change in its Chief Executive Officer, its common stock ceasing to be listed on the NYSE (or Nasdaq or another recognized stock exchange), a breach of the management agreement for the mortgaged vessels and cancellation or amendment of the time charters (unless replaced with a similar time charter with a charterer acceptable to the lenders) for the mortgaged vessels. The Company will not be permitted to pay cash dividends or repurchase shares of its capital stock unless (i) its consolidated net leverage is below 6:1 for four consecutive quarters and (ii) the ratio of the aggregate market value of its vessels to its outstanding indebtedness exceeds 125% for four consecutive quarters and provided that an event of default has not occurred and the Company is not, and after giving effect to the payment of the dividend is not, in breach of any covenant. Collateral The Sinosure-CEXIM Credit Facility is secured by customary post-delivery shipping industry collateral with respect to the vessels, CMA CGM Tancredi , CMA CGM Bianca and CMA CGM Samson , securing the respective tranche. Exit Fees The Company is required to pay Exit Fees of $25.0 million and, in the respective proportion to facilities covered by the Bank Agreement and the January 2011 Credit Facilities, are payable the earlier of (a) December 31, 2018 and (b) the date on which the respective facilities are repaid in full. In the year ended December 31, 2017, the Company paid $1.0 million of Exit Fees on loan facilities fully repaid within the year. The Exit Fees will accrete in the Consolidated Statements of Operations over the life of the respective facilities (with the effective interest rate method) and are reported under "Current portion of long-term debt, net" and "Long-term debt, net", respectively in the Consolidated Balance Sheets. The Company has recognized under "Current portion of long-term debt, net" an amount of $21.1 million and $18.9 million as of December 31, 2017 and December 31, 2016, respectively. Exit fees of $3.2 million, $3.4 million and $3.6 million were accrued and reported under "Other finance expenses" in the years ended December 31, 2017, December 31, 2016 and December 31, 2015, respectively. Credit Facilities Summary Table Credit Facility Outstanding Collateral Vessels The Royal Bank of Scotland(2) $ The Hyundai Progress , the Highway (ex Hyundai Highway) , the Bridge (ex Hyundai Bridge) , the Zim Monaco , the Express Argentina , the Express France , the Express Spain , the CMA CGM Racine, the CSCL America and the CMA CGM Melisande HSH Nordbank—Aegean Baltic Bank—Piraeus Bank(3) $ The Vladivostok (ex Hyundai Vladivostok) , the Advance (ex Hyundai Advance) , the Stride (ex Hyundai Stride) , the Future (ex Hyundai Future) , the Sprinter (ex Hyundai Sprinter) , the Amalia C , the MSC Zebra , the Danae C , the Dimitris C, the Performance, the Europe and the Priority Citibank $ The CMA CGM Moliere , the CMA CGM Musset , the Hyundai Honour (ex Hyundai Together) and the Hyundai Respect (ex Hyundai Tenacity) Deutsche Bank $ The Zim Rio Grande , the Zim Sao Paolo and the Zim Kingston (ex OOCL Istanbul), the Hyundai Honour (ex Hyundai Together) and the Hyundai Respect (ex Hyundai Tenacity) Credit Suisse $ The Zim Luanda , the CMA CGM Nerval and the YM Mandate the Hyundai Honour (ex Hyundai Together) and the Hyundai Respect (ex Hyundai Tenacity) ABN Amro—Bank of America Merrill Lynch—Burlington—National Bank of Greece $ The Colombo , the YM Seattle , the YM Vancouver and the Singapore (ex YM Singapore) EnTrustPermal—Credit Suisse—CitiGroup $ The Zim Dalian (ex OOCL Novorossiysk) , the Express Brazil, the YM Maturity , the Express Black Sea , the CMA CGM Attila, the Hyundai Honour (ex Hyundai Together) and the Hyundai Respect (ex Hyundai Tenacity) KEXIM-ABN Amro $ The CSCL Pusan and the CSCL Le Havre January 2011 Credit Facilities HSH Nordbank—Aegean Baltic Bank—Piraeus Bank(3) $ The Maersk Exeter ( ex Hyundai Speed) , the Express Rome and the CMA CGM Rabelais RBS(2) $ The Maersk Enping (ex Hyundai Smart) and the Express Berlin ABN Amro Club Facility $ The Express Athens Citibank-Eurobank $ The MSC Ambition (ex Hyundai Ambition) Sinosure—CEXIM—Citibank—ABN Amro $ The CMA CGM Tancredi , |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions | |
Related Party Transactions | 12. Related Party Transactions Management Services: Pursuant to a ship management agreement between each of the vessel owning companies and Danaos Shipping Company Limited (the "Manager"), the Manager acts as the fleet's technical manager responsible for (i) recruiting qualified officers and crews, (ii) managing day to day vessel operations and relationships with charterers, (iii) purchasing of stores, supplies and new equipment for the vessels, (iv) performing general vessel maintenance, reconditioning and repair, including commissioning and supervision of shipyards and subcontractors of drydock facilities required for such work, (v) ensuring regulatory and classification society compliance, (vi) performing operational budgeting and evaluation, (vii) arranging financing for vessels, (viii) providing accounting, treasury and finance services and (ix) providing information technology software and hardware in the support of the Company's processes. The Company's controlling shareholder also controls the Manager. On December 31, 2014, the Company signed an amended and restated management agreement to supersede the initial agreement signed in 2005 and incorporate all prior amendments. Pursuant to this agreement, effective January 1, 2015, the management fees are adjusted as follows: i) a daily management fee of $850, ii) a daily vessel management fee of $425 for vessels on bareboat charter and iii) a daily vessel management fee of $850 for vessels on time charter. The fee of 1.25% on gross freight, charter hire, ballast bonus and demurrage with respect to each vessel in the fleet and the fee of 0.5% based on the contract price of any vessel bought and sold by the manager on the Company's behalf remains the same as per addendum signed in 2013. Management fees in 2017 amounted to approximately $16.9 million (2016: $17.1 million, 2015: $17.4 million), which are presented under "General and administrative expenses" on the Consolidated Statements of Operations. Commissions to the Manager in 2017 amounted to approximately $5.3 million (2016: $6.3 million, 2015: $6.9 million), which are presented under "Voyage expenses" on the Consolidated Statements of Operations. The Company pays advances on account of the vessels' operating expenses. These prepaid amounts are presented in the consolidated balance sheet under "Due from related parties" totaling $34.0 million and $32.6 million as of December 31, 2017 and 2016, respectively. Additionally, the Manager provided the Company with the services of its executive officers for a fee of €0.5 million ($0.6 million) for the period from January 1, 2015 to April 30, 2015, after which date the Company directly employed the executive officers. The executive officers received an aggregate of €1.0 million ($1.1 million), €1.5 million ($1.7 million) and €1.5 million ($1.8 million) in compensation for the period from May 1, 2015 to December 31, 2015 and for the years ended December 31, 2016 and 2017, respectively. Dr. John Coustas, the Chief Executive Officer of the Company, is a member of the Board of Directors of The Swedish Club, the primary provider of insurance for the Company, including a substantial portion of its hull & machinery, war risk and protection and indemnity insurance. During the years ended December 31, 2017, 2016 and 2015 the Company paid premiums to The Swedish Club of $4.6 million, $5.6 million and $6.3 million, respectively, which are presented under Vessel operating expenses in the Consolidated Statements of Operations. As of December 31, 2017 and 2016, the Company did not have any outstanding balance to The Swedish Club. |
Taxes
Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Taxes | |
Taxes | 13. Taxes Under the laws of the countries of the Company's ship owning subsidiaries' incorporation and/or vessels' registration, the Company's ship operating subsidiaries are not subject to tax on international shipping income, however, they are subject to registration and tonnage taxes, which have been included in Vessel Operating Expenses in the accompanying Consolidated Statements of Operations. Pursuant to the U.S. Internal Revenue Code (the "Code"), U.S.-source income from the international operation of ships is generally exempt from U.S. tax if the company operating the ships meets certain requirements. Among other things, in order to qualify for this exemption, the company operating the ships must be incorporated in a country which grants an equivalent exemption from income taxes to U.S. corporations. All of the Company's ship-operating subsidiaries satisfy these initial criteria. In addition, these companies must be more than 50% owned by individuals who are residents, as defined, in the countries of incorporation or another foreign country that grants an equivalent exemption to U.S. corporations. These companies also currently satisfy the more than 50% beneficial ownership requirement. In addition, should the beneficial ownership requirement not be met, the management of the Company believes that by virtue of a special rule applicable to situations where the ship operating companies are beneficially owned by a publicly traded company like the Company, the more than 50% beneficial ownership requirement can also be satisfied based on the trading volume and the anticipated widely-held ownership of the Company's shares, but no assurance can be given that this will remain so in the future, since continued compliance with this rule is subject to factors outside of the Company's control. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments | |
Financial Instruments | 14. Financial Instruments The principal financial assets of the Company consist of cash and cash equivalents, trade receivables and other assets. The principal financial liabilities of the Company consist of long-term bank loans, accounts payable and derivatives. The following is a summary of the Company's risk management strategies and the effect of these strategies on the Company's consolidated financial statements. Interest Rate Risk: Interest rate risk arises on bank borrowings. The Company monitors the interest rate on borrowings closely to ensure that the borrowings are maintained at favorable rates. The interest rates relating to the long-term loans are disclosed in Note 11, "Long-term Debt, net". Concentration of Credit Risk: Financial instruments that are potentially subject the Company to significant concentrations of credit risk consist principally of cash, trade accounts receivable and derivatives. The Company places its temporary cash investments, consisting mostly of deposits, with established financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company's investment strategy. The Company is exposed to credit risk in the event of non-performance by counterparties to derivative instruments, however, the Company limits this exposure by diversifying among counterparties with high credit ratings. The Company depends upon a limited number of customers for a large part of its revenues. Refer to Note 15, "Operating Revenue", for further details on revenue from significant clients. Credit risk with respect to trade accounts receivable is generally managed by the selection of customers among the major liner companies in the world and their dispersion across many geographic areas. Fair Value: The carrying amounts reflected in the accompanying consolidated balance sheets of financial assets and liabilities (excluding long-term bank loans and certain other non-current assets) approximate their respective fair values due to the short maturity of these instruments. The fair values of long-term floating rate bank loans approximate the recorded values, generally due to their variable interest rates. The fair value of the swap agreements equals the amount that would be paid by the Company to cancel the swaps. The fair value of available for sale securities is estimated based on either observable market based inputs or unobservable inputs that are corroborated by market data. The Company is exposed to changes in fair value of available for sale securities as there is no hedging strategy. Interest Rate Swaps: The Company currently has no outstanding interest rate swaps agreements. However, in the past years, the Company entered into interest rate swap agreements with its lenders in order to manage its floating rate exposure. Certain variable-rate interests on specific borrowings were associated with vessels under construction and were capitalized as a cost of the specific vessels. In accordance with the accounting guidance on derivatives and hedging, the amounts related to realized gains or losses on cash flow hedges that have been entered into and qualified for hedge accounting, in order to hedge the variability of that interest, were recognized in accumulated other comprehensive loss and are reclassified into earnings over the depreciable life of the constructed asset, since that depreciable life coincides with the amortization period for the capitalized interest cost on the debt. a. Cash Flow Interest Rate Swap Hedges These interest rate swaps were designed to economically hedge the variability of interest cash flows arising from floating rate debt, attributable to movements in three-month USD$ LIBOR. According to the Company's Risk Management Accounting Policy, and after putting in place the formal documentation required by hedge accounting in order to designate these swaps as hedging instruments, as from their inception, these interest rate swaps qualified for hedge accounting, and, accordingly, from that time until June 30, 2012, only hedge ineffectiveness amounts arising from the differences in the change in fair value of the hedging instrument and the hedged item were recognized in the Company's earnings. Assessment and measurement of prospective and retrospective effectiveness for these interest rate swaps were performed on a quarterly basis. For qualifying cash flow hedges, the fair value gain or loss associated with the effective portion of the cash flow hedge was recognized initially in stockholders' equity, and recognized to the Statement of Operations in the periods when the hedged item affects profit or loss. On July 1, 2012, the Company elected to prospectively de-designate cash flow interest rate swaps for which it was obtaining hedge accounting treatment due to the compliance burden associated with this accounting policy. As a result, all changes in the fair value of the Company's cash flow interest rate swap agreements are recorded in earnings under "Unrealized and Realized Losses on Derivatives" from the de-designation date forward. The Company evaluated whether it is probable that the previously hedged forecasted interest payments are probable to not occur in the originally specified time period. The Company has concluded that the previously hedged forecasted interest payments are probable of occurring. Therefore, unrealized gains or losses in accumulated other comprehensive loss associated with the previously designated cash flow interest rate swaps will remain in accumulated other comprehensive loss and recognized in earnings when the interest payments will be recognized. If such interest payments were to be identified as being probable of not occurring, the accumulated other comprehensive loss balance pertaining to these amounts would be reversed through earnings immediately. The Company recorded in the Consolidated Statements of Operations unrealized gains of nil, $4.5 million and $48.9 million in relation to fair value changes of interest rate swaps for the years ended December 31, 2017, 2016 and 2015, respectively. Furthermore, unrealized losses of nil, $10.7 million and $32.6 million were reclassified from Accumulated Other Comprehensive Loss to earnings for the years ended December 31, 2017, 2016 and 2015, respectively. The variable-rate interest on specific borrowings that was associated with vessels under construction was capitalized as a cost of the specific vessels. In accordance with the accounting guidance on derivatives and hedging, the amounts in accumulated other comprehensive income/(loss) related to realized gains or losses on cash flow hedges that have been entered into and qualify for hedge accounting, in order to hedge the variability of that interest, were classified under other comprehensive income/(loss) and are reclassified into earnings over the depreciable life of the constructed asset, since that depreciable life coincides with the amortization period for the capitalized interest cost on the debt. An amount of $3.7 million, $4.0 million and $4.0 million was reclassified into earnings for the years ended December 31, 2017, 2016 and 2015, respectively, representing amortization over the depreciable life of the vessels. Additionally, the Company recognized accelerated amortization of these deferred realized losses of $7.7 million in connection with the impairment losses recognized on the respective vessels for the year ended December 31, 2016. An amount of $3.7 million is expected to be reclassified into earnings within the next 12 months. Year ended Year ended Year ended (in millions) Total realized losses — $ ) $ ) Amortization of deferred realized losses $ ) ) ) Accelerated amortization of deferred realized losses — ) — Unrealized gains — Unrealized and realized losses on cash flow interest rate swaps $ ) $ ) $ ) b. Fair Value Interest Rate Swap Hedges These interest rate swaps were designed to economically hedge the fair value of the fixed rate loan facilities against fluctuations in the market interest rates by converting the Company's fixed rate loan facilities to floating rate debt. Pursuant to the adoption of the Company's Risk Management Accounting Policy, and after putting in place the formal documentation required by hedge accounting in order to designate these swaps as hedging instruments, as of June 15, 2006, these interest rate swaps qualified for hedge accounting, and, accordingly, from that time until June 30, 2012, hedge ineffectiveness amounts arising from the differences in the change in fair value of the hedging instrument and the hedged item were recognized in the Company's earnings. The Company considered its strategic use of interest rate swaps to be a prudent method of managing interest rate sensitivity, as it prevented earnings from being exposed to undue risk posed by changes in interest rates. Assessment and measurement of prospective and retrospective effectiveness for these interest rate swaps was performed on a quarterly basis, on the financial statement and earnings reporting dates. On July 1, 2012, the Company elected to prospectively de-designate fair value interest rate swaps for which it was applying hedge accounting treatment due to the compliance burden associated with this accounting policy. All changes in the fair value of the Company's fair value interest rate swap agreements continue to be recorded in earnings under "Unrealized and Realized Losses on Derivatives" from the de-designation date forward. The Company evaluated whether it is probable that the previously hedged forecasted interest payments will not occur in the originally specified time period. The Company has concluded that the previously hedged forecasted interest payments continue to be probable of occurring. Therefore, the fair value of the hedged item associated with the previously designated fair value interest rate swaps will be frozen and recognized in earnings when the interest payments are recognized. If such interest payments were to be identified as being probable of not occurring, the fair value of hedged debt balance pertaining to these amounts would be reversed through earnings immediately. The total fair value change of the interest rate swaps for the years ended December 31, 2017, 2016 and 2015, amounted to nil, $(0.1) million and $(0.5) million, respectively, and is included in the Consolidated Statement of Operations in "Unrealized and realized losses on derivatives". The Company reclassified from "Current portion of long-term debt, net" and from "Long-term debt, net", where the fair value of hedged item is recorded, to its earnings unrealized gains of an amount of nil, $0.4 million and $0.6 million for the years ended December 31, 2017, 2016 and 2015, respectively. Year ended Year ended Year ended (in millions) Unrealized losses on swap asset — $ ) $ ) Reclassification of fair value of hedged debt to Statement of Operations — Realized gains — Unrealized and realized gains on fair value interest rate swaps — $ $ c. Fair Value of Financial Instruments The estimated fair values of the Company's financial instruments are as follows: As of December 31, 2017 As of December 31, 2016 Book Value Fair Value Book Value Fair Value (in thousands of $) Cash and cash equivalents $ $ $ $ Restricted cash $ $ $ $ Accounts receivable, net $ $ $ $ Due from related parties $ $ $ $ ZIM notes $ $ $ $ Equity investment in ZIM — — — — HMM notes $ $ $ $ Accounts payable $ $ $ $ Accrued liabilities $ $ $ $ Long-term debt, including current portion $ $ $ $ As of December 31, 2016, the Company recognized a bad debt expense amounting to $15.8 million in its Consolidated Statements of Operations, relating to accounts receivable from Hanjin Shipping which is under rehabilitation proceedings. Refer to Note 17 "Commitments and Contingencies". The estimated fair value of the financial instruments that are measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of December 31, 2017 (in thousands): Fair Value Measurements as of December 31, 2017 Total (Level I) (Level II) (Level III) (in thousands of $) ZIM notes(1) $ $ — $ $ — HMM notes(1) $ $ — $ — The estimated fair value of the financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of December 31, 2017 (in thousands): Fair Value Measurements as of December 31, 2017 Total (Level I) (Level II) (Level III) (in thousands of $) Equity investment in ZIM(1) $ — $ — $ — $ — Long-term debt, including current portion(2) $ $ — $ $ — Accrued liabilities(3) $ $ — $ $ — The estimated fair value of the financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of December 31, 2016 (in thousands): Fair Value Measurements as of December 31, 2016 Total (Level I) (Level II) (Level III) (in thousands of $) ZIM notes(1) $ $ — $ $ — Equity investment in ZIM(1) — $ — — $ — HMM notes(1) $ $ — $ $ — Long-term debt, including current portion(2) $ $ — $ $ — Accrued liabilities(3) $ $ — $ $ — (1) The fair value is estimated based on either observable market based inputs or unobservable inputs that are corroborated by market data, including currently available information on the Company's counterparty, other contracts with similar terms, remaining maturities and interest rates. (2) Long-term debt, including current portion is presented gross of deferred finance costs of $11.2 million and $22.3 million as of December 31, 2017 and December 31, 2016, respectively. The fair value of the Company's debt is estimated based on currently available debt with similar contract terms, interest rate and remaining maturities, as well as taking into account its increased credit risk. (3) The fair value of the Company's accrued liabilities, which mainly consists of accrued interest on its credit facilities is estimated based on currently available debt agreements with similar contract terms, as well as taking into account its creditworthiness. The Company's assets measured at fair value on a non-recurring basis were: Fair Value Measurements as of December 31, 2016 Total (Level I) (Level II) (Level III) (in millions of $) Fixed Assets, net $ $ — $ $ — Equity investment in ZIM $ — $ — $ — $ — The Company recorded an impairment loss of $415.1 million on its older vessels as of December 31, 2016, thus reducing the vessels' carrying value at December 31, 2016 from $594.5 million to $179.4 million. Fair value of each vessel was determined with the assistance from valuations obtained by third party independent shipbrokers. The entire original amount of equity investment in ZIM recognized at $28.7 million was impaired at December 31, 2016. |
Operating Revenue
Operating Revenue | 12 Months Ended |
Dec. 31, 2016 | |
Operating Revenue | |
Operating Revenue | 15. Operating Revenue Operating revenue from significant customers (constituting more than 10% of total revenue) for the years ended December 31, were as follows: Charterer 2017 2016 2015 CMA CGM % % % HMM Korea % % % YML % % % Hanjin % % % |
Operating Revenue by Geographic
Operating Revenue by Geographic Location | 12 Months Ended |
Dec. 31, 2017 | |
Operating Revenue by Geographic Location | |
Operating Revenue by Geographic Location | 16. Operating Revenue by Geographic Location Operating revenue by geographic location of the customers for the years ended December 31, was as follows (in thousands): Continent 2017 2016 2015 Australia—Asia $ $ $ Europe America — — Total Revenue $ $ $ |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 17. Commitments and Contingencies On September 1, 2016, Hanjin Shipping, a charterer of eight of the Company's vessels, referred to the Seoul Central District Court, which issued an order to commence the rehabilitation proceedings of Hanjin Shipping. Hanjin Shipping has cancelled all eight charter party agreements with the Company. On February 17, 2017, the Seoul Central District Court (Bankruptcy Division), declared the bankruptcy of Hanjin Shipping, converting the rehabilitation proceeding to a bankruptcy proceeding. The Seoul Central District Court (Bankruptcy Division) appointed a bankruptcy trustee to dispose of Hanjin Shipping's remaining assets and distribute the proceeds from the sale of such assets to Hanjin Shipping's creditors according to their priorities. The Company ceased recognizing revenue from Hanjin Shipping effective from July 1, 2016 onwards and recognized a bad debt expense amounting to $15.8 million in its Consolidated Statements of Operations for the year ended December 31, 2016. The Company has a total unsecured claim submitted to the Seoul Central District Court for unpaid charter hire, charges, expenses and loss of profit against Hanjin Shipping totaling $597.9 million, which is not recognized in the accompanying Consolidated Balance Sheet as of December 31, 2017 and 2016. There are no other material legal proceedings to which the Company is a party or to which any of its properties are the subject, or other contingencies that the Company is aware of, other than routine litigation incidental to the Company's business. Furthermore, the Company does not have any commitments outstanding. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Stock Based Compensation | |
Stock Based Compensation | 18. Stock Based Compensation As of April 18, 2008, the Board of Directors and the Compensation Committee approved incentive compensation of the Manager's employees with its shares from time to time, after specific for each such time, decision by the compensation committee and the Board of Directors in order to provide a means of compensation in the form of free shares to certain employees of the Manager of the Company's common stock. The plan was effective as of December 31, 2008. Pursuant to the terms of the plan, employees of the Manager may receive (from time to time) shares of the Company's common stock as additional compensation for their services offered during the preceding period. The stock will have no vesting period and the employee will own the stock immediately after grant. The total amount of stock to be granted to employees of the Manager will be at the Company's Board of Directors' discretion only and there will be no contractual obligation for any stock to be granted as part of the employees' compensation package in future periods. During 2017, no shares of common stock were granted and as of December 14, 2017, the Company cancelled the grant of 25,000 shares to employees from previous year. As of December 15, 2016, the Company granted 25,000 shares to certain employees of the Manager and recorded in "General and Administrative Expenses" an expense of $0.1 million representing the fair value of the stock granted as at the date of grant. As of December 11, 2015, the Company granted 15,879 shares to certain employees of the Manager and recorded in "General and Administrative Expenses" an expense of $0.1 million representing the fair value of the stock granted as at the date of grant. In settlement of the shares granted in 2014 and 2015, 17,608 shares were issued and distributed to the employees of the Manager in 2016. The Company has also established the Directors Share Payment Plan under its 2006 equity compensation plan. The purpose of the plan is to provide a means of payment of all or a portion of compensation payable to directors of the Company in the form of Company's Common Stock. The plan was effective as of April 18, 2008. Each member of the Board of Directors of the Company may participate in the plan. Pursuant to the terms of the plan, Directors may elect to receive in Common Stock all or a portion of their compensation. Following December 31 of each year, the Company delivers to each Director the number of shares represented by the rights credited to their Share Payment Account during the preceding calendar year. During 2017, 2016 and 2015, none of the directors elected to receive in Company shares his compensation. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | 19. Stockholders' Equity As of December 31, 2017 and December 31, 2016, the shares issued and outstanding were 109,799,352. Under the Articles of Incorporation as amended on September 18, 2009, the Company's authorized capital stock consists of 750,000,000 shares of common stock with a par value of $0.01 and 100,000,000 shares of preferred stock with a par value of $0.01. During 2017, no shares of common stock were issued. During 2016, the Company issued 17,608 shares of common stock, all of which were newly issued shares, to the employees of the Manager in partial settlement of 2015 and 2014 grants. During 2015, the Company issued 112,315 shares of common stock, all of which were newly issued shares, to the employees of the Manager in partial settlement of 2014 grants. Refer to Note 18, "Stock Based Compensation". During 2017, 2016 and 2015, the Company did not declare any dividends. In addition, under the terms of the Bank Agreement (Refer to Note 11, "Long-term Debt, net") the Company is not permitted to pay cash dividends or repurchase shares of its capital stock unless (i) its consolidated net leverage is below 6:1 for four consecutive quarters and (ii) the ratio of the aggregate market value of its vessels to its outstanding indebtedness exceeds 125% for four consecutive quarters and provided that an event of default has not occurred and the Company is not, and after giving effect to the payment of the dividend, in breach of any covenant. In 2011, the Company issued an aggregate of 15,000,000 warrants to its lenders under the Bank Agreement and the January 2011 Credit Facilities to purchase, solely on a cashless exercise basis, an aggregate of 15,000,000 shares of its common stock, which warrants have an exercise price of $7.00 per share. All of these warrants will expire on January 31, 2019. |
Earnings_(Loss) per Share
Earnings/(Loss) per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings/(Loss) per Share | |
Earnings/(Loss) per Share | 20. Earnings/(Loss) per Share The following table sets forth the computation of basic and diluted earnings/(loss) per share for the years ended December 31 (in thousands): 2017 2016 2015 (in thousands) Numerator: Net income/(loss) $ $ ) $ Denominator (number of shares in thousands): Basic and diluted weighted average common shares outstanding The warrants issued and outstanding amounting to 15,000,000 were excluded from the diluted earnings/(loss) per share for the years ended December 31, 2017, 2016 and 2015, because they were antidilutive. |
Significant Accounting Polici28
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation: The accompanying consolidated financial statements represent the consolidation of the accounts of the Company and its wholly-owned subsidiaries. The subsidiaries are fully consolidated from the date on which control is obtained by the Company. The Company also consolidates entities that are determined to be variable interest entities, of which the Company is the primary beneficiary, as defined in the accounting guidance, if it determines that it is the primary beneficiary. A variable interest entity is defined as a legal entity where either (a) equity interest holders as a group lack the characteristics of a controlling financial interest, including decision making ability and an interest in the entity's residual risks and rewards, or (b) the equity holders have not provided sufficient equity investment to permit the entity to finance its activities without additional subordinated financial support, or (c) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both and substantially all of the entity's activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Inter-company transaction balances and unrealized gains/(losses) on transactions between the companies are eliminated. |
Investments in affiliates | Investments in affiliates: The Company's investments in affiliates are accounted for using the equity method of accounting. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company's proportionate share of earnings or losses and distributions. The Company evaluates its investments in affiliates for impairment when events or circumstances indicate that the carrying value of such investments may have experienced other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is considered an other than temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the Consolidated Statements of Operations. |
Use of Estimates | Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an on-going basis, management evaluates the estimates and judgments, including those related to future drydock dates, the selection of useful lives for tangible assets, expected future cash flows from long-lived assets to support impairment tests, provisions necessary for accounts receivables, provisions for legal disputes, and contingencies. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions and/or conditions. |
Reclassifications in Other Comprehensive Income/(Loss) | Reclassifications in Other Comprehensive Income/(Loss): The Company had the following reclassifications out of Accumulated Other Comprehensive Loss as of December 31, 2017, 2016 and 2015, respectively (in thousands): Year ended December 31, Location of Reclassification into Income 2017 2016 2015 Amortization of deferred realized losses on cash flow hedges Net unrealized and realized losses on derivatives Accelerated amortization of deferred realized losses on cash flow hedges Net unrealized and realized losses on derivatives — — Reclassification of unrealized losses to earnings Net unrealized and realized losses on derivatives — Total Reclassifications $ $ $ |
Foreign Currency Translation | Foreign Currency Translation: The functional currency of the Company is the U.S. dollar. The Company engages in worldwide commerce with a variety of entities. Although its operations may expose it to certain levels of foreign currency risk, its transactions are predominantly U.S. dollar denominated. Additionally, the Company's wholly-owned vessel subsidiaries transacted a nominal amount of their operations in Euros; however, all of the subsidiaries' primary cash flows are U.S. dollar denominated. Transactions in currencies other than the functional currency are translated at the exchange rate in effect at the date of each transaction. Differences in exchange rates during the period between the date a transaction denominated in a foreign currency is consummated and the date on which it is either settled or translated, are recognized in the Consolidated Statements of Operations. The foreign currency exchange gains/(losses) recognized in the accompanying Consolidated Statements of Operations for each of the years ended December 31, 2017, 2016 and 2015 were $0.4 million loss, $0.1 million loss and $0.1 million loss, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash and cash equivalents consist of interest bearing call deposits, where the Company has instant access to its funds and withdrawals and deposits can be made at any time, as well as time deposits with original maturities of three months or less which are not restricted for use or withdrawal. Cash and cash equivalents of $66.9 million as of December 31, 2017 (December 31, 2016: $73.7 million) comprised cash balances and short-term deposits. |
Restricted Cash | Restricted Cash: Cash restricted accounts include retention accounts. Certain of the Company's loan agreements require the Company to deposit one- third of quarterly and one-sixth of the semi-annual principal installments and interest payments, respectively, due on the outstanding loan balance monthly in a retention account. On the rollover settlement date, both principal and interest are paid from the retention account. Refer to Note 4, "Restricted Cash". |
Accounts Receivable, Net | Accounts Receivable, Net: The amount shown as Accounts Receivable, net, at each balance sheet date includes estimated recoveries from charterers for hire and demurrage billings, net of a provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts based on the Company's history of write-offs, level of past due accounts based on the contractual term of the receivables and its relationships with and economic status of its customers. Bad debts are written off in the period in which they are identified. |
Insurance Claims | Insurance Claims: Insurance claims represent the claimable expenses, net of deductibles, which are expected to be recovered from insurance companies. Any costs to complete the claims are included in accrued liabilities. The Company accounts for the cost of possible additional call amounts under its insurance arrangements in accordance with the accounting guidance for contingencies based on the Company's historical experience and the shipping industry practices. Insurance claims are included in the consolidated balance sheet line item "Other current assets". |
Prepaid Expenses and Inventories | Prepaid Expenses and Inventories: Prepaid expenses consist mainly of insurance expenses, and inventories consist of bunkers, lubricants and provisions remaining on board the vessels at each period end, which are valued at cost as determined using the first-in, first-out method. Costs of spare parts are expensed as incurred. |
Deferred Financing Costs | Deferred Financing Costs: Fees incurred for obtaining new loans and loans that have been accounted for as modified are deferred and amortized over the loans' respective repayment periods using the effective interest rate method and are presented in the consolidated balance sheets as a direct deduction from the carrying amount of debt liability. Additionally, amortization of deferred finance costs amounting to $11.2 million, $12.7 million and $14.0 million is included in interest expenses in the Consolidated Statements of Operations for the years ended December 31, 2017, December 31, 2016 and December 31, 2015, respectively. |
Fixed Assets | Fixed Assets: Fixed assets consist of vessels. Vessels are stated at cost, less accumulated depreciation. The cost of vessels consists of the contract purchase price and any material expenses incurred upon acquisition (improvements and delivery expenses). Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Otherwise, these expenditures are charged to expense as incurred. Interest costs while under construction are included in vessels' cost. The Company has acquired certain vessels in the secondhand market in prior years, all of which were considered to be acquisitions of assets. Following adoption of ASU 2017-01 "Business Combinations (Topic 805)" on January 1, 2018, the Company will evaluate any vessel acquisition in secondhand market will constitute as a business or not. When substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. The following assets will be considered as a single asset for the purposes of the evaluation (i) a tangible asset that is attached to and cannot be physically removed and used separately from another tangible assets (or an intangible asset representing the right to use a tangible asset); (ii) in place lease intangibles, including favorable and unfavorable intangible assets or liabilities, and the related leased assets. |
Depreciation | Depreciation: The cost of the Company's vessels is depreciated on a straight-line basis over the vessels' remaining economic useful lives after considering the estimated residual value (refer to Note 5, "Fixed Assets, net"). Management has estimated the useful life of the Company's vessels to be 30 years from the year built. |
Vessels held for sale | Vessels held for sale: Vessels are classified as "Vessels held for sale" when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale. As of December 31, 2015, the Company recorded an impairment loss of $2.1 million for the vessel held for sale, which is included under "Impairment loss" in the Consolidated Statements of Operations. |
Accounting for Special Survey and Drydocking Costs | Accounting for Special Survey and Drydocking Costs: The Company follows the accounting guidance for planned major maintenance activities. Drydocking and special survey costs, which are reported in the balance sheet within "Deferred charges, net", include planned major maintenance and overhaul activities for ongoing certification including the inspection, refurbishment and replacement of steel, engine components, electrical, pipes and valves, and other parts of the vessel. The Company follows the deferral method of accounting for special survey and drydocking costs, whereby actual costs incurred are deferred and amortized on a straight-line basis over the period until the next scheduled survey and drydocking, which is two and a half years. If special survey or drydocking is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. The amortization periods reflect the estimated useful economic life of the deferred charge, which is the period between each special survey and drydocking. Costs incurred during the drydocking period relating to routine repairs and maintenance are expensed. The unamortized portion of special survey and drydocking costs for vessels sold is included as part of the carrying amount of the vessel in determining the gain/(loss) on sale of the vessel. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets: The accounting standard for impairment of long-lived assets requires that long-lived assets and certain identifiable intangibles held and used or disposed of by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In the case of long-lived assets held and used, if the future net undiscounted cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value. As of December 31, 2017, the Company concluded that there are no events and circumstances, which may trigger the existence of potential impairment of the Company's vessels. As of December 31, 2016 and December 31, 2015, the Company concluded that events and circumstances triggered the existence of potential impairment of its long-lived assets. These indicators included loss of a charterer, volatility in the spot market and decline in the vessels' market values, as well as the potential impact the current marketplace may have on its future operations. As a result, the Company performed step one of the impairment assessment of the Company's long-lived assets by comparing the undiscounted projected net operating cash flows for each vessel to its carrying value. The Company's strategy is to charter its vessels under multi-year, fixed rate period charters that range from less than 1 to 18 years for vessels in its fleet, providing the Company with contracted stable cash flows. The significant factors and assumptions the Company used in its undiscounted projected net operating cash flow analysis included, among others, operating revenues, off-hire revenues, drydocking costs, operating expenses and management fees estimates. Revenue assumptions were based on contracted time charter rates up to the end of life of the current contract of each vessel as well as the estimated average time charter equivalent rates for the remaining life of the vessel after the completion of its current contract. The estimated daily time charter equivalent rates used for non-contracted revenue days are based on a combination of (i) recent charter market rates, (ii) conditions existing in the containership market as of December 31, 2016 and December 31, 2015 in relation to laid up vessels; (iii) historical average time charter rates, based on publications by independent third party maritime research services, and (iv) estimated future time charter rates, based on publications by independent third party maritime research services that provide such forecasts. Recognizing that the container transportation industry is cyclical and subject to significant volatility based on factors beyond the Company's control, management believes the use of revenue estimates, based on the combination of factors (i) to (iv) above, to be reasonable as of the reporting date. In addition, the Company used an annual operating expenses escalation factor and estimates of scheduled and unscheduled off-hire revenues based on historical experience. All estimates used and assumptions made were in accordance with the Company's internal budgets and historical experience of the shipping industry. As of December 31, 2016 and December 31, 2015, the Company's assessment concluded that step two of the impairment analysis was required for certain of its vessels, as undiscounted projected net operating cash flows of certain vessels did not exceed the carrying value of the respective vessels. Fair value of each vessel was determined with the assistance from valuations obtained by third party independent shipbrokers (on the basis of a commercial transaction between a willing buyer and a willing seller). As of December 31, 2016 and December 31, 2015, the Company recorded an impairment loss of $415.1 million and $39.0 million, respectively for its vessels mainly due to the decrease in the estimated average time charter equivalent rates for the remaining life of the vessels, after the completion of their current contracts. The impairment loss is included under "Impairment loss" in the Consolidated Statements of Operations. |
Investments in Debt Securities | Investments in Debt Securities: The Company classified its debt securities originally as held-to-maturity based on management's positive intent and ability to hold to maturity and were reported at amortized cost, subject to impairment up until December 31, 2016. During 2017, the Company sold a portion of its debt securities, originally classified as held to maturity and as such reclassified remaining held to maturity debt securities into the available for sale category. The transfer between the categories is accounted for at fair value. The unrealized holding gain/(loss) upon transfer from held to maturity category to available for sale category is recorded in accumulated other comprehensive income/(loss). Available for sale securities are carried at fair value with net unrealized gain/(loss) included in accumulated other comprehensive income/(loss), subject to impairment. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Interest income, including amortization of premiums and accretion of discounts are recognized in the interest income in the consolidated statements of operations. Upon sale, realized gain/(loss) is recognized in the consolidated statement of operations based on specific identification method. Management evaluates securities for other than temporary impairment on a quarterly basis. An investment is considered impaired if the fair value of the investment is less than its amortized cost. Consideration is given to: 1) if the Company intends to sell the security (that is, it has decided to sell the security); 2) it is more likely than not that the Company will be required to sell the security before the recovery of its entire amortized cost basis; or 3) a credit loss exists—that is, the Company does not expect to recover the entire amortized cost basis of the security (the present value of cash flows expected to be collected is less than the amortized cost basis of the security). |
Investments in Equity Securities | Investments in Equity Securities: The Company classifies its equity securities of ZIM at cost as the Company does not have the ability to exercise significant influence. Equity securities of HMM were acquired and held principally for the purpose of resale in the near term and were classified as trading securities based on management's intention on the date of acquisition and were recorded at fair value based on quoted market prices with changes in fair value and realized gains/(losses) presented under "Other income/(expenses), net" in the Consolidated Statements of Operations. The Company sold equity securities of HMM during 2016. Management evaluates the equity security for other than temporary impairment on a quarterly basis. An investment is considered impaired if the fair value of the investment is less than its cost. Consideration is given to significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee, significant adverse change in the regulatory, economic, or technological environment of the investee, significant adverse change in the general market condition of either the geographic area or the industry in which the investee operates, as well as factors that raise significant concerns about the investee's ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. |
Pension and Retirement Benefit Obligations-Crew | Pension and Retirement Benefit Obligations-Crew: The crew on board the companies' vessels serve in such capacity under short-term contracts (usually up to seven months) and accordingly, the vessel-owning companies are not liable for any pension or post-retirement benefits. |
Accounting for Revenue and Expenses | Accounting for Revenue and Expenses: Revenues from time chartering of vessels are accounted for as operating leases and are thus recognized on a straight line basis as the average revenue over the rental periods of such charter agreements, as service is performed. The Company earns revenue from bareboat and time charters. Bareboat and time charters involve placing a vessel at the charterers' disposal for a period of time during which the charterer uses the vessel in return for the payment of a specified daily hire rate. Under a time charter, the daily hire rate includes the crew, lubricants, insurance, spares and stores. Under a bareboat charter, the charterer is provided only with the vessel. |
Voyage Expenses | Voyage Expenses: Voyage expenses include port and canal charges, bunker (fuel) expenses (bunker costs are normally covered by the Company's charterers, except in certain cases such as vessel re-positioning), address commissions and brokerage commissions. Under multi-year time charters and bareboat charters, such as those on which the Company charters its containerships and under short-term time charters, the charterers bear the voyage expenses other than brokerage and address commissions. As such, voyage expenses represent a relatively small portion of the vessels' overall expenses. |
Vessel Operating Expenses | Vessel Operating Expenses: Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses for repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Aggregate expenses increase as the size of the Company's fleet increases. Under multi-year time charters, the Company pays for vessel operating expenses. Under bareboat charters, the Company's charterers bear most vessel operating expenses, including the costs of crewing, insurance, surveys, drydockings, maintenance and repairs. |
General and administrative expenses | General and administrative expenses: General and administrative expenses include management fees paid to the vessels' manager (refer to Note 12, "Related Party Transactions"), audit fees, legal fees, board remuneration, executive officers compensation, directors & officers insurance and stock exchange fees. |
Repairs and Maintenance | Repairs and Maintenance: All repair and maintenance expenses are charged against income when incurred and are included in vessel operating expenses in the accompanying Consolidated Statements of Operations. |
Dividends | Dividends: Dividends, if any, are recorded in the Company's financial statements in the period in which they are declared by the Company's board of directors. |
Segment Reporting | Segment Reporting: The Company reports financial information and evaluates its operations by total charter revenues. Although revenue can be identified for different types of charters, management does not identify expenses, profitability or other financial information for different charters. As a result, management, including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet, and thus the Company has determined that it has only one operating and reportable segment. |
Going Concern | Going Concern: The management of the Company assesses the Company's ability to continue as a going concern at each period end. The assessment evaluates whether there are conditions that give rise to substantial doubt to continue as a going concern within one year from the consolidated financial statements issuance date. If a substantial doubt to continue as a going concern is identified and after considering management's plans this substantial doubt is alleviated the Company discloses the following: (i) principal conditions or events that raised substantial doubt about the Company's ability to continue as a going concern (before consideration of management's plans), (ii) management's evaluation of the significance of those conditions or events in relation to the Company's ability to meet its obligations, (iii) management's plans that alleviated substantial doubt about the Company's ability to continue as a going concern. If a substantial doubt to continue as a going concern is identified and after considering management's plans this substantial doubt is not alleviated the Company discloses the following: (i) a statement indicating that there is substantial doubt about the Company's ability to continue as a going concern, (ii) principal conditions or events that raised substantial doubt about the Company's ability to continue as a going concern, (iii) management's evaluation of the significance of those conditions or events in relation to the Company's ability to meet its obligations, and (iv) management's plans that are intended to mitigate the conditions or events that raised substantial doubt about the Company's ability to continue as a going concern. The Company updates the going concern disclosure in subsequent periods until the period in which substantial doubt no longer exists disclosing how the relevant conditions or events that raised substantial doubt were resolved. |
Derivative Instruments | Derivative Instruments: The Company entered into interest rate swap contracts to create economic hedges for its interest rate risks. The Company recorded these financial instruments at their fair value. When such derivatives do not qualify for hedge accounting, changes in their fair value are recorded in the Consolidated Statement of Operations. When the derivatives do qualify for hedge accounting, depending upon the nature of the hedge, changes in the fair value of derivatives are either offset against the fair value of assets, liabilities or firm commitments through income, or recognized in other comprehensive income (effective portion) and are reclassified to earnings when the hedged transaction is reflected in earnings. The ineffective portion of a derivative's change in fair value is immediately recognized in income. At the inception of the transaction, the Company documents the relationship between hedging instruments and hedged items, as well as its risk management objective and the strategy for undertaking various hedging transactions. The Company also documents its assessment, both at the hedge inception and on an ongoing basis, of whether the derivative financial instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. On July 1, 2012, the Company elected to prospectively de-designate fair value and cash flow interest rate swaps for which it was obtaining hedge accounting treatment due to the compliance burden associated with this accounting policy. As a result, all changes in the fair value of the Company's cash flow interest rate swap agreements were recorded in earnings under "Net Unrealized and Realized Losses on Derivatives" from the de-designation date forward. The Company evaluated whether it is probable that the previously hedged forecasted interest payments are probable to not occur in the originally specified time period. The Company has concluded that the previously hedged forecasted interest payments are probable of occurring. Therefore, unrealized gains or losses in accumulated other comprehensive loss associated with the previously designated cash flow interest rate swaps will remain frozen in accumulated other comprehensive loss and recognized in earnings when the interest payments will be recognized. If such interest payments were to be identified as being probable of not occurring, the accumulated other comprehensive loss balance pertaining to these amounts would be reversed through earnings immediately. The Company does not use financial instruments for trading or other speculative purposes. |
Earnings/(Loss) Per Share | Earnings/(Loss) Per Share: The Company has presented net earnings/(loss) per share for all years presented based on the weighted average number of outstanding shares of common stock of Danaos Corporation at the reported periods. The warrants issued in 2011 were excluded from the diluted earnings/(loss) per share for the year ended December 31, 2017, 2016 and 2015, because they were antidilutive. There are no other dilutive or potentially dilutive securities, accordingly there is no difference between basic and diluted net income per share. |
Equity Compensation Plan | Equity Compensation Plan: The Company has adopted an equity compensation plan (the "Plan"), which is generally administered by the compensation committee of the Board of Directors. The Plan allows the plan administrator to grant awards of shares of common stock or the right to receive or purchase shares of common stock to employees, directors or other persons or entities providing significant services to the Company or its subsidiaries. The actual terms of an award will be determined by the plan administrator and set forth in written award agreement with the participant. Any options granted under the Plan will be accounted for in accordance with the accounting guidance for share-based compensation arrangements. The aggregate number of shares of common stock for which awards may be granted under the Plan cannot exceed 6% of the number of shares of common stock issued and outstanding at the time any award is granted. Awards made under the Plan that have been forfeited, cancelled or have expired, will not be treated as having been granted for purposes of the preceding sentence. Unless otherwise set forth in an award agreement, any awards outstanding under the Plan will vest immediately upon a "change of control", as defined in the Plan. The Plan will automatically terminate ten years after it has been most recently approved by the Company's stockholders. Refer to Note 18, "Stock Based Compensation". As of April 18, 2008, the Company established the Directors Share Payment Plan ("Directors Plan") under the Plan. The purpose of the Directors Plan is to provide a means of payment of all or a portion of compensation payable to directors of the Company in the form of Company's Common Stock. Each member of the Board of Directors of the Company may participate in the Directors Plan. Pursuant to the terms of the Directors Plan, Directors may elect to receive in Common Stock all or a portion of their compensation. On the last business day of each quarter, the rights of common stock are credited to each Director's Share Payment Account. Following December 31st of each year, the Company will deliver to each Director the number of shares represented by the rights credited to their Share Payment Account during the preceding calendar year. Refer to Note 18, "Stock Based Compensation". As of April 18, 2008, the Board of Directors and the Compensation Committee approved the Company's ability to provide, from time to time, incentive compensation to the employees of Danaos Shipping Company Limited (the "Manager"), in the form of free shares of the Company's common stock under the Plan. Prior approval is required by the Compensation Committee and the Board of Directors. The plan was effective since December 31, 2008. Pursuant to the terms of the plan, employees of the Manager may receive (from time to time) shares of the Company's common stock as additional compensation for their services offered during the preceding period. The stock will have no vesting period and the employee will own the stock immediately after grant. The total amount of stock to be granted to employees of the Manager will be at the Company's Board of Directors' discretion only and there will be no contractual obligation for any stock to be granted as part of the employees' compensation package in future periods. Refer to Note 18, "Stock Based Compensation". |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: In May 2014, the FASB issued Accounting Standards Update No. 2014-9 "Revenue from Contracts with Customers" ("ASU 2014-09"), which will supersede the current revenue recognition guidance and outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The ASU 2014-09 was amended by ASU 2015-14 "Revenue from Contracts with Customers: Deferral of the Effective Date" ("ASU 2015-14"), which was issued in August 2015. Public entities can now elect to defer implementation of ASU 2014-09 to interim and annual periods beginning after December 15, 2017. Additionally, ASU 2015-14 permits early adoption of the standard but not before the original effective date, i.e. annual period beginning after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" ("ASU 2016-08"), which clarifies the implementation guidance on principal versus agent considerations. The amendments in ASU 2016-8 affect the guidance in the ASU 2014-09, which is not yet effective. ASU 2016-08 is effective for fiscal years beginning after December 15, 2017, and interim reporting periods within those years. In addition, in 2016, the FASB issued four amendments, which clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability and presentation of sales taxes. The Company will adopt these standards as of January 1, 2018 and is currently evaluating the impact that the adoption of the new standard will have on its consolidated financial statements. The adoption of these standards is not expected to have a material impact on the operating revenue of the Company since virtually all of its operating revenues are generated from time charter and bareboat charter agreements. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). ASU 2016-01 requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this Update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition the amendments in this Update eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement for to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early application is not permitted. The adoption of the standard is not expected to have a material impact on the consolidated financial statements and notes disclosures. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"). ASU 2016-02 will apply to both types of leases—capital (or finance) leases and operating leases. According to the new Accounting Standard, lessees will be required to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. This guidance requires companies to identify lease and non-lease components of a lease agreement. Lease components relate to the right to use the leased asset and non-lease components relate to payments for goods or services that are transferred separately from the right to use the underlying asset. Total lease consideration is allocated to lease and non-lease components on a relative standalone basis. The recognition of revenues related to lease components will be governed by ASC 842 while revenue related to non-lease components will be subject to ASC 606. In January 2018, the FASB issued a proposed amendment to ASU 842, that would provide an entity the optional transition method to initially account for the impact of the adoption with a cumulative adjustment to retained earnings on the effective date of the ASU, January 1, 2019 rather than January 1, 2017, which would eliminate the need to restate amounts presented prior to January 1, 2019. In addition, lessors can elect, as a practical expedient, not to allocate the total consideration to lease and non-lease components based on their relative standalone selling prices. If adopted, this practical expedient will allow lessors to elect a combined single lease component presentation if (i) the timing and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and, the combined single lease component would be classified as an operating lease. ASC 842 provides practical expedients that allow entities to not (i) reassess whether any expired or existing contracts are considered or contain leases; (ii) reassess the lease classification for any expired or existing leases; and (iii) reassess initial direct costs for any existing leases. The Company plans to adopt the standard on January 1, 2019 and expects to elect the use of practical expedients. The Company has not completed its analysis of this ASU. Based on a preliminary assessment, the Company is expecting that the adoption will not have a material effect on its consolidated financial statements since the Company is primarily a lessor and the changes are fairly minor. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The ASU 2016-13 is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of the new standard on the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"). The FASB issued ASU 2016-15 to decrease the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this update provide guidance on eight specific cash flow issues. Additionally, in November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash—a consensus of the FASB Emerging Issues Task Force" ("ASU 2016-18"), which requires that amounts described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. These revised standards are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The restricted cash balance of $2,812 thousand as of December 31, 2017 and December 31, 2016 would be subject to the change in the presentation in the consolidated statements of cash flows and notes disclosures. |
Basis of Presentation and Gen29
Basis of Presentation and General Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Basis of Presentation and General Information | |
Schedule of the vessel owning companies (the "Danaos Subsidiaries") | As of December 31, 2017, Danaos consolidated the vessel owning companies (the "Danaos Subsidiaries") listed below. All vessels are container vessels: Company Date of Incorporation Vessel Name Year Built TEU(1) Megacarrier (No. 1) Corp. September 10, 2007 Hyundai Honour (ex Hyundai Together) Megacarrier (No. 2) Corp. September 10, 2007 Hyundai Respect (ex Hyundai Tenacity) Megacarrier (No. 3) Corp. September 10, 2007 Maersk Enping (ex Hyundai Smart) Megacarrier (No. 4) Corp. September 10, 2007 Maersk Exeter (ex Hyundai Speed) Megacarrier (No. 5) Corp. September 10, 2007 MSC Ambition (ex Hyundai Ambition) CellContainer (No. 6) Corp. October 31, 2007 Express Berlin CellContainer (No. 7) Corp. October 31, 2007 Express Rome CellContainer (No. 8) Corp. October 31, 2007 Express Athens Karlita Shipping Co. Ltd. February 27, 2003 CSCL Pusan Ramona Marine Co. Ltd. February 27, 2003 CSCL Le Havre Teucarrier (No. 5) Corp. September 17, 2007 CMA CGM Melisande Teucarrier (No. 1) Corp. January 31, 2007 CMA CGM Attila Teucarrier (No. 2) Corp. January 31, 2007 CMA CGM Tancredi Teucarrier (No. 3) Corp. January 31, 2007 CMA CGM Bianca Teucarrier (No. 4) Corp. January 31, 2007 CMA CGM Samson Oceanew Shipping Ltd. January 14, 2002 Europe Oceanprize Navigation Ltd. January 21, 2003 CSCL America Boxcarrier (No. 2) Corp. June 27, 2006 CMA CGM Musset Boxcarrier (No. 3) Corp. June 27, 2006 CMA CGM Nerval Boxcarrier (No. 4) Corp. June 27, 2006 CMA CGM Rabelais Boxcarrier (No. 5) Corp. June 27, 2006 CMA CGM Racine Boxcarrier (No. 1) Corp. June 27, 2006 CMA CGM Moliere Expresscarrier (No. 1) Corp. March 5, 2007 YM Mandate Expresscarrier (No. 2) Corp. March 5, 2007 YM Maturity Actaea Company Limited October 14, 2014 Performance Asteria Shipping Company Limited October 14, 2014 Priority Continent Marine Inc. March 22, 2006 Zim Monaco Medsea Marine Inc. May 8, 2006 Zim Dalian (ex OOCL Novorossiysk) Blacksea Marine Inc. May 8, 2006 Zim Luanda Bayview Shipping Inc. March 22, 2006 Zim Rio Grande Channelview Marine Inc. March 22, 2006 Zim Sao Paolo Balticsea Marine Inc. March 22, 2006 Zim Kingston (ex OOCL Istanbul) Seacarriers Services Inc. June 28, 2005 YM Seattle Seacarriers Lines Inc. June 28, 2005 YM Vancouver Containers Services Inc. May 30, 2002 Deva Containers Lines Inc. May 30, 2002 Derby D Boulevard Shiptrade S.A September 12, 2013 Dimitris C CellContainer (No. 4) Corp. March 23, 2007 Express Spain CellContainer (No. 5) Corp. March 23, 2007 Express Black Sea CellContainer (No. 1) Corp. March 23, 2007 Express Argentina CellContainer (No. 2) Corp. March 23, 2007 Express Brazil CellContainer (No. 3) Corp. March 23, 2007 Express France Wellington Marine Inc. January 27, 2005 Singapore (ex YM Singapore) Auckland Marine Inc. January 27, 2005 Colombo Vilos Navigation Company Ltd. May 30, 2013 MSC Zebra Trindade Maritime Company April 10, 2013 Amalia C Sarond Shipping Inc. January 18, 2013 Danae C Speedcarrier (No. 7) Corp. December 6, 2007 Highway (ex Hyundai Highway) Speedcarrier (No. 6) Corp. December 6, 2007 Hyundai Progress Speedcarrier (No. 8) Corp. December 6, 2007 Bridge (ex Hyundai Bridge) Speedcarrier (No. 1) Corp. June 28, 2007 Vladivostok (ex Hyundai Vladivostok) Speedcarrier (No. 2) Corp. June 28, 2007 Advance (ex Hyundai Advance) Speedcarrier (No. 3) Corp. June 28, 2007 Stride (ex Hyundai Stride) Speedcarrier (No. 5) Corp. June 28, 2007 Future (ex Hyundai Future) Speedcarrier (No. 4) Corp. June 28, 2007 Sprinter (ex Hyundai Sprinter) Vessels sold during 2016 Federal Marine Inc. February 14, 2006 Federal (1) Twenty-foot equivalent unit, the international standard measure for containers and containership capacity. |
Significant Accounting Polici30
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies | |
Schedule of reclassifications out of accumulated other comprehensive loss | The Company had the following reclassifications out of Accumulated Other Comprehensive Loss as of December 31, 2017, 2016 and 2015, respectively (in thousands): Year ended December 31, Location of Reclassification into Income 2017 2016 2015 Amortization of deferred realized losses on cash flow hedges Net unrealized and realized losses on derivatives Accelerated amortization of deferred realized losses on cash flow hedges Net unrealized and realized losses on derivatives — — Reclassification of unrealized losses to earnings Net unrealized and realized losses on derivatives — Total Reclassifications $ $ $ |
Deferred Charges, Net (Tables)
Deferred Charges, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Charges, Net | |
Schedule of deferred charges, net | Deferred charges, net consisted of the following (in thousands): Drydocking and As of January 1, 2015 $ Additions Amortization ) As of December 31, 2015 $ Additions Amortization ) As of December 31, 2016 $ Additions Amortization ) As of December 31, 2017 $ |
Investments in affiliates (Tabl
Investments in affiliates (Tables) - Gemini | 12 Months Ended |
Dec. 31, 2017 | |
Investments in affiliates | |
Consolidated wholly owned subsidiaries | As of December 31, 2017, Gemini consolidated its wholly owned subsidiaries listed below: Company Vessel Name Year Built TEU Date of vessel delivery Averto Shipping S.A. Suez Canal July 20, 2015 Sinoi Marine Ltd. Genoa August 2, 2015 Kingsland International Shipping Limited NYK Lodestar September 21, 2015 Leo Shipping and Trading S.A. NYK Leo February 4, 2016 |
Summary of the financial information for equity accounted investments | A condensed summary of the financial information for equity accounted investments 49% owned by the Company shown on a 100% basis are as follows (in thousands): 2017 2016 2015 Current assets $ $ Non-current assets $ $ Current liabilities $ $ Long-term liabilities $ $ Net operating revenues $ $ $ Impairment loss — $ — Net income/(loss) $ $ ) $ ) |
Other Non-current Assets (Table
Other Non-current Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Non-current Assets | |
Schedule of other non-current assets | Other non-current assets consisted of the following as at December 31 (in thousands): 2017 2016 Available for sale securities: ZIM notes, net $ — HMM notes, net — Held to maturity securities: ZIM notes, net — $ HMM notes, net — Equity participation ZIM — — Other assets Total $ $ |
Schedule of available for sale securities at fair value and unrealized losses | HMM and ZIM as of December 31, 2017 (in thousands): Description of securities Amortized Fair value Unrealized loss ZIM notes $ $ $ HMM notes Total $ $ $ |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following as at December 31 (in thousands): 2017 2016 Accrued payroll $ $ Accrued interest Accrued expenses Total $ $ |
Lease Arrangements (Tables)
Lease Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Lease Arrangements | |
Schedule of future minimum rentals, expected to be earned on non cancellable time charters | The future minimum rentals, expected to be earned on non-cancellable time charters consisted of the following as at December 31, 2017 (in thousands): 2018 $ 2019 2020 2021 2022 2023 and thereafter Total future rentals $ |
Long-Term Debt, net (Tables)
Long-Term Debt, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt, net | |
Schedule of long-term debt | Long-term debt as of December 31, 2017 consisted of the following (in thousands): Credit Facility Balance as of Balance as of The Royal Bank of Scotland $ $ HSH Nordbank AG-Aegean Baltic Bank-Piraeus Bank HSH Nordbank-EnTrustPermal — The Export-Import Bank of Korea & ABN Amro Deutsche Bank Citibank Credit Suisse ABN Amro-Bank of America Merrill Lynch-Burlington Loan Management—National Bank of Greece EnTrustPermal-Credit Suisse-CitiGroup The Royal Bank of Scotland (January 2011 Credit Facility) HSH Nordbank AG-Aegean Baltic Bank-Piraeus Bank (January 2011 Credit Facility) ABN Amro-Bank of America Merrill Lynch-Burlington Loan Management—National Bank of Greece (January 2011 Credit Facility) Sinosure CEXIM-Citibank-ABN Amro Credit Facility Club Facility (January 2011 Credit Facility) — Citibank—Eurobank Credit Facility (January 2011 Credit Facility) Comprehensive Financing Plan exit fees accrued Total long-term debt $ $ Less: Deferred finance costs, net ) ) Total long-term debt net of deferred finance cost $ $ |
Schedule of maturities of long-term debt subsequent to financial year | The scheduled maturities of long-term debt subsequent to December 31, 2017 are as follows (in thousands): Fixed Variable Final Payment Total 2018 $ — $ $ 2019 — — 2020 — — 2021 — — Total long-term debt $ — $ $ * The last payment due on December 31, 2018, includes the unamortized remaining principal debt balances under the Bank Agreement, as such amount will be determinable following the fixed and variable amortization. |
Schedule of quarterly principal payments in fixed amounts in relation to total debt commitments from the lenders under the Bank Agreement and New Credit Facilities | Quarterly principal payments in fixed amounts, in relation to the Company's total debt commitments from the Company's lenders under the Bank Agreement and the January 2011 Credit Facilities, as specified in the table below (in thousands): February 15, May 15, August 15, November 15, December 31, Total 2018 $ $ $ $ $ $ * These principal payments represent originally scheduled maturities and assume debt will not be called by the lenders earlier due to the breaches of financial covenants. The Company may elect to make the scheduled payments shown in the above table three months earlier. |
Credit Facilities | |
Long-Term Debt, net | |
Schedule of long-term debt | Credit Facility Outstanding Collateral Vessels The Royal Bank of Scotland(2) $ The Hyundai Progress , the Highway (ex Hyundai Highway) , the Bridge (ex Hyundai Bridge) , the Zim Monaco , the Express Argentina , the Express France , the Express Spain , the CMA CGM Racine, the CSCL America and the CMA CGM Melisande HSH Nordbank—Aegean Baltic Bank—Piraeus Bank(3) $ The Vladivostok (ex Hyundai Vladivostok) , the Advance (ex Hyundai Advance) , the Stride (ex Hyundai Stride) , the Future (ex Hyundai Future) , the Sprinter (ex Hyundai Sprinter) , the Amalia C , the MSC Zebra , the Danae C , the Dimitris C, the Performance, the Europe and the Priority Citibank $ The CMA CGM Moliere , the CMA CGM Musset , the Hyundai Honour (ex Hyundai Together) and the Hyundai Respect (ex Hyundai Tenacity) Deutsche Bank $ The Zim Rio Grande , the Zim Sao Paolo and the Zim Kingston (ex OOCL Istanbul), the Hyundai Honour (ex Hyundai Together) and the Hyundai Respect (ex Hyundai Tenacity) Credit Suisse $ The Zim Luanda , the CMA CGM Nerval and the YM Mandate the Hyundai Honour (ex Hyundai Together) and the Hyundai Respect (ex Hyundai Tenacity) ABN Amro—Bank of America Merrill Lynch—Burlington—National Bank of Greece $ The Colombo , the YM Seattle , the YM Vancouver and the Singapore (ex YM Singapore) EnTrustPermal—Credit Suisse—CitiGroup $ The Zim Dalian (ex OOCL Novorossiysk) , the Express Brazil, the YM Maturity , the Express Black Sea , the CMA CGM Attila, the Hyundai Honour (ex Hyundai Together) and the Hyundai Respect (ex Hyundai Tenacity) KEXIM-ABN Amro $ The CSCL Pusan and the CSCL Le Havre January 2011 Credit Facilities HSH Nordbank—Aegean Baltic Bank—Piraeus Bank(3) $ The Maersk Exeter ( ex Hyundai Speed) , the Express Rome and the CMA CGM Rabelais RBS(2) $ The Maersk Enping (ex Hyundai Smart) and the Express Berlin ABN Amro Club Facility $ The Express Athens Citibank-Eurobank $ The MSC Ambition (ex Hyundai Ambition) Sinosure—CEXIM—Citibank—ABN Amro $ The CMA CGM Tancredi , the CMA CGM Bianca and the CMA CGM Samson (1) As of December 31, 2017. (2) Pursuant to the Bank Agreement, this credit facility is also secured by a second priority lien on the Derby D and the CSCL Le Havre . (3) Pursuant to the Bank Agreement, this credit facility is also secured by a second priority lien on the Deva and the CSCL Pusan . |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments | |
Schedule of estimated fair values of the financial instruments | As of December 31, 2017 As of December 31, 2016 Book Value Fair Value Book Value Fair Value (in thousands of $) Cash and cash equivalents $ $ $ $ Restricted cash $ $ $ $ Accounts receivable, net $ $ $ $ Due from related parties $ $ $ $ ZIM notes $ $ $ $ Equity investment in ZIM — — — — HMM notes $ $ $ $ Accounts payable $ $ $ $ Accrued liabilities $ $ $ $ Long-term debt, including current portion $ $ $ $ |
Schedule of estimated fair value of the financial instruments, categorized based upon the fair value hierarchy | The estimated fair value of the financial instruments that are measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of December 31, 2017 (in thousands): Fair Value Measurements as of December 31, 2017 Total (Level I) (Level II) (Level III) (in thousands of $) ZIM notes(1) $ $ — $ $ — HMM notes(1) $ $ — $ — The estimated fair value of the financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of December 31, 2017 (in thousands): Fair Value Measurements as of December 31, 2017 Total (Level I) (Level II) (Level III) (in thousands of $) Equity investment in ZIM(1) $ — $ — $ — $ — Long-term debt, including current portion(2) $ $ — $ $ — Accrued liabilities(3) $ $ — $ $ — The estimated fair value of the financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of December 31, 2016 (in thousands): Fair Value Measurements as of December 31, 2016 Total (Level I) (Level II) (Level III) (in thousands of $) ZIM notes(1) $ $ — $ $ — Equity investment in ZIM(1) — $ — — $ — HMM notes(1) $ $ — $ $ — Long-term debt, including current portion(2) $ $ — $ $ — Accrued liabilities(3) $ $ — $ $ — (1) The fair value is estimated based on either observable market based inputs or unobservable inputs that are corroborated by market data, including currently available information on the Company's counterparty, other contracts with similar terms, remaining maturities and interest rates. (2) Long-term debt, including current portion is presented gross of deferred finance costs of $11.2 million and $22.3 million as of December 31, 2017 and December 31, 2016, respectively. The fair value of the Company's debt is estimated based on currently available debt with similar contract terms, interest rate and remaining maturities, as well as taking into account its increased credit risk. (3) The fair value of the Company's accrued liabilities, which mainly consists of accrued interest on its credit facilities is estimated based on currently available debt agreements with similar contract terms, as well as taking into account its creditworthiness. |
Schedule of the Company's assets measured at fair value on a non-recurring basis | Fair Value Measurements as of December 31, 2016 Total (Level I) (Level II) (Level III) (in millions of $) Fixed Assets, net $ $ — $ $ — Equity investment in ZIM $ — $ — $ — $ — |
Cash Flow Hedges | |
Financial Instruments | |
Schedule of unrealized and realized losses on interest rate swaps | Year ended Year ended Year ended (in millions) Total realized losses — $ ) $ ) Amortization of deferred realized losses $ ) ) ) Accelerated amortization of deferred realized losses — ) — Unrealized gains — Unrealized and realized losses on cash flow interest rate swaps $ ) $ ) $ ) |
Fair Value Hedges | |
Financial Instruments | |
Schedule of unrealized and realized losses on interest rate swaps | Year ended Year ended Year ended (in millions) Unrealized losses on swap asset — $ ) $ ) Reclassification of fair value of hedged debt to Statement of Operations — Realized gains — Unrealized and realized gains on fair value interest rate swaps — $ $ |
Operating Revenue (Tables)
Operating Revenue (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Operating Revenue | |
Schedule of operating revenue from significant customers (constituting more than 10% of total revenue) | Charterer 2017 2016 2015 CMA CGM % % % HMM Korea % % % YML % % % Hanjin % % % |
Operating Revenue by Geograph39
Operating Revenue by Geographic Location (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Operating Revenue by Geographic Location | |
Schedule of operating revenue by geographic location | Operating revenue by geographic location of the customers for the years ended December 31, was as follows (in thousands): Continent 2017 2016 2015 Australia—Asia $ $ $ Europe America — — Total Revenue $ $ $ |
Earnings_(Loss) per Share (Tabl
Earnings/(Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings/(Loss) per Share | |
Schedule of computation of basic and diluted earnings/(loss) per share | The following table sets forth the computation of basic and diluted earnings/(loss) per share for the years ended December 31 (in thousands): 2017 2016 2015 (in thousands) Numerator: Net income/(loss) $ $ ) $ Denominator (number of shares in thousands): Basic and diluted weighted average common shares outstanding |
Basis of Presentation and Gen41
Basis of Presentation and General Information (Details) | Dec. 31, 2017item$ / sharesshares | Dec. 31, 2016$ / sharesshares | Sep. 18, 2009$ / sharesshares |
Basis of Presentation and General Information | |||
Common stock, authorized capital stock (in shares) | shares | 750,000,000 | 750,000,000 | 750,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, authorized capital stock (in shares) | shares | 100,000,000 | 100,000,000 | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Hyundai Honour (ex Hyundai Together) | |||
Basis of Presentation and General Information | |||
TEU | 13,100 | ||
Hyundai Respect (ex Hyundai Tenacity) | |||
Basis of Presentation and General Information | |||
TEU | 13,100 | ||
Maersk Enping (ex Hyundai Smart) | |||
Basis of Presentation and General Information | |||
TEU | 13,100 | ||
Maersk Exeter (ex Hyundai Speed) | |||
Basis of Presentation and General Information | |||
TEU | 13,100 | ||
MSC Ambition (ex Hyundai Ambition) | |||
Basis of Presentation and General Information | |||
TEU | 13,100 | ||
Express Berlin | |||
Basis of Presentation and General Information | |||
TEU | 10,100 | ||
Express Rome | |||
Basis of Presentation and General Information | |||
TEU | 10,100 | ||
Express Athens | |||
Basis of Presentation and General Information | |||
TEU | 10,100 | ||
CSCL Pusan | |||
Basis of Presentation and General Information | |||
TEU | 9,580 | ||
CSCL Le Havre | |||
Basis of Presentation and General Information | |||
TEU | 9,580 | ||
CMA CGM Melisande | |||
Basis of Presentation and General Information | |||
TEU | 8,530 | ||
CMA CGM Attila | |||
Basis of Presentation and General Information | |||
TEU | 8,530 | ||
CMA CGM Tancredi | |||
Basis of Presentation and General Information | |||
TEU | 8,530 | ||
CMA CGM Bianca | |||
Basis of Presentation and General Information | |||
TEU | 8,530 | ||
CMA CGM Samson | |||
Basis of Presentation and General Information | |||
TEU | 8,530 | ||
Europe | |||
Basis of Presentation and General Information | |||
TEU | 8,468 | ||
CSCL America | |||
Basis of Presentation and General Information | |||
TEU | 8,468 | ||
CMA CGM Musset | |||
Basis of Presentation and General Information | |||
TEU | 6,500 | ||
CMA CGM Nerval | |||
Basis of Presentation and General Information | |||
TEU | 6,500 | ||
CMA CGM Rabelais | |||
Basis of Presentation and General Information | |||
TEU | 6,500 | ||
CMA CGM Racine | |||
Basis of Presentation and General Information | |||
TEU | 6,500 | ||
CMA CGM Moliere | |||
Basis of Presentation and General Information | |||
TEU | 6,500 | ||
YM Mandate | |||
Basis of Presentation and General Information | |||
TEU | 6,500 | ||
YM Maturity | |||
Basis of Presentation and General Information | |||
TEU | 6,500 | ||
Performance | |||
Basis of Presentation and General Information | |||
TEU | 6,402 | ||
Priority | |||
Basis of Presentation and General Information | |||
TEU | 6,402 | ||
Zim Monaco | |||
Basis of Presentation and General Information | |||
TEU | 4,253 | ||
Zim Dalian (ex OOCL Novorossiysk) | |||
Basis of Presentation and General Information | |||
TEU | 4,253 | ||
Zim Luanda | |||
Basis of Presentation and General Information | |||
TEU | 4,253 | ||
Zim Rio Grande | |||
Basis of Presentation and General Information | |||
TEU | 4,253 | ||
Zim Sao Paolo | |||
Basis of Presentation and General Information | |||
TEU | 4,253 | ||
Zim Kingston (ex OOCL Istanbul) | |||
Basis of Presentation and General Information | |||
TEU | 4,253 | ||
YM Seattle | |||
Basis of Presentation and General Information | |||
TEU | 4,253 | ||
YM Vancouver | |||
Basis of Presentation and General Information | |||
TEU | 4,253 | ||
Deva | |||
Basis of Presentation and General Information | |||
TEU | 4,253 | ||
Derby D | |||
Basis of Presentation and General Information | |||
TEU | 4,253 | ||
Dimitris C | |||
Basis of Presentation and General Information | |||
TEU | 3,430 | ||
Express Spain | |||
Basis of Presentation and General Information | |||
TEU | 3,400 | ||
Express Black Sea | |||
Basis of Presentation and General Information | |||
TEU | 3,400 | ||
Express Argentina | |||
Basis of Presentation and General Information | |||
TEU | 3,400 | ||
Express Brazil | |||
Basis of Presentation and General Information | |||
TEU | 3,400 | ||
Express France | |||
Basis of Presentation and General Information | |||
TEU | 3,400 | ||
Singapore (ex YM Singapore) | |||
Basis of Presentation and General Information | |||
TEU | 3,314 | ||
Colombo | |||
Basis of Presentation and General Information | |||
TEU | 3,314 | ||
MSC Zebra | |||
Basis of Presentation and General Information | |||
TEU | 2,602 | ||
Amalia C | |||
Basis of Presentation and General Information | |||
TEU | 2,452 | ||
Danae C | |||
Basis of Presentation and General Information | |||
TEU | 2,524 | ||
Highway (ex Hyundai Highway) | |||
Basis of Presentation and General Information | |||
TEU | 2,200 | ||
Hyundai Progress | |||
Basis of Presentation and General Information | |||
TEU | 2,200 | ||
Bridge (ex Hyundai Bridge) | |||
Basis of Presentation and General Information | |||
TEU | 2,200 | ||
Vladivostok (ex Hyundai Vladivostok) | |||
Basis of Presentation and General Information | |||
TEU | 2,200 | ||
Advance (ex Hyundai Advance) | |||
Basis of Presentation and General Information | |||
TEU | 2,200 | ||
Stride (ex Hyundai Stride) | |||
Basis of Presentation and General Information | |||
TEU | 2,200 | ||
Future (ex Hyundai Future) | |||
Basis of Presentation and General Information | |||
TEU | 2,200 | ||
Sprinter (ex Hyundai Sprinter) | |||
Basis of Presentation and General Information | |||
TEU | 2,200 | ||
Federal | |||
Basis of Presentation and General Information | |||
TEU | 4,651 |
Significant Accounting Polici42
Significant Accounting Policies - Reclassifications in Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassifications in Other Comprehensive Income/(Loss) | |||
Net unrealized and realized losses on derivatives | $ (3,694) | $ (12,482) | $ (39,857) |
Reclassification out of accumulated other comprehensive income | |||
Reclassifications in Other Comprehensive Income/(Loss) | |||
Net unrealized and realized losses on derivatives | 3,694 | 11,918 | 36,661 |
Amortization of deferred realized losses on cash flow hedges | Reclassification out of accumulated other comprehensive income | |||
Reclassifications in Other Comprehensive Income/(Loss) | |||
Net unrealized and realized losses on derivatives | $ 3,694 | 4,028 | 4,017 |
Accelerated amortization of deferred realized losses on cash flow hedges | Reclassification out of accumulated other comprehensive income | |||
Reclassifications in Other Comprehensive Income/(Loss) | |||
Net unrealized and realized losses on derivatives | 7,706 | ||
Reclassification of unrealized losses to earnings | Reclassification out of accumulated other comprehensive income | |||
Reclassifications in Other Comprehensive Income/(Loss) | |||
Net unrealized and realized losses on derivatives | $ 184 | $ 32,644 |
Significant Accounting Polici43
Significant Accounting Policies - Foreign Currency Translation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Foreign Currency Translation: | |||
Foreign currency exchange losses | $ (0.4) | $ (0.1) | $ (0.1) |
Significant Accounting Polici44
Significant Accounting Policies - Cash (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Cash and Cash Equivalents: | ||||
Cash and cash equivalents | $ 66,895 | $ 73,717 | $ 72,253 | $ 57,730 |
Restricted Cash: | ||||
Proportion of quarterly principal installments equal to the monthly deposit amount required for retention | 0.3333 | |||
Proportion of semi-annual interest installments equal to the monthly deposit amount required for retention | 0.1667 |
Significant Accounting Polici45
Significant Accounting Policies - Deferred Financing Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred Financing Costs | |||
Amortization of finance costs | $ 11,153 | $ 12,652 | $ 14,038 |
Significant Accounting Polici46
Significant Accounting Policies - Depreciation (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Vessels | |
Depreciation | |
Estimated useful life from the year built | 30 years |
Significant Accounting Polici47
Significant Accounting Policies - Vessels held for sale (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Vessels held for sale | |
Impairment loss of vessel held for sale | $ 2.1 |
Significant Accounting Polici48
Significant Accounting Policies - Accounting for Special Survey and Drydocking Costs (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Vessels | |
Accounting for Special Survey and Drydocking Costs | |
Deferral and amortization period of survey and drydocking costs | 2 years 6 months |
Significant Accounting Polici49
Significant Accounting Policies - Impairment of Long lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impairment of Long-lived Assets: | |||
Impairment loss of vessels held and used | $ 415,118 | $ 41,080 | |
Vessels | |||
Impairment of Long-lived Assets: | |||
Impairment loss of vessels held and used | $ 0 | $ 415,100 | $ 39,000 |
Vessels | Minimum | |||
Impairment of Long-lived Assets: | |||
Term of multi-year fixed rate period charters for vessels in current fleet and contracted vessels | 1 year | ||
Vessels | Maximum | |||
Impairment of Long-lived Assets: | |||
Term of multi-year fixed rate period charters for vessels in current fleet and contracted vessels | 18 years |
Significant Accounting Polici50
Significant Accounting Policies - Pension and Retirement Benefit Obligations-Crew (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Vessels | Maximum | |
Pension and Retirement Benefit Obligations-Crew: | |
On board period of crew under the short-term contracts | 7 months |
Significant Accounting Polici51
Significant Accounting Policies - Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Segment Reporting: | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Significant Accounting Polici52
Significant Accounting Policies - Earnings/(Loss) Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings/(Loss) Per Share: | |||
Other dilutive or potentially dilutive securities | 0 | 0 | 0 |
Significant Accounting Polici53
Significant Accounting Policies - Equity Compensation Plan (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Equity Compensation Plan: | |
Maximum number of shares that may be issued as a proportion of outstanding capital stock | 6.00% |
Period of automatic termination from approval of plan by stockholders | P10Y |
Common Stock | |
Equity Compensation Plan: | |
Vesting period | 0 years |
Contractual obligation for any stock to be granted | $ 0 |
Significant Accounting Polici54
Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Recent Accounting Pronouncements | ||
Restricted cash | $ 2,812 | $ 2,812 |
Going Concern (Details)
Going Concern (Details) $ in Thousands | Sep. 01, 2016item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Principal amount due for repayment by December 31, 2018 | $ 2,258,659 | ||
Total current liabilities | 2,379,839 | $ 2,566,281 | |
Total current assets | $ 125,999 | $ 135,954 | |
Hanjin | |||
Number of charters cancelled | item | 8 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted cash | ||
Restricted cash | $ 2,812 | $ 2,812 |
Retention account | ||
Restricted cash | ||
Restricted cash | $ 2,800 | $ 2,800 |
Fixed Assets, Net (Details)
Fixed Assets, Net (Details) $ in Thousands | Jan. 08, 2016USD ($) | Dec. 23, 2015USD ($) | Dec. 31, 2017USD ($)$ / T | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Fixed Assets, Net | |||||
Loss on sale of vessels | $ 36 | ||||
Impairment loss | $ 2,100 | ||||
Impairment loss of vessels held and used | 415,118 | 41,080 | |||
Vessels | |||||
Fixed Assets, Net | |||||
Impairment loss of vessels held and used | $ 0 | 415,100 | 39,000 | ||
Residual value of the fleet | $ 378,200 | 379,600 | |||
Average life of scrap considered to calculate residual value of vessel, one | 10 years | ||||
Average life of scrap considered to calculate residual value of vessel, two | 5 years | ||||
Scrap value per ton (in dollars per ton) | $ / T | 300 | ||||
Federal | |||||
Fixed Assets, Net | |||||
Gross sale consideration | $ 7,200 | ||||
Amount received from sale of vessel | $ 5,800 | $ 1,400 | |||
Federal | |||||
Fixed Assets, Net | |||||
Loss on sale of vessels | $ 36 |
Deferred Charges, Net (Details)
Deferred Charges, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in deferred charges, net | |||
Balance at the beginning of the period | $ 8,199 | ||
Balance at the end of the period | 8,962 | $ 8,199 | |
Drydocking and Special Survey Costs | |||
Changes in deferred charges, net | |||
Balance at the beginning of the period | 8,199 | 4,751 | $ 6,255 |
Additions | 7,511 | 8,976 | 2,341 |
Amortization | (6,748) | (5,528) | (3,845) |
Balance at the end of the period | $ 8,962 | $ 8,199 | $ 4,751 |
Period of amortization for deferred costs | 2 years 6 months |
Investments in affiliates - Who
Investments in affiliates - Wholly Owned Subsidiaries (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2015USD ($)entity | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Gemini | |||
Schedule of Equity Method Investments | |||
Ownership (as a percent) | 49.00% | 49.00% | 49.00% |
Gemini | |||
Schedule of Equity Method Investments | |||
Capital lease obligations assumed | $ | $ 35.4 | ||
Borrowings under a secured loan facility | $ | 19 | ||
Proceeds from equity contributions | $ | $ 47.4 | ||
Net assets | $ | $ 12.2 | $ 10.3 | |
Gemini | Suez Canal | |||
Schedule of Equity Method Investments | |||
TEU | item | 5,610 | ||
Gemini | Genoa | |||
Schedule of Equity Method Investments | |||
TEU | item | 5,544 | ||
Gemini | NYK Lodestar | |||
Schedule of Equity Method Investments | |||
TEU | item | 6,422 | ||
Gemini | NYK Leo | |||
Schedule of Equity Method Investments | |||
TEU | item | 6,422 | ||
Gemini | Entities that leases Suez Canal and Genoa and owns NYK Lodestar | |||
Schedule of Equity Method Investments | |||
Acquired interest | 100.00% | ||
Number of entities acquired | entity | 2 | ||
Gemini | Owners of container vessels NYK Lodestar and NYK Leo | |||
Schedule of Equity Method Investments | |||
Acquired interest | 100.00% | ||
Number of entities acquired | entity | 2 | ||
Virage | Gemini | |||
Schedule of Equity Method Investments | |||
Ownership (as a percent) | 51.00% |
Investments in affiliates - Equ
Investments in affiliates - Equity Accounted Investments (Details) - Gemini - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of financial information | ||||
Ownership (as a percent) | 49.00% | 49.00% | 49.00% | |
Current assets | $ 10,014 | $ 10,829 | ||
Non-current assets | 40,901 | 42,752 | ||
Current liabilities | 6,131 | 6,890 | ||
Long-term liabilities | 32,544 | 36,420 | ||
Net operating revenues | 17,388 | 13,909 | $ 1,775 | |
Impairment loss | 29,881 | |||
Net income/(loss) | $ 1,969 | $ (33,168) | $ (3,961) |
Other Non-current Assets (Detai
Other Non-current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Non-current Assets | ||
Other assets | $ 14,864 | $ 5,274 |
Total | 49,466 | 71,157 |
ZIM notes | ||
Other Non-current Assets | ||
Available for sale securities | 21,093 | |
Held to maturity securities | 40,232 | |
HMM notes | ||
Other Non-current Assets | ||
Available for sale securities | $ 13,509 | |
Held to maturity securities | $ 25,651 |
Other Non-current Assets - ZIM
Other Non-current Assets - ZIM (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2014USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Other Non-current Assets | ||||
Impairment loss at reporting date | $ 444,502 | $ 41,080 | ||
Current portion of unearned revenue | $ 22,853 | 27,724 | ||
Non-current portion of unearned revenue | 56,159 | 70,589 | ||
ZIM | ||||
Other Non-current Assets | ||||
Deferred revenue recorded | $ 39,100 | |||
Number of vessels of which the charter rates payable was reduced | item | 6 | |||
Current portion of unearned revenue | 6,000 | 6,000 | ||
Non-current portion of unearned revenue | 12,500 | 18,400 | ||
Notes | ZIM | ||||
Other Non-current Assets | ||||
Impairment loss at reporting date | 700 | |||
Redemption amount | 300 | |||
Series 1 Notes | ZIM | ||||
Other Non-current Assets | ||||
Principal amount of unsecured notes received | $ 8,800 | |||
Series 2 Notes | ZIM | ||||
Other Non-current Assets | ||||
Principal amount of unsecured notes received | $ 41,100 | |||
Operating revenues | ZIM | ||||
Other Non-current Assets | ||||
Recognized unearned revenue | 6,000 | 6,000 | 6,000 | |
Interest income | Notes | ZIM | ||||
Other Non-current Assets | ||||
Interest income from fair value unwinding | 1,300 | 1,300 | 1,100 | |
Noncash interest income | $ 900 | 900 | $ 800 | |
Equity participation | ZIM | ||||
Other Non-current Assets | ||||
Impairment loss at reporting date | 28,700 | |||
Equity participation ZIM | $ 0 |
Other Non-current Assets - HMM
Other Non-current Assets - HMM (Details) - USD ($) $ in Thousands, shares in Millions | Sep. 01, 2016 | Jul. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 18, 2016 |
Other Non-current Assets | |||||
Current portion of unearned revenue | $ 22,853 | $ 27,724 | |||
Non-current portion of unearned revenue | 56,159 | 70,589 | |||
HMM | |||||
Other Non-current Assets | |||||
Shares received from charter restructuring | 4.6 | ||||
Current portion of unearned revenue | 8,800 | 15,600 | |||
Non-current portion of unearned revenue | 43,400 | 52,100 | |||
Net proceeds from sale of trading securities | $ 38,100 | ||||
Unearned revenue | $ 75,600 | ||||
Loan Notes 1 HMM | HMM | |||||
Other Non-current Assets | |||||
Principal amount of unsecured notes received | $ 32,800 | ||||
Loan Notes 2 HMM | HMM | |||||
Other Non-current Assets | |||||
Principal amount of unsecured notes received | $ 6,200 | ||||
Operating revenues | HMM | |||||
Other Non-current Assets | |||||
Recognized unearned revenue | 15,600 | 7,900 | |||
Other income/(expenses), net | HMM | |||||
Other Non-current Assets | |||||
Net loss on sale of trading securities | $ 12,900 | ||||
Interest income | HMM | |||||
Other Non-current Assets | |||||
Interest income from fair value unwinding | $ 1,800 | $ 1,000 |
Other Non-current Assets - Tran
Other Non-current Assets - Transfer to Available for sale category (Details) - USD ($) $ in Thousands | Mar. 28, 2017 | Dec. 31, 2017 |
Available for sale securities at fair value and unrealized losses | ||
Amortized cost basis | $ 61,209 | |
Fair value | 34,602 | |
Unrealized loss | 26,607 | |
ZIM notes | ||
Available for sale securities at fair value and unrealized losses | ||
Amortized cost basis | 42,368 | |
Fair value | 21,093 | |
Unrealized loss | 21,275 | |
HMM notes | ||
Available for sale securities at fair value and unrealized losses | ||
Amortized cost basis | 18,841 | |
Fair value | 13,509 | |
Unrealized loss | 5,332 | |
Loan Notes 1 HMM | HMM | ||
Other Non-current Assets | ||
Principal amount of Loan Notes sold | $ 13,000 | |
Amortized costs | 8,600 | |
Proceeds from sale of notes receivable | $ 6,200 | |
Loan Notes 1 HMM | HMM | Other income/(expenses), net | ||
Other Non-current Assets | ||
Loss on sale of notes receivable | $ 2,400 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued Liabilities | ||
Accrued payroll | $ 928 | $ 1,032 |
Accrued interest | 9,953 | 9,193 |
Accrued expenses | 4,345 | 5,239 |
Total | $ 15,226 | $ 15,464 |
Lease Arrangements (Details)
Lease Arrangements (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Future minimum revenue expected to be earned | |
2,018 | $ 366,903 |
2,019 | 307,734 |
2,020 | 285,637 |
2,021 | 266,553 |
2,022 | 223,023 |
2023 and thereafter | 288,140 |
Total future rentals | $ 1,737,990 |
Term of periodic drydocking and special survey maintenance per vessel | 2 years 6 months |
Term of periodic drydocking and special survey maintenance per vessel for vessels less than 15 years old | 5 years |
Minimum | |
Future minimum revenue expected to be earned | |
Period of drydocking and special survey maintenance carried out on vessels | 10 days |
Maximum | |
Future minimum revenue expected to be earned | |
Age of vessels for which drydocking and special survey maintenance is carried out every 5 years | 15 years |
Period of drydocking and special survey maintenance carried out on vessels | 15 days |
Long-Term Debt, net - Schedule
Long-Term Debt, net - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-Term Debt, net | ||
Total long-term debt | $ 2,340,778 | $ 2,527,262 |
Comprehensive Financing Plan exit fees accrued | 21,099 | 18,948 |
Less: Deferred finance costs, Current portion | (11,177) | (22,330) |
Total long-term debt net of deferred finance costs, Current portion | 2,329,601 | 2,504,932 |
The Royal Bank of Scotland | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 634,864 | 648,528 |
HSH Nordbank AG-Aegean Baltic Bank-Piraeus Bank | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 622,851 | 624,570 |
HSH Nordbank-EnTrustPermal | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 12,200 | |
The Export-Import Bank of Korea & ABN Amro | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 23,109 | 34,359 |
Deutsche Bank | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 156,062 | 164,582 |
Citibank | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 117,316 | 127,353 |
Credit Suisse | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 176,189 | 189,080 |
ABN Amro-Bank of America Merrill Lynch-Burlington Loan Management-National Bank of Greece | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 199,302 | 217,584 |
EnTrustPermal-Credit Suisse CitiGroup | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 220,689 | 242,229 |
The Royal Bank of Scotland (January 2011 Credit Facility) | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 24,316 | 42,384 |
HSH Nordbank AG Aegean Baltic Bank Piraeus Bank (January 2011 Credit Facility) | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 17,205 | 34,562 |
ABN Amro Bank of America Merrill Lynch Burlington Loan Management National Bank of Greece (January 2011 Credit Facility) | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 8,771 | 9,655 |
Sinosure CEXIM-Citibank-ABN Amro Credit Facility | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 81,360 | 101,700 |
Club Facility (January 2011 Credit Facility) | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | 11,590 | |
Citibank-Eurobank Credit Facility (January 2011 Credit Facility) | ||
Long-Term Debt, net | ||
Long-term debt, Current portion | $ 37,645 | $ 47,938 |
Long-Term Debt, net - Maturity
Long-Term Debt, net - Maturity (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Scheduled maturities of long-term debt | |
2,018 | $ 2,258,659 |
2,019 | 20,340 |
2,020 | 20,340 |
2,021 | 20,340 |
Total long-term debt | 2,319,679 |
Fixed principal repayments | |
Scheduled maturities of long-term debt | |
2,018 | 203,364 |
2,019 | 20,340 |
2,020 | 20,340 |
2,021 | 20,340 |
Total long-term debt | 264,384 |
Final Payment due on December 31, 2018 | |
Scheduled maturities of long-term debt | |
2,018 | 2,055,295 |
Total long-term debt | $ 2,055,295 |
Long-Term Debt, net - Bank Agre
Long-Term Debt, net - Bank Agreement (Details) - USD ($) $ in Thousands | Jan. 07, 2015 | Dec. 23, 2014 | Feb. 09, 2012 | Mar. 05, 2011 | Mar. 04, 2011 | Jan. 31, 2011 | Dec. 31, 2010 | Aug. 31, 2010 | Mar. 04, 2011 | Dec. 31, 2017 |
Bank agreement | ||||||||||
Long-Term Debt, net | ||||||||||
New debt financing subject to bank agreement | $ 425,000 | $ 425,000 | ||||||||
Bank agreement | LIBOR | ||||||||||
Long-Term Debt, net | ||||||||||
Interest rate added to variable rate basis (as a percent) | 1.85% | |||||||||
The Export-Import Bank of Korea & ABN Amro | ||||||||||
Long-Term Debt, net | ||||||||||
Increase in interest rate margin (as a percent) | 0.50% | |||||||||
Previously Existing Credit Facilities | Bank agreement | ||||||||||
Long-Term Debt, net | ||||||||||
Amendment fee as a percentage of outstanding commitments | 0.50% | |||||||||
Amendment fee | $ 12,500 | |||||||||
Percentage of amendment fee paid and deferred | 40.00% | 20.00% | ||||||||
Remaining percentage of amendment fee, which is due for payment on December 31, 2014 | 40.00% | |||||||||
Amendment fee paid | $ 700 | $ 4,300 | ||||||||
Sinosure CEXIM-Citibank-ABN Amro Credit Facility | LIBOR | ||||||||||
Long-Term Debt, net | ||||||||||
Interest rate added to variable rate basis (as a percent) | 2.85% | |||||||||
Sinosure CEXIM-Citibank-ABN Amro Credit Facility | Bank agreement | ||||||||||
Long-Term Debt, net | ||||||||||
Amendment fee | $ 4,380 | |||||||||
Commitment fee on undrawn committed debt designated for specific newbuildings (as a percent) | 0.75% | 0.25% | ||||||||
Amendment fee paid | $ 3,160 | $ 1,220 |
Long-Term Debt, net - Principal
Long-Term Debt, net - Principal Payments (Details) - Bank agreement $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Quarterly principal payments in fixed amounts | |
Quarterly principal payments | $ 2,215,210 |
Period of early payment of fixed principal installments of which option is available | 3 months |
Percentage of actual free cash flow equal to variable payment and fixed principal payment until the earlier of May 15, 2015 and the maximum consolidated net leverage ratio | 92.50% |
Maximum consolidated net leverage ratio | 6 |
Percentage of actual free cash flow equal to variable payment and fixed principal payment after May 15, 2015, until maturity | 89.50% |
Accumulated unrestricted cash and cash equivalents used in determining amount of additional variable payment | $ 50,000 |
Percentage of consolidated debt used in determining amount of additional variable payment | 2.00% |
Percentage of relevant budget up to which operating expenses and allocated general and administrative expenses per vessel cannot exceed | 20.00% |
Percentage of the first specified value of net equity proceeds equal to which additional prepayments are required | 50.00% |
Net equity proceeds used for determining additional prepayments | $ 300,000 |
Percentage of additional net equity proceeds equal to which additional prepayments are required to be made | 25.00% |
Minimum period considered for determining use of retained equity proceeds for prepayment | 12 months |
Voting interest owned in outstanding capital stock by Dr. Coustas and his family members, qualified for change of control (as a Percent) | 33.00% |
Voting interest owned by any person or group in outstanding capital stock, qualified for change of control (as a percent) | 20.00% |
February 15 | |
Quarterly principal payments in fixed amounts | |
Quarterly principal payments | $ 32,586 |
May 15 | |
Quarterly principal payments in fixed amounts | |
Quarterly principal payments | 37,589 |
August 15 | |
Quarterly principal payments in fixed amounts | |
Quarterly principal payments | 44,403 |
November 15 | |
Quarterly principal payments in fixed amounts | |
Quarterly principal payments | 45,337 |
December 31 | |
Quarterly principal payments in fixed amounts | |
Quarterly principal payments | $ 2,055,295 |
Long-Term Debt, net - Covenants
Long-Term Debt, net - Covenants and Events of Defaults (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)item | |
Other income/(expenses), net | |
Debt refinancing discussion | |
Professional fees related to refinancing discussions with lenders | $ 14.3 |
Bank agreement | |
Long-Term Debt, net | |
Number of vessels collateralizing new credit facilities | item | 9 |
Period for which a ratio of consolidated indebtedness to consolidated EBITDA is required to be maintained under financial covenants | 12 months |
Period for which a ratio of consolidated EBITDA to net interest expense is required to be maintained under financial covenants | 12 months |
Period for which consolidated net leverage ratio is required to be maintained under financial covenants to pay cash dividends or repurchase shares | 1 year |
Period for which a ratio of aggregate market value of vessels to outstanding indebtedness is required to be maintained under financial covenants to pay cash dividends or repurchase shares | 1 year |
Bank agreement | Minimum | |
Long-Term Debt, net | |
Ratio of market value of vessels, on a charter-inclusive basis, plus net realizable value of additional collateral to consolidated total debt through 2011 (as a percent) | 90.00% |
Ratio of market value of vessels, on a charter-inclusive basis, plus net realizable value of additional collateral to consolidated total debt from September 2017 through September 2018 (as a percent) | 130.00% |
Ratio of market value of vessels collateralizing the credit facilities, plus net realizable value of additional collateral, to aggregate debt outstanding (as a percent) | 100.00% |
Free consolidated unrestricted cash and cash equivalents after 2012 | $ 30 |
Ratio of consolidated EBITDA to net interest expense | 1.50 |
Ratio of consolidated EBITDA to net interest expense after gradual increase | 2.80 |
Consolidated market value of adjusted net worth | $ 400 |
Required duration of vessel's charter at the time of valuation | 12 months |
Bank agreement | Maximum | |
Long-Term Debt, net | |
Percentage of non-recurring items excluded from calculation of EBITDA, based on EBITDA calculated in the manner as prescribed | 5.00% |
Ratio of consolidated total debt less unrestricted cash and cash equivalents to consolidated EBITDA | 12 |
Ratio of consolidated total debt less unrestricted cash and cash equivalents to consolidated EBITDA gradual decrease | 4.75 |
Consolidated net leverage ratio to pay cash dividends or repurchase shares | 6 |
Ratio of aggregate market value of vessels to outstanding indebtedness required to pay cash dividends or repurchase shares (as a percent) | 125.00% |
Long-Term Debt, net - Credit Fa
Long-Term Debt, net - Credit Facilities (Details) $ in Thousands | Nov. 05, 2014USD ($)item | Oct. 22, 2014item | Jan. 31, 2011USD ($) | Aug. 31, 2010USD ($) | Jan. 31, 2011USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jan. 24, 2011USD ($) |
Long-Term Debt, net | ||||||||||
Gross sale consideration | $ 5,178 | $ 1,050 | ||||||||
Payments made to acquire vessels | $ 37,000 | |||||||||
Number Of Vessels Acquired | item | 2 | |||||||||
Lenders fees paid for utilizing sale proceeds | $ 90 | |||||||||
January 2011 Credit Facility | ||||||||||
Long-Term Debt, net | ||||||||||
Minimum aggregate outstanding indebtedness under credit facility for interest rate margin to be 2.50% | $ 276,000 | |||||||||
Minimum aggregate outstanding indebtedness under credit facility for interest rate margin to be 3.00% | 326,000 | |||||||||
Minimum aggregate outstanding indebtedness under credit facility for interest rate margin to be 3.50% | $ 376,000 | |||||||||
Arrangement fee (as a percent) | 2.00% | |||||||||
Arrangement fee paid | $ 5,200 | $ 3,300 | $ 8,500 | |||||||
Commitment fee payable (as a percent) | 0.75% | |||||||||
January 2011 Credit Facility | LIBOR | ||||||||||
Long-Term Debt, net | ||||||||||
Interest rate margin (as a percent) | 1.85% | |||||||||
Interest rate margin if aggregate outstanding indebtedness exceeds $276 million (as a percent) | 2.50% | |||||||||
Interest rate margin if aggregate outstanding indebtedness exceeds $326 million (as a percent) | 3.00% | |||||||||
Interest rate margin if aggregate outstanding indebtedness exceeds $376 million (as a percent) | 3.50% | |||||||||
HSH Nordbank AG Aegean Baltic Bank Piraeus Bank (January 2011 Credit Facility) | ||||||||||
Long-Term Debt, net | ||||||||||
Maximum borrowing capacity under credit facility | $ 123,800 | |||||||||
Amount outstanding as of the balance sheet date | $ 17,200 | 23,750 | ||||||||
Number of Vessels Sold | item | 5 | |||||||||
Gross sale consideration | $ 55,200 | |||||||||
Amount applied against prepayment of facility | $ 18,200 | |||||||||
The Royal Bank of Scotland (January 2011 Credit Facility) | ||||||||||
Long-Term Debt, net | ||||||||||
Maximum borrowing capacity under credit facility | 100,000 | |||||||||
Amount outstanding as of the balance sheet date | 24,300 | |||||||||
ABN Amro Bank of America Merrill Lynch Burlington Loan Management National Bank of Greece (January 2011 Credit Facility) | ||||||||||
Long-Term Debt, net | ||||||||||
Maximum borrowing capacity under credit facility | 37,100 | |||||||||
Club Facility (January 2011 Credit Facility) | ||||||||||
Long-Term Debt, net | ||||||||||
Maximum borrowing capacity under credit facility | 83,900 | |||||||||
Citibank-Eurobank Credit Facility (January 2011 Credit Facility) | ||||||||||
Long-Term Debt, net | ||||||||||
Maximum borrowing capacity under credit facility | $ 80,000 | |||||||||
Amount outstanding as of the balance sheet date | $ 37,600 |
Long-Term Debt, net - Sinosure
Long-Term Debt, net - Sinosure CEXIM Citibank ABN Amro (Details) - Sinosure CEXIM-Citibank-ABN Amro Credit Facility $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Feb. 21, 2011USD ($)item | |
Long-Term Debt, net | ||
Maximum borrowing capacity under credit facility | $ 203.4 | |
Number of tranches which comprise the credit facility | item | 3 | |
Amount of each tranche equal to a percentage of contract price for newbuilding vessels securing such tranche | 60.00% | |
Period of repayment of principal in semi-annual installments | 10 years | |
Ratio of market value of vessels collateralizing the credit facilities, to aggregate debt outstanding (as a percent) | 125.00% | |
Consolidated net leverage ratio to pay cash dividends or repurchase shares | 6 | |
Maximum | ||
Long-Term Debt, net | ||
Amount of each tranche, which comprises the credit facility, option one | $ 67.8 | |
LIBOR | ||
Long-Term Debt, net | ||
Interest rate margin (as a percent) | 2.85% |
Long-Term Debt, net - Exit Fees
Long-Term Debt, net - Exit Fees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Exit Fees | |||
Aggregate exit fee payable on the common maturity date | $ 25,000 | ||
Exit fees paid | 1,000 | ||
Exit fees accrued | 21,099 | $ 18,948 | |
Other income/(expenses), net | |||
Exit Fees | |||
Exit fees | $ 3,200 | $ 3,400 | $ 3,600 |
Long-Term Debt, net - Credit 75
Long-Term Debt, net - Credit Facilities Summary Table (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 24, 2011 |
The Royal Bank of Scotland | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | $ 634,900 | |
HSH Nordbank AG-Aegean Baltic Bank-Piraeus Bank | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 622,900 | |
Citibank | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 117,300 | |
Deutsche Bank | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 156,100 | |
Credit Suisse | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 176,200 | |
ABN Amro-Bank of America Merrill Lynch-Burlington Loan Management-National Bank of Greece | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 199,300 | |
EnTrustPermal-Credit Suisse CitiGroup | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 220,700 | |
The Export-Import Bank of Korea (KEXIM) | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 23,100 | |
HSH Nordbank AG Aegean Baltic Bank Piraeus Bank (January 2011 Credit Facility) | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 17,200 | $ 23,750 |
The Royal Bank of Scotland (January 2011 Credit Facility) | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 24,300 | |
ABN Amro Club Facility | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 8,800 | |
Citibank-Eurobank Credit Facility (January 2011 Credit Facility) | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 37,600 | |
Sinosure CEXIM-Citibank-ABN Amro Credit Facility | ||
Credit Facilities Summary Table | ||
Outstanding Principal Amount | 81,300 | |
Credit Facilities | ||
Credit Facilities Summary Table | ||
Remaining borrowing availability | $ 0 |
Long-Term Debt, net - Interest
Long-Term Debt, net - Interest (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest | |||
Weighted average interest rate on long-term borrowings (as a percent) | 3.10% | 2.60% | 2.40% |
Interest paid | $ 74.6 | $ 69.2 | $ 71.8 |
Interest cost incurred | $ 75.4 | $ 70.3 | $ 70.4 |
Related Party Transactions (Det
Related Party Transactions (Details) € in Millions | Jan. 01, 2015USD ($) | Apr. 30, 2015EUR (€) | Apr. 30, 2015USD ($) | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) | Dec. 31, 2016EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Related Party Transactions | ||||||||||
Monthly advances on account of the vessels' operating expenses | $ 34,007,000 | $ 32,603,000 | ||||||||
Manager | ||||||||||
Related Party Transactions | ||||||||||
Adjusted daily management fees | $ 850 | |||||||||
Adjusted daily vessel management fees for vessels on bareboat charter | 425 | |||||||||
Adjusted daily vessel management fees for vessels on time charter | $ 850 | |||||||||
Management fee on gross freight, charter hire, ballast bonus and demurrage before adjustment (as a percent) | 1.25% | |||||||||
Adjusted management fee on gross freight, charter hire, ballast bonus and demurrage (as a percent) | 0.50% | |||||||||
Management fees incurred shown under General and administrative expenses | 16,900,000 | 17,100,000 | $ 17,400,000 | |||||||
Management commissions incurred shown under Voyage expenses | 5,300,000 | 6,300,000 | 6,900,000 | |||||||
Fee for providing services of executive officers | € 0.5 | $ 600,000 | ||||||||
Executive officers compensation | € 1 | $ 1,100,000 | € 1.5 | 1,800,000 | € 1.5 | 1,700,000 | ||||
The Swedish Club | ||||||||||
Related Party Transactions | ||||||||||
Premiums paid | $ 4,600,000 | $ 5,600,000 | $ 6,300,000 |
Financial Instruments - Cash Fl
Financial Instruments - Cash Flow Interest Rate Swap Hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effect of interest rate swap hedges on results | |||
Unrealized gains | $ 4,649 | $ 16,285 | |
Net unrealized and realized losses on derivatives | $ (3,694) | (12,482) | (39,857) |
Interest rate swap hedges | Cash Flow Hedges | |||
Financial Instruments | |||
Unrealized gains related to fair value changes | 0 | 4,500 | 48,900 |
Unrealized losses reclassified from accumulated OCI into earnings | 0 | 10,700 | 32,600 |
Effect of interest rate swap hedges on results | |||
Total realized losses | (5,500) | (52,700) | |
Amortization of deferred realized losses | (3,700) | (4,000) | (4,000) |
Accelerated amortization of deferred realized losses | (7,700) | ||
Unrealized gains | 4,300 | 16,200 | |
Net unrealized and realized losses on derivatives | $ (3,700) | $ (12,900) | $ (40,500) |
Financial Instruments - Fair Va
Financial Instruments - Fair Value Interest Rate Swap Hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effect of interest rate swap hedges on results | |||
Net unrealized and realized losses on derivatives | $ (3,694) | $ (12,482) | $ (39,857) |
Fair Value Hedges | Interest rate swap hedges | |||
Fair Value Interest Rate Swap Hedges | |||
Fair value change of interest rate swaps | $ 0 | (100) | (500) |
Effect of interest rate swap hedges on results | |||
Unrealized losses on swap asset | (100) | (500) | |
Reclassification of fair value of hedged debt to Statement of Income | 400 | 600 | |
Realized gains | 100 | 500 | |
Net unrealized and realized losses on derivatives | $ 400 | $ 600 |
Financial Instruments - Estimat
Financial Instruments - Estimated Fair Values Of Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Financial Instruments | ||
Bad debt expense | $ 15,834 | |
Book Value | ||
Financial Instruments | ||
Cash and cash equivalents | $ 66,895 | 73,717 |
Restricted cash | 2,812 | 2,812 |
Accounts receivable, net | 6,502 | 8,028 |
Due from related parties | 34,007 | 32,603 |
Accounts payable | 11,371 | 11,156 |
Accrued liabilities | 15,226 | 15,464 |
Long-term debt, including current portion | 2,340,778 | 2,527,262 |
Fair Value | ||
Financial Instruments | ||
Cash and cash equivalents | 66,895 | 73,717 |
Restricted cash | 2,812 | 2,812 |
Accounts receivable, net | 6,502 | 8,028 |
Due from related parties | 34,007 | 32,603 |
Accounts payable | 11,371 | 11,156 |
Accrued liabilities | 15,226 | 15,464 |
Long-term debt, including current portion | 2,325,209 | 2,527,262 |
ZIM | Book Value | Notes | ||
Financial Instruments | ||
Notes | 21,093 | 40,232 |
ZIM | Fair Value | Notes | ||
Financial Instruments | ||
Notes | 21,093 | 35,574 |
HMM | Book Value | Notes | ||
Financial Instruments | ||
Notes | 13,509 | 25,651 |
HMM | Fair Value | Notes | ||
Financial Instruments | ||
Notes | 13,509 | 25,651 |
Hanjin | ||
Financial Instruments | ||
Bad debt expense | $ 15,800 | $ 15,800 |
Financial Instruments - Financi
Financial Instruments - Financial Instruments Measured and Not Measured At Fair Value On Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial instruments measured at fair value on a recurring basis | ||
Deferred finance costs, net | $ 11,200 | $ 22,300 |
Fair Value | ||
Financial instruments measured at fair value on a recurring basis | ||
Long-term debt, including current portion | 2,325,209 | 2,527,262 |
Accrued liabilities | 15,226 | 15,464 |
Non-recurring basis | Level II | ||
Financial instruments measured at fair value on a recurring basis | ||
Long-term debt, including current portion | 2,340,778 | 2,527,262 |
Accrued liabilities | 15,226 | 15,464 |
Non-recurring basis | Fair Value | ||
Financial instruments measured at fair value on a recurring basis | ||
Long-term debt, including current portion | 2,340,778 | 2,527,262 |
Accrued liabilities | 15,226 | 15,464 |
Notes | ZIM | Fair Value | ||
Financial instruments measured at fair value on a recurring basis | ||
Notes | 21,093 | 35,574 |
Notes | ZIM | Recurring basis | Level II | ||
Financial instruments measured at fair value on a recurring basis | ||
Notes | 21,093 | |
Notes | ZIM | Recurring basis | Fair Value | ||
Financial instruments measured at fair value on a recurring basis | ||
Notes | 21,093 | |
Notes | ZIM | Non-recurring basis | Level II | ||
Financial instruments measured at fair value on a recurring basis | ||
Notes | 35,574 | |
Notes | ZIM | Non-recurring basis | Fair Value | ||
Financial instruments measured at fair value on a recurring basis | ||
Notes | 35,574 | |
Notes | HMM | Fair Value | ||
Financial instruments measured at fair value on a recurring basis | ||
Notes | 13,509 | 25,651 |
Notes | HMM | Recurring basis | Level II | ||
Financial instruments measured at fair value on a recurring basis | ||
Notes | 13,509 | |
Notes | HMM | Recurring basis | Fair Value | ||
Financial instruments measured at fair value on a recurring basis | ||
Notes | $ 13,509 | |
Notes | HMM | Non-recurring basis | Level II | ||
Financial instruments measured at fair value on a recurring basis | ||
Notes | 25,651 | |
Notes | HMM | Non-recurring basis | Fair Value | ||
Financial instruments measured at fair value on a recurring basis | ||
Notes | $ 25,651 |
Financial Instruments - Assets
Financial Instruments - Assets Measured At Fair value On Non-recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 30, 2016 | |
Nonfinancial items measured at fair value on a non-recurring | ||||
Impairment loss of vessels held and used | $ 415,118 | $ 41,080 | ||
Non-recurring basis | Level II | ||||
Nonfinancial items measured at fair value on a non-recurring | ||||
Fixed assets, net | 179,400 | |||
Non-recurring basis | Fair Value | ||||
Nonfinancial items measured at fair value on a non-recurring | ||||
Fixed assets, net | 179,400 | |||
Vessels | ||||
Nonfinancial items measured at fair value on a non-recurring | ||||
Impairment loss of vessels held and used | $ 0 | 415,100 | $ 39,000 | |
Vessels | Book Value | ||||
Nonfinancial items measured at fair value on a non-recurring | ||||
Fixed assets, net | 179,400 | $ 594,500 | ||
ZIM | ||||
Nonfinancial items measured at fair value on a non-recurring | ||||
Equity participation impairment loss | $ 28,700 |
Operating Revenue (Details)
Operating Revenue (Details) - Operating revenues - Significant customers | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CMA CGM | |||
Operating Revenue | |||
Percentage of operating revenue | 34.00% | 29.00% | 26.00% |
HMM Korea | |||
Operating Revenue | |||
Percentage of operating revenue | 31.00% | 32.00% | 28.00% |
YML | |||
Operating Revenue | |||
Percentage of operating revenue | 14.00% | 12.00% | 13.00% |
Hanjin | |||
Operating Revenue | |||
Percentage of operating revenue | 0.00% | 10.00% | 17.00% |
Operating Revenue by Geograph84
Operating Revenue by Geographic Location (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating revenue by geographic location | |||
Revenue | $ 451,731 | $ 498,332 | $ 567,936 |
Australia-Asia | |||
Operating revenue by geographic location | |||
Revenue | 284,302 | 344,400 | 410,827 |
Europe | |||
Operating revenue by geographic location | |||
Revenue | 165,639 | $ 153,932 | $ 157,109 |
America | |||
Operating revenue by geographic location | |||
Revenue | $ 1,790 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Sep. 01, 2016item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Commitments and Contingencies | |||
Bad debt expense | $ 15,834 | ||
Hanjin | |||
Commitments and Contingencies | |||
Number of charters cancelled | item | 8 | ||
Bad debt expense | $ 15,800 | 15,800 | |
Collectability of receivables | Unsecured claim submitted to Seoul Central District Court against Hanjin Shipping | Pending litigation | |||
Commitments and Contingencies | |||
Total unsecured claim | $ 597,900 | $ 597,900 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) $ in Millions | Dec. 14, 2017shares | Dec. 15, 2016USD ($)shares | Dec. 11, 2015USD ($)shares | Dec. 31, 2017USD ($)directorshares | Dec. 31, 2016directorshares | Dec. 31, 2015director |
Stock Based Compensation | ||||||
Newly issued shares to the employees of the Manager of the company | 0 | |||||
Number of directors who elected to receive their compensation in shares | director | 0 | 0 | 0 | |||
Common Stock | ||||||
Stock Based Compensation | ||||||
Vesting period | 0 years | |||||
Contractual obligation for any stock to be granted | $ | $ 0 | |||||
Shares granted | 25,000 | 15,879 | 0 | |||
Number of cancelled shares | 25,000 | |||||
Newly issued shares to the employees of the Manager of the company | 17,608 | |||||
General and Administrative Expense | Common Stock | ||||||
Stock Based Compensation | ||||||
Expenses representing fair value of the stock granted recognized in General and Administrative Expenses | $ | $ 0.1 | $ 0.1 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 12 Months Ended | ||||
Dec. 31, 2017item$ / sharesshares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2015shares | Dec. 31, 2011$ / sharesshares | Sep. 18, 2009$ / sharesshares | |
Stockholders' Equity | |||||
Shares issued | 109,799,352 | 109,799,352 | |||
Shares outstanding | 109,799,352 | 109,799,352 | |||
Authorized capital stock, common stock (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | ||
Authorized capital stock, par value of common stock (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||
Authorized capital stock, preferred stock (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | ||
Authorized capital stock, par value of preferred stock (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||
Newly issued shares | 0 | ||||
Maximum consolidated net leverage ratio set as condition for payment of cash dividends and repurchase of shares | 6 | ||||
Number of consecutive quarters considered for calculation of consolidated net leverage ratio | item | 4 | ||||
Ratio of aggregate market value of vessels to outstanding indebtedness (as a percent) | 125.00% | ||||
Number of consecutive quarters considered for calculation of ratio of aggregate market value of vessels to outstanding indebtedness | item | 4 | ||||
Number of warrants issued to lenders | 15,000,000 | 15,000,000 | 15,000,000 | 15,000,000 | |
Exercise price of warrant (in dollars per share) | $ / shares | $ 7 | ||||
Manager's employees, directors and employees of the Company | |||||
Stockholders' Equity | |||||
Newly issued shares | 17,608 | 112,315 |
Earnings_(Loss) per Share (Deta
Earnings/(Loss) per Share (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2011 | |
Numerator: | ||||
Net income /(loss) | $ 83,905 | $ (366,195) | $ 117,016 | |
Denominator: | ||||
Basic and diluted weighted average common shares outstanding | 109,824,329 | 109,801,586 | 109,785,484 | |
Number of warrants issued | 15,000,000 | 15,000,000 | 15,000,000 | 15,000,000 |
Number of warrants outstanding | 15,000,000 | 15,000,000 | 15,000,000 |